Reference Check

Overview

A reference check asks someone who worked with a candidate what they were like to work with. It is the only component of a background check that gathers opinion rather than record, and that difference drives everything about how it is regulated and how little it usually produces.

It is also routinely confused with employment verification, which is a different thing with different rules.

Throughout this page, “screening company” refers to the outside firm an employer hires to run the check. In the law it is called a consumer reporting agency, or CRA.

Reference Check Versus Employment Verification

Employment Verification	Confirms facts. Dates, job title, employment status. Goes to HR or a payroll database. Produces a yes or no.
Reference Check	Gathers judgment. Performance, reliability, how someone handled pressure, whether the person would rehire them. Goes to a named individual. Produces an opinion.

They are often bought together and reported together, which is why candidates assume they are one thing. Our employment history page covers the verification side, including why past employers disclose so little.

When It Becomes an Investigative Consumer Report

This is the part employers most often miss, and it changes the legal obligations.

When a screening company conducts reference interviews, the result is usually an investigative consumer report. That category covers reports where information about a person’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews. It carries disclosure requirements beyond the ordinary background check.

Where that category applies, federal law requires:

A written disclosure to the candidate that such a report may be made, delivered within 3 days of the report first being requested
That disclosure must tell the candidate they may request the nature and scope of the investigation, and must include the summary of consumer rights
If the candidate makes that request in writing, a complete and accurate description of the nature and scope, delivered within 5 days of the request or of the report first being requested, whichever is later
Certification from the employer to the screening company that these disclosures were made

The rule is straightforward and widely ignored, largely because employers do not realize the reference component moved them into a different category. Our article on what an investigative consumer report is covers this in more depth.

An employer that calls references itself, without using a screening company, is not producing a consumer report at all and these rules do not apply. The obligations attach to using a third party, not to the act of asking.

What References Actually Say

Usually less than the employer hoped. Most organizations route reference requests to HR, and most HR departments confirm dates and title and stop, exactly as they do for verification.

This is a policy choice, not a legal requirement. Most states have passed job reference immunity statutes giving employers qualified immunity when they respond in good faith with truthful, job related information. The law in most places encourages honest references rather than discouraging them.

Employers stay quiet anyway because the immunity is qualified rather than absolute, because whether they acted in good faith is a jury question, and because a few states, including New York and Massachusetts, have no immunity statute at all. Saying nothing is close to risk free.

Where a reference does speak, the useful material is specific and behavioral. What the person actually did, how they handled a particular situation, whether the speaker would work with them again. General impressions of personality are weak evidence and are where discrimination risk tends to enter.

Questions That Create Legal Risk

A reference call is an unscripted conversation with a third party, which makes it the easiest place in a hiring process to collect information nobody should have collected. A screening company is specifically barred from making an inquiry for an investigative consumer report where the same inquiry by the employer would violate equal employment opportunity law.

Subjects to stay away from:

Age, or proxies for it such as graduation year
Health, disability, medical leave, or attendance tied to either
Workers compensation claims
Pregnancy, children, marital status, or caregiving
Religion, national origin, ethnicity, or accent
Any complaint the person filed, internally or with an agency
Compensation, in the 20 jurisdictions that restrict asking a former employer about pay

The risk is not only in asking. A reference who volunteers protected information puts the employer in possession of it, and the sensible response is to note that it was unsolicited and disregard it, rather than following up.

Personal and Character References

References supplied by the candidate who are not former colleagues, such as friends, neighbors, or community figures, are worth little in a hiring decision. The candidate chose them, they have no basis to assess work performance, and they will say something positive.

They appear for 2 legitimate reasons. Some regulated roles require character references by statute or licensing rule. And for candidates with little formal work history, particularly younger applicants, they may be the only reference available. Outside those cases they are ceremony rather than evidence.

The Rules Employers Must Follow

Three rules apply. Each has its own page on this site, so this is the summary.

