Beth Busch helps organize Hawai'i's biggest job fairs and has a simple tip for people looking for work: Be honest about criminal convictions because more businesses are running background checks on applicants.

"My advice is to come clean from the beginning," said Busch, president of Success Advertising and executive director of the WorkForce job fairs. "If you don't admit it and they find out about it, that's worse. Lying is never ever good."

A recent study by InfoLink Screening Services, a California-based employment background screening company, found that 8.4 percent of job candidates nationwide in 2004 had at least one "hit" for a range of issues that included bad credit, outstanding traffic warrants and a variety of felony convictions, including sexual assault and attempted murder.

"These are people who were advised in advance that there may be a background check and authorized it in writing," said Barry Nadell, InfoLink's president. "That's what's so amazing."

With Hawai'i enjoying one of the lowest unemployment rates in the country and an expanding economy, small and large businesses are feeling the pressure to hire more people.

At the same time, they sometimes end up with applicants who test positive for illegal drugs, particularly ice.

"Background checks are a big issue right now," Busch said. "With all of this increased security, everybody's feeling the need to tighten things up. I've seen many of my clients debating: 'How strict do we have to be? We're already having trouble finding people, yet we have to be more selective — and running background checks can be expensive.' "

The alternative, for small businesses in particular, means risking hiring an employee with a criminal past who might steal from the company.

"For a small business," Busch said, "someone who embezzles or steals from them — the effects can be devastating."

Nadell's company charges $20 to $75 for background reports that can include driving, criminal and credit histories, previous employment, any workers' compensation claims and work histories. While some of the research is conducted through computerized databases, Nadell said his staff always checks court records in person.

"Court records provide the only real accurate information, so we always do the leg work," Nadell said.

What happens next is up to the employer.

"I'm not saying that people convicted of a crime shouldn't work," Nadell said. "I am saying that employers need the information to make intelligent decisions about who to hire. Most of the employers end up saying, 'I wish the person was just honest with me at first. I would have given them a chance.' "

In Hawai'i and many jurisdictions, it's legal to ask about criminal convictions but not arrests.

Employers also are free to fire someone who lied on their application, said Michelle Alarcon, a professor of management at Hawai'i Pacific University who also has a law degree.

Companies can choose to hire an applicant who lied — but put them on notice that they're being watched, Alarcon said.

"It's OK to let them know that despite your conviction we're going to give you a chance, but we're going to keep you on probation," Alarcon said. "That's perfectly OK. It's a duty for employers to make sure that they're safeguarding their workplace."

Alarcon has consulted with two companies that had job candidates with convictions for drug possession or drug abuse.

"Businesses tend not to hire these people," Alarcon said. "But then their dilemma is that they don't have many (hiring options) left because of the low unemployment."

InfoLink's study found that 3.3 percent of all industries that tested for drugs got positive test results; 40.2 percent found motor vehicle information that ranged from drunken driving convictions to outstanding tickets; 36 percent discovered questionable credit histories that included delinquent accounts that went out to collection agencies.

"Some applicants also conveniently fail to list employers with whom they've filed workers' comp claims," Nadell said.

Tony Behm, president and owner of Mid-Pacific Mortgage, has never conducted a criminal background check on his employees in 15 years of doing business.

Behm rarely even asks for references.

"It's funny that I'm in the business of credit and yet I don't," Behm said. "I rely more on my gut than I do on background checks. What's the story? Is there consistency? I may not actually trust what I might be hearing."

Behm acknowledged that he doesn't even know how to get started running a thorough background check on a job candidate.

But the last time he even bothered to check someone's references, Behm said he ended up disappointed with the worker's performance.

"He came in with some referrals and his background looked fine," Behm said. "But his performance was not and I had to let him go."

Kama'aina Kids is required by law to investigate the backgrounds of each of the 2,000 applicants the nonprofit group gets every year for its 90 centers around the state.

Kama'aina Kids hires about 30 people per month. Ten to 15 of them get "positive hits" during background checks, said Ray Sanborn, president of Kama'aina Kids.

The application process includes an FBI fingerprint check, criminal background check and surveys sent to two previous employers and an acquaintance.

"The survey has lots of references to drug use and alcohol use and any abusive nature," Sanborn said. "We have to be thorough because of the nature of our job, dealing with kids."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.