Clearing Up Legal Misperception of Reference Checking

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This piece was contributed by Gerad of Chequed.com, a leading reference checking software provider.

When it comes to reference checking, far too many organizations are falling down on their duties. Although organizations shy away from this practice because of uncertainty and misperceptions pertaining to the ever-changing, complex array of employment-related legal risks, reference checking should be a vital part of every strategic hiring process. And, really, there’s nothing to fear as long as hiring managers and recruiters are informed about the basic realities of reference checking in the eyes of the law.

1. Legal risks are actually low

While some worry about the risks of engaging in reference checking, the reality is that they should be concerned about making a poor hiring decision. Making a bad hire because of lack of a thorough check is much more probable than legal action and can be even more costly.

Only 2% of companies that perform reference checks are targeted for defamation in their process. The legal risks of reference checking are similar to that of libel claims against journalists and news organizations – it must be proven that not only was harm done but it was also done with malice and dishonest intention. As a result the true legal risks are fairly low.

2. Consent is a Must

Prior to beginning any type of reference check, employers must receive signed consent from their candidates.  For reference checking, specifically, such a consent form should allow employers to seek out relevant information from both named and unnamed references.

By allowing access to unnamed references, the hiring manager is able to ask existing sources for additional candidate referrals in the event that initial results are substandard.   Assure references that they will remain anonymous. An automated reference checking  process that generates aggregate response data is one way to retain the anonymity of the person giving the reference.

3. Be Objective

Everyone learns about employment-related discrimination in HR 101. Yet, even many people still engage in subjective hiring practices.  Unstructured hiring is an open invitation for bias and subsequent legal liability.

In order to avoid such a problem, consistency is key – when asking  reference check questions and when assessing candidates. Candidates should begin the recruitment process on an even playing field and should be filtered out only through objective means.

However, humans, unfortunately, have an inability to completely avoid bias. Consequently, many companies are turning to technology as a solution. Automated reference checking and predictive pre-employment testing offer a highly effective solution that simultaneously decreases subjective liability, while maximizing the likelihood of selecting the best candidate.

Although, from the outside, the docket of employment regulations can seem mountainous and complex, the reality is that hiring appropriately is not only paramount but also quite manageable. If organizations follow these basic parameters, they’ll be well on their way to aligning their hiring practices with EEOC and other employment-related legal policies.