Employee Due Diligence is an investigation by an Employer to identify any risks, screen or scrutinize hired staff’s or potential employee’s history in order to prevent any financial, reputational or other risks to the company.
It must be appreciated that employees and prospective employees can be either assets or liabilities to their employers. One effective way to protect an organisation from potential issues is by carrying out a due diligence on (prospective) employees, where necessary.
Also, Contract/ Temporary Staff Background check, Know Your Customer (KYC), Criminal Security Clearance, Credit Checks Status of the employee can be conducted by employer to determine level of loans in various financial institutions. Character assessment (this can be achieved by obtaining the Nigeria Police Clearance Certificate especially for high-risk jobs, e.g. where employee fraud is highly likely).
Employee Due Diligence will help curtail likely employment risks and give an organisation a good reputation. It will help an Employer to identify any red flags such as any pending litigations against employees in which the company might have to pay compensation in the future
What is Employee Due Diligence?
It must be appreciated that employees and prospective employees can be either assets or liabilities to their employers. One effective way to protect an organisation from potential issues is by carrying out a due diligence on (prospective) employees, where necessary.
Also, Contract/ Temporary Staff Background check, Know Your Customer (KYC), Criminal Security Clearance, Credit Checks Status of the employee can be conducted by employer to determine level of loans in various financial institutions. Character assessment (this can be achieved by obtaining the Nigeria Police Clearance Certificate especially for high-risk jobs, e.g. where employee fraud is highly likely).
Employee Due Diligence will help curtail likely employment risks and give an organisation a good reputation. It will help an Employer to identify any red flags such as any pending litigations against employees in which the company might have to pay compensation in the future
What is Needed to Conduct Employee Due Diligence?
In order to conduct an Employee Due Diligence, the employer is expected to provide or obtain from the targets (i.e. the employees to be investigated) the following:
- A government-issued means of identification for identity verification (National Identification Number, Bank Verification Number, Drivers’ License);
- Academic credentials, NYSC certificate and Professional certificate for qualification verification (local & foreign degrees)
- Previous letters of employment, confirmation, salary increase, termination or resignation for Previous Employer Reference Checks;
- Bank Account number or BVN for Credit Record Checks;
- International Passport, utilities and residence permit for International Background Check
- Name, address, phone number, utility bills, etc., for Address History Verification, Guarantor’s Checks and Neighborhood Intelligence Gathering (NIG);
- Driver’s license for driving record checks;
- Criminal records through the Sex Offender Registry Checks across relevant States, National Collateral Registry Checks, State Criminal Investigation Department (SCID) Checks, etc.
What are the things to note before carrying out an Employee Due Diligence?
- Have a Company Policy that mandates Employee Due Diligence and the Policy should provide a step-by-step check in carrying out the due diligence;
- Obtain a written consent of the target (i.e. employees) and exclusion of liability agreement regarding the Employee Due Diligence; and
- Get legal advice from a legal practitioner to ensure that such due diligence does not birth legal issues for the organisation.
- Hire professionals to undertake the tasks.
- Have a fair, complete and accurate Report at the end of the exercise.
What are issues can be uncovered from Employee Due Diligence?
- Forged Certificates;
- Doctored Grades;
- Inexistent Contact Address;
- Criminal record or practices;
- Fictitious Guarantors/Referees;
- Unavailable Claimed Work History;
- Integrity Issues;
- Incompatible lifestyle with the culture and style of the employer;
- Affinity or other relationship with employer’s competition.
What is the cost of Employee Due Diligence?
The cost of the due diligence exercise will depend on the status of the target, the location(s) to be visited for investigation and their distance (whether locally, regional or international) and the scope of the investigation (whether partial or complete).
The Compliance and Investigation Team of Koriat & Co. comprises experienced undercover spy police officers, fraud examiners and criminal law lawyers.
