All the Law Employers Need to Know

1.  Hiring

• Legal Guidelines for Hiring Employees
• Job Descriptions
• Job Advertisements
• Job Applications
• Interviews
• Testing
• Investigations
• Making a Job Offer
• Rejecting Applicants
• Tax Compliance
• Immigration Law Requirements
• New Hire Reporting Form

2.  Personnel Practices

• Employee Files
• Employee Handbooks
• Employee Performance Reviews
• Disciplining Employees

3.  Wages and Hours

• Overtime and Minimum Wage Requirements
• Equal Pay Requirements
• How to Pay Employees
• Calculating Work Hours
• Record-Keeping Requirements
• Child Labor Rules
• Payroll Withholding
• The Consequences of Bending the Rules

4.  Employee Benefits

• Health Care Coverage
• Retirement Plans
• Other Employee Benefits

5.  Taxes

• Employer Identification Numbers
• Federal Employment Taxes
• Federal Self-Employment Taxes
• Federal Tax Deductions for Salaries and Other Expenses
• Independent Contractors
• Statutory Employees

6.  Family and Medical Leave

• Who Is Covered
• Reasons for Taking a Leave
• Scheduling Leave
• Temporary Transfer to Another Job
• Substituting Paid Leave
• Advance Notice of Leave
• Certification
• Health Benefits
• Returning to Work
• Related Laws
• Enforcement

7.  Health and Safety

• The Occupational Safety and Health Act
• Getting Help
• State OSHA Laws
• Hazardous Chemicals
• Workers' Compensation
• Disease Prevention
• Tobacco Smoke
• Drug and Alcohol Abuse
• Repetitive Stress Disorder

8.  Illegal Discrimination

• Title VII of the Civil Rights Act
• Harassment
• Age
• Pregnancy
• Citizenship
• Genetic Information
• Religion
• Sexual Orientation
• Gender Identity
• State and Local Antidiscrimination Laws

9.  Workers With Disabilities

• The Americans with Disabilities Act
• Businesses That Are Covered
• Who Is Protected
• Exceptions to Coverage
• Providing Reasonable Accommodations
• Workers With Emotional or Mental Impairments
• Financial Assistance
• Health and Safety Standards
• Medical Exams
• Enforcement

10.  Termination

• Wrongful Discharge Cases
• Guarding Against Legal Claims
• Guidelines for Firing Employees
• Investigating Complaints Against Workers
• Alternatives to Firing
• The Firing Process
• Heading Off Trouble
• Final Paychecks
• Continuing Health Insurance
• Unemployment Compensation
• Protecting Your Business Information
• Handling Postemployment Inquiries

11.  Employee Privacy

• Monitoring Employees at Work
• Searches
• Off-Duty Activities

12.  Independent Contractors

• Comparing Employees and Independent Contractors
• The IRS Rules
• Workers Automatically Classified as Employees
• State Laws
• The Risks of Misclassification
• Hiring Independent Contractors

13.  Unions

• The National Labor Relations Act
• Unionizing a Workplace
• Employer Rights and Limitations
• Employee Rights and Limitations
• Making Unions Unnecessary

14.  Lawyers and Legal Research

• Getting Help From a Lawyer
• Paying a Lawyer
• Resolving Problems With Your Lawyer
• Legal Research 

Appendix

• Labor Departments and Agencies
• State Drug and Alcohol Testing Laws
• State Laws on Employee Arrest and Conviction Records
• State Laws on Access to Personnel Records
• State Minimum Wage Laws for Tipped and Regular Employees
• State Meal and Rest Break Laws
• State Health Insurance Continuation Laws
• State Family and Medical Leave Laws
• State Laws Prohibiting Discrimination in Employment
• Agencies That Enforce Laws Prohibiting Discrimination in Employment
• State Laws That Control Final Paychecks

Index

Chapter 1: Hiring

Many state and federal laws—as well as countless court decisions—set out legal protocol for every phase of the employment relationship, including the hiring process. If you’ve correctly sensed that many workers today are well informed about their legal rights and are willing to fight to enforce them, you may be concerned about making costly mistakes during hiring.

Fortunately, you can steer clear of most of the legal perils of hiring employees by understanding and following these sensible guidelines:

• Avoid illegal discrimination.
• Respect each applicant’s privacy rights.
• Don’t promise job security unless you mean it.
• Protect against unfair competition.
• Observe the legal rules for hiring young workers and immigrants.

The first part of this chapter discusses these key principles, some of which apply throughout the employment relationship and are discussed elsewhere in this book as well.

The rest of the chapter will explain how to keep legal risks to a minimum as you write job descriptions, advertise for workers, design job applications, interview applicants, check into their backgrounds, and offer them jobs.

RELATED TOPIC
Hiring independent contractors? Consult Chapter 12, where you’ll find a detailed discussion of the legal and practical issues you’ll have to consider.

Legal Guidelines for Hiring Employees

Most large companies maintain human resource departments and in-house lawyers to lead them through the intricacies of employment law. If you run a small or midsized company, however, this is an unaffordable luxury. In either case, the guidelines discussed here should reduce your need for outside legal help when hiring employees.

Avoiding Illegal Discrimination

Federal and state laws prohibit all but the smallest employers from discriminat­ing against an employee or applicant because of race, color, gender, religious beliefs, national origin, disability, age, or genetic information. Also, many states and cities have laws prohibiting employment discrimination based on other criteria, such as marital status or military service.

These antidiscrimination laws—covered in depth in Chapters 8 and 9—apply to all stages of the employment process: preparing job descriptions, writing ads, conducting interviews, deciding whom to hire, setting salaries and job benefits, promoting employees, and disciplining and firing them.

Federal laws apply only to employers who have more than a certain number of employees, which differs for each antidiscrimination law. And many state laws apply to smaller employers who are not covered by the federal laws. To find out whether your business must comply with these laws, see Chapters 8 and 9.

