In the current economic environment, competition for jobs is intense. There may be dozens of candidates for each job opening, and hiring companies will have their pick. Even in times like these, however, employers must be vigilant about obeying the law when they make hiring decisions. Charges of illegal discrimination in hiring may become more likely during a tough job market. It is essential that employers follow federal and state laws that regulate what factors they may consider in the hiring process. Those who focus on the wrong things may find themselves the targets of government inquiries.
Several federal laws address discrimination in hiring:
- The Age Discrimination in Employment Act prohibits an employer from refusing to hire, firing, or otherwise discriminating against employees age 40 or older, solely on the basis of age. For example, it is illegal for an employer to offer a benefit such as vision insurance to younger workers but not to older ones.
- The Americans With Disabilities Act of 1990 forbids discrimination against disabled workers or job applicants. Under this law, an employer cannot refuse to hire a person who has difficulty walking solely on that basis; the employer must have another, legitimate reason.
- The Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, national origin, religion, sex, pregnancy, sex stereotyping, and sexual harassment of workers. Decades ago, an employer could fire a woman for becoming pregnant. The Civil Rights Act outlawed such actions.
Although these laws have been in effect for several years, some employers still try to get around them. In 2008, the federal Equal Employment Opportunity Commission leveled penalties against employers in the amount of $83 million for age discrimination; $57 million for discrimination against disabled workers; $12 million for discrimination against pregnant women; $79 million for race discrimination; $109 million for sex discrimination; and $25 million for discrimination on the basis of national origin.
What are valid considerations for an employer to use in hiring decisions? Instead of focusing on an applicant’s age, the employer should look at her track record of performance, accomplishments and continuous learning. Rather than assuming that she won’t work at a fast rate or will be slow to adopt new technology, the employer should find out through job simulations, reference checking, and testing. Instead of looking at an applicant’s disabilities (difficulty walking, for instance), the employer should look at his job skills, such as ability to calm angry customers and quickly troubleshoot problems. Rather than ask an applicant whether she is a Christian or a Wicca or an adherent of any other religion, ask what she did to generate leads and close sales when the economy slipped into recession.
Prior to conducting interviews, employers should review with all involved personnel the legal restrictions on what they may ask or say when speaking with applicants. If necessary, training on effective and legal interviewing techniques should be given to these employees beforehand. It should be emphasized that interviewers need to focus on the tasks involved in the job and the applicant’s ability to perform them.
No matter how much preparation and training an employer does, things can still go wrong. It is important that businesses carry employment practices liability insurance from a financially strong insurance company. A good insurance agent can obtain multiple coverage quotes, give advice on the various coverage features, and discuss the claims-handling performance of different companies.
Hiring new employees is always a difficult and uncertain proposition. Finding the right person for the job can be tricky. Complying with legal parameters can be trickier, but it is essential. By avoiding illegally discriminatory practices, employers can build a strong workforce and stay out of regulators’ cross hairs.
And remember if you find yourself in the middle if a lawsuit that involves your company's hiring practices, it is not covered by your general liability insurance policy. In order to have coverage for these types of lawsuits, you will need to have an Employment Practices Liability Insurance (EPLI) policy.
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