Hiring Legally - Best Practices
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Recently eESI was a sponsor and presenter at the National Association of Women Business Owners (NAWBO) conference in San Antonio, TX. We have made our presentation available for those participants who wanted a copy or individuals who were unable to attend the conference. If anyone has further inquires about the information feel free to contact Jessica O’Con within our HR Department at 888-465-1171 or jocon@eesipeo.com
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Hiring Legally - Best Practices
- 12. Hiring Legally
- 25. Questions
Editor's Notes
- Today we are going to talk about the legal hiring practices we want every client to follow. Numerous state and federal laws prohibit hiring discrimination in the workplace. These laws also allow job candidates who win lawsuits to collect substantial damages from organizations like ours. Equal employment opportunity policies are only the first step in preventing hiring discrimination. It also takes an organization-wide awareness of and commitment to nondiscriminatory hiring practices. You are in the best position to promote nondiscriminatory hiring. That’s why you need to understand the legal requirements and our hiring policies and procedures. With this knowledge you can handle all aspects of the hiring process fairly and appropriately.
- The objective of this training session is to ensure you know, understand and follow legal hiring practices when hiring new employees. At the end of the training session, you will be able to: Identify requirements of fair employment laws Follow the organization’s EEO policy Evaluate job applicants solely on job-related criteria Conduct all phases of the hiring process to avoid discrimination
- We’ll discuss: Fair employment laws and ESI’s policy How to effectively write and use job descriptions Composing unbiased job advertisements How to conduct nondiscriminatory interviews Choosing appropriate pre-employment tests Checking and documenting references Choosing and hiring the best candidates Correctly classifying employees as either non-exempt or exempt Offer letters, pay agreements and hiring forms Feel free to ask any questions during the presentation if anything is unclear or needs further explanation.
- Hiring decisions are among the most important decisions you will make. Choosing the right employees for your organization will help your business be successful. Good hiring practices can eliminate or reduce many legal risks, reduce costs, increase productivity, and improve employee morale. Ill-advised hiring, on the other hand, can result in high turnover, duplication of training, missed opportunities, and lost customers. Employees who are misclassified, offer letters poorly written, and incomplete hiring forms can result in hefty fines against the organization. Furthermore, an ill-advised hiring decision might well necessitate a subsequent termination, and every termination – no matter how justifiable and well documented – exposes the organization to the risk of a wrongful termination or discrimination claim from the disgruntled former employee. For all these reasons, it pays to follow the right procedures when hiring employees the first time around.
- Let’s begin our examination of legal hiring practices by considering the laws that require these practices. The Civil Rights Act of 1964, commonly known as Title VII, is the grandparent of employment discrimination laws in this country. It says you cannot consider race, color, sex, religion, or national origin when making any employment decision, including hiring. The Age Discrimination in Employment Act prohibits discrimination based on age. You cannot refuse to hire an applicant solely because he or she is over the age of 40. The Equal Pay Act says that men and women must get equal pay for work that requires equal skill, effort, and responsibility, and is performed under similar work conditions. The Americans with Disabilities Act, or ADA, says you can’t discriminate against job applicants with disabilities. Qualified people with disabilities are entitled by law to equal job opportunities. The Genetic Information Non-discrimination Act prohibits discrimination on the basis of genetic information, as well as the use, gathering, and disclosure of genetic information in the context of employment relationships.
- Executive Order 11246 requires companies that receive government contracts to have written equal employment opportunity plans and affirmative action plans for minorities, women, and/or Vietnam-era veterans. The Pregnancy Discrimination Act amends Title VII to prohibit discrimination based on pregnancy, childbirth, or related medical conditions. The fact that a female job applicant is pregnant, therefore, cannot enter into your hiring decision. The Immigration Reform and Control Act says you cannot hire illegal immigrants. However, it also says you cannot discriminate against applicants who are legal immigrants on the basis of their national origin or the fact that they are not American citizens. Texas Texas Worker’s Compensation Act – protects against discrimination based upon workers’ compensation claim history. Although the Texas Supreme Court has ruled that this statue applies only to employees, not to applicants, discriminating against applicants based upon workers’ compensation claim history will generally be viewed by the EEOC as a violation of disability discrimination laws.
