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Best Hiring Practices : Hire Smart Now, Reduce Liability Later

Best Hiring Practices : Hire Smart Now, Reduce Liability Later. Nicole J. Gray Member McDonald Hopkins LLC 216.348.5418 ngray@mcdonaldhopkins.com. Employer “Best Practices”. Practical, legally compliant strategies for handling tough employment issues Presentation format:

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Best Hiring Practices : Hire Smart Now, Reduce Liability Later

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  1. Best Hiring Practices:Hire Smart Now, Reduce Liability Later Nicole J. Gray Member McDonald Hopkins LLC 216.348.5418 ngray@mcdonaldhopkins.com

  2. Employer “Best Practices” • Practical, legally compliant strategies for handling tough employment issues • Presentation format: • Highlight some key legal issues in the hiring process • Discuss real life situations that you face • Tips on minimizing liability

  3. Why is the Process of Hiring Important? • The EEOC is taking a renewed interest in hiring issues • The EEOC’s Strategic Enforcement Plan makes eliminating barriers in recruitment and hiring a key priority • Employers face compliance challenges at every turn • Disparate treatment and disparate impact concerns • ADA compliance and proper position classification • Social media recruiting • Background check issues • Mistakes are costly! • In a recent survey, 69% of employers reported that bad hires lowered productivity, affected worker morale and resulted in ….legal issues • 41% of companies estimate that a bad hire costs more than $25,000 and 25% said it costs more than $50,000

  4. It Makes Good Business Sense • Hiring is key to the success of your business • Strengthen talent on the team • Improve retention • Enhance performance of team • Save cost People are not your most important asset, the right people are. - Jim Collins, Good to Great

  5. Focus on Hiring Barriers by EEOC Post from Chair Jenny R. Yang (January 2015): EEOC @ 50—Investing in Solutions for the 21st Century Workplace • As we prepare to celebrate our 50th Anniversary on July 2, 2015, the occasion provides a fitting moment to reflect on our role and progress in achieving the nation’s goal of equal opportunity in the workplace. When Congress passed the Civil Rights Act of 1964, it established the EEOC to enforce our workplace anti-discrimination laws. Over time, Congress added the Age Discrimination in Employment Act, the Equal Pay Act, the Americans with Disabilities Act, the Rehabilitation Act, and the Genetic Information Nondiscrimination Act to the agency's enforcement responsibilities. • Theseanti-discrimination laws have transformed American society in many ways since their enactment. By expanding equal opportunity in the workplace, we have made great strides as a nation towards ensuring that each of us can do the kind of work we want to do—free from discrimination. Yet, there is still much work to be done. • Today, we continue to see systemic barriers to equal opportunity in many areas, including hiring, persistent harassment, and increased retaliation. This 50th Anniversary year presents an opportune time for a call to action—to enlist employers and workers in a broader effort to prevent and correct workplace discrimination and to identify real world solutions for our most difficult workplace challenges.

  6. Hiring: EEOC by the Numbers • Total charges in FY 2015 89,385 • Failure to hire charges in FY 2015 8,701 • Nearly 10% of all charges filed • Age discrimination was basis for 2,085 charges (24%) • 6 out of 16 (37.5%) systemic suits filed by the EEOC in FY 2015 were based on allegations of discriminatory hiring practices • 7 out of 14 (50%) investigations initiated by EEOC in FY 2015 by Commissioner charges were based on allegations of discriminatory hiring practices

  7. Failure to Hire = Key Litigation by EEOC • Failure to hire people age 40 and older for front of the house positions (national restaurant chain) • Failure to hire African American and Hispanic/Latino applicants (wholesale bakery) • Failure to hire based on whether applicants had history of carpal tunnel syndrome and gave nerve conduction tests (manufacturing company) • Failure to hire women at company’s warehouse distribution facilities (food distributor)* https://www.eeoc.gov/eeoc/plan/upload/2015par.pdf

  8. Discrimination in Hiring • From the outset, an employer must be mindful of the potential for discrimination: • Race • Color • Religion • Sex (including pregnancy, gender identity and sexual orientation) • National origin • Age (40 and older) • Disability • Genetic information • And the potential need for accommodation

