Yesterday’s Advisor provided a few tips for providing honest references about former employees while minimizing the legal risks to the company; today, we look at the flip side of the coin—checking references for potential new hires.
Of course, employers have a number of options when it comes to checking the references of a prospective employee. These can range from having a member of your HR staff or the hiring manager call the former supervisor directly to check the reference, to hiring a third party to collect background information on a candidate (including checking references) and then report back to the employer.
Hiring Third Parties to Check References and Perform Background Checks
Keep it legal if you go this route. When employers hire a third party to conduct a background/reference check or to obtain reports from outside agencies, such background checks and reports are subject to the Fair Credit Reporting Act (FCRA). The types of information that may be obtained through background checks include:
- Verification of Social Security number and past addresses
- Criminal and civil records searches
- Driving records
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- Credit history
- Verification of education and past employment
- Verification of professional licenses
- Reference checks
- Bankruptcy and workers’ compensation records
Under FCRA, employers must provide employees with certain notices and obtain their written authorization before having a third party conduct a background or reference check. Employers should take care to hire reputable companies to perform any background or reference checks on their behalf and to make sure that these companies comply with all local, state, and federal laws.
Practical Tips for Checking References Internally
If an employer decides to check references in-house by contacting the applicant’s former employer directly, the employer should consider the following guidelines:
- Include a statement on the employment application directly above the applicant’s signature line stating that all information on the application is subject to verification and that any false or misleading information may result in refusal to hire or, if already hired, immediate discharge.
- Require every applicant for employment to sign a waiver and consent form authorizing the prospective employer to check references and authorizing all former employers, supervisors, and managers to release information in response to a request for a reference and/or verification of employment.
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- Establish a written procedure for reference checking, including when in the hiring process reference checks will be conducted, who will conduct the reference checks, and what kinds of documentation will be kept of information obtained (or unsuccessfully sought) through a reference check.
- Limit questions to information that is job-related; do not ask for medical information, information about physical characteristics, and/or other personal information that is unrelated to the employee’s conduct on the job.
- Consider preparing a list of job-related questions that will be asked of all finalists for a particular position. This may help avoid claims of discrimination or claims that the prospective employer inquired about information that it was not legally entitled to have.
- Be fair and consistent.