- These federal laws and similar state laws are enforced by government agencies and the courts. The Equal Employment Opportunity Commission (EEOC) in Washington enforces the federal fair employment laws. EEOC investigates employment discrimination complaints on behalf of job applicants and employees who claim they have been the victim of employment bias. State Equal Employment Opportunity agencies enforce state anti-discrimination laws, and assist with bias claimants and investigate discrimination charges. State and federal courts play an important role in making sure employers obey fair employment laws. The fair employment laws give the courts the power to levy substantial damages against companies that violate the laws. For example, the Civil Rights Act of 1991, allows courts and juries to assess compensatory and punitive damages in cases brought under Title VII or the ADA if intentional discrimination is charged.
- The goal is to hire the best candidates for each job opening solely on the basis of their qualifications to perform the job. In addition, we are here as a resource to our clients so you can follow the fair employment laws and make the best hiring decisions.
- Job descriptions form the basis of objective, job-related hiring practices. In order to carry out the mandate of the fair employment laws and company policy, and to ensure that your hiring practices are truly non-discriminatory, you need to start with a written job description for each position. Be sure to focus on job qualifications, such as necessary skills and level of experience. If there are educational requirements or certifications needed for the position, be sure to note those too. Specify essential and marginal (non-essential) job functions. These essential functions form the core of the job and a successful candidate must be able to perform these functions. This is particularly important for compliance with the Americans with Disabilities Act, which makes you determine essential functions so that you don’t exclude potential candidates because they can’t perform some marginal duty. When looking at the functions of the position to determine whether it is essential or marginal, you will want to look at four things: The importance of the duty to your company’s operation It’s frequency If there is enough staff to reassign the duty to another employee If the duty can be redesigned or performed in another way For example – Receptionist. Essential – Answering phones or greeting customers. Marginal – Making coffee or escorting customers to staff offices Case study: An applicant applies for a position as a construction worker, but tells the potential employer that due to a skin condition, he cannot be outside in the sun for long periods of time. According to the job description, “Frequent work outside in extreme heat” is listed as an essential function
- Be careful about setting educational and experience requirements as you write a job description for a position. If these are set at too high a level, your requirements may have the unintentional effect of excluding a disproportionate number of minorities or applicants who are members of other groups protected by fair employment laws. For example, do you think a person applying for a receptionist position needs to have a bachelor’s degree? Of course, where certain levels of education or experience are clearly job-related, then the requirements are reasonable. Also be careful of physical requirements. Height and weight requirements, for example, are generally viewed as unacceptable because they tend to exclude women and some minorities. If a job requires heavy lifting, however, you can require applicants to be able to lift at least a certain minimum weight.
- There are several things you need to remember when posting job ads and recruiting. First, avoid gender-specific job titles in job postings. While there is no Federal (or Texas) law specifically requiring employers to avoid gender-specific job titles in job postings, it is generally recommended that employers try to use gender-neutral job titles whenever possible, unless there is a bona fide occupational qualification (BFOQ) that the position be filled by a man or a woman. So, instead of “repairman”, you could use “repair person”. Instead of “seamstress”, you might use “sewing machine operator”, “tailor assistant”, or clothing alterations specialist”. You want to focus your job ad on the job responsibilities and skills necessary based on the job description. Again, be careful with listing unnecessary education requirements. Be sure to keep all resumes and applications for at least one year. That is how long the EEOC requires employers to keep applications. Additionally, there is no law that requires employers to accept resumes or applications if there are no openings, but an employer should either keep all unsolicited applications or throw them all away. “Cherry picking,” whereby you only keep the ones that look promising, can easily lead to discrimination and disparate treatment claims with the EEOC.
- Conducting non-discriminatory interviews is central to a fair hiring process. One of the best forms of insurance against making potentially discriminatory errors during an interview, is to write your questions down beforehand. We’ll look at questions you can and can’t ask during the interview in just a moment, but first let’s consider some basic elements of non-discriminatory interviews. You want to make sure to describe the job objectively, concentrating on essential functions, skills, and experience. Ask similar questions of all applicants. Uniformity will help ensure you treat all applicants fairly. Focus the discussion on job requirements and company policies. For example, if you’re concerned that an applicant who might have young children may need to take too much time off, you can’t ask if this person has children or about their childcare arrangements. You can, however, explain your attendance policy and ask if the applicant has any problem with it. Avoid stereotyping. Interview the individual, not a member of a group. Be sure to take notes of your conversation with each applicant. Your notes can be used later to defend against discrimination charges should an applicant challenge your hiring decision in court.
