August 01, 2018

I. INTRODUCTION

Hiring the right individuals is one of the most important functions for human resources or other individuals involved in this process. Yet, the task of hiring is fraught with pitfalls for the unsuspecting and the untrained. Employers may be subject to charges of discrimination, negligent hiring, invasion of privacy, and other claims arising out of the recruitment, selection, and hiring process. With the help of carefully drafted personnel documents, trained interviewers, and a basic knowledge of the equal employment opportunity laws, both state and federal, an employer can match applicants to openings without fearing the pitfalls.

II. PRE-EMPLOYMENT DOCUMENTS
A. Designing a Lawful and Effective Employment Application

The use of employment applications is certainly considered standard operating procedure, even for the smallest and most unsophisticated employer. Yet, employment applications can and have been used against employers by thwarted applicants and disgruntled employees. The key is having a lawful and effective application for employment that elicits the information necessary to evaluate the candidate but that disavows that the application is a guarantee of any term or condition of employment.

1. EEO statement: affirmative action employer status, if applicable; protected characteristics under federal, state and local law (e.g., race, sex, sexual orientation, age, religion, national origin, marital status, disability, etc.)
2. Personal information: name; mailing address; contact information
3. Work authorization
4. Employment desired
5. Job-related skills: clerical, mechanical, professional
6. History: education (highest grade completed, not dates of matriculation); vocational or trade schools; courses of study
7. Military service --- be careful of wording
8. Criminal convictions: dates, nature of convictions (if relevant), subsequent rehabilitation, and still not bar to employment!
9. Licenses & certificates
10. References: name, address, phone number; former job titles, supervisors, salary history, reasons for leaving
11. Limitation or restrictions upon employment: restrictive covenants, confidentiality agreements
12. Certification statement: no promise of contract; employment-at-will; authorization to obtain reference information; acknowledgement of company rules; affirmation of complete and truthful responses

B. Other Forms

Be careful introducing other forms at the pre-employment stage. If your Company does, make sure proper disclaimers are on the forms and explain the purpose of introducing the form.

III. I-9 FORM EMPLOYMENT ELIGIBILITY VERIFICATION SIMPLIFIED

The document inspection process for employers to verify an individual’s eligibility for employment in the United States has been made simpler. When hiring an employee, the employer is required to complete Form I-9. To prove work authorization, the employee has the choice of showing a document establishing both identity and work authorization (List A) or one document establishing identity (List B) and a second document demonstrating work authorization

IV. FEDERAL FAIR CREDIT REPORTING ACT REQUIREMENTS FOR BACKGROUND INVESTIGATIONS

The Federal Fair Credit Reporting Act will directly affect a company’s ability to obtain background information on applicants and current employees through contracts with consumer reporting agencies. The law specifically addresses and regulates the circumstances under which employers can use such reporting agencies to obtain background information and to rely on that information in making hiring, promotion, transfer, and other employment decisions. In addition to the federal FCRA, many states have their own fair credit reporting laws and may have requirements different from the federal law. Here we touch on the requirements under the federal law only. It also should be noted that investigative consumer reports, which include information obtained from personal interviews, require additional employer reporting and disclosure under these amendments which are not discussed here.

A. What Employers Must Do

Prior to obtaining a consumer report on an applicant or employee, the employer must certify to the consumer reporting agency that it has provided to the applicant or employee a “clear and conspicuous” written disclosure that a report may be obtained for employment purposes.

Additionally, the applicant or employee must give the employer written authorization to procure the report. Previously, the disclosure could be included as part of the employment application. That is no longer the case, and it must now appear in a “stand alone” document. The employer must also certify to the reporting agency that before the employer takes any adverse action based in whole or part on the report, it will provide the applicant or employee with a copy of the report and provide a description of his or her FCRA rights (formerly published by the Federal Trade Commission, and now published by the Consumer Financial Protection Bureau (CFPB)). The certification must include a statement that the information being obtained will not be used in violation of any federal or state equal employment opportunity law or regulation.

After receiving the report but before any adverse action is taken, the employer must provide the applicant or employee with the following: (a) a copy of the report; and (b) a description in writing of his or her rights under the law. In New York, if the report reveals a conviction, irrespective of whether the employer is considering not hiring the individual, the Employer must distribute a 23A Correction Law Notice.

After taking adverse action based on the report, the employer must provide the applicant or employee with the following: (1) an oral, written or electronic notice of the adverse action; (2) the name, address and telephone number, either orally, in writing or electronically, of the consumer reporting agency that furnished the report; (3) a statement that the consumer reporting agency did not make the decision to take adverse action and is unable to provide the applicant or employee with the specific reasons why the adverse action was taken; and (4) an oral, written or electronic notice of the applicant or employee’s right to obtain a free copy of the complete consumer report from the reporting agency, if requested within sixty days, as well as information regarding the consumer’s right to dispute the information with the reporting agency.