A particular form of discrimination becomes illegal when Congress, a state legislature, or a city council decides that a characteristic—race, for example—bears no legitimate relationship to employment decisions. A law or an ordinance is then passed prohibiting workplace discrimination based on that characteristic, making the characteristic protected. Courts get involved, too, by interpreting and applying antidiscrimination laws and ordinances. Obviously, as an employer, you need to know what types of discrimination are illegal.

At the same time, however, antidiscrimination laws don’t dictate whom you must hire. You can exercise discretion based on a wide range of business considerations. You remain free, for example, to hire, promote, discipline, and fire employees and to set their salaries based on their skills, experience, performance, or reliability, or even on your whim. You risk violating anti­discrimination laws only when you treat a person or a group differently for reasons that are based on a protected characteristic.

Some illegal practices are obvious, such as advertising a job for people ages 20 to 30 or paying lower wages to women than men. Other types of discrimination are more subtle, but just as illegal. Employment practices that have a disproportionate and discriminatory impact on protected groups are also barred by antidiscrimination laws. For example, if your primary means of seeking job candidates is through word of mouth and your workforce consists entirely of white men, the word-of-mouth system could constitute illegal discrimination if it results in an applicant pool of mostly white men. The effect of the procedures is what counts, even if you did not intend to discriminate.

To avoid violating antidiscrimination laws at the hiring stage, you should do all of the following:

• Advertise job openings in a variety of places so they come to the attention of a wide pool of applicants.
• Determine which skills, education, and other attributes are truly necessary to perform the job so that you don’t impose job requirements that unnecessarily exclude capable applicants.
• Avoid application forms and screening techniques that have an unfair impact on any group of applicants.

Running afoul of antidiscrimination laws can be both time-consuming and costly. An unhappy employee or applicant may sue your business. Federal and state agencies also may take legal action against it. And publicity about a violation of antidiscrimination laws can adversely affect your business reputation, driving down revenues. If word gets out that a company has discriminated against female employees, for example, female customers may avoid dealing with the company long after the discriminatory practices have been dropped.

Respecting Applicants’ Privacy Rights

As an employer, you likely believe that the more information you have about job applicants, the better your hiring decisions will be. But there’s a potential problem in delving too deeply. Your desire to gather information about an applicant may conflict with the applicant’s right to privacy or violate federal and state laws.

For example, a number of laws regulate how and when you can request transcripts, credit reports, and other background information. In addition, many states have laws that prohibit you from requesting or requiring the social media account passwords of a job applicant or employee. Laws and court rulings also restrict your right to screen applicants through aptitude tests and drug tests. We discuss those issues more fully below.

You need to be careful, too, about rejecting applicants because of their off-duty, nonwork activities. It’s easy to understand why you might want to limit your payroll to people who don’t smoke, drink alcohol, or use drugs—even off the job—to hold down health care costs or to keep a harmonious workforce. But, depending on your state, you may not be allowed to dictate such off-the-job behavior. Where legal restrictions are in place, screening out applicants based on off-duty conduct can get you into trouble.

Even if you’re in a state where it’s legal to reject applicants based on their lifestyles or their conduct away from work, caution is in order. To be on safe legal ground, it’s best to avoid rejecting an applicant for lifestyle reasons or off-duty conduct unless you have a convincing business purpose. And, even then, be sure to apply your selection criteria evenhandedly.

Avoiding False Promises of Job Security

If there’s no contract for a fixed term of employment, an employee works at the will of the employer and employee. The employer can fire the employee at any time—and the employee is free to quit at any time—for any reason or for no reason at all. That’s the basic law, although you can’t fire someone for an illegal reason: because of the color of the employee’s skin, for example, or because you prefer to put a younger person in the job.

CAUTION
The rules are different in Montana. There, an employee is at will only during the “probationary period”: the first six months of the employment relationship, unless the employer specifies a different probationary period while hiring. After the probationary period is over, the employer must have “good cause” to fire the employee, defined as “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason.”

The at-will relationship gives you maximum freedom to fire employees, but preserving your legal right to fire at will can be tricky. Courts in many states have held that if employers are not careful about what they tell employees, what they write in employee handbooks, and what they say in documents, letters, and emails, they may lose that right. For example:

• A law firm hires Joan as a receptionist. The managing partner assures her that she will remain employed as long as she does a good job. Eight months later, Joan is fired. She sues the firm. The judge says that the managing partner’s assurance created a contract that the firm would fire Joan only for a legitimate business reason. The firm doesn’t come up with a good business reason for the firing, so Joan is entitled to damages for breach of contract.

• A restaurant hires Henry as its general manager and gives him an employee handbook. The handbook says that the restaurant can fire an employee only after warnings are given and disciplinary procedures are followed. Later, the restaurant fires Henry without warning and without following the disciplinary steps outlined in the handbook. Scott has a solid basis for suing the restaurant for wrongful discharge.

During the hiring process, don’t make promises that you may not be able to honor. It can be difficult to restrain yourself when you’re trying hard to entice an attractive candidate to join your workforce. You’ll have a natural tendency to say positive things about your business, the candidate, and the future employment relationship. But those upbeat statements can be turned against you if your promises don’t come true or if the employee is later fired.

Your best protection is to make sure your application forms, employee handbooks, and offers of employment state that the job is at will and to require the applicant to acknowledge this in writing. This will protect your right to terminate the employment relationship on your own terms, without legal repercussions.

Here’s an example of language you may wish to include in your job application form regarding at-will employment.

