Employment Law 101: How to Hire the Right Way

Employment Law 101: How to Hire the Right Way

Employment Law 101: How to Hire the Right Way

Hiring extra staff is an exercise often fraught with uncertainty and questions. Alex Wheatley smooths out the process by offering some legal and practical considerations relevant to hiring employees.

So, you are ready to hire an employee. This is usually good news—it means that business is going well enough that you need, and can afford, additional help. Productive employees, paid the appropriate amount, can be profit generators for your company. A “bad hire,” on the other hand, can cost your company dearly in several ways (e.g., driving business away, lawsuits, theft, etc.). Implementing the right procedures to properly screen applicants, and taking the time to actually follow those procedures, is vital to your business’ success.


Applicants’ Legal Rights

The employment relationship begins at hiring. The law, however, provides certain protections to individuals even before they become employees. Federal law prohibits discrimination in hiring on the basis of race, national origin, gender, pregnancy, age, disability, or religion. Many states and localities protect additional characteristics (such as sexual orientation and family status). Therefore, it is important that employers avoid questions that relate to these protected classes. It is also important that the employer develop the job description for the position being filled prior to hiring so that there is no question what the essential functions of that job are. The goal, both from the legal and the business points of view, should be to determine the applicant’s ability to perform the job, so the focus of interview questions should be on work-life rather than personal life.

Employers also need to be familiar with the laws restricting the employer’s ability to dig into the applicant’s past. The Fair Credit Reporting Act requires that employers provide certain notices and comply with other procedures if the employer obtains a background check. Many states and cities now restrict employers’ ability to ask about past criminal convictions on job applications or before a conditional offer of employment is made. Many states also now restrict an employers’ ability to require that an employer provide access to the employee’s social media accounts. While no law prohibits an employer from “Googling” an applicant, doing so can be risky because it may reveal information about a protected characteristic of the employee.


Employment-Related Contracts

The employment relationship is contractual in nature. In most states, however, the relationship is “at will,” meaning that both the employer and the employee can terminate the relationship for any reason or no reason at all. This is a bigger benefit to the employer than the employee, so it is important that the employer not make any promises or guarantees that could upset this default. Employers should avoid saying things like, “as long as you do good work, you will always have a job here,” or “we will give you the tools to succeed,” and “we are hiring you for a one-year project.”


“You want your employees to pay attention to detail, so do not hire an applicant who gives you a sloppy, incomplete application.”


During the hiring process, the employer should also consider whether it is advisable to enter into one or more of the following common restrictive covenants: non-competition, non-solicitation, or non-disclosure agreements. Generally speaking, a non-competition agreement is an agreement in which the employee agrees not to conduct any business in competition with the employer’s business for a period of time after the employment relationship ends. It is the most restrictive of the three agreements and the most difficult to enforce. Indeed, many states now impose severe restrictions on non-competition agreements, making such agreements far less useful for employers than they used to be. In a non-solicitation agreement, an employee promises to not solicit other employees or customers of the business for a period after the employment ends. In a non-disclosure agreement, the employee agrees to keep any confidential information they have access to (e.g., customer or supplier lists) confidential after they leave employment. Restrictive covenants usually only make sense for particular employees. You should consult an employment law expert to make sure any agreements are both useful and legal before using them.


Practical Considerations

While you must understand the legal considerations applicable to the hiring process, your goal is to hire the best possible employee, which is more of a personnel than legal problem. Having the right procedures in place, and taking the process seriously, reduces the odds that you will hire a problem employee.

You should require that all applicants submit a written application. Review the application and look for red flags: gaps in employment, lack of information for past employers, sloppiness, history of declining pay, etc. You want your employees to pay attention to detail, so do not hire an applicant who gives you a sloppy, incomplete application. Contact the applicant’s prior employers and other references. They may not tell you anything, but taking the 30 minutes to make those calls may save you some problems in the long run.

Interview the applicant personally and let the applicant do 80 per cent of the talking. Be creative with your interview. While you need to avoid the prohibited areas listed above, your goal is to get to know the applicant and make sure he or she will do the job well and get along with others. Consider taking the applicant on a tour of the workplace to see how he or she interacts with other employees. Make sure the applicant is curious and interested in the business. Finally, consider allowing other employees to also interview the applicant, as long as they are trained on the legal restrictions. They are likely the ones who will work most closely with the applicant, after all.

There is always a bit of luck involved in hiring. However, following these procedures, and working with an expert when you encounter the sticky situations, will definitely put the odds in your favor.


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