Hiring 101: Evaluating the Candidate

Your business is growing and you’re ready to bring someone aboard to join your team. But the hiring process can be complicated and intimidating. Check out these important things to keep in mind as you attempt to find the perfect candidate.

Good employees can be the most crucial ingredient in a successful business. But finding and hiring good employees can be among the most challenging aspects of running a small or growing company. There are some important things to keep in mind as you set out to add the best-of-the-best to your team.

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    Know the laws

    Numerous federal and state laws govern the various processes of soliciting employees, including advertising, interviewing and hiring. If you don’t follow the rules, you may find yourself as the defendant in a lawsuit over your hiring (or non-hiring) practices.  Or, you may end up being stuck with a very costly and unproductive employee who you have trouble firing.

    Employers are subject to many laws requiring equal employment opportunity and prohibiting discrimination in employment, which can include:

    • Title VII of the Civil Rights Act of 1964;
    • Equal Pay Act;
    • Age Discrimination in Employment Act;
    • Civil Rights Act of 1966;
    • Immigration Reform and Control Act;
    • American with Disabilities Act; and
    • numerous other federal and state laws.

    Don’t even Go there

    You probably have many questions that you would like to ask a prospective employee. But certain questions can only get you in trouble (yes, you can trip over many laws in an interview). The following seven questions are examples of questions you should NOT ask:

    No.1: How old are you?

    No. 2: Do you have any disabilities?

    No. 3: Are you pregnant?

    No. 4: Are you married with kids?

    No. 5: Have you ever been arrested?

    No. 6: What is your religious affiliation?

    No. 7: What is your sexual orientation?

    Focus on questions relating to the skill and experience of the candidates and the qualifications needed to perform the job.

    Do your homework

    Once you find the “perfect” candidate for the job, you should perform a background and reference check before extending an offer. Ideally the prospective employee will sign your “background check permission form,” which allows you to get reference information from prior employers and even do a credit-check. Before formally requesting information in writing from a prior employer, make sure the prospective employee gives you permission to do so. However, you may find that previous employers are reluctant to give much information, often confirming only the employment, position and maybe salary. (And yes, your company should have a similar policy with respect to your departing employees.)

    From a fact-checking perspective, think about checking out school experience (some people embellish their degrees or where they went to school); talk to the candidate’s former supervisor(s), if possible, who may provide more meaningful information than the company’s HR department; for sensitive jobs, check for felony convictions; and verify past employment (ensure the candidate actually worked at each of the companies listed, in the position listed, and check dates of employment).

    Stacy is a founding member of BauerGriffith, a business law firm providing high quality legal and business counsel to a wide array of clients, with an emphasis on non-profit organizations, small business and individual planning clients. She serves as outsourced corporate counsel for diverse clients, partnering with executive management to design, plan and implement stated and defined business objectives within legal parameters.
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    Next up: How to Avoid a Giant Bill by Misclassifying Employees as Independent Contractors
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  • How to Avoid a Giant Bill by Misclassifying Employees as Independent Contractors

    Follow these helpful tips to help your business avoid all of the extra taxes and penalties that go with misclassifying employees.

    If a worker is misclassified, your company could be liable for an enormous bill for back employment taxes plus penalties, interest and legal costs. In assessing whether a worker is an employee or an independent contractor, the IRS has concluded that such a determination revolves around control.

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    First, if your company is exercising behavioral control over a worker by dictating when and where to do work, the sequence in which to perform the work, and providing training regarding required procedures and methods, that worker should most likely be classified as an employee. Second, if you are in financial control of a worker by directing the financial and business aspects of a worker’s job, they are also more likely to be an employee.

    Below are 10 helpful tips that will help ensure that you’re not treating your independent contractors like employees.

    1. Don’t closely supervise the independent contractor or their assistants.
    2. Don’t let the independent contractor work at your office, unless the nature of the service they’re providing requires it.
    3. Don’t give the independent contractor employee handbooks or company policy manuals.
    4. Don’t establish the working hours.
    5. Don’t provide ongoing instructions or training.
    6. Don’t provide equipment or materials unless it’s necessary.
    7. Don’t pay for travel or other business expenses directly.
    8. Require independent contractors to sign documentation stating that they are not entitled to, and will not seek, unemployment benefits, and don’t provide any other form of benefits to them.
    9. Don’t provide business cards or stationary with your company’s logo for the contractor to use or distribute.
    10. Require that they submit invoices for their time and expenses and pay them like a vendor, as opposed to weekly or biweekly.

    Ending the relationship

    There is not a single rule or test for determining whether an individual is an independent contractor or an employee, but these tips highlight factors which have been considered by the courts in worker classification cases. In addition to these 10 tips, it’s also important to note that how the relationship can be ended might determine status. The ability of a worker to terminate the relationship with your company at any time he or she wishes without incurring liability indicates employee status. To avoid this, you should consider documenting an exit protocol to the contrary (for example, requiring 30 days’ written notice of termination between your company and any independent contractor).

    If you find yourself in a situation where you are unsure of how to classify a worker, you can request an IRS determination by filing Form SS-8, “Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” However, be cautious to the fact that the IRS usually classifies workers as employees whenever it’s not clear-cut what their status is. Further, employers that request such a determination lose protections against liability for misclassification. Filing Form SS-8 without talking to an attorney is not recommended.

    It’s important to not only be aware of the distinctions that exist between employees and independent contractors, but also to be conscious of them always. If you’re not careful in how your treat independent contractors, you’ll likely find yourself handing over a wad of cash to Uncle Sam instead of to your next big project!

    For more information on this topic, contact Alex Gertsburg at 440-571-7775 or ag@gertsburglaw.com.

    Get more legal tips for your business on The Gertsburg Law Firm blog, with new articles every week. 

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    Next up: How to Create and Best Utilize Your Internship Program
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    Next up: How to Cultivate a Team Culture
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  • How to Cultivate a Team Culture

    Cultivating a team culture in your business helps keep your employees focused on the mission of the organization instead of worrying about group dynamics. A positive team culture can also do wonders for employee morale and productivity. We spoke to Tameka L. Taylor, Ph.D, CDE, president of Compass Consulting Services, LLC, who shared her tips on keeping your team happy.

    Cultivating a team culture in your business helps keep your employees focused on the mission of the organization instead of worrying about group dynamics. A positive team culture can also do wonders for employee morale and productivity. We spoke to Tameka L. Taylor, Ph.D, CDE, president of Compass Consulting Services, LLC, who shared her tips on how to keep your team happy:

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    • Show Appreciation – Recognize your employees and enhance group dynamics through regularly scheduled appreciation activities like lunches, company cookouts and other activities outside of the office. Learning more about each other on a personal level outside of the work environment can build relationships and respect and, ultimately, teamwork. (Tip: Schedule activities during business hours so employees can’t opt out.)
    • Engage in Team Building Activities – Team building exercises are a great way to build trust and respect, enhance communication and promote teamwork. (Tip: There is great value in bringing in a neutral party to facilitate team building exercises. Employee responses and engagement become different when these activities are led by the boss.)
    • Resolve Conflict Quickly – While disagreements and conflict are natural among employees or between management and staff, unresolved conflict can lead to a lack of collaboration and a loss of creativity and productivity. Conflict brings with it high stress levels and emotions that when not addressed quickly can become landmines that will eventually blow up. (Tip: Don’t procrastinate. These things never blow up at a convenient time.)

    This article originally appeared in the May 11, 2015, edition of Small Business Matters.

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