- Here are some suggestions for taking nondiscriminatory interview note: Your notes should be factual. In other words, you should document your questions and the key elements of the applicant’s responses. Avoid any opinions or personal biases in your note-taking. If your notes were ever subpoenaed in a lawsuit, this kind of information could be cast in a bad light and put forth as evidence of discriminatory intentions on your part. Make sure to note job-related information. For example, there is no need to note information about the way the applicant is dressed or groomed unless these matters are directly related to the job – such as in the case of a customer service employee or someone who is being hired to work in reception and will be dealing with the public. When taking notes, always test yourself as to whether or not something should be written down: would you feel comfortable explaining it in front of a judge and twelve total strangers who are being coached by a plaintiff’s attorney, skilled in making employer’s look bad? Finally, be sure to keep your interview notes for all applicants on file for at least 1 year. In case discrimination charges are brought, your notes will help you defend your hiring decision.
- The requirements of fair employment laws prohibit you from asking certain questions during an interview. You can’t ask any questions that might indicate a candidates age – for example, questions about when an applicant graduated from high school or college or other questions whose answers might suggest that a person is over age 40. You can’t ask if an applicant is married – for example, whether the applicant’s wife will mind him working long hours or whether a candidate’s husband is likely to be transferred. You can’t ask if an applicant has children or dependants. Nor can you ask questions about child care, pregnancy, or plans for having a family. Questions about dating, love life, sexual orientation, or living arrangements are strictly off limits. You can’t ask candidates questions such as: “How many sick days did you take last year?” “Are you generally healthy?” or “Do you have any chronic ailments?” You can’t ask any questions about an applicant’s nationality, ancestry, national or ethnic origin, or parentage. You can’t ask if someone was born in the United States nor can you ask what language they speak at home or what kind of accent they have. You can’t ask an applicant if he or she is a U.S. Citizen or discuss the citizenship or birthplace of the applicant’s parents, spouse, or other relatives. As we mentioned a few minutes ago, you cannot ask general questions about an applicant’s state of health. Nor can you ask whether an applicant has ever received workers’ compensation. And you cannot ask if the applicant has any physical or mental disabilities. Under no circumstances can you ask questions concerning an applicant’s religion. You can’t even ask if an applicant’s religion prevents him or her from working weekends or holidays or whether the person would need to take time off for observance of any religious days. You cannot ask applicants whether they have ever been arrested or about their arrest records.
- Now let’s look at the questions you can ask. You can tell applicants that if they are offered the job, they will be required to verify their legal right to work in the United States. It is acceptable to ask an applicant about the ability to speak, read, or write in another language other than English if the use of another language is relevant to the job for which they are applying for. You can inform applicants about company policies concerning job assignments of employees who are related. You can ask applicants whether they can perform particular tasks if these tasks are essential job duties. If a physical exam is required for the job, you can inform candidates that if a job offer is made, they will have to pass a physical exam in order to be hired. You can inform job applicants about your attendance policy and discuss regular job hours, shift assignments, and so forth. You can ask the applicant if he or she has any problem with that. It is important to note here that reasonable accommodations must be made to account for a person’s religious obligations. Problems in this regard would not necessarily exclude this applicant. You can ask an applicant who has indicated military service on a resume or application questions about skills and experience acquired during that service that apply to the job. You can ask applicants job-related questions about criminal convictions. For example, if you are hiring someone for a position that involves handling money, you can inquire about whether a conviction concerned theft.
- For some jobs, it may be necessary to give applicants a pre-employment test. The EEOC allows employers to conduct pre-employment testing to aid in the selection and hiring process. However, any such tests must be clearly job-related. It must be directly connected to required job skills and responsibilities of the job and be able to predict the ability of an applicant to actually succeed in the job. Be careful with inflated or unrealistic self-assessments by applicants – it is common to overestimate one’s own skills. That does not necessarily prove misconduct or dishonesty, but does demonstrate the need for employers to verify claims of a particular level of skill. Tests the company requires you to give applicants will most likely have been validated. This means that the test has been examined to make sure that it has no adverse impact on any group protected by fair employment laws. If you use a pre-employment test, be sure to give the test to all applicants for the position – no exceptions. Also make sure that each applicant for a position is given the same test. The ADA prohibits medical inquiries prior to making a tentative offer of employment. The same inquiries must be made of all applicants for such a position, not just the ones who look like they may have medical problems. All medical inquiries should relate directly to the essential job functions of the job. The ADA requires employers to maintain any and all medical information in a separate and confidential medical records file. The employer must be prepared to offer a reasonable accommodation to any otherwise qualified applicant who turns out to have a protected disability. Reasonable accommodation is a change in procedures, a device, a change in duties, a shifting of personnel, or a change in the work environment that the employer could make without “undue hardship”.
