Got Employees or Thinking of Hiring? Here are Some Basics You Need to Know- Part 1

Interviews and New Hire Paperwork: Most employers are aware that there are some things they cannot ask in an interview.  For example, generally speaking, interviewers cannot ask about an applicant’s medical history.  Americans with Disabilities Act (“ADA”) 29 U.S.C. § 706 et seq. But it is permissible to ask if an applicant can meet the physical requirements of the job. (See also ADA).  So, for example, if the job description includes lifting 50 lbs or more on a daily basis, it is ok to ask if the applicant can meet that job requirement.  It helps to standardize the process with a list of questions to be asked of essentially all applicants, with some variation on questions focused on particular job requirements of each position.

When you are ready to hire the applicant, you are required to obtain proof that the applicant is legally eligible to work (i.e., citizens, and foreign citizens authorized to work in the U.S.), and complete federal form I-9.  This has been required since 1986, and the federal government has lots of helpful information regarding which documents are acceptable to prove both identity and eligibility to work.  See, e.g.,    As an employer, you are required do more than just take the applicant’s word that they are eligible to work.  The United States Citizenship and Immigration Service (“USCIS”) now has an “E-Verify” program to verify the applicant’s eligibility; participation in E-Verify is free.

Once you have the appropriate documentation, federal rules require the employer to retain copies for 3 years during the employee’s time with the company; if the employee is with your company for less than 3 years,  the documents must be kept for one year after the employee has left the company.  The documents do not get filed with the federal government, but the company must retain them in the event of an audit or review.

For companies in Washington State, take note that a New Hire Report form must be filed with the state’s Department of Social and Health Services (DSHS), within 20 days of hiring an employee.  The information is essentially the same as for an employee’s W-4 form (for the IRS).  The penalty for delaying or not filing the New Hire Report form with DSHS can add up: $25/month per employee. If the employer and employee conspire in the failure to file the document, the fee is $500.  RCW 26.23.040.

Given the myriad rules, it is extremely helpful to use a checklist; work with an HR consultant or lawyer for more information and to develop a checklist that works for you.  Also consider using a payroll service; such services can help manage the paperwork, freeing you up to focus on the main work of your business.

Non-Exempt v. Exempt Employees: You have undoubtedly heard the terms “non-exempt” and “exempt” employees.  This refers to whether the employee is covered by various wage and hour rules, including the federal Fair Labor Standards Act (“FLSA”).  Generally, employees who are paid on an hourly basis (not a fixed salary), are “non-exempt”, which means the wage and hour rules for minimum wage, calculating overtime, break times, etc. apply to these employees.  In contrast, many salaried and managerial employees are “exempt”, and are generally not subject to the same set of rules.  For example, managerial employees are not statutorily entitled to overtime pay (you can, of course, negotiate in the manager’s employment contract to provide comp time, vacation, sick leave, personal leave, etc., but those are provided by contract, not required by statute).

Work Environment: Even in “at-will” employment states like Washington, it is illegal to discriminate against employees on the basis of race, creed, color, national origin, families with children, sex, marital status, sexual orientation, age, honorably discharged veteran or military status, or the presence of any sensory, mental, or physical disability or the use of a trained dog guide or service animal by a person with a disability. See, e.g., Washington Law Against Discrimination. See RCW 49.60.180 et seq. There are some exceptions “if the particular disability prevents the proper performance of the particular worker involved.”  RCW 49.60.180(1).  The goal is to avoid discrimination while also recognizing a business’s legitimate needs.  It can be a delicate balance, so when in doubt, consult an HR professional or your lawyer.

Employment Contracts and Handbooks: Many employers have written employment contracts setting out some details of the terms of employment, such as the job description, salary, leave time accrual method, non-solicitation, non-disclosure and non-compete clauses, etc.  Many employers also have employment handbooks, which serve as a guide to the employer’s standards of behavior and job performance.  Not all employers use formal written contracts or handbooks; it really depends on the needs of the employer, the sensitivity of the job or position, and other factors.  If you are interested in using an employee manual, note that an employer can be bound by certain promises made in the handbook.  When a manual sets expectations that employers have of employees, it can also set expectations that employees have of the employer. It is wise to consult with an HR consultant and/or lawyer when considering using written employment contracts and handbooks.

This is just a fraction of some of the rules governing employment. Stay tuned for Employment Basics – Part 2.

Disclaimer: This article is for general information only and is not to be construed as legal advice.  Consult an attorney for guidance regarding your specific situation.

©2012 Law Office of Susan K. Fuller, PLLC