Get Written Permission First

When a screening company conducts references, the result is a consumer report, and usually an investigative one. The employer must give a standalone written disclosure and obtain written authorization, plus the additional investigative disclosure described above. See our FCRA overview.

Ask the Same Questions of Everyone

An unscripted call produces different information about different candidates, which is how inconsistent hiring standards get built without anyone deciding to build one. A written question set applied to every candidate for a role solves most of this.

Follow the Steps Before Rejecting Someone

If something a reference said is going to cost the candidate the job, the employer must send a preliminary notice with a copy of the report, allow time to respond, and only then issue the final decision. This matters here because a candidate has no way to know what was said about them otherwise. See the adverse action process.

For Applicants

Ask first, every time. A reference who is surprised by the call gives a worse answer than one who expected it, regardless of what they think of you.
Choose people who saw your work. A direct supervisor or close colleague can speak to specifics. A senior name who barely knew you cannot, and it shows.
Tell them what the role is. A reference who knows what you are being considered for can speak to the relevant parts.
Expect HR to say very little. If your former employer routes everything through HR, your named reference may not be permitted to speak at all. Ask them in advance whether they are allowed to.
You can ask what the investigation covered. Where a screening company conducted interviews, you have a right to request the nature and scope in writing, and a right to a response.
If something said about you is false, dispute it. Our guide to disputing a background check covers the process.

Best Practices

Write the question set before the first call and use it for every candidate for that role
Ask about specific behavior rather than general impressions
Know whether you are producing an investigative consumer report, and if you are, make the additional disclosure on time
Stay off protected subjects, and disregard protected information a reference volunteers
Do not ask about compensation where the state restricts it
Record what was said rather than your impression of it
Treat a reference who will only confirm dates as neutral information, not as a signal
Weigh references supplied by the candidate accordingly, since the candidate selected them

Frequently Asked Questions

What is the difference between a reference check and employment verification?

Verification confirms facts such as dates and job title, usually from HR or a payroll database. A reference check asks a named person for their assessment of how you worked. One produces a record, the other produces an opinion, and they carry different legal requirements.

Can a former employer say something negative about me?

Yes, provided it is truthful. Truth is a complete defense to defamation, and most states have immunity statutes protecting good faith references. What is not permitted is stating something false as fact. In practice most employers say very little because silence carries less risk.

Do I have to be told that references are being called?

If a screening company is conducting them, yes. That is normally an investigative consumer report, which requires a written disclosure delivered within 3 days of the report being requested, telling you that you may request the nature and scope of the investigation.

Can I find out what my references said?

You can request the nature and scope of the investigation in writing, and the employer must respond within 5 days. If something in the report is going to cost you the job, you are also entitled to a copy of the report before the decision becomes final.

Does my employer need my permission to call references?

If a screening company is doing it, yes, and the disclosure and authorization requirements apply. If the employer calls references itself, it is not producing a consumer report and those specific rules do not attach, though it is still bound by discrimination law.

What if my former manager has left the company?

You can still offer them as a reference, and many candidates do. They can speak to your work even though they no longer represent the employer. What they cannot do is confirm official records, which is what verification is for.

Can an employer contact someone I did not list?

A screening company works from what it is given and from your authorization. Employers sometimes reach out informally to shared contacts, which is legal but sits outside the process and outside its protections. If your authorization limited who may be contacted, read that clause carefully.

Are personal references worth anything?

Rarely, in a hiring decision. You chose them and they have no basis to assess your work. They exist mainly where a licensing rule requires them, or where a candidate has little formal work history and no professional reference is available.

Can a reference be asked what I earned?

Not in the 20 jurisdictions with salary history restrictions, most of which specifically prohibit seeking pay history from a current or former employer rather than only from you. Where no restriction applies, the question is permitted.

What if a reference said something untrue?

If a screening company reported it, dispute it in writing and provide anything that contradicts it. If it is going to cost you the job, you must receive a copy of the report first, which is the point at which to respond. A knowingly false statement of fact may also be defamation, which is a separate matter for a lawyer.

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