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Hiring Employees and Avoiding Legal Problems - Seven Mistakes Employers Should Avoid When Hiring

Galen Gentry

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MISTAKE NO. 1 Failing to ensure the employee knows that he or she is employed at will.
Be careful what you say orally or in writing when you make a job offer. The statements you make about the nature of the position or the long term opportunities with the company may be construed as a promise that the job is secure for a certain period, or that you would not fire the employee with out good cause. To protect yourself you can write an employment letter that states the title of the position, the date the job begins, the starting salary, reiterates the at will status of the employee, and explains and limits how the at will relationship can be altered in the future. The status should only be alterable by obtaining the signed consent of an important company official, like the president. I know that this is a hassle. If you are not going to do it, at least have the employee fill out and sign an application for employment; you can buy them from office supply stores. Make sure the application has a clause that notes the employee is employed at will.

MISTAKE NO. 2 Defining at will employment in your letter or employee handbook.
Be careful. If you try to define at will employment you may give the employee, his or her attorney, the labor commission, a judge or jury the chance to second guess you. Generally, at will employees can be legally terminated without cause if the employer has no illegal motivation for the termination. While the employee may perceive this as unfair, it is not actionable. Just use the term. .

MISTAKE NO. 3 Engaging in discriminatory hiring practices.
Do not do it. State and Federal laws prohibit all but the smallest firms from discriminating based upon race, color, gender, religious beliefs, national origin, disability, or age. The antidiscrimination laws apply to all stages of the employment process: preparing job descriptions, writing ads, settling salaries, deciding whom to hire, promotion and discipline. The laws apply only to employers who have more than a certain number of employees; the number differs for each antidiscrimination law.

MISTAKE NO. 4 Asking unlawful questions in the interview.
The U. S. Equal Employment Opportunity Commission sets out examples of questions employers may not ask on its website. Here is a partial list of general inquiries you cannot ask an applicant: birthplace, age (other than asking if the applicant is over 18), race, height, weight, gender, and are you married? The Americans with Disabilities Act prohibits pre-employment questions about a disability. You may ask about the ability of the applicant to perform specific job functions. You may not enquire into the nature or severity of a disability, ask about medical treatment, or require an exam. After you make a conditional offer and before an applicant starts work, you are free to gather more details. You can require a medical exam or ask health related questions as long as you require this for all candidates who receive conditional offers in the job category.

MISTAKE NO. 5 Breaching the privacy rights of an individual.
Some individuals give incomplete information when they apply for a position. It is makes good business sense to do some background investigation. If a person lacks the requisite experience or a criminal record, you may have a problem. Seek only the information you need. Inform the applicant in writing if you will request information from schools, credit reporting agencies, former employers, etc.

MISTAKE NO. 6 Violating the Fair Credit Reporting Act.
A federal law imposes rules regarding obtaining and using consumer reports, credit reports, and background checks. The rules relate to any report prepared by a consumer reporting agency like TransUnion, Equifax a report prepared by a private detective would also be covered. You must notify a person in writing before you obtain the report. You need the person's written permission.
If you get the report and you are going to take an action adverse to the person such as not hire them you must first give the person a copy of the report and a copy of A Summary of Your Rights Under the Fair Credit Reporting Act which is available from Federal Trade Commission website, or simply obtain one from the entity that prepared the report. After you have taken the adverse action you must notify the person. You should do it in writing and the notification must give the name, address and telephone number of the company that prepared the report. State the company that prepared the report did not make the decision to take the adverse action. State the person has the right to dispute the accuracy or completeness of the information furnished. State the person may obtain an additional free report from the credit agency upon request within 60 days.

MISTAKE NO. 7 Failing to fill out the paper work.
Form I-9, IRS Form W-4, New Hire Report to the State. Every employer must fill out the forms. Retain copies and comply with the relevant regulations. If you are a new company, before you hire any employees you must have an Employer Identification Number. To obtain one file form SS-4. An employer must also register with the California EDD after paying over $100 in total wages to one or more employees in a calendar quarter. Registration forms can be ordered on EDD's website or downloaded.

Immigration laws prohibit employers from hiring aliens who lack authorization to work in the United States. You and the employee must complete the Form I-9 Employment Eligibility Verification. This one page form is retained by the employer, and can be used to show that the employer complied with the law and took the steps required to determine the employee was eligible to work legally in the United States.

Galen Gentry has 18 years of jury trial experience at both the state and federal levels. Galen has received an A-V rating from Martindale-Hubbell. An A-V rating is the highest rating an attorney can achieve for legal ability and ethical standards. His firm represents individuals and businesses in employment and business matters. For more information visit


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