- Now let’s talk about release forms and obtaining information about applicants. If you are going to check references and obtain other information about job applicants, you need to have them sign a release form at the time of the interview, giving you legal permission to access this information. Releases must be in writing and signed and dated by job applicants. It’s a good idea to have the applicant’s signature witnessed by someone in the organization who also signs and dates the release form. Be sure to include a release statement for each type of information you will be seeking – for example, references from former employers, personal references, educational records, driving records, and so on. Remember that you may only ask for information such as credit histories or driving and criminal records if they are relevant in some way to the job. Be specific about the details you choose to ask for. For example, in the release for employment information from former employers, be sure to include positions held, last pay rate, work performance information, disciplinary records, and information about any incidents involving unsafe, threatening, or violent behavior, dishonesty, or insubordination. You may not actually get a former employer to talk to you about such things, but you should include them in your release just in case the information is forthcoming.
- Many former employers are reluctant to provide much information when asked to give a reference other than verification of employment and dates of employment. They are worried about being sued by former employees who claim their former employer bad-mouthed them to prospective employers. So you may not always get much useful information from reference checks, but it important to check anyways. Tell applicants that no job offer will be made until references are checked. Check references for all applicants, not just the front-runners. Call or write each reference supplied. Even if you don’t succeed in actually contacting someone or even if you don’t get much useful information, you need to be able to show you made the effort. Be sure to fully document all information you receive. We’ll speak more about exactly what that means in a moment.
- If you don’t get sufficient information through your reference check, you can ask the job applicant for more information or you can ask the applicant to ask the references to be more forthcoming. Misrepresentations or material omissions of information on employment applications uncovered during a reference check are legal grounds for denying an application or withdrawing a job offer.
- It is important to document your reference checks in case your hiring decisions are later challenged. Documentation should begin with a list of all references you’ve checked. Include the name of the person who made contact with a reference if it wasn’t you. Note the means of contact – letter, email, or telephone. List the name and title of everyone you contacted in pursuit of the reference.
- File all return letters and any records you receive, such as credit histories, educational records, or driving records. Be sure to take notes of your telephone conversations with references and file your notes with the rest of your documentation. Document any unsuccessful efforts to contact references and any efforts that yielded insufficient information. Retain your documentation for at least 1 year, whether or not you hire the applicant. EEOC considers reference check documents as legal records of hiring decisions, and requires employers to retain them for 1 year. Usually, if a lawsuit is going to be filed over a hiring decision, you will know about it within a year.
- Notwithstanding discrimination laws, employers may always hire the best-qualified for the job. The important thing is being able to explain how the one who was hired really had the best qualifications and was the best “fit.” To do that, it requires a very close look at the job applications and other information about the applicants and a meticulous consideration of all factors that are relevant to the job, such as minimum qualifications, prior experience, availability, and work ethic. A hiring standard that results in exclusion of an applicant on the basis of race, color, religion, age, gender, national origin, disability, or genetic information is suspect and presents a risk of an EEO claim or lawsuit unless there is a bona fide occupational qualification dictating that one type of person be favored over other types of people for a position. The burden of proving that a BFOQ exists is on the employer. In general, employers do not have to explain why they are not hiring a particular applicant. The exception to this is applicants who are turned down due to an adverse background or credit check. The Fair Credit Reporting Act require employers to notify applicants of the decision and supply the name and contact information of the credit reporting agency used. Additionally, employers need to inform the employee that the employer, and not the agency, made the decision not to make a job offer; the applicant’s right to dispute information contained in the report; and the right to require an additional free copy of the report within 60 days. It is usually best to restrict any explanations to short and factual, non-inflammatory statements such as “you seem to have some good qualifications. However, the one we hired better fit the requirements we had at this time. Please check back with us about any openings we might have in the future. Thank you.” Try to avoid ever using the term “overqualified” to explain why a person is not suitable for hire. The EEOC considers that to be potential evidence of age discrimination.
