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‘Tis the Season ... to Hire Smarter

8/27/2014

As the holiday season approaches, many retailers will ramp up their staff to accommodate the increase in customers and other operational demands. However, in today’s era of widespread employment litigation, employers must be even more conscientious of the legal liabilities and practical consequences they face during this time of year.



Despite the fast-paced nature of the holiday rush, companies should still conduct their due diligence when screening new employees, whether they are long-term or seasonal. In the long run, retailers will help lower the risk of employee misconduct and future litigation by taking the appropriate precautionary measures, such as background checks. However, companies need to be cognizant of increased enforcement of efforts by governmental agencies to ensure they minimize risks in doing so.



Some tips for companies conducting seasonal hiring include:



Employment of Minors



Many applicants for seasonal jobs are young adults looking to fill holiday breaks with temporary positions. Hiring staff under the age of 18 comes with specific labor laws to follow. For example, some of the most common violations include employing 14- and 15-year-olds outside of allowable hours, allowing youth employees to load, operate or unload a trash or cardboard compactor, or allowing employees under the age of 18 to drive on public roadways as part of their employment outside of prescribed limits.



Employers should be sure to review applicable laws for compliance and corporate policies when employing minors for seasonal employment.



Seasonal Employees as Independent Contractors



Businesses often misclassify employees as independent contractors, and in the process, open themselves up to significant potential liability. This temptation is often especially compelling for seasonal employees. Most part-time retail positions would be unfit for independent contractor status and could create future legal liability.



For example, independent contractors, as defined by the IRS, must provide their own supplies and equipment, control their own hours of employment and, most importantly, control the manner and means by which the services are provided. Therefore, employers should be sure to avoid designating a seasonal worker as an independent contractor without first determining that the circumstances legally justify such a classification.



Overtime Requirements



Generally, the Federal Fair Labor Standards Act and similar state law require that employers pay non-exempt employees one and one half their regular rate of pay for any hours worked in excess of 40 in a workweek. Both federal and state law, however, exempt certain individuals from overtime requirements.



Retailers may require long shifts when understaffed, but employers should be sure to review corporate policies and their seasonal employees’ status under federal and state law to determine whether they are exempt from paying overtime to employees or other wage and hour issues like meal and rest period requirements, which commonly lead to legal claims.



When to Conduct Background Checks



Depending on the industry, open job position and potential candidate, a background check is almost always a good idea. Background checks often involve a variety of steps, including researching criminal records, driving records, contacting previous employers to verify the information that a candidate has provided on his/her application and verifying a candidate’s employment history, job titles, starting and ending dates and salary/ bonus information.



The nature and extent of the background check will depend on the industry and the position for which the candidate is applying. For example, in retail, criminal record searches can be a vital part of an employer’s program to avoid employee theft and misconduct, while driving records are vital for positions that require vehicle operation as employers are liable for accidents that happen on company time.



Boundaries of the Background Check



When you use a third party (such as a screening firm) to conduct a background check on an applicant, there is a federal statute known as the Fair Credit Reporting Act and state specific statutes (such as the California Investigative Consumer Reporting Agencies Act) that govern how employers obtain and use background checks.



These statutes require that employers obtain written authorization to conduct a background check, provide certain disclosures to applicants and notify the applicants regarding any potential or actual adverse employment actions that will be taken.



Christopher Boman is a partner in the Irvine office of Fisher & Phillips, a national labor and employment law firm. Boman can be contacted at [email protected].

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