The hiring process cannot be underestimate, both from a managerial and legal perspective.  This Friday’s Five focuses on critical management and legal considerations for employers during the hiring process:

1. Ignore the applicant’s resume during the interview.

Nolan Bushnell, the inventor of Atari and Chuck E. Cheese, and the first person to hire Steve Jobs, provides some great examples of how to conduct an interview to determine if the applicant is a good fit for the company in his book, Finding the Next Steve Jobs.  He recommends asking applicants about their top ten favorite books, listening to how they describe their life (“the passionless tend to be blamers”), and asking questions that have no right answers. This allows the interviewer to understand how the applicant analyzes a problem.  The book is a must read for leaders in companies that require creative thought leaders working in their establishment.

2. Leaders need to be involved in the hiring process.

This is simply something too important for a company to leave to other people.  Sam Altman, of Y Combinator, wrote:

The vast majority of founders don’t spend nearly enough time hiring. After you figure out your vision and get product-market fit, you should probably be spending between a third and a half of your time hiring. It sounds crazy, and there will always be a ton of other work, but it’s the highest-leverage thing you can do, and great companies always, always have great people. You can’t outsource this—you need to be spending time identifying people, getting potential candidates to want to work at your company, and meeting every person that comes to interview. Keith Rabois believes the CEO/founders should interview every candidate until the company is at least 500 employees.

Founders interviewing employee number 1 to 500 sets to tone for the company in many ways in addition to the value mentioned by Sam. First, meeting all new hires illustrates that the employees are valued. Second, it shows that the founders are approachable and should the employee have any complaints they could discuss the issues with the founders. Granted once the company passes the 50 employee mark, it becomes more difficult to have a personal relationship with everyone in the company, but at least the founders are meeting everyone working at the company. This proves to the employees that they are valued. Usually the company’s open door policy states that if the employee has any complaints, they are free to discuss it with their supervisor, and if appropriate their concerns can be escalated to the founders/CEO. Meeting with employee during the hiring process can give teeth to the open door policy, and promote the practice of speaking with the founders if any employees have concerns about work.

3. Try working with the applicant first.

I don’t care how many interviews someone has conducted, no one can determine if an applicant will be a good fit in a company over an interview at lunch. No matter how good you believe your interview questions are at finding out the applicant’s true values, work ethic, and knowledge base, anyone with an internet can study-up on how to handle almost any type of interview scenario and look amazing during the interview. How does a company get past this problem? Sam Altman again has some great advice and recommends hiring the applicant as an independent contractor and giving her a day or two of work on a noncritical project. I recommend that companies may take it one step further, and depending on the circumstances, it may even be appropriate to hire the applicant as an employee with the idea that they are to only work on one short project during the nights or weekends. There is nothing in the law that prevents a company from hiring employees for a day or two to see how they would work, that is the idea behind at-will employment.

4. Find the applicant’s true ambition.

 Gary Vaynerchuk has a great take on what interviewers should be striving to determine during the interview:

 When I interview you, the main thing I want to know is where you want your career to go. “What do you want to be when you grow up?” I want to get into the psychology of what their ambition is. And I spend most of the interview trying to get that person comfortable enough to tell me the truth to that question. Because I don’t care if you want to be the CEO of VaynerMedia, or if you just want to move a couple levels up and have great work life balance. I don’t even care if you want to come work for me for two years, suck up all my IP, and then go somewhere to start your own agency. I really don’t care. Truly. Whatever your agenda is, I’m fine with it. I just want to know what it is, so I can help us get there. You and me.

5. Make a checklist of legal hiring compliance issues.

As always, it is good to periodically review hiring materials, questions and processes to insure compliance with local, city, and state laws, such as:

  • Are applications seeking appropriate information?
  • Are new hires provided with required policies and notices?
  • Are new hires provided and acknowledge recommended policies?
    • For example: meal period waivers for shifts less than six hours
  • Are hiring managers trained about the correct questions to ask during the interview?
  • Does the company provide new hires (and existing employees) with arbitration agreements?

Effective January 1, 2018 California employers can no longer ask an applicant for employment to disclose information about criminal convictions.  The new law (added as Section 12952 to the Government Code) applies to employers with 5 or more employees.  Once an offer of employment has been made, employers can conduct criminal history background checks, but only when the conviction history has a “direct and adverse relationship with the specific duties of the job,” and requires certain disclosures to the applicant if employment is denied based on the background check.  This Friday’s Five covers five areas of the new law that California employers should be aware of when hiring employees:

1. Employers may not include on any application for employment “any questions that seeks the disclosure of an applicant’s conviction history.”

2. Employers may not inquire into or consider this conviction history of the applicant, including any inquiry about conviction history on any employment application, until after the employer has made a conditional offer of employment to the applicant.