At-Will Employment. I acknowledge that if hired, I will be an at-will employee, subject to dismissal or discipline without notice or cause, at the discretion of the employer. I also understand that this means I am free to quit my employment at any time, for any reason, without notice. I understand that no representative of the company, other than the president, has authority to change the terms of the at-will relationship and that any such change can occur only in a written contract. JNO Initials

Another way to protect yourself is to make sure that you always have a good business-related reason for firing an employee. In legal parlance, this is called firing “for cause.” If you fire for cause, the firing will be lawful, even if a court later finds that the employee was not an at-will employee after all.

Prevent Negligent Hiring Claims

The main reason to investigate an applicant’s background is to make sure the person will do a good job for you and fit in with your other employees. But sometimes there’s an additional, equally powerful reason to conduct a thorough investigation. When you hire someone for a position that may expose customers or others to danger, you must use special care in checking references and other background information.

Legally, you may have a duty to protect your customers, clients, visitors, and members of the general public from injury caused by employees whom you know, or should know, pose a risk of harm to others. In some states, you may also have a duty to protect other employees from an employee whom you know—or should know—is dangerous. If someone gets hurt or has property stolen or damaged by an employee whose background you didn’t check carefully, you might be subject to a lawsuit for negligent hiring.

Be especially vigilant when hiring maintenance workers and delivery drivers, whose jobs give them easy access to people’s homes.

Example: The Village Green, a 200-unit apartment complex, hires Elton as a maintenance worker and gives him a master key. Elton enters an apartment and sexually molests a young girl while the child’s parents are running an errand. Had the company checked before hiring Elton, it would have discovered that Elton had just completed a prison term for a sexual offense. The child’s parents sue The Village Green for negligent hiring.

Doing a background check can be a delicate matter, because you are also legally required to respect the applicant’s privacy. If you hire people for sensitive jobs, you must investigate their backgrounds as thoroughly as possible, without stepping over the line and violating their privacy rights. You can be faulted for not looking into an applicant’s criminal convictions, but not for failing to learn about prior arrests that didn’t result in convictions, because such arrest records are often protected by privacy laws.

In doing background checks on applicants for sensitive jobs, check for felony convictions. Also, be diligent in contacting all previous employers. Keep a written record of your investigation efforts. Insist that the applicant explain any gaps in employment history. Consider turning over the prehire investigation to professionals who do this for a living. If you choose to follow this route—and can afford it—it can go a long way toward refuting later claims that you failed to use reasonable efforts to learn about the employee’s history.

CAUTION
Strict rules may apply to background checks. Any time you hire a business—such as a credit bureau or investigative agency—to gather information about applicants (or employees), you must follow the strict guidelines set forth in the Fair Credit Reporting Act or FCRA. (15 U.S.C. §§ 1681 and following.) This federal law requires you to, among other things, get the applicant’s consent to the investigation and give the applicant a copy of the investigative report if you decide not to hire the applicant based on its contents.

Protect Against Unfair Competition

Whenever you hire workers, you run the risk that they’ll later start a competing business or go to work for a competitor. If so, they may use information or contacts they gained at your workplace to draw away business that otherwise would be yours.

Obviously, you don’t need to be too concerned about the employee you hire to flip hamburgers or the clerk you hire to handle dry cleaning orders. But employees who have access to inside information about product pricing or business expansion plans, for example, may pose competitive risks. The same goes for employees who serve valuable and hard-won customers, such as the salesperson who handles your largest accounts.

You can help protect your business from unfair competition by asking new hires to sign agreements not to take or disclose trade secrets and other confidential information. You can also ask select employees to sign covenants not to compete with your business. Such covenants must be carefully written so that a former employee has a reasonable chance to earn a living, however, and they aren’t legal in all states.

Trade Secrets

In hiring and working with employees, some business owners need to protect their unique assets from misuse. Some possibly protectable business assets may include, for example:

• a restaurant’s recipes for a special salad dressing and a muffin that draw people from miles away
• a heating and cooling company’s list of 500 customers for whom it regularly provides maintenance, or
• a computer company’s unique process for speedily assembling computer boards.

If they are treated as such, the recipes, the customer list, and the assembly process are all trade secrets. Other examples are an unpatented invention, engineering techniques, cost data, a formula, or a machine. To qualify for trade secret protection, your business information must meet two requirements.

First, you must show that you’ve taken steps to keep the information secret by, for example:

• keeping it in a secure place such as a locked cabinet or password-protected database
• giving employees access to it on a need-to-know basis only
• informing employees that the information is proprietary, and
• requiring employees to acknowledge in writing that the information is a trade secret.

Example: Violet works at Speedy Copy Shop. She has daily access to the list of larger accounts that are regularly billed more than $2,000 per month. Violet quits to open her own competing shop. Before she does, she copies the list of major accounts. One of her first steps in getting her new business going is to try to get their business away from her former employer. Speedy sues Violet for stealing its trade secret. At trial, Speedy shows that it keeps the list in a secure place and permits access only to selected employees who need the information. In light of these precautions, the judge orders Violet not to contact the customers on the list and requires her to compensate Speedy for any profits she has already earned on those accounts.

Second, the information must not be freely available from other sources. Trade secrets lose their protected status if they are published or disclosed to the public. For example, if the recipe for a restaurant’s award-winning custard tart can be found in a standard American cookbook or is readily available on the Internet, it’s no longer a trade secret. On the other hand, a publication that is brief, temporary, or obscure will not cause a trade secret to lose its protected status. For example, if the restaurant’s chef found the recipe in a medieval French cookbook in a provincial museum, translated it, and figured out how to adapt it to currently available ingredients, that is probably obscure enough that the trade secret will still be protected.

In addition to the requirements that a trade secret must be guarded infor­mation that is not generally available, judges sometimes look at how valuable the information is to you and your competitors and how much money and effort you spent in developing the trade secret.

Covenants Not to Compete

To prevent employees from competing with you after leaving your workplace, consider having them sign a covenant not to compete (also called a noncompete agreement). In a typical noncompete, the employee agrees not to become an owner or employee of a business that competes with yours for a specific period of time in a specific location.

