With a whopping 30% of job seekers falsifying information on their applications, reference checks are critical to making a sound hiring decision. Reference checks are a valuable tool, not only for verifying information on an application, but also for gaining a knowledgeable perspective of the candidate’s character, qualifications, and work ethic.

However, obtaining information from previous employers beyond objective information verification has become difficult, not to say almost impossible in today’s litigious environment. On one side of the issue, employers are gathering information necessary for protection against negligent hiring suits, while on the other side employers are restricting responses as protection against defamation suits.

Despite the fact that most states’ laws protect employer comments made during a reference check as “qualifiedly privileged,” and therefore cannot be held liable “unless he or she knowing and recklessly makes false statements,” organizations still fear law suits due to the burden and costs associated in defending a case.

To add to the complexity of the issue, a new scenario is surfacing for possible law suits pertaining to getting and giving reference checks. In a sexual assault case, a California court found a former employer liable for harm that their past employee caused while working for a new organization. In this case, the intial employer withheld the reasons for which the employee was terminated, effectively misleading the new employer into believing the candidate was a good fit for the job. The court found that once the former employer agreed to provide a reference, they were obligated to provide a complete and accurate reference, especially when keeping in mind the safety of others.

Ultimately, truthful references will protect both parties. However, until these conflicting legal issues are clarified, hiring managers must still complete all reasonable steps necessary to perform a thorough background check.

Getting the type of reference checks that will assist in your hiring decision requires that you create a standardized process that will work toward protecting both you and the candidate’s references. The following are some guidelines for creating an effective reference check process:

• Create a standard set of questions for reference checks based on the position you are filling. Include only job related questions that discuss performance, skills, etc., and be sure to include questions that verify employment dates, job title, position description, pay, professional certifications, education and degrees, as well as the applicant’s reason for resigning a former position. Keep in mind that reference checks must also adhere to the laws and regulations your state mandates for interviews.
• Get written consent to contact previous employers and references, and to ask job related questions. Ensuring consent includes a background check waiver protecting you and the candidate’s references from lawsuits.
• If appropriate, verify with the candidate that previous employers and personal references are aware you will be contacting them.
• Provide a copy of the waiver to references being contacted.

While you may still meet resistance while conducting reference checks, having a well thought out and standardized process will assist you in obtaining useful and pertinent information regarding your applicants.