3. Employers can only research certain areas of an applicant’s background after a conditional offer has been made.

Employers may not “consider, distribute, or disseminate information” relating to any of the following areas when conducting a conviction history background check:

(A) Arrest not followed by conviction, except in some limited circumstances set forth in Labor Code section 432.7.

(B) Referral to or participation in a pretrial or posttrial diversion program.

(C) Convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.

4. If an employer intends to deny employment based on the applicant’s conviction history, it must make an “individualized assessment” if the conviction history “has a direct and adverse relationship with the specific duties of the job.

In making his determination, the employer shall consider all of the following:

(i) The nature and gravity of the offense or conduct.

(ii) The time that has passed since the offense or conduct and completion of the sentence.

(iii) The nature of the job held or sought.

The employer is not required to record these results of this individualized assessment in writing. However, employers that are governed by local city and county background checks must be careful to follow those requirements as well.  For example, Los Angeles’ ordinance requires that employers provide this assessment in writing to applicants. 

5. If the employer preliminary disqualifies the applicant based on a conviction history, the employer is required to provide written notice to the applicant.

The notice must contain all of the following items:

(A) Notice of the disqualifying conviction or convictions that are the basis for the preliminary decision to rescind the offer.

(B) A copy of the conviction history report, if any.

(C) An explanation of the applicant’s right to respond to the notice of the employer’s preliminary decision before that decision becomes final and the deadline by which to respond. The explanation shall inform the applicant that the response may include submission of evidence challenging the accuracy of the conviction history report that is the basis for rescinding the offer, evidence of rehabilitation or mitigating circumstances, or both.

The applicant then has five business days to respond to the notice before the employer makes a final decision.  If the employee responds within this time limit, and states that they dispute the accuracy of the conviction history report and is in the process of obtaining evidence to support their position, the applicant will have an extra five business days to respond.  The employer must consider the information provided by the applicant before making a final decision.

If the employer makes a final decision denying the applicant employment solely or in part because of the applicant’s conviction history, the employer is required to provide a second written notice to the applicant containing the following:

(A) The final denial or disqualification. The employer may, but is not required to, justify or explain the employer’s reasoning for making the final denial or disqualification.

(B) Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration.

(C) The right to file a complaint with the Department of Fair Employment and Housing.

In addition to this new law, California employers need to be sure they are in compliance with the Federal Fair Credit Reporting Act (FCRA) and the California Investigative Consumer Reporting Agencies Act (ICRAA) when conducting any background checks.

Happy New Year.  I started the Friday’s Five articles in the summer of 2014, and the interest in the articles has been more than I expected.  I appreciate everyone who has read them and provided comments and feedback. If you have any topics you would like me to address, please let me know. With that said, here is a list of five resolutions for California employers in 2018:

1. Relax – Still need to make sure your employees are taking their meal and rest breaks.

2. Train – All supervisors must be trained to comply with California’s required sexual harassment prevention training for employers with 50 or more employees.

Since 2015 the training must discuss bullying in the workplace to be legally compliant, and as of January 1, 2018, the training also needs to cover harassment based on gender identity, gender expression, and sexual orientation.

3. Read – Update employment handbook policies on a yearly basis.

2018 has a few new laws that should be addressed the employee handbook and new hire packets.

4. Run – Sorry, no play on words with this one, you just need to get outside and run a bit.

5. Organize – and keep employment files, time records and wage information for at least the length of any applicable statute of limitations.

Employers should review their systems to ensure there is a process in place on how to organize and maintain employment information for the required time periods, it is required under the law and can help defend the company should litigation ensue.

A final more bonus resolution:
Learn – more by attending my webinars on California employment laws to stay up to date.

In the next month, I will be hosting a seminar on the new laws facing employers in 2018 and what steps should be taken to comply. The date is still to be determined, but drop me an email if you are interested and I make sure you are notified once we set the date and location.

Wishing you the best in 2018!

AB 168 was approved by Governor Brown on October 12, 2017 which prohibits employers from seeking or taking into consideration an applicant’s prior compensation and benefits when determining whether to hire the applicant, and in setting the applicant’s compensation and benefits.  The new law creates Labor Code section 432.3.  This Friday’s Five covers five issues of the new law that employers must understand:

1. The law applies to all employers, regardless of size, effective January 1, 2018.

2. Employers may not rely on salary history information of an applicant in determining whether to offer employment and in determining the about of compensation to offer.

