How to Establish a Legal, Effective Hiring Process

Vethan Law Firm P.C. for Entrepreneurs’ Organization

Are you an entrepreneur or startup founder who is starting to hire employees? Then it’s critical to be aware of the legal considerations of hiring.

The Federal Department of Labor enforces legal policies for employment and is the organization responsible for the Office of Federal Contract Compliance Programs (OFCCP) and the Office of Disability Employment Policy (ODEP), which oversees the American with Disabilities Act (ADA).

Establishing an effective hiring process includes ensuring your business is compliant with all local, state and federal hiring laws—from the job description you post to the final hiring steps.

A Glossary of Employment Term Definitions

Applicant: An individual who meets a specified set of criteria and is considered for an open position officially posted or advertised is an applicant. This individual must:

  • Express an interest in the open role
  • Meet minimum qualifications
  • Complete the application process

Consider: An applicant is considered once an employer reviews and evaluates an individual’s qualifications. Testing someone on their skills counts as placing them under consideration as an applicant.

Disposition Codes: Disposition codes refer to defined reasons for non-selection for every applicant that is dropped from consideration at any point in the hiring process.

  • Not Minimally Qualified/Doesn’t Meet Basic Qualifications: The applicant did not meet the age, education or experience requirements, did not complete the application, or failed a drug or background check.
  • Candidate Withdrew/Candidate Not Interested: You were unable to reach the applicant to follow up with the next step in the process; the candidate was no longer interested in the position, could not work the required hours or didn’t like the work environment; or the candidate accepted another position during the recruiting process.
  • Company Not Interested/Not Best Qualified: The candidate met minimum requirements but had a poor interview, other candidates had a stronger work history, or the candidate’s references were not favorable.
  • Candidate Declined Offer

To steer clear of legal entanglements, record a disposition code for any applicant who came under consideration. You should be able to prove that you did not discriminate during your hiring process and that everything was fair and above board.

Keeping track of why you’re not hiring candidates is also a good way to notice any trends. For example, if you look back and notice you are rejecting too many applicants due to lack of qualifications, revisit your job description and interview questions to avoid missing qualified talent.

Record-Keeping Requirements

The OFCCP requires that employers maintain records of:

  • All resumes and applications
  • Jobs descriptions including the basic qualifications
  • Job posting information
  • Applicant data for each stage of the process including non-selection
  • Race, ethnicity and gender of all applicants
  • Any tests or decisions
  • Requests for accommodation

Creating a written hiring process as well as templates for each stage can help you and your hiring team members remain compliant with all regulations, while also building a standard record to your files. Make sure all processes match the recruitment process, particularly if you use an automated process or multiple people are involved.

Creating Job Descriptions

Before you develop a job description, decide exactly what you need for the role for which you are hiring. You should have minimum qualifications defined for every role in your company.

Determine whether each function in the description is essential or non-essential. Remember, the ADA prohibits qualified candidates from being disqualified based on disability if they can perform essential job functions with or without accommodation.

Your description may include such things as:

  • Educational attainment: do you require a bachelor’s or master’s degree or will a certification suffice? Can experience be substituted for education?
  • Experience: Is this an entry-level position or do you need years of experience with particular programs, tools or industries?
  • Software: Does the applicant need to know particular software programs or packages?

Employee Classification

Each employee must be classified as exempt or non-exempt. Non-exempt employees are entitled to overtime pay, generally at one and a half times their regular pay rate. If you have misclassified a non-exempt employee as an exempt employee, you may be required to provide back pay and other damages.

To determine whether an employee is exempt, read the requirements from the Fair Labor Standards Act for guidance. Exemption is not just predicated on salary. The Department of Labor (DOL) has been giving this subject close attention.

Interviewing

Make sure all interview questions are ADA-compliant. Avoid any improper questions. You may not ask a candidate:

  • Where he or she was born or whether he or she is an American citizen. Instead, ask if the candidate can verify eligibility for working in the United States.
  • Whether a candidate’s religion prevents working certain days. Instead, ask the candidate if he or she can work the required schedule.
  • Are you disabled? How long have you been disabled? How did you become disabled? Instead, ask the candidate if he or she is capable of performing the position’s essential job functions. It’s OK to ask the applicant to show you how he or she manages the performance of the function.

All notes taken by the interviewer can be used as evidence if issues arise later. Only write notes that are factual, related to the job and not opinion based.

Additionally, do not ask about:

  • Clubs, social organizations, or union membership unless it is a relevant professional organization
  • Age, except to verify candidate can prove legal age
  • Alcohol or drug use, expect to ask if he or she is currently using illegal drugs
  • Any arrests, only whether the candidate has ever been convicted of a crime
  • Marital status, children in the home, family issues, appearance, home ownership or personal financial situation
  • Gender assumptions about job capabilities

Background Screening

Perform the same screening for all candidates for a specific position. Avoid performing screening that may have an adverse impact on certain demographics. All aspects of background screening conducted by a third party are subject to local and state law as well as the Fair Credit Reporting Act (FCRA).

As an example: Do not require a credit check for positions in which the candidate will not directly handle finances or money.

You should obtain written authorization from the applicant for any background screening you require. Also, the FCRA requires that candidates be given a chance to correct or challenge any negative information discovered during screening.

Compliance Counts

The DOL makes periodic changes to its auditing focus. Most recently, the focus has been on discrimination of veterans, ADA non-compliance, fairness in compensation and background checks.

Non-compliance with any legal hiring regulation or requirement can have substantial consequences on both your company’s reputation and finances. Pay close attention to employment law and adapt to changes as soon as they are made. Be consistent and be fair to all applicants.

May you find the best employee for the job.

For over twenty years, Vethan Law Firm P.C. (VLF) has delivered top-tier legal counsel to private businesses and professional practices of all sizes. VLF’s team of experienced business attorneys have helped clients in Texas and beyond navigate their most serious legal challenges. VLF delivers results by focusing on the unique needs of each business client, bringing to bear its commercial litigation experience and corporate planning expertise.

Categories: Best Practices Hiring Human Resources

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