  9. Accommodation and Hiring Disability: • Employers are required to provide reasonable accommodation to enable individuals with disabilities to apply for and be considered for a job opening • Are the application and interview process accessible to disabled applicants? • On-line application process: Are there alternate methods for applying? • Interview process: Does the process discourage disabled applicants? Religious accommodation: • EEOC v. Abercrombie & Fitch Stores, Inc., 135 S.Ct. 2028 (2015): applicant denied employment based on employer’s “look policy” but never specifically requested an accommodation based on her religion (i.e., wearing a headscarf) • Are the application and interview process accessible to disabled applicants? • SCOTUS: “actual knowledge” of the reason behind the accommodation unnecessary • The “applicant need only show that his need for an accommodation was a motivating factor in the employer’s decision” • Other recent EEOCLitigation: • Lawsuit filed by EEOC based on alleged failure to hire individual who refused to cut hair on religious grounds • Lawsuit based on withdrawal of job offer to Seventh Day Adventist after learned could not start work on a Friday afternoon on religious grounds • Lawsuit filed after employee declined follicle drug test on religious grounds forbidding cutting hair from scalp

  10. Danger Ahead, Proceed with Caution • The hiring process is full of opportunities … and risks • EEO protections apply to all stages of hiring process: • Job descriptions • Advertising • Employment applications • Interviews • Background screening • Offer • On-boarding

  11. What Work Needs to be Done? • Clarify why you are hiring somebody before you do anything else • Answer these questions: • What is the real business need the right person will solve? • What are the skill sets required to do this job? • How will this job be performed? • What are attributes of someone who will be successful in this position? • Hard skills, soft skills, education, training, motivation • Why would the right person want this job?

  12. Review the Job Description • What you want the employee to do drives the hiring process • From the legal prospective:A job description allows an employer to establish the essential functions and primary duties of a specific position • Allows an employer to create “Exhibit A” when challenged in a variety of employment situations • From the Real World: Accurate description of the job is essential to finding the right candidate to do the work needed • Best Practices: • Initial step is a detailed job analysis • Who, what, where, when, why, how

  13. Job Descriptions and ADA • How does a written job description help an employer relative to the ADA? • Qualified applicants • Accommodation • Consideration is given to the employer’s judgment as to what functions are essential • Whether the position exists to perform that function • The number of other employees who perform the function or to whom the performance of the function can be distributed, and • The degree of expertise or skill required to perform the function • If the employer has prepared a written job description beforeadvertising/interviewing applicants, the description will be considered evidenceof the essential functions of the job

  14. Creating the Job Description • What are the essential functions of the job? • What level of education is needed for the job? • Identify physical, mental and environmental job factors that can help determine whether reasonable accommodations can be made for a disabled applicant or incumbent • If the job requires excessive standing, sitting, climbing, twisting, lifting, typing, etc. … SAY SO! • State physical/strength requirements • Indicate mental/analytical skills; Does the job require multi-tasking, high-stress, rapidly changing directives? • State the expected work hours – even for exempt employees • Include whether the job requires on-site work

  15. Getting the Right ClassificationExempt or non-exempt? That is the question. • The DOL is aggressively enforcing classification compliance • New FLSA overtime rule effective December 1, 2016 • This means it’s more important than ever to get FLSA classification decisions right—and a good start is with a detailed job description • Job descriptions support the company’s classification of a position as exempt from overtime pay requirements both with the job title and the job functions • Exempt/Non-exempt analysis: • Salary level test: At least $455 per week (soon to be $913 per week) • Salary basis test: Employee regularly receives set amount that is not subject to reduction due to quantity or quality of work performed • Job duties test: Focused on the primaryduties • Very fact-intensive inquiry • Assessment of use of discretion and independent judgment