3. Employers may not seek salary history information, which includes compensation and benefits, about the applicant.

4. Upon a reasonable request, an employer must provide the “pay scale” for the position to an applicant.

5. Nothing in the law prohibits employees from voluntarily disclosing salary history to a prospective employer.

AB 168 was approved by Governor Brown on October 12, 2017 which prohibits employers from seeking or taking into consideration an applicant’s prior compensation and benefits when determining whether to hire the applicant, and in setting the applicant’s compensation and benefits.  The new law creates Labor Code section 432.3.  This Friday’s Five covers five issues of the new law that employers must understand:

  1. The law applies to all employers, regardless of size, effective January 1, 2018.
  2. Employers may not rely on salary history information of an applicant in determining whether to offer employment and in determining the about of compensation to offer.
  3. Employers may not seek salary history information, which includes compensation and benefits, about the applicant.
  4. Upon a reasonable request, an employer must provide the “pay scale” for the position to an applicant.
  5. Nothing in the law prohibits employees from voluntarily disclosing salary history to a prospective employer.

Employers should start taking steps to comply with the new law by the beginning of the new year to ensure compliance.  Some steps to consider include:

  • Train hiring managers about new law and that they are not to seek information from applicants regarding prior salary and benefits history.
  • Remove any requests or questions about salaries at prior employment on applications or other documents provided to candidates.
  • Prepare a set “pay scale” for the positions the employer is hiring for. The law does not set forth what information must be included on the pay scale.  In addition, the law does not explicitly require that this information must be provided in writing to the applicant.  However, employers should consider whether the pay scale should be done in writing in case there is a dispute about whether the pay scale was provided to the applicant and what information was conveyed to the applicant.

California’s state legislature is nearing the end of its term, and employers are beginning to glimpse some of the laws that could apply in 2018.  There are multiple proposed bills that prohibits employers’ ability to rely upon or seek information about applicant’s previous wages to set the employee’s pay.  This Friday’s Five reviews the current law – California’s Fair Pay Act, the proposed bills on disclosure of wages, and San Francisco’s local ordinance that recently passed.

1. Current law – California’s Fair Pay Act (Labor Code section 1197.5)

Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work for work performance that requires equal skill, effort, and responsibility that are performed under similar working conditions.  Effective as of January 1, 2017, AB 1676 amended California’s Fair Pay Act, found in Labor Code section 1197.5, prohibiting employers from relying on an employee’s prior salary, by itself, to justify any disparity in compensation.  It is important to note the bill was modified to take out language that would have prohibited employers from obtaining an applicant’s prior salary.

2. Proposed State Bill – AB 1209 – Gender Pay Gap Transparency Act

This bill has been sent to the Governor’s desk during the week of September 11, 2017 to be signed into law or vetoed.  The bill, if signed by the Governor, would require employers with at least 500 employees to calculate the difference between the wages of male and female exempt employees in California by each job classification or title.  The employer would also have to do the same for all board members who are located in California.  The employer would need to report the difference in pay, which would be published on the Internet by the Secretary of State.  Governor Brown has until October 15, 2017 to sign or veto the bill.

3. Proposed State Bill – AB 168 – Salary Information

This bill prohibits employers from replying upon or seeking salary history from applicants.  In addition, employers would be required to provide the pay scale for a position to an applicant.

4. San Francisco local ordinance: Parity in Pay Ordinance

San Francisco passed a local law that prohibits employers from asking job applicants to disclose their salary history.  It also prohibits employers from considering an applicant’s pay history as a factor in determining the level of pay to offer.  The law is effective July 1, 2018, so San Francisco employers have some time to review hiring practices to comply.

5. Proposed State Bill – AB 46 – Wage Discrimination

This bill amends the California Fair Pay Act to make clear that the law applies to both public and private employers.

While the information posted on the Internet on social networking sites is usually public for everyone to see, employers need to be aware of potential claims for using this information in the employment context.  The law, as usual, cannot keep up with the fast-moving technology and change social media sites, so there are many uncertainties in this area.  This Friday’s Five discusses potential pitfalls California employers need to be aware of when conducting background checks.

1. Local City “Ban The Box” Ordinances

Many local cities in California have passed ordinances restricting an employer’s ability to conduct criminal history checks on applicants and employees.  For example, Los Angeles passed the Fair Chance Initiative for Hiring Ordinance that prohibits employers from seeking criminal background information prior to offering a job to applicants.  The law became effective on January 1, 2017, and the city began enforcing the law on July 1, 2017.  Under the ordinance, employers cannot conduct any “direct or indirect” activity to gather criminal history from or about any applicant using any form of communication, including on application forms, interviews or Criminal History Reports.  This includes searching the internet for information pertaining to the applicant’s criminal history.  Employers must be aware of their local ordinances to ensure that any background research on applicants or employees meets the requirements that apply to them.  More information on Los Angeles’ ordinance can be read here.

