Hiring Employees Without Getting into Hot Water

As the economy improves and hiring increases, many clients have questions regarding how to avoid common pitfalls when hiring employees.  Asking the right questions and avoiding the wrong ones is just one step in Hiring Right!

Finding the Right Candidates

Hiring right begins with finding qualified candidates.  Before you begin your search make sure you know what you are looking for.  Explore your requirements and talk to others that will be working with, for and above the person.  What skills and qualities are needed?  What personalities will mesh with colleagues, subordinates and superiors?  What level of education or past experience is necessary for the job?  Will the person be supervising others?  Do you need someone with extensive experience in the field or will a recent graduate work better?  The answers to these questions and others are a good start in defining the position.

Once you determine the type of qualities and experiences the company needs, draft a job description to define the position.  An effective job description details the essential job functions, including any physical or mental requirements.  Having the essential job functions detailed in a formal job description enables you to determine what, if any, reasonable accommodations are possible for candidates with disabilities. The job description should list any job expectations and the reporting structure.  The job description should accurately reflect the work the employee is expected to perform.  Ambiguous or incomplete descriptions are not helpful and can cause problems in the future.  You may need to update the job description on an annual or more frequent basis depending on the actual work performed.

Determine a compensation range for the position as well as whether the employee will be eligible for incentive payment plans (i.e., commissions, bonuses).

Once the job description is created, determine whether the position should be classified as exempt or non-exempt.  Consult a professional familiar with the overtime laws if necessary.  Failing to correctly classify a non-exempt employee can result in an unpaid wage claim.  Recent years have seen a dramatic increase in overtime claims based on misclassification of non-exempt employees.

Once you have a Job Title for the position you are ready to create a job announcement.  Whether you work with a recruiter or post the job announcement online yourself, the job announcement should provide a good overview of the skills, qualifications and requirements of the position.  Some employers include pay ranges whereas others prefer to keep the pay range “close to the vest.”  Identifying the pay range may prevent people with higher salary requirements from applying, but may also encourage others to overstate their requirements.  Either method works if its right for you.

When considering where to post the announcement don’t forget to post the position internally.  Oftentimes the best candidates come from within your own personnel pool or from employee referrals.  Placement agencies and recruiters are a good choice if you don’t mind paying a referral fee.  Oftentimes they can vet the candidates reserving only qualified candidates for your review.  Consider posting the position with the Employment Development Department’s Job Match System.  If you are considering recent graduates, contact trade schools or other appropriate places of education.  Do not forget to put the job announcement on your own website and other online social media sites (e.g., www.LinkedIn.com, etc.).

Be aware: union contracts may require internal posting before seeking outside candidates.

When advertising the job, do not use language that could be interpreted as preferring one protected class over another (i.e., age, race, sex, national origin, marital status, sexual orientation, etc.) and state your Equal Employment Opportunity policy in the advertisement.  Do not make reference to the length of employment unless the position truly is temporary.  Remember, most employees are employed “at-will” and may be terminated or can quit for any or no reason.  Representations regarding the length of employment (i.e., “Our employees are like family – they never leave!”) can interfere with the at-will nature of the employment or lead to possible fraud claims.

The Interview Process

Hopefully your recruiting efforts resulted in a slew of qualified candidates and you now get to choose one among many to fulfill the vacant position(s).  Whether the candidates are interviewed by one person or several, each person participating in the interview process should review the job description and the candidate’s qualification prior to the interview.  Preferably, the decision makers will have already conferred about the qualities that the ideal candidate will possess.

The law prohibits discriminating against candidates based on various protected characteristics (e.g., age, race, sex, national origin, sexual orientation, disability, religion, marital status, etc.).  The law also may require employers to make reasonable accommodations for candidates with qualifying disabilities to enable such candidates to fully participate in the hiring process.  To avoid asking inappropriate or potentially unlawful questions, prepare the essential questions that you will ask every candidate ahead of time.  The questions should be designed to better enable the company to evaluate how well the candidates will be able to meet the criterion specified in the job description.  Asking the same questions to each candidate makes it less likely any single candidate can claim the interview process was slanted.

Try to ask open-ended questions, giving the candidate the opportunity to explain his/her qualifications or reasons for the answer.    Asking candidates how they handled, or would handle, specific scenarios can often provide insight into the candidates’ problem-solving and task-managing processes.

Do not, DO NOT, ask questions about:

Marital status

  • Are you single?
  • Do you live alone?
  • Are you dating anyone?
  • Have you ever been married?
  • Do you have or plan to have/raise a family?


  • Is that a Jewish name?
  • Where do you go to church?


  • What year were you born?
  • What year did you graduate from high school?

Disabilities[1] or other medical conditions

  • Do you get sick often?
  • How often were you sick at your last job?
  • Do you need health insurance?
  • Have you ever been injured on the job?

Lawsuits (especially against prior employers)

Second languages unless speaking another language is an essential job function

Where the person was born

Are you a U.S. Citizen[2]?

Political affiliations

  • Who did you vote for?
  • What’s your take on [insert political issue of the day]?

Although not directly prohibited, employers should avoid asking about participation in clubs or other organizations because the answers may be perceived as asking about religion, age, etc.  Instead, ask if the candidate what interests the candidate has outside of work.

Questions should focus on the job requirements and the skills necessary to perform the job.

