Hiring Employees

Introduction

Hiring can be a tough task for managers. It's challenging enough to find the right hire for the job -- someone with the skills, attitude, personality, and other important qualities to be a success at your company. When you add legal concerns to the mix, hiring can seem like a truly daunting responsibility.

But you cannot ignore your legal obligations when hiring new employees. Federal and state employment laws reach beyond current employees; many also protect those who apply for jobs by, for example, prohibiting discriminatory job postings, putting limits on the information you can gather in a background check, or outlawing certain kinds of applicant screening tests. What's more, the things you say and do during the hiring process could come back to haunt you and your company later, particularly if an employee claims that you offered a job contract or promised job security.

The good news is that following sensible and careful hiring practices will keep your company out of immediate legal trouble, help you find the most qualified employees, and -- by screening out problem employees from the get-go -- help prevent management headaches and possible lawsuits down the road.

This chapter explains the legal ins and outs of hiring, including practical advice on how to find, interview, and seal the deal with your lucky new hire.

Frequently Asked Questions About Hiring
Do I have to advertise open positions?

No. Although federal, state, and local governments typically have to post openings, private companies don't. Nonetheless, there are some very good reasons to advertise:

You can choose from a larger pool of applicants, which increases your odds of finding a great person for the job.
You avoid unintentional discrimination. (For example, if you rely solely on word of mouth when looking for applicants and you only know people of your race or ethnicity, then your hiring process may be discriminatory -- even though that is not your intention.)
You can avoid the appearance of nepotism or favoritism. If you hire your friends, family members, or neighbors to come work for you, the employees who currently report to you may think you'll play favorites. By posting open positions and choosing your hires from a broad range of applicants, you can show your reports that you hire -- and manage -- on merit alone. (For advice on effective and legal job advertisements, see "Advertisements," below.)
Are there questions I cannot ask during a job interview?

Yes. For example, you may not ask whether an applicant has a disability, what country an applicant comes from, and, in some states, whether an applicant has ever been arrested. (To learn what questions you can and cannot ask an applicant during an interview, see "Interviews," below.)

Are there things I shouldn't say when I'm trying to convince a really strong applicant to take a job?

Absolutely. Although you'll be tempted to sell your company during a job interview, don't overdo it. If you exaggerate -- or out-and-out lie -- about the position, the company's prospects, or other important facts, and the applicant takes the job based on your statements, that employee can sue the company if your statements turn out to be false or overly optimistic. (For more information on statements to avoid when hiring, see "Making Promises," below.)

Can I ask whether an applicant has a disability?

No. The Americans with Disabilities Act (ADA) prohibits you from asking whether an applicant has a disability. Instead, you should focus your interview questions on the applicant's abilities -- for example, you may ask whether and how an applicant would perform each essential job function. If you know that an applicant has a disability (because it is obvious or the applicant has told you about it), you may ask whether the applicant will need an accommodation to perform the job. (For more on avoiding disability discrimination when hiring, see "Applicants With Disabilities," below.)

Can I ask every applicant to take a lie detector test?

No. The Employee Polygraph Protection Act (EPPA) prohibits lie detector tests by all but a few types of employers -- those that provide certain types of security services or manufacture pharmaceuticals, for example. (For more information on what tests you can -- and can't -- ask applicants to take, see "Testing Applicants," below.)

Can I run background checks on applicants?

It depends on the information you plan to collect. You can check information that is relevant to the job for which you are hiring. However, state and federal laws restrict you from gathering or using certain types of records. If you are considering running a background check, you should ask applicants to consent to the check in advance, in writing. (See "Background Checks," below, for more information.)

Can I hire teenagers to do clerical work?

Generally, yes. Teenagers who are at least 16 years old may work unlimited hours in any profession that the government has not deemed hazardous. You can also hire younger teens, although the law restricts how many hours they may work. (For more information, see "Young Workers," below.)

If I want to offer someone a job, do I have to do it in writing?

There is no law that governs how you offer someone a job. You can do it in person, over the phone, or with a formal letter. However, you should probably send written offer letters just to make sure potential hires understand exactly what you are offering. Offer letters aren't without their pitfalls, however, so be careful what you write. (To learn more, see "Offer Letters," below.)

When I hire someone, should I use a written contract?

It depends on the circumstances. The law does not require you to use a written employment contract and, for the most part, you probably won't want to. However, there may be times when writing a contract is a good idea -- for example, if you want the employee to make a long-term commitment to the company. (To learn about when you should and should not use an employment contract, see "Written Employment Contracts," below.)

What forms or paperwork do new employees have to complete?

In addition to paperwork your company requires -- such as signing an acknowledgment form for the employee handbook, completing benefits registration forms, or naming someone to call in case of emergency -- you should also ask employees to complete the following documents:

IRS Form W-4, Withholding Allowance Certificate. Employees use this form to tell you how many allowances they are claiming for tax purposes and, therefore, how much you should withhold from their paychecks.
USCIS Form I-9, Employee Eligibility Verification. You and the employee each complete a portion of this form to verify that the employee is eligible to work in the United States.
New Hire Reporting Form. The new hire reporting program requires employers to report basic identifying information on all new employees to a state agency, to be used to locate parents who owe child support.
(For more on these requirements, see "Checklist: First Day Paperwork," below.)