B. Practical Implications

According to a designated attorney with the FTC for handling inquiries on the Amendments, the Commission took the position that the law implies the employer should not take any adverse action until the consumer has an opportunity to review the report and address any discrepancies. The statute does not state this, however, the FTC’s interpretation is not unreasonable since the law requires the employer to give the applicant or employee a copy of the report before the adverse action is taken.

The provisions of the statute concerning the use of the report for employment purposes were clearly written to protect the consumer reporting agency, not the employer using the report, from lawsuits. Several aspects of the law invite this conclusion: (1) the employer must notify the applicant or employee that adverse action was taken based on the report; (2) the consumer reporting agency did not make the decision and does not know why it was made; and (3) the statute does not require the employer to disclose the nature of the information relied on to reach the adverse decision.

To minimize the increased risk of litigation over the use of consumer reports, we suggest the following steps: (1) in the notice to the applicant/employee before adverse action is taken, reveal the nature of the information received from the consumer reporting agency; (2) include with this notice a copy of the report and notice of rights as required by the statute; (3) give the applicant/employee a short but reasonable period of time to provide information that would explain the discrepancy, omission, or misrepresentation; (4) if the applicant or employee is unable to do so, take appropriate action; and (5) if that action is adverse to the applicant or employee’s interest, provide the notice described above.

With respect to current employees, the employer should consider whether to require all employees to sign a Disclosure and Consent form even though no background investigation is planned with respect to any specific employee. Before making this decision, the employer should be prepared to deal with the situation where employees may refuse to sign the form. Is the employer prepared to terminate these employees for refusing to sign? What are the practical and legal implications of doing so?

V. INTERVIEWING JOB APPLICANTS

After the application stage, the hiring process normally leads to the interview. Managers and supervisors with hiring responsibilities should be thoroughly trained in how lawfully to interview job candidates. Both the federal Equal Employment Opportunity Commission (“EEOC”) and the New York State Division of Human Rights have issued guidelines on what questions may and may not be asked during an employment interview.

A. Questions an Interviewer Should Not Ask a Job Applicant

1. Do not ask the applicant how old he or she is.
2. Do not ask the applicant his or her date of birth.
3. Do not ask the applicant how long he or she has resided at his or her present address.
4. Do not ask the applicant what his or her previous address was.
5. Do not ask the applicant what church he or she attends or the name of his or her priest, rabbi or minister.
6. Do not ask the applicant what his or her father's surname is.
7. Do not ask the female applicant what her maiden name was.
8. Do not ask applicants whether they are married, divorced, separated, widowed or single.
9. Do not ask applicants who resides with them.
10. Do not ask applicants how may children they have.
11. Do not ask the ages of any children of applicants.
12. Do not ask who will care for children while the applicant is working.
13. Do not ask how the applicant will get to work, unless owning a car is a job requirement.
14. Do not ask the applicant where a spouse or parent works or resides.
15. Do not ask the applicant if he or she owns or rents his or her place of residence.
16. Do not ask the applicant the name of his or her bank or any information as to amount of loans outstanding.
17. Do not ask the applicant whether he or she ever had his or her wages garnished or declared bankruptcy.
18. Do not ask the applicant whether he or she was ever arrested.
19. Do not ask the applicant whether he or she ever served in the armed forces of another country.
20. Do not ask the applicant how he or she spends his or her spare time or what clubs he or she belongs to.
21. Do not ask the applicant what foreign languages he or she can speak, read or write (unless job requirement).
22. Do not write anything on the application form, except, if so desired, information as to:

a. Date to begin work, department, salary.
b. Job related reason for rejection such as inability to do work, inability to work required hours, not legally permitted to work in U.S.A., no working papers or work permits, obviously under influence of intoxicants or drugs at time of interview.

23. Do not ask the applicant if he or she is for or against unions or whether the applicant was ever a union member.
24. Do not ask the applicant about prior work-related injury or illness.
25. Do not ask the applicant whether he or she has a disability.
26. Do not ask the applicant whether he or she has ever filed a workers' compensation claim.

B. Questions Related to Religious Beliefs

Both federal and state law prohibit questions during a job interview about a person's religious beliefs and practices. The EEOC's Religious Discrimination Guidelines specifically discuss how an employer may question an applicant about religious limitations on his or her availability to work during scheduled working hours.

C. Questions Regarding Disabilities and Reasonable Accommodation

Under the Americans With Disabilities Act (“ADA”), employers are prohibited from discriminating on the basis of disability against employees and job applicants. The EEOC has issued guidelines on pre-employment inquiries under the ADA. Generally speaking, an employer may not ask a job applicant at the pre-offer stage any "disability-related" question, that is, any question that is likely to elicit information about a disability. Employers are also forbidden from requiring applicants at the pre-offer stage from submitting to a procedure or test that seeks information about physical or mental impairments or health.