Some employers refuse to allow interviewers to take notes, fearing that something might be written in the notes and interpreted incorrectly.  I think notes can be helpful in recalling why a particular candidate was or was not chosen.  I do recommend the notes refer to objective information rather than subjective comments.  Note-takers should avoid comments such as “not a good fit” or “didn’t feel right.”  Instead, include the factors that led to those conclusions (e.g., “Wouldn’t make eye contact”  “Clothes were disheveled” “Did not answer questions directly”).

Checking Referrals

Some employers feel that checking referrals is a waste of time because the applicants will only provide referral sources that will provide positive information.  While this may be true, contacting former employers can help you evaluate strengths and weaknesses of potential candidates. Checking an applicant’s employment history can also verify the accuracy of the applicant’s resume and prevent a possible “negligent hiring” claim later on.

When checking references, obtain a release from the candidate authorizing the referral source to speak with you candidly about the applicant’s employment history.  As with the interview process, be consistent.  If you check references for one candidate, check references for all candidates.  The questions you ask should all be related to the job the applicant will perform.  Keep notes regarding the information obtained from prior employers with your notes from the initial interview.

Many companies do not know whether they should conduct background checks.  Background checks (as opposed to reference checks) usually refer to criminal and/or credit reporting checks.  Generally speaking, I recommend conducting a background check for employees that will have significant customer contact at customer sites or homes, or if the employee will be handling money. There are laws that limit the types of background checks employers can perform on certain employees.  If you are going to conduct a background check use a third party company familiar with the rights and responsibilities regarding how to conduct a proper background check.  Always ensure the employee authorizes the background check in writing.  NOTE: the background check authorization has to be separate from the general employment application paperwork.

Offer Letter or Employment Agreement?

Congratulations, you’ve found one or more qualified candidates!  Should you offer the job verbally or in writing?  The essential terms of the employment should always be in writing.  Essential terms include:

  • Job Title and possibly a short job description,
  • Reporting structure,
  • Compensation and benefits,
  • Vacation, Sick Leave, and/or PTO accrual if any,
  • Beginning employment date,
  • Necessity of providing appropriate documentation regarding ability to work in the U.S.
  • At-will nature of employment.

If you are going to make a verbal offer, send a written confirmation of the employment terms for the potential employee to sign.  If the offer is subject to any contingencies (such as successful background check or drug test[3]) make sure the contingencies are listed in the offer letter.  If the offer letter is a pre-cursor to a more formal Employment Agreement, ensure the terms remain the same and that the offer letter informs the employee that the employment is contingent upon execution of a formal Employment Agreement.

Many offer letters say they are not “contracts,” but they are.  At the very least they are written confirmation of the terms of the verbal contract.  Therefore, do NOT include any terms that are not part of the employment arrangement or that you will not be able to perform.

A detailed written offer may negate the need for a formal Employment Agreement.  However, depending on the level of formality and the essential terms of the employment an Employment Agreement may be necessary.  Many companies will require employees to sign Confidential and Proprietary Information Agreements.  These agreements can be part of or separate from the Employment Agreement.

Whether you use an offer letter, an Employment Agreement, a Confidential and Proprietary Information Agreement, or some combination thereof, have the documents reviewed by qualified counsel to ensure the terms are clear, unambiguous, lawful and beneficial to the company.

The Employee’s First Day

Hiring right does not end until the employee receives a copy of all essential handbooks and benefit policies and receives any necessary training or orientation.  Smart employers have all of the new employee paperwork together for the employee on their first day, as well as a check list the HR Manager can use to confirm the employee’s receipt of the necessary paperwork.

The following paperwork is either required or highly recommended:

  • Notice to Employee (Labor Code 2810.5)
  • Report of New Employee (DE-34 from the EDD)
  • Employee’s State Withholding Allowance (DE-4 from the EDD)
  • Employee’s Federal Withholding Allowance (from IRS)
  • State Disability Insurance Pamphlet (DE-2515 from the EDD)
  • Paid Family Leave Pamphlet (From the DFEH)
  • Workers’ Compensation Rights and Benefits Notice (from WCAB)
  • Employment Eligibility Verification (I-9 from UCIS)
  • Sexual Harassment Information Sheet (From DFEH)
  • Personal Physician/Chiropractic Pre-designation Form (from WCAB)
  • COBRA, Cal-COBRA and/or HIPAA Questionnaire if the company offers health benefits

I also recommend confirming receipt of the following employment and benefit policies:

  • Sexual Harassment Prevention Policy
  • At-Will Employment Policy
  • Computer and Technology Use Policy
  • Employee Handbook
  • Summary Plan Descriptions or other paperwork regarding Health, Disability, Retirement or other employer-provided benefits

The employee should sign an acknowledgement that s/he received each of the policies.

Consider what type of training the employee will receive and implement the training as soon as possible.  If there is any safety or hazardous material training required prior to performing the job ensure the proper certifications are obtained before the employee performs any such work.

In Conclusion …

Hiring right is not something that just happens.  It takes careful consideration of the options and tactics that will work best for your company.  Thoughtful contemplation of your company’s needs and frank discussions with knowledgeable counsel regarding the various rights and responsibilities imposed by law can ensure your company hires and retains the right employees – and avoids costly litigation!


[1] You may show candidates the job description and ask, “Would you be able to perform the essential functions of this job with or without reasonable accommodations?”  Do not ask “Do you have a disability that would interfere with this job?”
[2] You may ask, “If you are hired, can you provide evidence that you are legally able to work inside the United States?”  However, if you ask the question to one candidate you must ask it of all candidates.
[3] When an employer can drug test a potential or current employee is regulated.  Speak with a knowledgeable professional before implementing a drug testing policy.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

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The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, Berkeley, San Ramon, Concord, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.