Indiana References laws & HR compliance analysis

Indiana References: What you need to know

Reference checks are a useful way for employers to gather information about applicants that they might not discover through the application and interview process. However, despite the usefulness of reference checking, many employers are legitimately concerned about lawsuits from former employees based on information provided in response to a request for a reference. This creates a quandary for employers.
Employers are also concerned about liability for the actions of employees where the company failed to conduct a thorough reference check. Indiana, like many states, has recognized the tort of negligent hiring (Pittsburgh, Ft. W., C. Ry. Co. v. Ruby, 38 Ind. 294 (1871). Employers may be liable for intentional or negligent acts of an employee if they knew or should have known of an employee's dangerous propensities. Therefore, employers should be diligent in conducting reference and background checks on new employees, particularly when the job involves contact with the public.
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To deal with employers' reluctance to provide information about former employees, a number of states have enacted laws “immunizing” employers against employee claims over such disclosures. The immunity laws generally provide protection from claims by former employees for defamation of character.
Indiana has a reference immunity law. Under Indiana law, employers are immune from liability for disclosing information about a current or former employee, unless it is proven by a preponderance of the evidence that the information disclosed was known to be false at the time the disclosure was made (Ind. Code § 22-5-3-1).
Within 30 days of receiving a written request from a prospective employee, a prospective employer ...

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