  16. Employer “How Tos”Discussion Points for the Real World Compare this job description: • HR Representative is responsible for all or part of these areas: • HRIS/Records Management and Data Integrity • Attracting and hiring new staff • Orientation/on-boarding of new hires • Compliance to regulatory concerns and reporting With this revised job description: • Recruit applicants and hire new staff by identifying and implementing effective recruiting methods, interviewing, evaluating, and recommending candidates • Create process and procedure and ensure effective on-boarding and orientation of new hires as part of overall retention strategy • Manage HRIS/Records Management and Data Integrity and provide analysis of employment metrics • Knowledge of HR regulatory compliance requirements and develop policies to ensure company is meeting obligations and reporting requirements

  17. Sourcing and Job Postings • Where and how you advertise for a position impacts the applicant pool • From the legal prospective:Illegal for a company to publish a job advertisement that shows a preference for or discourages someone from applying for a job because of a protected class • From the Real World: Looking for qualified, diverse candidates • Best Practices: • Clear, non-discriminatory job postings • Look for opportunities to bring diversity to sourcing • Use an applicant tracking system

  18. Job Sourcing • The EEOC has noted that: • “Who ultimately receives employment opportunities is highly dependent on how and where the employer looks for candidates” • It has found issue with word of mouth recruiting • Homogeneous recruiting (advertising in newspaper that only reaches a certain demographic) • Limiting publication to a particular religious publication • Limiting publication to one associated with a particular origin

  19. Job Postings • Be clear on essential duties • Designate required qualifications (must have) versus preferred qualifications (want to have) • Avoid discriminatory language (be critical of even seemingly innocuous statements) • Seeking recent college graduate • Seeking “young and dynamic” individuals • Seeking a “mature” person • Seeking suitable candidate to join a “youthful, energetic” team • Seeking a “salesman” or “handyman” • Seeking a person who will have a “long-term” fit with the company

  20. Social Media Recruiting Job ads aren’t what they used to be • Using social media to find the right talent: • 2015 SHRM survey: 84% of employers surveyed use social networking sites to recruit candidates, up from 56% in 2011 • 8in 10 HR professionals (82%) said recruiting passive job candidates is the primary reason their organizations use social media for recruitment • 57% do not have any kind of policy—formal or informal—on using social networking sites to screen candidates • Social media recruiting risks: • Concerns regarding diversity of applicant pool • No retention of postings • Informal nature of social media communication

  21. Employer “How Tos”Discussion Points for the Real World RRecruiterJun 18, 3:51pm via Twitter for iPhone #OMG- grt resume!!! When cn u start? • Should an employer communicate with an applicant through social media? • Should an employer have a social media recruiting policy?

  22. Employment Applications • Use an application form not just a resume – why? • Resumes can be false or misleading • An application allows the employer to gather information necessary to properly screen applicants • It helps protect a company by ensuring uniformity of process – everyone is treated the same • Provides a basis for terminating an employee who has falsified an application • Gives opportunity to set the terms of the hiring and employment process • Employment application must be drafted to: • Obtain relevant information, and • Protect your business • Purpose of application does notinclude obtaining protected information: • Age, race, religion, national origin, disability, previous workers’ comp injuries…and possibly unemployment status

  23. Employment Applications • Applications as an employer’s first line of defense • From the legal prospective:EEO protections extend to the application process • From the Real World: Applications need to be lawful and useful • Best practices: • All applicants should complete an employment application • Review your employment application and tailor it to protect your company • State EEO employer status • Establish “at-will” employment relationship and conditions to employment • Agreement to follow company policies • Verify truthfulness of information • Provide for authorizations and releases • Establish limitations on litigation

  24. Employer “How Tos”Discussion Points for the Real World Which questions below can appear on an employment application? • What year did you graduate [high school, college, etc.]? • What is your spouse’s name and occupation? • State your number of workers’ compensation claims. • What is your native language? • How many sick days did you take last year?

