July 2011 Archives

Employment Basics for Employers - Reference Checks

July 25, 2011,

Whether you are a startup company in Sunnyvale or a family owned business in San Jose, as an employer, you will have some basic employment concerns. In my previous two blogs, I discussed risks in looking for employees and evaluating potential applicants. This blog focuses on reference checks, both for potential employees and when another business owner calls you with regards to an ex-employee of yours.

When you are interested in an applicant, a reference check is always a good idea. In particular, checking references may be crucial to avoiding a claim of negligent hiring. This is very important when your employee will be working with young children, like a daycare teacher, or entering homes or businesses, such as an installer or a janitorial worker. However, reference checks can be a concern both when you are the potential employer and when you are the previous employer. Any information you ask and any information you give to a potential employer must not be discriminatory or retaliatory.
Often, a good strategy as the previous employer is to have a strict policy of only providing very basic information such as confirming that the employee did work for you, dates of employment, and position.

If they are going to give more information than just basic information for former employees, employers should use the following guidelines:

Disclose only truthful information.
State facts and avoid conclusions.
Include favorable facts about the employee.
Designate a limited number of employees to give references.
Obtain a release from the employee.
Require all employees asking for references to request the reference in writing.

When checking references for job applicants, have applicants sign a statement acknowledging that it is o.k. for you to contact their previous employers for references.

California employers are also allowed to conduct background checks, including criminal background checks and credit checks, on prospective employees. Employers must provide a written notice to applicants notifying them that the company will be running a criminal and/or credit check on the applicant. This written notice must be made in a document that consists solely of the disclosure. Prospective employees must first sign a statement authorizing the potential employer to run a criminal background and credit check, as well as any other drug related testing. The signed statement should be a document separate from any employment application or offer letter.

Employment Basics for Employers - Evaluating Potential Employees

July 11, 2011,

In my previous blog, I discussed the risks faced by companies that are looking to hire new employees. This blog focuses on issues employers need to be concerned with once they have found some candidates and need to choose between them.

Once you are ready to interview candidates, you still need to be wary of a discrimination claim for the questions you ask and the information you gather, even if the information is crucial to determining whether the person would be a good fit for your company. So, you have to be very careful about how you obtain information and decide between candidates. Looking up candidates on the web through social networks is the subject of many articles itself. This blog just deals with the old fashioned methods of considering job applicants.

If you require potential applicants to complete a job application, don't just download a form from the web and think you are safe. The questions you ask must be relevant to the position you are trying to fill. This means that even within your company one application may not be appropriate for all positions. Avoid asking questions about age (including requesting date of birth!), race, religion, nationality, disabilities, gender, marital status and whether or not the applicant has kids, is a single parent, etc. When it comes time for an interview, be prepared with a list of potential questions to ask as well as ones to avoid, and have each interviewer review these questions before an interview. I strongly recommend for employees who have never been the interviewer to go through a practice interview so that he or she can rehearse the role and responses to various questions. Questions should be geared towards a candidate's past job performance and qualifications, and careful emphasis should be placed on returning the conversation to an appropriate line of questions if the applicant volunteers information that may be considered discriminatory if asked.

Here is a basic list of questions that should never be asked in an interview:
What is your maiden name?
Do you own or rent your home?
What is your birth date?
When did you complete school or what years did you attend school?
What religious holidays do you observe?
Do you have any children and what are their ages?
Where were your parents born?
Do you have any medical conditions?
What non-work related organizations do you belong to?
Do you have any debt?
Do you plan to get married or start a family?
Have you ever been treated for alcoholism or drug addiction?

However, you can ask potential employees to describe or show you how they would do job-related physical tasks. You can also ask applicants to take a drug test (for controlled substances), but you cannot require them to undergo a medical examination until after you have made them a job offer. If you conduct drug tests, make sure you get the written consent from the applicants, and that you use a reputable laboratory.

There are also certain statements that should never be made. For instance, never say anything that would imply permanent rather than at-will employment.

Employment Basics for Employers - Looking for Employees

July 5, 2011,

Silicon Valley's job market heats up even as national employment stalls, thanks to an increase in venture capital and personal investing. Large corporations are competing with small businesses and start-ups for talent. Although some of my business clients are start-up companies where the founders are the only employees, more and more of my clients are operating businesses with day to day concerns, the most common of which is employee issues. A growing business that is hiring may need employment contracts and possibly a stock option plan in place. All businesses need employment policies and possibly an employee handbook. And almost all businesses at some time or other will need to deal with employee complaints, discipline and even terminating employees. This is the start of a series of blogs on some of the basics you should know as an employer, whether here in Santa Clara County or elsewhere. Keep in mind that every situation and every employee is different and the laws of other states may be different than California. This is not a substitute for calling your company's lawyer, but more of a guide to help you spot issues and know when you need to ask for help.

Looking for New Hires:
The first rule of hiring is to be wary of discrimination. You can hire anyone you want, as long as you don't discriminate based on age, race, nationality, gender, disability or any other protected class. Discrimination can show up or be inferred from many situations where it may not have been intended. For example, I represent a janitorial company in Santa Clara that employed many people from one religion and those employees often referred their friends and family when positions opened up. When looking for new hires, the company has to be very careful to ask all their employees for referrals and not just that group of employees, or the company could be found to be discriminating against people who are not part of that religion.

Anyone that represents your company in recruiting new employees should be well trained in employment laws. Be careful about how you write your employment ads so they don't exclude any class of potential employees, and make sure to include a statement that your company is an Equal Opportunity Employer in each ad. Be careful about where you advertise. For example, I represent a bilingual English/Chinese preschool in Sunnyvale. Although it may be okay for the school to advertise in an all-Chinese newspaper when they are looking to hire Chinese teachers, it may be considered discriminatory against non-Chinese speakers when they are looking to fill any position that does not require Chinese language capabilities.

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