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SANTA MONICA, Calif.-Employers can avoid hiring problem workers, but only if they follow the law in pre-screening job applicants.

"Our biggest problem is trying to work within the law, to come up with a good screening program so that we have a very good workforce to begin with," said Jeffrey W. Pettegrew, vp-insurance and risk management with Western Staff Services in Walnut Creek, Calif., a professional employer organization.

He moderated a panel discussion on the topic during Business Insurance's Fifth Annual Workers Compensation Conference in Santa Monica, Calif., last month.

Many employers use pre-employment screening because applicants who have submitted a workers comp claim in the past are likely to file one again or to reinjure themselves, according to Brent Winans, a former national account manager for Avert Inc., an administrative screening service in Fort Collins, Colo. He recently left Avert to become the employer segment market manager at the National Council on Compensation Insurance in Boca Raton, Fla.

However, Mr. Winans said, the biggest concern employers face about workers comp background checks is assuring their screening activities comply with the Americans with Disabilities Act and other applicable laws.

The ADA essentially requires that an employer not ask an applicant about prior workers compensation injuries and other past and present medical conditions until after making a conditional offer of employment, he noted.

It is "important" to document the timing of an applicant's answers by having him or her answer the questions in writing on a signed and dated form, Mr. Winans said.

The ADA also generally requires that workers comp background checks, medical questions and examinations be uniformly administered to all applicants in a single job category, though not all job categories need to receive the same treatment, he said.

The cost of a typical background check from a service like Avert generally starts at $12 per person per state, Mr. Winans said.

An applicant who reports a specific medical condition, such as a prior back injury, may be asked to undergo a medical examination, if it is focused on evaluating that specific medical condition, according to Mr. Winans.

After pre-employment screening and a medical evaluation, there are "three reasons why a company can legally not hire an applicant," Mr. Winans said, which are:

The applicant lied to you.

A medical professional determines the applicant is a safety or health threat to himself or others.

A medical professional determines the applicant is unable to perform the essential functions of the job.

Before determining that medical reasons would bar an employee from being hired, however, an employer must first consider making "reasonable accommodations" to help a person perform the job, Mr. Winans said. An employer may reject a disabled applicant only if the accommodation creates an undue hardship on the employer's operations, according to the ADA.

An employer also may be able to withdraw a conditional offer of employment if a background check of an applicant shows the person has filed multiple workers comp claims that have been denied, because that may be considered an indication of potential fraud, according to Mr. Winans.

Since Sept. 30, employers that reject an applicant based even partially on information obtained from a background check must inform the applicant in writing of that, according to new provisions of the Fair Credit Reporting Act. They must also provide the name and address of the company that performed the background check, so the applicant can contest any areas he or she considers erroneous, Mr. Winans said.

Drug testing of potential job applicants also is legal.

Some employers prefer screening applicants for drug use by testing an applicant's or employee's hair sample, rather than the more common urine sample, said Michael Lamb, executive vp-sales and marketing with Cambridge, Mass.-based Psychemedics Corp., which provides hair testing services.

The results of drug testing on a 11/2-inch hair sample have several advantages over urine testing, he said.

For example, it provides "a wider window of detection," because evidence of some drugs remains in the hair for about 90 days, compared with two to three days for urine, he said.

Drug testing based on hair sample analysis, which costs $40 to $60 per test, also is less invasive, Mr. Lamb contends.

Hair testing is also harder for an individual to "beat," though some have tried to avoid detection by shaving off all body hair, Mr. Lamb said.

An employer faced with a hairless applicant should advise him to reapply when his hair grows back in, he recommended.

Mr. Lamb debunked myths surrounding the use of hair testing, including a bias against women, who more often have longer hair. He also noted that the test is not biased against people with darker hair, as color is taken out of the hair as part of the testing.

In addition, the test's required washing procedures eliminate any possibility that an employee could contend that his hair sample tested positive because it absorbed drugs from the smoky atmosphere of a rock concert, instead of his own usage.