The best time to secure a covenant not to compete is when you hire an employee. An employee who is already on the payroll may be more reluctant to sign anything. You’ll also have less leverage to negotiate the agreement.

CAUTION
Not all states honor noncompete agreements. Noncompete agreements can be difficult—or impossible—to enforce. In California, for example, courts virtually never enforce noncompete agreements, and other states enforce noncompetes only in limited circumstances. Even in the states where they are enforced, it’s often hard to overcome a judge’s reluctance to interfere with an employee’s ability to earn a living. One way around this potential uphill battle is to ask employees instead to sign a nonsolicitation agreement and a nondisclosure agreement. Some courts are more willing to enforce these agreements because they are less restrictive. They can keep ex-employees from using your client or customer lists, luring employees to a competing business, or stealing your trade secrets. If you can get all of these protections, you don’t lose much by forgoing a noncompete agreement.

Battles over the legality of these agreements must usually be resolved in court. Judges are reluctant to deprive people of their rights to earn a living, so the key to a legally enforceable covenant not to compete is to make its terms reasonable. In evaluating whether a covenant not to compete is reasonable, focus on these three questions:

• Is there a legitimate business reason for restricting the future activities of the particular employee? There probably is if you expect to spend significant time and money training a high-level employee and plan to entrust the employee with sensitive contacts on lucrative accounts. Such an employee could easily—and unfairly—hurt your business by competing with you. This would motivate a judge to find that you have a legitimate business reason for the covenant. On the other hand, if you require a new receptionist or typist to sign a similar covenant, a judge would probably find that you have no valid business purpose for restricting the employee’s ability to work elsewhere.

• Is the covenant reasonably limited in time? Agreements lasting a year or two are more likely to be upheld than agreements stretching well into the future.

• Is the covenant reasonably limited as to geographic scope? A limit spanning several states might not be deemed reasonable, but you may be able to prohibit an employee from competing within your city limits or larger urban area.

Example: When Mary hires Sid to be the office manager for her profitable travel agency, she realizes that Sid will have access to major corporate accounts and daily contact with the corporate managers who make travel arrangements. Mary also knows that she’ll spend considerable time training Sid and invest more than $4,000 in specialized seminars that she will require Sid to attend. She asks Sid to sign a covenant not to compete in which Sid promises that while working for Mary and for two years afterward, he won’t work for or own a travel agency within 50 miles of Mary’s agency. After six months, Sid quits and starts a competing agency one mile from Mary’s. The judge enforces the covenant not to compete by forbidding Sid from operating his new business and by awarding damages to Mary.

Hiring Young Workers

Federal and state laws restrict your right to hire workers who are younger than 18 years old. These laws limit the type of work for which young people may be hired and the hours they may work. (See Chapter 3 for more information.)

Hiring Immigrants

Federal law prohibits hiring workers not authorized to work in the United States. You and each new employee are required to complete Form I-9, Employment Eligibility Verification (discussed below).

Job Descriptions

Write a job description for each position you’re seeking to fill. Listing the skills and attributes you’re looking for in applicants will make the hiring process more objective. It will also give you ready standards to measure which applicants are most qualified. Current employees can often help you write job descriptions. They know how the business operates and the kind of skills that are needed.

In writing job descriptions, be careful not to violate the laws that prohibit discrimination in employment.

Under federal law, you can’t discriminate against applicants on the basis of their race, skin color, gender, religious beliefs, national origin, disability, age (if the applicant is at least 40 years old), pregnancy, or genetic information. In addition, many states prohibit discrimination based on a variety of other characteristics, including marital status and sexual orientation. To learn about laws prohibiting discrimination in employment, see Chapter 8.

Necessary Elements

A well-drafted job description usually contains these components:

• Qualifications, such as necessary skills, education, experience, and licenses. Be careful in setting requirements for education and experience. If set too high for the job, your requirements may have an unintended discriminatory effect on groups protected by antidiscrimination laws.

• Essential job functions. The federal Americans with Disabilities Act (ADA) has forced employers to take a fresh look at job descriptions and decide what really is the core of each job. (For more on the ADA, see Chapter 9.) To help eliminate unfair discrimination against people with disabilities, the ADA seeks to make sure a person isn’t excluded from a job simply because the individual can’t perform some marginal duties listed in a job description. For example, suppose your job description for a file clerk includes lifting heavy boxes of office supplies, but the basic functions of the job are to file and retrieve written materials. Employees who work in the mail room usually handle the boxes of office supplies. Someone with an injured back may have a lifting restriction that precludes moving the boxes, but be perfectly able to file and retrieve papers. Lifting the boxes isn’t an essential job function and shouldn’t be listed as one.

• Nonessential job functions. You may wish to specify functions and duties that are desirable but not required for a particular job. That’s okay as long as the job description clearly states that these additional functions and duties are not job requirements. Suppose you’re seeking a receptionist. If you never or seldom require the receptionist to type, typing isn’t an essential function. You could, however, mention typing as a desirable function if you made it clear that it’s not required.

RESOURCE
Want help writing job descriptions? Check out The Job Description Handbook, by Margie Mader-Clark (Nolo), which provides step-by-step instructions for crafting effective job descriptions.

Permitted Discrimination

Antidiscrimination laws recognize that in certain very limited circumstances, an employer may have a legitimate reason to seek an employee of a particular gender, religion, or ethnicity, even though such a preference would ordinarily be illegal. These are called bona fide occupational qualification (BFOQ) exceptions. Religion, sex, or national origin can be a BFOQ only if it’s a reasonably necessary qualification for the normal operation of a business or enterprise. Not surprisingly, courts almost never find that the BFOQ exception applies. Race can never be a BFOQ.

