References laws & HR compliance analysis

References: What you need to know

Employers invest time and money in hiring and training new employees. As a result, they want to find out as much information as possible before hiring an individual. Often, former employers and supervisors can provide the most helpful information about a candidate's past work experience, ability to work with others, customer service skills, attendance, etc. In addition, information provided by former employers can help determine if a candidate provided accurate information on the employment application.
Still, many employers are reluctant to provide detailed references for former employees for fear of legal repercussions. Conversely, employers are concerned that if they don't check references and, as a result, fail to uncover information that would have proved a new employee unsuitable for the job, they may expose themselves to claims of negligent hiring or, at the very least, make an expensive mistake.
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Some employers consider the legal risks of responding fully and truthfully to a request for a job reference—especially with negative information—are too high to justify any disclosure beyond name, job title, and dates of employment. The principal hazard is lawsuits by former employees, claiming that such disclosures were defamatory or were made in retaliation for the former employee exercising his or her statutory rights, such as filing a discrimination complaint.
Although employers win the overwhelming majority of such lawsuits, the mere threat of litigation has remained a serious deterrent to candor in reference giving. The result has been deafening silence about the job performance and abilities of former employees, especially those that had been disciplined, even ...

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