When a company decides to hire employees, it undertakes not only a major monetary commitment, but has to confront the fact that the relationship itself has the potential to create downstream liabilities. Employers should be wary of possible claims of discrimination, retaliation, wage and hour, and even theft of company information or trade secrets. What is more, employers must confront the very real possibility of governmental audits based on immigration, unemployment, worker classification, and wage and hour, to name only a few. Employers can do more than just recognize or accept these risks as a cost of doing business; they can implement effective hiring practices and more rigorous compliance processes in an effort to mitigate and manage that risk.
Employment related risk management actually starts before the employment relationship even begins, because exposure to discrimination and retaliation claims often arises as a result of the manner in which an employee is recruited and screened. When posting job vacancies for example, if your company practices unbiased selection processes, you should always include a statement of EEO compliance. In screening candidates, remember to create job related requirements that are based in business necessity and only ask questions that are useful in making the hiring decision. And in the interview process it is imperative that candidates are all asked the same basic questions to fairly assess candidates against one another. Interviewers should also be careful to avoid asking personal questions even to ?break the ice?. Finally, once a candidate is selected for an offer, the offer of employment should be conditioned upon successful completion of a (compliantly run) background check process. Background checks are often subject to restriction depending on whether a credit or criminal (or both) check is run. It is important to work with a vendor who helps you understand and comply with federal and state requirements and limitations related not just to how the checks are run, but what information may be used.
Trade Secrets and Proprietary Information
Remember to take precautionary measures to preserve your business? competitive advantage. Create an agreement to protect trade secrets and confidential information and be sure to have all employees sign that agreement as part of the offer process. Well crafted agreements can (and probably often should) include a ?Non Compete? covenant that helps to define, in advance, expectations related to the manner in which the employee may move on to new employment after his or her engagement with you. Remember, however, that non-compete agreements are generally subject to geographic and time limitations based on state laws. So, it is wise to secure advice and counsel to assure that the documents used are compliant and will be given effect.
These are just some of the steps an employer can easily take to avoid or mitigate employee claims of discrimination or adverse action and work to mitigate risks presented from governmental audits by implementing sound foundations upon which to attract and retain employees. We will address other risks, including wage and hour and immigration related concerns in future blawgs.
SMART TIP: In keeping with The AR Group?s philosophy of proactive management of risk, we are offering a free download of our HR Self Audit Checklist. This checklist has been developed to enable you to reflect more strategically on your business practices considering these employer-related risk areas.