Here are some guidelines.

Religion. Religion can be a job requirement if the job involves religious duties. The U.S. Supreme Court has ruled that the First Amendment gives religious entities the right to decide who will “preach their beliefs, teach their faith, and carry out their mission.” This is sometimes referred to as the “ministerial exception” to the usual antidiscrimination rules. Although the usual antidiscrimination rules apply to positions that are not ministerial (such as administrative workers), a religious employer has more freedom in choosing those who will carry and teach its message when it comes to ministerial positions.

National origin. National origin can be a BFOQ, but only very rarely. For example, an American subsidiary of a Japanese company involved in international trade might be allowed to make Japanese nationality a job requirement because of the need for language proficiency and cultural background, but only if the company could show that this restriction is reasonably necessary to do the job. Aside from such a narrow situation, you can’t use national origin as a BFOQ.

Gender. About the only time that gender can be a BFOQ is for jobs affecting personal privacy—for example, restroom attendants or security guards who are required to search employees—and acting and modeling work.

Job Advertisements

Even if you write a great job description, you can still get tripped up when summarizing the job in an advertisement, especially if you let someone who’s not familiar with the legal guidelines write your ad. Nuances in an ad can be used as evidence of discrimination against applicants of a particular gender, age, or other protected characteristic.

Here are a number of semantic pitfalls to avoid when posting a job.

Don’t Use	Use
Salesman College student Handyman Digital native Married couple Waiter Young Three to five years’ experience	Salesperson Part-time worker General repair person Tech-savvy Two-person job Server Energetic At least three years’ experience

 

Requiring a high school or college degree may be discriminatory in some job categories. You can avoid problems by stating that an applicant must have “a degree or equivalent experience.”

The best way to write an ad that meets legal requirements is to keep it short and sweet. Stick to the skills needed and the basic responsibilities the job entails. Some examples:

• “Fifty-unit apartment complex seeks experienced manager with general maintenance skills.”
• “Midsized manufacturing company has opening for accountant with tax experience to oversee interstate accounts.”
• “Cook trainee position available in new vegetarian restaurant. Flexible hours.”

Help wanted ads placed by federal contractors must state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. Ads often express this with the phrase “An Equal Opportunity Employer” or “EOE.”

Some employers who are not federal contractors also use this phrase in their ads; it’s a good shorthand way to let potential employees know that you’ll give them a fair shake, which can help you attract a more diverse group of applicants.

Job Applications

Develop a standard application form to make it easy to compare the experience and skills of applicants. Limit the form to job-related information that will help you decide who’s the best person for the job. Questions like these are fairly standard:

• What is your name, address, and phone number?
• Are you legally entitled to work in the United States?
• What position are you applying for?
• What other positions would you like to be considered for?
• If you are hired, when can you start work?
• What is your educational background, including high school, college, graduate school, and other (including school names, addresses, number of years attended, degree, and major)?
• Describe your employment history, including name, address, and phone number of each employer, supervisor’s name, dates of employment, job title and responsibilities, and reason for leaving.
• Do you have any special training or experience relevant to this position?

Avoiding Unlawful Questions

The chart below (“Preemployment Inquiries”) outlines the type of information that you can ask for in applications and during job interviews. Follow the chart to comply with federal laws. Adhering to the federal laws might also be sufficient for complying with the laws of your state, but to be sure, check with your state’s fair employment office. (You can find charts listing state fair employment laws and offices in the appendix.) Note that in California and a handful of other states, employers can’t ask about an applicant’s salary history on job applications or at any other point during the hiring process.

In addition to the areas covered in the chart, the ADA prohibits any preemployment questions about a disability. Before you make a job offer, you may ask questions about an applicant’s ability to perform specific job functions. You may not, however, inquire about the nature or severity of a disability, ask about medical history or treatment, or require any medical exam. These rules apply to application forms, job interviews, and background or reference checks. See Chapter 9 for more on the ADA.

After you make a conditional job offer and before an applicant starts work, you’re free to gather more details. At that point, you can require a medical exam or ask health-related questions, but only if you require this for all candidates who receive conditional offers in the same job category.

Employers may not ask questions that would tend to elicit information about an applicant’s disability before a job offer is made. According to the Equal Employment Opportunity Commission (EEOC), the federal agency that enforces workplace discrimination laws, you may not ask questions like these in an interview, on an application form, or in any other context before making a job offer:

• Do you have a disability? Have you ever had a disability?
• Have you ever had or been treated for (followed by a list of conditions and diseases, such as a heart condition, cancer, asthma, diabetes, and so on)?
• How many days were you sick last year?
• Have you ever filed for workers’ compensation?
• Have you ever been treated for mental health problems?
• What prescription drugs are you currently taking, if any?
• Are you a drug addict or an alcoholic?

The Legal Effect of Job Applications

A well-written application form can help get the employment relationship started on solid legal footing. Because it’s filled out very early in the process, you can use the form to let the applicant know the basic terms and conditions of the job and the workplace. And, because the applicant signs the application, it can be a valuable piece of evidence if a question comes up later about what you actually promised about the job.

You can also use the job application to obtain the employee’s consent to a background investigation and reference check. If the applicant consents to your investigation, the applicant will have a tough time later claiming an invasion of privacy. Indeed, if you plan to pull a credit report or hire someone to conduct a background check, you will be legally required to get the applicant’s consent first.

Impress on the applicant the need to be honest and accurate in completing the form. Lying or giving incomplete information on an application can be a good legal reason to fire an employee if the correct story later surfaces. So serious is application fraud—or résumé fraud as it’s sometimes called—that some courts have allowed employers to use it to justify a firing even if they didn’t know of the fraud until the employee was gone.

