Pre-Employment Checks as Fraud Preventative
by Brendon Carr
Last week my associate Sun-Hee Kim and I forwarded the International Bar Association and Kluwer Law Publishing our contribution to the forthcoming volume “Recruiting, Screening, Testing, Interviewing and Hiring the Best Qualified and Most Talented Employees” (a title with this many commas has to be the work of lawyers, solicitors, barristers, advocates, and/or other legal professionals...). The book, a survey of something like 50 countries worldwide, will answer in yes-or-no fashion some of the most common questions on pre-employment screening and interview questions. It will be published shortly before the IBA’s Singapore annual conference in October.
(I’ll be speaking on some panels at the IBA. If you read Korea Law Blog, come on up and say hello.)
Preparing this chapter for publication, we were struck by how undeveloped the law in Korea is in respect of pre-employment processes. Employers are generally free to ask, and to require answers to, any questions they want. How much can you drink? Boxers or briefs? Don’t you want to come to church with me?—all of these are common enough that they would not trigger any special legal jeopardy.
But that’s the pre-employment stage. We’d like to offer a tip in respect of the in-processing stage after a hiring decision has been made, and that is for employers to request and require that their new employees provide a copy of family registers connecting their siblings, parents, and cousins, as well as the same relationships on the spouse’s side. The Korean family register records births, deaths, and additions to the family by marriage. It is proof of who is and is not a related party.
We suggest this because in the vast majority of “Inside” fraud cases, a relative is involved but the fact of relationship is often denied by the employee. Because the family register is not a public document, if the employee has not previously provided a copy of the family register the company has no way to confirm relationships. Most multinationals have anti-nepotism policies in place already to avoid actual or potential conflicts of interest, but without gathering data on family relationships how can these policies be enforced?
At the intake stage of the employment relationship, everybody is happy and cooperative. Once an employee is involved in a fraud using his or her relatives, there is no chance to get a copy of the family register then. So ask for it up front, make a database of related parties, and cross-check identities before entering in vendor relationships or hiring additional employees. Dealing with relatives is not itself per se wrong, but you ought to have the ability to do so from an informed position.
We also believe that employers who make it a practice to gather this information probably discourage their employees from getting tricky with them in the first place.
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Hi Brendon,
I’m a business person in Korea and I’ve enjoyed reading your blog. Keep up the good work.
Ryan, thanks for the praise. I hope you learn something from Korea Law Blog and that I can help you avoid problems. And, of course, if you do happen to have a problem, feel free to hire our firm.
Brendon, Looks like an interesting book. I would be interested in getting a copy. Is there a webpage your readers could go to to find advance ordering details?
FA, thanks for stopping by. The book is still in the galley phase of pre-production, and I don’t know if Kluwer has scheduled a publication date yet. The publisher Kluwer Law International has a website: http://www.kluwerlaw.com—but it’s pretty unusable if you are on a Mac, as I am.