Employees

In these pages, we provide some basic information on how to deal with employees. This could easily be included in the Legal Section, since much of the material is legal in nature, but we put it here because employees are primarily a business concern.

Before we begin the discusssion, here are a list of some forms that you should remember to fill out for each employee that you hire:

  • Form I-9 (Immigration) within three days of hiring an employee
  • W-4 (IRS)
  • State forms
  • local

Interviewing and making (or not making) an offer to prospective employees

When you do get applications (and if you advertise a job opening, you will get plenty of them), select four or five from the multitude. Contact these people and ask them to stop by for an interview. Send the rest of the applicants a polite form letter thanking them for their interest.

The authors of this site have been through way too many interviews in their short lives, so if we can offer you one bit of advice, avoid “pressure” interviews (i.e., act like an asshole and see how the applicant performs under pressure) unless this is the kind of situation the applicant will face in the workplace. Pressure interviews turn off applicants and fail to tell you if the person would be a good employee. That being said, there are some other “rules of conduct” to follow when interviewing prospective employees:

  1. NEVER contact the current employer of the applicant. That is a sure way to get the applicant in trouble with their current employer. (We know it is a no-brainer, but you would be surprised at how often this happens, even in professions like law and banking.)
  2. Have a list of interview questions to refer to during the interview. This prevents uncomfortable lags in the conversation (remember that you are in charge of moving the interview along, the applicant is there to answer your questions, so you need to be ready).
  3. Be frank with the applicant and do not try to “sell” the job, a disappointed employee will not stay any longer than is necessary to find something better.
  4. You need to control the course of the conversation, but try and let the applicant do the talking. Ask them questions that require some explanation and thought. Although the authors always hated this particular question, many interviews start off with something like, “Tell me about yourself.” Other standard questions include (a) Why are you applying here? (b) Why are you leaving your current job? (c) Tell me about your experience in the area of ________. (d) Do you like your current job? Why or why not? (e) List the strengths (weaknesses) you would bring to your job here. (f) Describe your goals for the next ten years. (g) What goals have you attained recently? Above all, make sure you ask the employee whether s/he is cognizant of the post-modern traits found in the fifth season of the Brady Brunch (this one separates the stallions from the donkeys!)
  5. Take notes during the interview.
  6. Midway through the interview, thoroughly explain the job you are interviewing for and ask the applicant if they would be interested in such a position. Expect them to ask some questions at this point.
  7. Provide the applicant with an opportunity to ask you questions about the job, the business, yourself, etc. Answer fully and honestly.
  8. Wind up the interview with a statement that you enjoyed talking to the applicant and you will contact them with your decision shortly. An interview should not be less than ten minutes nor more than forty five minutes.

Equal Employment Opportunity Laws (know them!)

These laws generally require that you not discriminate against an applicant on the basis of the applicant’s race, religion, sex, national origin, or age. But there are a few ins and outs of these laws, and you should be familiar enough with them to know when you might be getting close to breaking these laws. So we provide this short description of a few of the more important federal employment/labor laws. Please note that your state and/or city may have additional requirements and laws. Such state and city laws will have their own separate requirements which must be complied with and a different set of penalties. You should contact an attorney to find out if there are additional requirements you must comply with in addition to the federal laws outlined below.

Title VII (Civil rights Act of 1964): Title VII states that an employer may not fail or refuse to hire or discharge any individual or otherwise discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment because of such individual’s race, color, religion, sex or national origin. Nor can an employer limit segregate or classify employees (or applicants for employment) in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his or her status as an employee because of such individual’s race, color, religion, sex or national origin.

Let me explain in simple english what the above law means. Title VII covers any business that employs more than fourteen employees. (But private clubs exempt from taxation and churches employing people of a particular religion may not be covered in some instances.) What you cannot do is treat similarly situated people (i.e., same experience level, educational status, etc.) differently because of a person’s race, religion, sex, national origin, or age. A clear example is a business that prefers not hire blacks. This is a plainly illegal policy. So at the most basic level, Title VII forbids a business from consciously deciding not to hire, promote or retain people based on the race, religion, sex, national origin, or age of the person.

But it is also a little more complicated than just that. You see, Title VII also prohibits businesses from using “neutral” selection criteria having the effect of disproportionately screening out members of certain minority groups. Can you see how this is different than a case where a businessperson simply consciously decides to discriminate against a person because of that person’s race, religion, etc.? For example, a business may have a policy that it will not hire anyone who does not have a college degree. Since the ratio of black and Hispanic workers with a college degree as compared to their number in society is low, this requirement will have the effect of reducing the number of blacks and Hispanics who can qualify for the job. Therefore the requirement of a college degree disproportionately screens out blacks and Hispanics who could otherwise qualify for the job. When this is the case, the business has to be able to show that the use of the discriminatory criteria is related to the job and is a business necessity. The fact that the business does not intend to discriminate when it implements the college degree requirement is irrelevant. The criteria must be justified nonetheless.