Employers may ask an applicant whether he or she will need reasonable accommodation to complete the hiring process. Employers also may inquire about how an applicant would perform the job, including reasonable accommodation, under certain limited conditions, including when the disability is obvious, when the applicant has voluntarily disclosed a disability, and when the applicant has voluntarily disclosed the need for reasonable accommodation.

The guidelines "take a common sense approach" to allow employers to address reasonable accommodation under limited circumstances at the initial interview stage. Initially, the EEOC had advised that employers were not permitted to make any inquiries at the interview stage about whether an applicant would require reasonable accommodation to perform the essential functions of the position.

In question and answer format, the revised guidelines discuss the ADA's prohibition against asking disability-related questions at the various stages of the hiring process. The guidelines provide specific examples of questions that may and may not be asked about drug and alcohol use and workers' compensation history, for example. They also provide guidance on the use of medical examinations and other types of pre-employment tests.

VI. REDUCING THE RISKS OF REFERENCE CHECKING AND BACKGROUND INVESTIGATIONS

In recent years, employers have faced a growing number of lawsuits by individuals who claim they have been injured by false, misleading, or prejudicial information provided by former employers during the pre-employment investigation process. As a result, employers have increasingly restricted the amount of information that they will provide about job applicants. While this may protect the former employer from a defamation or invasion of privacy lawsuit, it leaves the prospective employer to make hiring decisions without critical information about the applicant and to face the possibility of unknowingly hiring an individual with a history of employment problems, which may include disruptive or violent behavior.

Employers face the potential for negligent hiring or negligent retention liability if they fail to conduct an adequate pre-employment investigation into an applicant's background. If an employee has a history of misconduct indicating a propensity for violent behavior or other misconduct that an employer could have discovered through a background investigation, the employer could be liable for resulting injuries. Failing to adequately investigate prior to hiring can expose the employer to liability for actual injuries, pain, suffering, and even punitive damages under "common law" theories of negligence. An employer incurs a similar risk if it fails to take action against an employee after knowing or suspecting that an employee poses a risk of harm to coworkers, customers, or others.

In addition to the "rank, file, and salary" information often provided as the only response to a reference check from a former employer, a prospective employer may broaden the search to include public records on felony and misdemeanor convictions. However, even if a search turns up a criminal conviction, its use is limited to situations where there are job-related reasons for disqualifying an applicant due to misconduct, such as criminal negligence, assault, battery, fraud, theft, and other crimes involving violence or dishonesty.

While this information is generally available to the public, searching through public records is a time-consuming task. Consumer reporting agencies, investigative services and other document and information retrieval services may be helpful but costly. For that reason, it is advisable to devise guidelines as to when such additional information is necessary. Such guidelines should be applied consistently and uniformly to avoid any appearance of discrimination or unfair treatment of certain job applicants. Additionally, the federal Fair Credit Reporting Act, as well as some state laws, require employers to provide applicants with specific notice and to disclose certain information obtained from consumer reporting agencies, and an applicant’s credit history may only be used in making hiring decisions if the information is reasonably related to the position being sought. Again, guidelines may help to streamline the process and assure consistency and fairness.

(See, discussion above on pre-employment screening for more information on the FCRA.) Even if an employer is willing to spend the time and money on this kind of background investigation, these sources may not yield the type or depth of information that is critical when making the important decision to hire or not to hire the applicant. This kind of information is most often available only from a former employer. However, as mentioned above, employers have a reluctance to provide information about former employees beyond confirming dates of hire and termination and salary history. They fear reprisal if statements or opinions are viewed as negative, unfair, not supported by the facts, or overly critical.

What about a "google search"? Now you are faced with knowing information you should perhaps not know and consider as part of the employment consideration process. Be careful. There is a growing trend of states prohibiting employers to require access to certain social media sites as part of the hiring process.

A. Navigating the Obstacles to Reference Checks

Employers are not without recourse to obtain information to screen out individuals with records of criminal conduct or other undesirable behavior and to conduct background investigations of applicants to avoid the pitfalls of negligent hiring. As mentioned above, using a reliable document search or investigative service or credit reporting agency may be appropriate for certain positions involving high degrees of trustworthiness, honesty, sensitivity, or fiduciary responsibilities.

Short of taking such steps, employers can make use of the basic information that a job applicant provides as part of completing an employment application. First, all information regarding educational experience, degrees and licenses held, and employment history should be verified. Second, all references should be checked, both business and personal. Third, all applicants should sign a consent and release form giving the employer permission to check references and releasing it from all claims that might arise as a result. The application should state that all information will be verified and all references will be checked. It should also state that any information will be kept confidential and only communicated to those individuals who are directly involved in the screening and hiring process. The applicant should be asked to sign the statement as part of completing the employment application. The statement may be amended to the application or be part of a separate acknowledgment that also states that employment is "at will" and may be terminated at any time by either party.