Example: Dolores, age 42, applies for a job as a land surveyor with Progressive Engineering Consultants (PEC). On her application, Dolores states that she has a civil engineering degree from a prestigious college and is licensed by the state. The application form warns that false information will be a cause for immediate discharge. Relying on the application, PEC hires Dolores. Six months later, PEC becomes dissatisfied with Dolores’s work and fires her, replacing her with a 30-year-old man. Dolores sues, claiming that the firm discriminated against her based on age and gender. PEC belatedly looks into her application statements and discovers that Dolores has neither the degree nor the license she said she had. Because of Dolores’s lies, the judge dismisses her wrongful termination case without getting into the discrimination charges.

Including the following language in an application form can help you establish that you clearly told the applicant about the consequences of lying.

Accuracy. I verify that the statements I have made in this application are true and complete. I understand that if I am hired, any false or incomplete statements in this application will be grounds for immediate discharge. JNO Initials

 

Interviews

Before you begin interviewing applicants for a job opening, write down a set of questions focusing on the job duties and the applicant’s skills and experience. Some examples include:

• “Tell me about your experience running a mailroom.”
• “How much experience did you have making cold calls on your last job?”
• “Explain how you typically go about organizing your workday.”
• “Have any of your jobs required strong leadership skills?”

By writing down the questions and sticking to the same format in all interviews for the position, you reduce the risk that a rejected applicant will later complain about unequal treatment. It’s also smart to summarize the applicant’s answers for your files, but don’t get so involved in documenting the interview that you forget to listen closely to the applicant. And don’t be so locked in to your list of questions that you don’t follow up on something significant that an applicant has said or try to pin down an ambiguous or evasive response.

Interviewing Protocol

Get the interview started by giving the applicant some information about the job: the duties, hours, pay range, benefits, and career opportunities. This will give the applicant a chance to get comfortable before you start in on the questions. Questions about the applicant’s work history and experience that may be relevant to the job opening are always appropriate. But don’t encourage the employee to divulge the trade secrets of a present or former employer, especially a competitor. That can lead to a lawsuit. And be cautious about an employee who volunteers such information or promises to bring secrets to the new position; such an employee will probably play fast and loose with your own company’s secrets, given the chance.

Keep your antennae tuned carefully to the applicant who spouts a litany of complaints against former employers. If you hire that person, your business may well become the next object of the applicant’s invective. But watch your step if you learn that the applicant has sued a former employer for discrimination or filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC). If you refuse to hire the applicant because of the prior proceedings, the EEOC may treat your refusal as a form of illegal retaliation, even though your business wasn’t involved in the earlier dispute. See Chapter 8 for more on retaliation claims.

Give applicants plenty of time to answer questions. Make sure they understand your questions; ask them to let you know if something is unclear. Also ask them if they have any questions about your company or the job for which they’re applying. Finally, let them know your time frame for getting back to them with a hiring decision so they know what to expect.

RESOURCE
Want additional suggestions on interviewing? See Questions to Ask Before You Hire, by Paul Falcone (AMACOM). In addition, Nolo’s Dealing With Problem Employees, by Amy DelPo and Lisa Guerin, devotes an entire chapter to the hiring process, including effective interviewing techniques

Legal Restrictions on Questions

The rules of etiquette once dictated that you avoid discussing sex, religion, or politics in a social setting. While that standard has been relaxed, it still applies to job interviews, along with similar cautions to avoid focusing on an applicant’s age, ethnicity, birthplace, or personal finances. In fact, such inquiries are not only bad manners; they may be illegal—plain and simple.

Review the legal restrictions on what you can and can’t ask in a job application. (See “Job Applications,” above.) The same guidelines and restrictions apply to interviews. As with job applications, the focus of your interviews should be to find the best person for the job based on skill, experience, education, and other relevant qualifications.

To avoid improper inquiries, stay focused on job requirements and company policies. Suppose you’re concerned that an applicant with young kids may spend too much time talking with them on the phone. You can’t ask: “Do you have children?” or “Who watches the kids when you’re at work?” But you can say to the applicant: “We don’t allow personal phone calls during work hours. Do you have a problem with that?” The applicant then knows the ground rules and can let you know if a problem exists. Just be sure you apply your phone policy to all employees.

During an interview, you can ask about the applicant’s ability to perform job tasks and about any needed accommodation. Remember, disability discrimination laws prohibit questions about an applicant’s disability. Focus on the applicant’s ability to do the job, not on the applicant’s disability.

Example: Zack, who has only one arm, applies at ABC Industries for a job that requires driving. The interviewer avoids asking Zack if or how this disability would affect his driving. Instead, to comply with the law, the interviewer asks: “Do you have a valid driver’s license?” and “Can you drive on frequent long distance trips, with or without an accommodation?” The interviewer continues: “At least 80% of the time of this sales job must be spent on the road covering a three-state territory. What is your outside selling experience? What is your accident record?” All are permissible questions.

You can describe or demonstrate the specific job tasks, then ask whether the applicant can perform these tasks with or without an accommodation. If you’re interviewing an applicant for a mailroom job, you can say: “The person in this job is responsible for receiving incoming mail and packages, sorting the mail, and taking it in a cart to many offices in two buildings, one block apart. The mail clerk must also receive boxes of supplies weighing up to 50 pounds and place them on storage shelves six feet high. Can you perform these tasks with or without an accommodation?”

You can ask applicants to describe or show how they will perform specific job functions, but only if you require this of everyone applying for a job in this category. For example, a telemarketing firm could require all applicants to demonstrate selling ability by taking a simulated telephone sales test.

Be mindful that some applicants with disabilities will need accommodations to participate in the interview process. For example, you may need to provide an accessible location for an applicant in a wheelchair or a sign interpreter for a deaf person. (See Chapter 9 for an extensive discussion of the disability law requirements.)