  25. Screening Process You now have hundreds of applications on your desk, how can you screen the applications? • Look for ones that have missing information – easy to eliminate • Look for lack of minimal, basic qualifications • Look for “red flags” • Significant gaps in employment • Past employment dates of short duration • Pattern of temporary positions • Typos, formatting issues, sloppy work

  26. Can I Google… • Can employers use social media sites to obtain information on applicants? • Employers may legally obtain information on applicants with the same legal consideration that apply to other background checks • 2015 SHRM Survey: 43% of organizations said they used social media or online search engines to screen job candidates, up from 20% in 2013 • 61% of organizations said that the number one reason for screening public social media profiles of candidates was to obtain more information about the person than provided in a resume • Legal risks: • Obtaining information about protected categories • Privacy issues • Protection of off duty conduct

  27. Social Media Checks • Best practices: • Establish a protocol for review of social media sites • Include “public social media” review as part of release/consent for background check • Determine when in the hiring process to review social media sites • Designate who may conduct social media check and what information can be provided to decision makers • Consider only lawful information that serves a legitimate, non-discriminatory predictor of job performance

  28. Social Media Checks • Best practices: • Keep records of information reviewed and used in the employment decision • Do not create a false identity to attempt to gain access to a person’s social media page • Check for state laws that prohibit the use of social media or restrict its use as it pertains to “off duty” conduct

  29. #SocialMediaandGenY • The generation coming into the workforce views social media differently • They have no boundaries and will blog, tweet, instagram…. about anything and everything • So, how does an employer handle that in the hiring process? Cisco just offered me a job! Now I have to weigh the utility of a fatty paycheck against the daily commute to San Jose and HATING the work. Who is the hiring manager. I’m sure they would love to know that you will hate the work. We here at Cisco are versed in the web.

  30. Interview Process • Careful planning for the interview will help prevent inquiry into illegal areas • Ask questions that elicit legitimate job-related information – not information about an applicant’s membership in a protected category • Design an interview process to obtain information that is legitimately useful in the hiring decision • How do you do that? • Train managers on interviewing techniques and related legal considerations • Know what can and can’t be asked • Ensure that managers do not make misleading statements about likelihood of an offer or the nature of the job • Develop interview protocols that establish consistency in the process (e.g., written interview questions, procedure regarding note-taking)

  31. Can You Ask… • You look so young, how old are you? • Do you have children with whom the hours of this job might cause a problem? • Do you have reliable transportation to ensure you get to work on time? • I detect a South American accent, are you from Peru by any chance? • Have you ever been arrested? • This is a picture of my husband, are you also married? • Are you eligible to work in the United States? • I went to the same high school. What year did you graduate? • What days are you available for work? • The job requires lifting of 50 lbs. Are you able to perform that essential function with or without reasonable accommodation? • Are you voting for Hillary or Donald?

  32. Oh No, Now What? • An interviewee has voluntarily shared inappropriate information such as his national origin, genetic information, etc. Now what? • How do you do that? • You should not ask follow-up questions even though the human side of you says you should • You should steer the conversation back to the structured interview • If the interviewee persists in pursuing the discussion, tell the interviewee that it’s not appropriate in an interview to share this information and ask that he/she move on • Keep careful notes to establish you did not bring up or pursue the illegal topic

  33. Background Screening • Types of screening cover a broad range of investigations • References, education checks, driving history, credit checks, license/certification checks, criminal background checks, social media screening • Employment screening and hiring practices are under tough scrutiny from the EEOC, Congress and even state legislatures • Employers who use these types of background check procedures should review policies for compliance • Beware of the Fair Credit Reporting Act in your screening process • If you do not utilize a third party to perform your background checks, the FCRA does not apply • If you do use a third party to perform your background checks, the FCRA does apply

  34. FCRA Screening Process • Fair Credit Reporting Act Overview

  35. Credit Checks • Can employers perform credit checks? • Yes… • However, the EEOC has expressed concern that credit checks can lead to discriminatory hiring practices • Credit checks must comply with FCRA requirements – if a 3rd party entity is involved • State law: A number of states have recently enacted, or are considering, limits on credit checks: • California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Oregon, Nevada, Vermont, and Washington have laws limiting the use of credit informaitonfor employment purposes • Several other states are considering legislation to limit employer use of credit report information

  36. Credit Check Compliance • Best practices: • Be selective on which positions to subject to a credit check • Have a legitimate business reason as to why a credit check is needed for predicting job performance that is related to the business functions • Ensure that managers use only the information relevant to the job in question to make an employment decision • Allow the candidate to explain the reasons for negative credit information. This will place you in a better position to assert that the credit information really was job related and consistent with business necessity. • Comply with applicable state law