- Once the decision is made to hire a candidate, you need to determine their amount of pay and employment classification. This is particularly important because misclassifying employees can lead to lost wages, overtime, and heavy fines from the Department of Labor. All employees are non-exempt by default; in other words, they are entitled to overtime under the FLSA (Fair Labor Standards Act). It is up to the employer to prove if an employee is classified as exempt; Exempt employees are not entitled to overtime, but their pay each week stays the same regardless of performance or hours worked. There are 6 exemptions. I’m going to tell you each one, but we are going to focus on the 2 prevalent ones for your business. If you have specific questions about the others, just let me know. There is an exemption for Professional employees, such as Doctors, Teachers, and Lawyers. Then you have the Outside Sales Exemption; for those employees whose primary duty is to generate business. These employees are customarily away from their place of business and out in the “field” The highly compensated exemption classifies those employees who earn more than $100,00, and performs one or more duties of an exempt executive, administrative, or professional employee. And there is also an exemption for computer employees; those employees dealing with software programming, analysts, or design and development. The last two are the ones most often used in your business, so it’s important that you familiarize yourself with them so you can correctly classify exempt employees. The Executive exemption is for those employees who have the ability to hire and fire, or whose recommendations and suggestions with regards to hiring hold significant weight. They must regularly and customarily direct the work of more than two employees, and manage some aspect of the business. Usually, these are going to be your Managers, Directors, and Staff Supervisors. However, be wary of classifying an employee under the “executive” exemption just based on title alone. The Department of Labor does not look at the title of the employee, but rather their actual job duties in determining whether or not they qualify under one of the exemptions. The other one is the Administrative Exemption. This is the most litigated exemption because employers often misclassify their employees under this one. To qualify under the Administrative exemption, the employees primary duties must be office or non-manual work directly related to the management policies or general business operations of the employer or its customers. The employee also must have discretionary judgment in their position; meaning they should be able to make significant decisions without getting approval from anyone else. So ordering being able to purchase creamer for the company would not qualify as a “significant decision”, but a “Secretary/Assistant” to a nightclub management, who orders over $500k in beer and liquor, would qualify as a significant decision. So again, it is not the title of the employee, but their actual job duties that determine their exemption. Salary vs. Hourly. A lot of people use these terms interchangeably with exempt and non-exempt. But, they are actually not the same. You can be a salaried, non-exempt employee. Salary is just a set, agreed upon, pay. It can be on a per month, per week, bi-weekly, or semi-monthly basis. For all of the exemptions, the other caveat is that the employee MUST make at least $455/week. Otherwise, they are considered a non-exempt employee. An employee that is paid on a “salary” basis is guaranteed a certain amount regardless of their hours worked. You cannot deduct their salary if they work less than the scheduled work week. Now the bonus to that is that if they are a salary exempt employee, you don’t have to pay them overtime if they work more than 40 hours per week.
- Do you have any questions on the exemptions? Do you understand the difference between salary and hourly? Exempt and non-exempt?
- Offer letters are a good way to let the applicant know you are interested in them joining your team. However, they must be written in a clear, and unambiguous way so there is no room for misinterpretation. They should always have an “at-will” clause in there stating that their employment is still “at-will” and that either the employer or them can terminate the employment relationship at any time with or without notice and with or without cause. It should also say something to the effect that nothing in the offer letter changes that status and that only the President or Owner can make any kind of employment contract. Again, it should be clear and concise. When indicating the pay in the offer letter; make sure to express the compensation in terms of a weekly, or bi-weekly pay period. Annual salary offers have been held in certain cases to constitute a promise of at least one year’s employment. Additionally, you want to list any contingencies that are in effect. For example, “your employment is contingent upon successfully passing a drug screen and background check”, or “contingent upon completing the new hire paperwork”.
- Accurate completion of the I-9 form is extremely important. Mistakes can cost an organization upwards of $1,000 per mistake. This form must be completed on the first day the employee begins work. Not the day before, or on their second day. It must be dated to coincide with their first day worked. Section 1 needs to be completed by the employee. If they have someone assist them in completing the form, perhaps a translator or someone else has to complete the form for them, they need to complete the section listed “Preparer/Translator”. Section 2 MUST be completed by an employer representative. Certification dates must match, and the employer must verify documents no later than the third day from their first day worked. Go over acceptable documents, and how to write them in.