So when you are drawing up hiring criteria, make very sure that any and all qualifications and prerequisites for employment are necessary and easily justifiable. (When we say easily justifiable, we mean that you could explain it to a group of 100 people selected from society at random, and 90% of them would readily agree with your explanation.)

Examples of criteria that may break Title VII’s rules against discriminatory criteria are:

  1. Having height and weight requirements which rule out most women for a job where the height and weight of the applicant is not necessarily an important characteristic.
  2. Requiring a college degree for a job where one is not needed (i.e. a waiter in a posh restaurant).
  3. Employing IQ tests or other tests to determine whether applicants will be hired.
  4. Using health or fitness tests (unrelated to the job requirements) that will reject minorities more often than other groups.

This is hardly an exhaustive list. In fact, the list is endless because any criteria, in the right circumstances, could be illegal. Confused? That is common. Talk to your lawyer, she should be able to help.

Equal Pay Act of 1963: Because of this act, it is illegal for employers to pay lower wages to an employee involved in the production, buying or selling goods because of the sex of the employee. Basically, if you have employees who work under similar conditions and do the same thing or do something requiring the same degree of skill, effort and responsibility, then you cannot pay them different amounts unless the pay difference is due to (1) seniority, (2) a merit based system, (3) a system measuring and offering earnings based on quantity or quality of work performed, (4) some other differential based on some factor other than sex. Also, remember that offering fringe benefits based on sex will get you into trouble as well (i.e., offering women something, like free mammogram testing, that men cannot use.) The same is true for requiring women to pay more into retirement systems than men.

Age Discrimination in Employment Act: Under this federal law, private employers with 20 or more employees cannot discriminate against workers aged 40 or more unless there is a bona fide occupation requirement. You need to remember this law when advertising the position since you would never want to state that you are looking for a teenager or twenty-something for a job unless it is a necessary and required part of the job that they be a certain age (e.g., young model for cosmetics).

We know all of this seems a little odd. But it can be boiled down to a couple simple rules of thumb: (1) Never use age, sex, religion national origin, etc. as a criteria for anything. (2) Never use any criteria that may tend to discriminate against a minority group (ethnic, age groups, gender groups, religions, etc.) to select among applicants unless you can show others how the criteria is important to the job.

We know that you are probably a little frustrated about the information provided here. Employment law is not the most difficult area of law, but to a layman it can be a little strange in appearance. But recognize that just like computer code, business spread sheets, marketing surveys, or any other technical and/or professional work causes puzzlement to the uninitiated, the law and its processes can confuse the uninitiated as well. To help you avoid problems we have created a checklist of things to remember in dealing with employees. This checklist should help you avoid some of the more common and clearly illegal actions employers often (unintentionally) take.

Termination of employees

You will find a few tips concerning the investigation of employee misconduct on our related checklist. So if you are confronted with a situation where you have a dishonest employee, you may want to go there first.

But for those situations where you are not firing an employee for aberrant misconduct, but instead you are letting people go because the employee is not working out, you should follow a set of clear guidelines and standard practices for terminating employees. That way there is less chance of getting accused of discriminating against your employees. Those guidelines should included the following.

Poor Performance Firings: Before you get to the point of letting people go for poor performance, let them know that you are displeased with their performance. There are a couple of reasons, for this. First, if the contemplated firing does not come as a complete surprise, it may not provoke as strong an emotional reaction in the employee when the end finally comes. And having an employee leave angry is never a good thing. Second, the employee may turn it around and get his or her act together, thus saving you the headache of getting new employee.

When you tell the employee that you are displeased with their performance, tell them what they need to do to avoid being fired. Give them a chance to improve. It does not have to be a long time, but some reasonable length of time that most people would agree is long enough to improve their performance. What the particular time frame is will be your judgment call. Just try to be fair.

But once you do decide to get rid of an employee for poor performance, fire them without delay. You should also do the following:

  1. Do not discuss your decision to fire the poorly performing employee with any other employees beforehand (except maybe a trusted supervisor of the employee).
  2. Conduct an exit interview with the employee to politely explain why they are being let go.
  3. Give the employee all wages they earned up to that date at the exit interview, including any severance pay.
  4. Save the paperwork you have concerning the employee in a file and put a memo into the file describing (1) why the person was let go and (2) the conversation you had with them at the exit interview.
  5. If you receive any information requests concerning the employee from an unemployment agency, respond promptly.

Economic Firings: Every business has its setbacks. So we know that businesses must occasionally let people go even when the employees are goods employees. The list of things you should do to let go employees for economic reasons is roughly the same as that for a poorly performing employee. Please remember that you need to keep the laws concerning employment discrimination in mind when cutting back on your number of employees, you do not want to be accused of discriminating against a minority group or other protected class of worker when you prune your staff. We suggest one additional thing when you need to let go employees due to economic circumstances: make some calls on their behalf and see if you can help them find other work. You do not have to go overboard, but a few simple phone calls to other businesses saying that you have to let go a good employee who you can recommend is not only the act of a good person, but it also may also dull an employee’s anger at being let go.