  37. Criminal Record Checks

  38. Criminal Record Check Compliance • EEOC issued new Enforcement Guidance on Criminal Background Checksin April 2012 • Blanket policies against hiring because of criminal record generally prohibited • EEOCguidance best practices: • Targeted screens: Analyze the actual requirements of each job to determine whether a business justification exists to deny employment based on criminal background (i.e., “job-related and consistent with business necessity”), and consider: • Individualized assessments: • The nature and gravity of the crime • The nature of the job held or sought • Time passed since the crime and/or completion of the sentence • Extenuating circumstances

  39. Criminal Record Check Compliance • Beware of multidimensional compliance issues • Additional federal and state law compliance issues • FCRA compliance • State and local restrictions • “Ban the Box” restrictions: 100+ jurisdictions now have some form of restriction on employers (public and/or private) from requesting criminal history information in the employment application • Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island, Vermont and Washington D.C. – have statewide laws that prohibit private employers from asking about criminal history on job applications

  40. Employer “How Tos”Discussion Points for the Real World • A1Employer is considering hiring an applicant, Sam Shadey, as its bookkeeper • Background check conducted uncovered criminal conviction for felony theft five years ago • Now, what can/should A1 do? • First, review employment application: Did Sam lie on the employment application? • Second, determine whether exclusion from the position based on criminal conduct is job-related and consistent with business necessity • Third, begin FCRA adverse action notification process

  41. Offer Letter • The job offer should be in writing and detailed as to the terms and conditions of the offer • Position • Nature of relationship: At-will • Compensation • Base pay • Commission • Bonus—Conditions for receiving bonus • Confidentiality and other restrictive covenants/issues • Sunset date for acceptance and require applicant’s signature of acceptance • Any contingencies to offer: Subject to background check other testing, I-9 requirements, no restrictions on applicant’s ability to work

  42. Employee Testing • EEOC has also increased scrutiny of employment testing along with other hiring processes as it targets barriers to hiring • Two main types of testing: • Physical and medical tests, including drug tests • Skills-based testing • Both present significant issues and require planning and care from employers • General rules: • All employees and applicants for the same position should be treated similarly and given the same set of tests/exams • Tests should be job-related and consistent with business necessity

  43. I-9 Process: Employment Eligibility Verification • Audit the I-9 forms to evaluate compliance and correct errors in the forms • I-9s are a seemingly simple one page form • Despite this, nearly every organization has some issue with its employees’ I-9s • I-9 compliance is an employer’s responsibility • Note: New I-9 form effective January 21, 2017 • Best practices: • Conduct yearly audits of I-9s to ensure compliance and update out-of-date forms • Take corrective measures where I-9 errors are discovered and, if necessary, seek legal assistance to ensure that corrections are completed accurately

  44. Closing the Loop • Document your hiring decision – the time you spend documenting the decision may be worth millions • The documentation should include specific reasons as to why the person was selected • Communicate with the others you interviewed that they were not selected for the job

  45. Employer “How Tos”Discussion Points for the Real World • How to handle rejected applicants To: Hiring Manager Fr: Sam Shadey When I interviewed last week, my experience seemed like the perfect fit. Talkative Tom, the manager, hinted that I would be starting soon. Can you tell me why I didn’t receive an offer? Can I apply for other open positions that are posted? • Is it legally necessary to respond to inquiries from rejected applicants? • While not legally necessary, it is a good practice to have a consistentapproach to rejected applicants • Why? • Proper etiquette • Provides certainty to applicant • Reduce “annoying” follow-up inquiries • Good-will

  46. “Best Practice” Takeaways • Analyze job duties, functions and competencies to produce objective, job-related qualification standards and compensation structure • Recruit, hire and promote with EEO principles in mind – including providing accommodation when needed • Ensure background check procedures are job-related and comply with federal and state laws • Provide accurate professional feedback to rejected applicants

  47. Thank you! Nicole J. Gray Member McDonald Hopkins LLC 216.348.5418 ngray@mcdonaldhopkins.com

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