Testing

Preemployment testing—which might include skills testing, aptitude testing, honesty testing, medical testing, and drug testing—is most common in larger businesses. But no matter what size your business is, you should know the legal limits on your ability to test applicants.

Skills Tests

Most small businesses—especially new ones—operate on a slim profit margin. This means that your employees must be up to speed from Day One. If you’re hiring a data input clerk, you may want to test the applicant for typing speed and accuracy. If you’re hiring a person to be a clerk in your bookstore, you may want to test the applicant’s knowledge of literature. If you’re hiring a driver for a delivery van, a road test would be appropriate. As long as the skills you’re testing are genuinely related to the job duties, a skills test is generally legal.

To avoid discriminating against applicants protected by the ADA, be sure your tests measure the actual skills and abilities needed to do a job. (For more on the ADA, see Chapter 9.)

Aptitude and Psychological Tests

Some employers use written tests—usually multiple choice tests—to get additional insight into applicants’ abilities. Others attempt to probe the psyche of their applicants.

These tests are going out of fashion and for good reason. A multiple- choice aptitude test may discriminate illegally against members of protected groups, because it really reflects test-taking ability rather than actual job skills. A personality test can be even riskier. Besides its potential for illegal discrimination, such a test may invade an applicant’s privacy (by inquiring, for example, into religious beliefs or sexual practices).

If you do decide to use aptitude or personality tests, proceed cautiously. Make sure that the tests have been screened scientifically for validity and that they are correlated to job performance. Review them carefully for any questions that may intrude into the applicant’s privacy.

Another concern for employers is the ADA, which lets you give a psycho­logical test or exam to a job applicant only if the test or exam isn’t medical. This can be tricky. A psychological test or exam is considered medical if it provides evidence that can help identify a mental disorder or impairment. A test or exam is permissible if it measures only such things as honesty, tastes, and habits. But if it helps identify whether the applicant has excessive anxiety, depression, or a compulsive disorder, it qualifies as a medical test and is illegal if given at the wrong time.

Be aware, too, that the ADA sets special requirements when you test people who have impaired sensory, speaking, or manual skills. Sensory skills include the abilities to hear, to see, and to process information. If applicants wouldn’t have to use the impaired skill on the job, you must design your tests so that they don’t have to use the impaired skill to take the test.

Example: Joe is applying for a position as a food handler, a job that does not require reading. Because of dyslexia, Joe has a very difficult time reading. He should be given an oral rather than a written aptitude test. By contrast, if you were interviewing Joe for a proofreader job—which clearly requires the ability to read without help—a written test would be appropriate and legal.

RESOURCE
Want more on how to avoid legal problems when using screening tests? Check out the EEOC’s guidance on employment tests and selection procedures at www.eeoc.gov/policy/docs/factemployment_procedures.html.

Honesty Tests

Lie detector or polygraph tests—rarely used by small businesses—are virtually outlawed by the federal Employee Polygraph Protection Act. With just a few exceptions, you can’t require job applicants to take lie detector tests and you can’t inquire about previous tests. The only private employers who can use lie detector tests to screen applicants are businesses that offer armored car, alarm, and guard services or that manufacture, distribute, or dispense pharmaceuticals. Even in those situations, there are restrictions on which applicants can be tested and how the tests must be administered.

About the only time a typical employer can use a lie detector test is to question an employee who is reasonably suspected of being involved in a workplace theft or embezzlement.

You must post a notice of the Employee Polygraph Protection Act where employees and job applicants can readily see it. For a poster containing the required notice, contact the local office of the Wage and Hour Division of the U.S. Department of Labor. (See the appendix for contact details.)

Some employers use written honesty tests to screen job applicants. Because these tests are often inaccurate and can invade an applicant’s privacy or have a discriminatory impact, the legality of the tests is doubtful in most states.

Limit honesty tests to situations in which you have a legitimate business reason to be concerned about workers’ honesty, such as when hiring workers who will be handling large amounts of cash. Before using a test, ask to see scientific backup establishing the test’s accuracy. And, to protect yourself against charges of illegal discrimination, test all applicants for a particular job.

RESOURCE
Want to know more about the Polygraph Protection Act? For detailed information, including whom the law covers, what the law requires and prohibits, tips for compliance, and exceptions to the law, see The Essential Guide to Federal Employment Laws, by Lisa Guerin and Sachi Barreiro (Nolo).

Medical Tests

To avoid violating the ADA, don’t ask applicants about their medical history or conduct any medical exam before you make a job offer. You can, however, offer a job conditioned on an applicant’s passing a medical exam. If you do require such a post-offer exam, you must require exams for all entering employees who will be doing the same job. You can’t single out for testing employees who appear to have disabilities.

Example: Cornerstone Corporation has openings for construction crane operators. It offers Bill a job conditioned on a medical exam showing he doesn’t have a medical condition, such as uncontrolled seizures, which may be risky to other workers. Because Cornerstone requires such exams for all the crane operators it hires, and because the exam screens out only those workers who would not be able to do the job safely, the exam is legal.

If you require medical exams only for people with known disabilities or those who you believe may have a disability, you’ll violate the ADA. But the scope of medical exams needn’t be identical for all employees. You can give follow-up tests or exams if further information is needed. Suppose, for example, that your restaurant requires all prospective kitchen workers to fill out a questionnaire about exposure to foodborne illnesses. If one person’s questionnaire indicates symptoms of typhoid fever, which is a foodborne illness, you can require further tests for that employee to determine whether there is a risk of the employee passing the illness to others.

After making a conditional job offer, you may require a full physical exam and you may ask questions that you couldn’t ask at the preemployment stage (for example, questions about previous illnesses, diseases, or medications). You can probe to find out whether the person has the physical or mental qualifications needed to perform the job or to determine whether a person can perform the job without posing a direct threat to the health or safety of others.

