This article by SHRM talks about the importance of checking references and backgrounds for any potential hires you are considering. The article mostly focuses on just a "bad" hire in general where they don't have the experience or education you may think they have, but there are even worse implications than that: Let's say you don't run a criminal background check on an employee and that same employee causes harm to another person(s), which is a worst case scenario. If there was something in their background check (you did not run) that may have alerted you to the possibility, then your company will be at fault for "negligent hiring" and potential large lawsuit.
Read the article below for more details and information to the above subject:
Screening Lapses by Small Business Invite Large Risk
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