Employers should also establish a standard procedure for interviewing and evaluating applicants, including checking references and verifying information. Interviewers and others involved in the hiring process should be trained in how to conduct an effective and lawful interview. Once all information has been gathered and verified to the extent possible, the applicants should be evaluated based on all relevant, job-related factors in light of the requirements for the position and the staffing needs of the facility.

B. Checklist to Help You Avoid Mistakes in Hiring

To help employers avoid mistakes when hiring employees, Jackson Lewis has developed the following checklist. The basic procedures outlined below may reduce the chance that hiring decisions could lead to allegations of mismanagement, unwanted negative publicity, and unlimited liability.

I. INITIAL MEETING

1. _____ Provide application, which has been reviewed by legal counsel, to prospective employee.

2. _____ Meet applicant face-to-face in private area.

3. _____ Review the blank application to explain information required and answer applicant's questions.

4. _____ Tell prospect to answer all questions and provide complete information.

5. _____ Carefully review completed application.

6. _____ Confirm accuracy of spelling and addresses concerning past employment, references, educational institutions, etc.

7. _____ Determine applicant's residence and how long he/she has lived there.

8. _____ Ask the applicant about any gaps in his/her employment history.

9. _____ Ask the applicant if you will need additional information from him/her concerning any change of name, nickname, or use of an assumed name to allow you to check references and work record.

10. _____ Review the applicant's educational training if it has a bearing on the job for which he/she applies.

11. _____ Ask if the applicant has been convicted of a crime. (You may not ask if an applicant has been arrested). You should explain to the applicant that a conviction of a crime will not automatically bar employment. In determining whether or not to deny employment based on an applicant's conviction of a crime, you must consider the following facts:

a. the relationship of the crime to the job duties;
b. the nature, number and circumstances of the offense(s) for which the individual was convicted;
c. the length of time intervening between the conviction(s) and the employment decision;
d. the individual's employment history; and
e. the individual's efforts at rehabilitation.

12. _____ If the applicant's duties will require driving, ask him/her for a valid driver's license and the driving record. (In many states, you can obtain a driving "abstract" for an applicant from the state Department of Motor Vehicles. You should call the local DMV to determine what information is available and how you can get it.)

13. _____Ask the applicant to sign a statement on the application form giving the employer permission to check all references and obtain information from previous employers. The statement should also release previous employers and all others from liability for any information that is provided.

II. AFTER THE INITIAL MEETING

1. _____ Check all personal/character references of the applicant. If you discover the references are generally family members, for example, ask the applicant for other references.

a. _____ How do they know the applicant?

b. _____ How long have they known him/her?

c. _____ Upon what is the reference based? (personal observation/secondhand information).

d. _____ Do you need to ask the applicant for more current references?

e. _____ Document all comments you receive.

2. _____ Check all professional/employment references.

a. _____ Determine job duties. (Do they coincide with those on the application?)

b. _____ Determine length of employment.

c. _____ Determine reasons applicant left previous job.

d. _____ Determine if former employer was satisfied with applicant's performance.

e. _____ Document all comments you receive.

3. _____ Confirm educational information provided by applicant.

4. _____ Order a copy of the applicant's driving record, if driving is required for the job.

5. _____ If you are concerned about the applicant's criminal past and its effect on fitness for the job, you may want to obtain a copy of the applicant's criminal record. Each state has different rules concerning the availability of these public records. Some possible sources of information are: the State Police, the Office of the State Attorney General, offices of the County Clerk in counties throughout the state, District Attorneys' offices, and your attorney.

6. _____ Request a consumer credit report from a consumer reporting agency, if necessary. (However, you must comply with the Fair Credit Reporting Act and similar State Acts.)

7. _____ Speak with the applicant again if you need clarification or additional information.

8. _____ Review the application and the information about the applicant with other decision-makers within the organization. Caution: Only those individuals within the organization who have a reason to know the information should be included in this review.

9. _____ Discuss the applicant in detail. Discussion should be limited to the requirements of the position and the applicant's suitability for that position.

10. _____ Make a decision based on all relevant and job-related factors as to which candidate is best qualified for the job.

VII. PREVENTIVE AUDIT

In light of the foregoing issues, employers should conduct a periodic audit of the company's personnel forms and documents used in the screening and hiring process. Such an audit would involve the review of classified advertisements, job postings, applications, offer letters, interview forms, and the like for form, content, and legal significance. Additionally, supervisors and managers with responsibilities for hiring should be trained periodically in the legal and practical aspects of interviewing, reference sharing, and background investigations. Such audits should be conducted in light of relevant federal, state, and local law.