2. Federal and State Discrimination Claims

Because people are becoming so comfortable in sharing private information on social networking sites, employers may learn too much information about an applicant that would not and could not have been discovered through an interview. Discovery of this personal information is not unlawful – it is likely that the employer would find out many of these traits at the first in-person interview with the applicant anyway. However, employers cannot base its employment decisions upon a protected category, such as race or gender.   By learning about this type of information of an applicant via their on-line profile, the employer may have to explain that the information did not enter into the hiring decision.

3. Invasion of Privacy Claims

Though one might argue that members of social networking sites have no expectation of privacy (since the information is posted publicly) some applicants or employees might argue that the employer overstepped its legal bounds by using profile data in employment decisions. Arguably, the terms of service agreement may create expectation of privacy for users of site.

State Law Privacy Claims
Employees could potentially argue that using Facebook, Snapchat, Instagram, or similar site to conduct background checks violate state statutory law. For example, California and New York have statutes that prohibit employers from interfering with employee’s off-duty private lives. Employees may attempt to argue a public policy violation has occurred in violating a state statute that protects off-duty conduct from employer’s control.

State common law could also create liability. Generally, there are four common law torts for invasion of privacy:

  1. intrusion upon seclusion,
  2. public disclosure of private facts causing injury to one’s reputation,
  3. publicly placing an individual in a false light, and
  4. appropriation of another’s name or likeness for one’s own use or benefit.

As explained by one court, the tort of unreasonable intrusion upon the seclusion of another, “depends upon some type of highly offensive prying into the physical boundaries or affairs of another person. The basis of the tort is not publication or publicity. Rather, the core of this tort is the offensive prying into the private domain of another.” (citing Restatement (Second) of Torts § 652B, comments a, b, at 378-79 (1977)). Generally, the invasion of privacy must consist of (1) highly offensive intrusion (deceitful means to obtain information); and (2) prying into private information (information placed on the web is most likely not private).

4. Fair Credit Reporting Act (“FCRA”)

An employer’s use of social networking sites may implicate the FCRA, which places additional disclosures and authorization requirements on employers. In enacting the FCRA, Congress stated its underlying purpose was to ensure that decisions affecting extension of credit, insurance, and employment, among other things, were based on fair, accurate, and relevant information about consumers. The FCRA is intended to provide employee with notice of the background check, authorization to conduct the check in certain circumstances, and disclosure to the employee if the information is used in the employment context.

FCRA Definitions:

  • A “consumer report” is defined at as information (oral, written, or other communication) provided by a “consumer reporting agency” about credit matters as well as about a person’s “character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for…employment purposes.”
  • Another kind of “consumer report,” called an “investigative consumer report” contains information on a consumer’s character, general reputation, personal characteristics, or mode of living that is obtained through personal interviews with friends, neighbors, and associates of the consumer.
  • A “consumer reporting agency,” is defined as “any person who regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.”

Employers who conduct the background checks internally do not qualify as a “consumer reporting agency” and therefore the FCRA does not apply. Employers still need to be careful, however, because state law may apply. For example, California Investigative Consumer Reporting Agencies Act is more restrictive than the FCRA.

5. Terms of Service Violations

Social media sites have terms of service posted on their pages that generally prohibit use of their content for “commercial purposes.” Violation of the terms of service would not automatically create a cause of action in and of itself. However, as discussed above, it may be a way for a plaintiff to argue that there is an expectation of privacy in using the site and everyone who signs up to use the site is agreeing to abide by those terms.

In this Friday’s Five I recommend books that I am either reading and have read related to managing employees or a business.  I hope everyone is having a great summer.

 

1. Manager Onboarding: 5 Steps for Setting New Leaders Up for Success

By Sharlyn Lauby

 

2. 101 Tough Conversations to Have with Employees: A Manager’s Guide to Addressing Performance, Conduct, and Discipline Challenges

By Paul Falcone

 

3. 101 Sample Write-Ups for Documenting Employee Performance Problems: A Guide to Progressive Discipline & Termination

By Paul Falcone

 

4. How to Win Friends & Influence People

By:  Dale Carnegie

A classic business book not often thought of as a human resources book.  However, many of the principles set out in this book are great practices for human recourse managers.

 

5. The Thank You Economy

By: Gary Vaynerchuk

Anther book not thought of as a traditional human resources book, but many of the lessons set out by Gary on how to market and build a successful business in today’s economy equally apply to human resources and managing a workforce.  Being authentic and focusing on one-on-one interactions with people will always be a good practice, no matter how technical the workplace becomes.

Photo by Ben White on Unsplash

USCIS released a revised version of Form I-9, Employment Eligibility Verification. The revised I-9 was released on July 17, 2017, and employers can use this revised version or continue using Form I-9 with a revision date of 11/14/16 N through September 17, 2017. On September 18, 2017 employers must use the revised form with a revision date of 07/17/17 N. Employers must continue following existing storage and retention rules for any previously completed Form I-9.