3 Tips To Stay Compliant In Today's Hiring World

Employment laws are rapidly changing at the county, city, state and even federal levels. It can be confusing and time consuming to stay on top of all these rules and regulations. This is especially true for smaller, growing businesses without a full-time internal HR team to help navigate the process. Too often SMBs are unaware of or are misinterpreting laws; meanwhile, candidates and employees are becoming more conscious of their legal rights within employment.

Chris Dyer is founder and CEO of PeopleG2, a leading human capital management services provider. With over 15 years of experience working with small to medium size businesses, Mr. Dyer offers three tips to ease the hiring process for SMBs. He is an excellent authority on human capital intelligence and best practices with a deep understanding of the complex challenges inherent to talent management decisions.

1. Looking for candidates, time to do your homework! Before the interviewing and hiring process even begins companies need to check local employment laws. With the flurry of class action lawsuits, which rose 26.8 percent in the last year according to the Consumer Financial Protection Bureau (CFPB), proper disclosures on background and credit checks are imperative and legally required based on the Fair Credit Reporting Act (FCRA). In addition to proper disclosures, a handful of cities and states are prohibiting consumer credit checks, background checks, criminal history questions and more.
2. Candidates are applying, keep them safe. Once the application and interview process has started, security must be a priority. As an applicant’s information is collected (including personal information such as social security number, credit history, drug tests, etc.), the data must be handled with caution. This isn’t limited to locking a filing cabinet full of applications. Take proper care to ensure the data is secure via all transmissions. If HR is outsourced be sure to occasionally audit the vendor’s securities practices. In addition, the handling of the applicant is very important – be sure to communicate with applicants correctly, be aware of compliance requirements and practice timeliness when communicating.
3. The position’s filled (or not), now what? There are discrepancies on who handles what documents. A team manager can see some content on the candidate including work experience, but they don’t legally have access to some of the applicant’s personal data. Once a hire is made, proper documentation for onboarding is important and records of all of the applicant’s documents must be kept for a certain amount of time, dictated by local laws. If a background check is run and the candidate is not hired, there are requirements for an adverse action notice. This informs the candidate that they were denied employment based on information in a credit report. In addition, background documents must be kept on file for a required amount of time.

As a business owner or HR professional, it’s a legal liability when companies are not familiar with the laws around employment. The laws are continuously changing and consumers are being coming more savvy of their own legal rights, and arguably more litigious. Knowing the local, state and federal laws can empower a company to hire with confidence as they grow.