HiredThere are many laws governing the hiring of employees, from the questions an employer is allowed to ask, to how job placement ads must be worded.  While there are many ways to hire a new employee, there are also many ways to get into trouble when doing so.  Here are five of the most common areas for mistakes which California businesses make during the hiring process.

Job Advertisements

Federal employment laws and state employment laws make illegal any employment ad with reference to the religion, race, national origin, medical condition, physical or mental disability, marital status, sex or sexual orientation, ancestry, age or color of applicant.  Job placement ads shouldn’t contain language such as “young,” “male,” “straight,” or any language which refers to the aforementioned categories.  This type of language may be in violation of federal or state law and could lead to a lawsuit.

Illegal Interview Questions

During the interview for a prospective employee, there are questions which are illegal.  Relevant questions should be asked regarding skills, prior experience and education, as well as questions regarding job-specific qualifications which impact performance of the job in question.  While an employer may desire to know other specifics, there are certain areas of inquiry which are disallowed by law.  Areas of inquiry which should not be broached during the interview process include:

  • Age of applicant
  • Familial relations, including whether the applicant has children
  • Marital status
  • Pregnancy
  • Religious affiliation
  • Sexual orientation
  • Disability

Written Contract

In the state of California, employees who are not offered a written contract or letter of employment may be fired “at will”.  Without a written contract or letter of employment, an employee is considered to be “at will” and may be released for any reason or no reason at all. It’s the potential employee’s responsibility to request such a contract if they wish to have any guarantees in terms of how their employment contract may be terminated.  Such a document should contain the following information:

  • Position/title of employee
  • Starting hourly wage/salary
  • Date employment is expected to commence
  • Employee benefits
  • Statement of at-will employments

The statement of employment should contain a concise explanation of how the employment relationship may be altered at a future date.  Failure to comply with the terms of a properly drafted and signed employee offer of employment or written contract can result in the employer being sued for wrongful termination after employment has ended. Essentially, if the employer is unable to prove compliance with the terms stated in such a contract, the court will likely find in favor of the employee in a wrongful termination suit.

Background and Credit Checks

If an employee is hired and they have a history of violent conduct, the employer can be sued if that employee causes injury to other employees.  The injured employee can bring a claim against the employer of “negligent hiring”.  It’s important to conduct the background check in an appropriate way; such a check can reveal masses of information about a prospective employee.  The check must be limited in scope and should only cover information which is both factual and related to the job.  The applicant should sign a form verifying their consent to such a check; the form should also include verification that the applicant has been informed that such a check will be taking place.  Along with verification, the form should also give the extent and nature of the check, as well as a release for previous employers to provide relevant information.  All information gathered should be kept completely confidential, in a separate confidential file.  It should not be kept in the personnel file of the employee.

New laws became effective as of January 1st, 2012 concerning credit checks on prospective employees.  Part of the California Labor Code (§1024.5) now disallows most employers in the state from obtaining consumer reports for a prospective employee’s credit, except in certain circumstance, which are very limited in scope.  If a prospective employee is subject to an exemption, the employer may perform a check of the applicant’s credit, but must comply with notices and procedural requirements at both the state and federal level.

Also as of the first day of January, 2012, the notice requirement within the state has been amended by A.B. 22, which amends §1785.20.5 of the Civil Code, and requires the employer to give applicants written notice of the credit check in advance.  The notice must identify the basis of the check pursuant to Labor Code section 1024.5(a), identifying the reasons the report is to be used.  The applicant must provide written authorization prior to such checks being conducted.

If an employer fails to hire an applicant after reviewing their credit report, the employer must provide the applicant with a copy of the relevant report, as well as a copy of “A Summary of Your Rights under the Fair Credit Reporting Act,” and written notice of the decision, including:

  • Name and contact information of credit agency preparing said report
  • Statement confirming that employer, not reporting agency, is responsible for decision not to hire

The applicant may dispute information in the credit report if it is inaccurate or incomplete.  The applicant has the right to procure, at no cost and within 60 days, a credit report from the agency.

Tax Form Failures

Employers in California, even those with a single employee, have to be registered with the CEDD (California Employment Development Department).  Employers must complete an Employer Registration form, known as Form DE-1, and Form DE 34, Report of New Hire form, for every new employee.  This form must be completed no later than 15 days after the new employee has been paid $100 or more.  An Employment Eligibility Verification (I-9) and W-4 must be filled out for every new employee.  If the applicant serves in the capacity of an independent contractor and will earn $600 or more, California employers must complete a Report of Independent Contractors.