If you withdraw a conditional job offer based on results of an exam or inquiry, you must be able to show both of the following:

• Your reasons were job related and consistent with business necessity, or the person was excluded to avoid a direct threat to health and safety.
• No reasonable accommodation could be made or such an accommodation would cause undue hardship. (For more guidance, see Chapter 9.)

To avoid claims that you discriminated against a person with a disability, carefully document all medical inquiries and the responses to them. If you reject a prospective employee, be prepared to show how the medical facts relate to the person’s ability to perform the job or reveal a direct threat to health and safety.

Example: Kendra’s medical exam reveals an impairment that will require her to frequently be away from work for lengthy medical treatment. The job requires daily availability for the next three months. The company doesn’t hire Kendra. This is permissible under the ADA because Kendra isn’t available to perform the essential functions of the job, and no accommodation is possible.

Drug Tests

You have a legal right to insist on a drug-free workplace, even in states that have decriminalized the use of marijuana. The only problem is that testing to identify drug users might conflict with workers’ rights to privacy. The laws on drug testing vary widely from state to state and are changing quickly as legislators and judges struggle to strike a balance between workers’ rights and the legitimate needs of businesses. (See “State Drug and Alcohol Testing Laws,” in the appendix.) Some state statutes allow you to test employees only in a narrow range of jobs, such as those concerned with safety.

TIP
Federal contractors must comply with the Drug-Free Workplace Act. The law requires federal contractors and grantees to agree to maintain a drug-free workplace. If your business has a contract with the federal government for $100,000 or more (for something other than goods you’re selling to the government), you need to notify employees that they’re prohibited from unlawfully making, distributing, possessing, or using controlled substances in your workplace. And you need to set up an awareness program that tells workers about the dangers of drug abuse while at work and lets them know about assistance programs that may be available. For detailed information on these requirements, check out the Drug-Free Workplace Programs page of the Substance Abuse and Mental Health Administration’s website, www.samhsa.gov/workplace.

Fortunately, even restrictive states generally allow you much more leeway in screening job applicants than in testing employees who are already on board. If your state permits testing applicants or employees and you plan to do such testing, use the application form to let applicants know of this policy. State law may also require you to give applicants a written policy statement that’s separate from the application. When applicants are told up front about drug testing, it’s harder for them to later claim that their privacy was violated.

Once an applicant becomes an employee, the rules may be more restrictive. Testing is usually permitted when employees have been in an accident or you’ve seen them bring illegal drugs to work. Your legal right to test at random and without prior notice is not as clear, in some states.

With any drug testing, treat all individuals consistently, being careful not to single out any one group. And consult with competent drug testing experts to ensure that your test procedures are as accurate as possible. Because the laws of drug testing are in constant flux, talk to a lawyer before administering any tests.

What About Medical Marijuana?

About half of the states have legalized the use of marijuana when a doctor prescribes it to treat a medical condition. More recently, a growing minority of states (including California) have decriminalized marijuana for recreational use. This doesn’t necessarily mean that you can’t test employees for marijuana use—or fire them for testing positive—however. In some states, employers may fire employees who test positive for marijuana, even if they have a valid prescription for the drug. Other states protect employees from termination in this context, as long as they don’t use or possess the drug—and are not impaired—at work. This is one of the most rapidly changing areas of law right now. If you do business in a state that has decriminalized the use of marijuana for medicinal or recreational use, you should definitely talk to a lawyer before you adopt a drug testing program or fire anyone who tests positive under your existing program.

Recovering addicts are protected from discrimination, but not if they are currently engaged in the illegal use of drugs. The ADA prohibits you from discriminating against people because of their past drug problems. This includes people who no longer use drugs illegally and those who are receiving treatment for drug addiction or have successfully been rehabilitated. However, if an applicant tests positive for drug use, addiction is not a defense. You can make job decisions based on the current use of illegal drugs, even if it is fueled by an underlying addiction.

Alcoholics are also protected from discrimination, whether they are currently using alcohol or not. However, employers can require an alcohol-free workplace and discipline employees if their use of alcohol affects their job performances.

RESOURCE
For help developing a drug policy, contact the Center for Substance Abuse Prevention Workplace Helpline. You can also find lots of helpful information on their website at www.samhsa.gov.

Investigations

Because some people give false or incomplete information in their job applications, it’s a good idea to do some investigating to verify application information. You might find out, for example, that an applicant doesn’t have the work experience or occupational license listed in a job application, or that the applicant didn’t really leave the last job voluntarily. What’s more, you might learn that the applicant has a history of violent behavior or even a criminal record that would disqualify the applicant from a job that may put members of the public or other employees at risk.

Your need to investigate a job applicant is legitimate. If you go overboard, however, you may violate the job applicant’s legal right to privacy. The best way to reduce the risk of an invasion of privacy claim is to do both of the following:

• Seek only the background information you really need to figure out whether the applicant is suited for the job.
• Inform the applicant, in the job application, that you will be requesting information from, for example, schools, credit reporting agencies, former employers, and law enforcement agencies.

As part of the application process, ask the applicant to sign a consent form. Use a separate form rather than making the consent a part of the application. That way, you can easily photocopy the consent and send it to the people from whom you’re seeking information.

TIP
Will your investigation yield relevant information? It’s often a waste of time and effort to acquire and review transcripts and credit reports, although occasionally they’re useful. If you’re hiring a bookkeeper, for example, experience garnered on the job is much more important than the grades the applicant received in a community college bookkeeping program ten years ago. But if the applicant is fresh out of school and has never held a bookkeeping job, then a transcript may yield some insights. Similarly, if you’re hiring a software engineer, information on a credit report would be irrelevant. But if you’re hiring a bar manager who will be handling large cash receipts, you might want to find out whether the applicant is in financial trouble.

---

We hope you enjoyed this sample. If you would like to read the complete chapter, please purchase the book.