Reference checks are important because they identify problem employees before they become your company's headache, said Lester Rosen, president of Employment Screening Resources, during the Society for Human Resource Management's 59th Annual Conference and Exposition in Las Vegas.

Rosen said every employer has a legal duty to exercise due diligence in hiring. He added that verifying past employment is as important as a criminal background check, which can have holes. A verification that a potential employee was gainfully employed for the past 5 to 10 years means it is less likely that he or she spent long periods in custody, he said.

He noted that one of the problems employers run into when checking references is that the former employer is unwilling to provide much information because it fears litigation from the former employee.

However, an employer should at least try to get a reference, Rosen said. He said that attempting to obtain a reference demonstrates due diligence. If unsuccessful, the employer should get the former employer to verify past employment, such as start and stop dates, job title, and possibly salary. Virtually all employers will give basic verification of employment, Rosen said.

Rosen provided several tips for employers when asked for references:

• Determine your policy and be consistent
• Have a written policy that everyone knows and follows.
• Clearly document who is asking for the reference, what information is given, and the person providing it.
• Possibly ask for a written release, which provides protection.
• Strictly limit information to the basics (start and top dates, title) if there is a current lawsuit or complaint.

He also had suggestions for when a reference is negative:

• Give notice during exit interview of the information that will provided. Rosen said the primary reason most former employees sue an employer is when they are surprised by the information being provided during reference checks.
• Ensure that everything is factually correct.
• State facts and avoid conclusions. Use objective terms that are work-related.
• Include favorable facts.
• Make sure the personnel file is accurate.

He reminded attendees of the rules when asking a former employee reference questions. He said:

• No questions should be asked that an employer is prohibited from asking during an interview.
• Follow your state's fair employment rules
• Avoid unduly invading a candidate's privacy.
• Treat candidates he same and consider using a standard form so that the same questions are asked.

To end his presentation, Rosen stressed the importance of verifying education. He said it is important because it will reveal the truthfulness of the candidate's application, a degree may be required for the job, and it may demonstrate a candidate's knowledge, skills, or experience.