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The hiring process: How to control risks

risks-of-hiringRecruiting and hiring new staff members is fraught with challenges. Which candidate has the right combination of skills for the job? Will she fit in with her new team members? Can he actually do the things he says he can? These questions are fundamental to effective hiring, but they don’t begin to consider the legal risks associated with the hiring process. Employers face risk throughout recruitment and hiring, including:
 
 

  • Conducting negligent reference checks
  • Discriminatory job ads and interviews
  • Failing to offer accommodation to candidates based on prohibited grounds of discrimination (e.g., disability, religion, family status)
  • Incomplete or inaccurate candidate and employee records
  • Inappropriately sharing a candidate’s confidential information
  • Failing to offer a written employment contract
  • Including unenforceable provisions in employment agreements
  • Sharing liability with a recruitment agency
  • Hiring friends and family
  • Hiring foreign workers
  • Classifying workers as employees, independent contractors or dependent contractors

Reducing the risks of recruiting and hiring

Employers can’t avoid these risks, but you can manage them with effective human resources internal controls. In this article, I’ll review three basic recruiting and hiring controls:

  1. Understanding the various laws involved with recruiting and hiring and conducting regular legal and regulatory reviews
  2. Preparing policies and procedures that comply with the law and applicable regulations
  3. Training management and staff on your policies and procedures and their legal obligations at work

Know employment standards law

Employers must understand the employment-related legislation and regulations in their jurisdiction to avoid fines, penalties and legal challenges. Violating employment standards, human rights or privacy law may cause unexpected repercussions within the organization and expose the employer to significant financial penalties. Moreover, employers should remember that the recruitment process is the starting point for all other aspects of human resources administration. If there are flaws in the hiring process, there are more likely to be challenges in the employment relationship.

Employment law is broad and places many obligations on employers when it comes to hiring. Failure to comply can result in a disgruntled applicant or employee seeking restitution through agencies, boards, tribunals or the courts that handle complaints on behalf of applicants and employees.

Knowing the law and staying up to date are substantial challenges that many employers prefer to do on an “as-needed” basis. When the need arises, the Internet is always nearby to provide answers, but searching the web for accurate, current and relevant information—the specific information you need—can be as challenging as finding the right person for a job: lots of candidates but who’s qualified? Moreover, you often have to look at several online sources to find everything you’re looking for.

Alternatively, employers can use an authoritative reference like The Human Resources Advisor, published by First Reference, for a clear, comprehensive and always current overview of your legal obligations in the hiring process.

Prepare and implement hiring policies and procedures

Knowing the law is one thing, but applying it is something else entirely. Clearly written and legally compliant policies and procedures covering recruitment and hiring will ensure you dot all the i’s and cross all the t’s.

Hiring policies can’t ensure you hire the right person for the job, but they can reduce the risk that you’ll have trouble managing the employment relationship. They’ll also demonstrate your due diligence and help protect you in the event the employment relationship sours.

Let’s take a look at two of the most important policies for your hiring process.

Discrimination and accommodation

Employers may not discriminate against job candidates or employees based on various prohibited grounds at any stage of the recruitment or hiring process. Consult the human rights legislation for your jurisdiction (or The Human Resources Advisor) for details on prohibited grounds of discrimination.

A common example of discrimination in hiring is an employer rejecting a candidate because she is pregnant.

Human rights legislation limits what information employers can request on application forms, in the pre-screening process, interviews and medical inquiries. Under the employer’s duty to accommodate persons with disabilities, human rights legislation even places statutory limits on the right to hire an employee who is fit to perform the essential duties of the job.

The Accessibility for Ontarians with Disabilities Act (AODA) outlines specific new requirements for employers in Ontario with respect to hiring. Manitoba has a similar law, but regulations are pending. In provinces without such legislation, employers can look at the requirements in the AODA as best practices. These include:

  • Preparing policies and procedures for establishing individual accommodation plans where barriers cannot be removed proactively
  • Notifying employees and the public about the availability of accommodation for applicants with disabilities in their recruitment, selection and hiring processes
  • Providing accessibility for persons with disabilities throughout the employment life cycle (i.e., recruitment, selection, retention, etc.)

In general, employers can comply with human rights legislation by assessing candidates based on the relevant aspects of the job, and not extraneous factors that could overlap with prohibited grounds of discrimination. This is the case when asking questions on the job application, during interviews, or when making final hiring decisions. It is important to document the reasons why a candidate was or was not preferred during the selection process, citing reasons that do not have anything to do with the prohibited grounds of discrimination.

Checking references

Reference and background checks are not required by legislation, unless you’re hiring employees and volunteers who will be working with children and vulnerable adults in certain sectors. Nonetheless, it is important to conduct thorough checks on candidates and their abilities in order to avoid legal problems and hire effective employees.

The law might not mandate background checks, but that does not mean it has nothing to say about them. Human rights and privacy both come into play when conducting background checks and employers should institute policies and procedures to reduce the risk of violating candidates’ rights. Your background checking policies and procedures should incorporate these principles:

  • Carefully consider what information about a candidate you want and need, and exactly when and how you will conduct enquiries to obtain the information
  • Avoid seeking or obtaining irrelevant information about a candidate’s ethnicity, religion, creed, disability, gender or other ground prohibited under human rights law
  • Be very careful about how you obtain and protect candidates’ information
  • Explain to the candidate (preferably in writing) exactly what type of information you’re seeking, why you’re seeking it, what you’ll use it for, and how you’ll use it, and obtain written consent from the candidate to conduct the background check
  • In the event you do collect information about prohibited grounds of discrimination, ensure you don’t use that information in your hiring decision

When faced with a potential candidate, it is tempting to again turn to Google. While there is often valuable information to be found about candidates on the Internet and social media, these sources of information may be tainted since they are likely to expose far more personal information than is necessary or appropriate to make a hiring decision.

In brief, employers should avoid adopting a “more is better” approach to collecting personal information about a job candidate since unnecessary information may ultimately burden an employer with legal liability.

You can find expert-prepared sample policies on these and many more employment topics in Human Resources PolicyPro, from First Reference.

Training hiring managers for maximum effectiveness

This should be obvious. With or without policies (and I wholeheartedly recommend you prepare and implement policies), managers must have training in effective recruiting and hiring. Policies and procedures will give hiring managers the steps to follow to find qualified candidates, but only training can give managers the practice they need to properly manage the process from job description to job offer—and to comply with their legal obligations.

Conclusion

You can’t avoid recruiting and hiring employees, but you can avoid many of the risks associated with the process by implementing strong HR controls as outlined above, including:

  • A process to build and maintain knowledge of the relevant employment laws
  • Legally compliant policies and procedures to keep staff on track and demonstrate due diligence
  • A solid training program for managers and supervisors in charge of hiring and recruiting

Ignorance of the law is no excuse in a tribunal or court. Many employers have found that out the hard way and faced substantial penalties, such as the employer fined $7,500 for failing to accommodate a job candidate with a learning disability, or another employer fined $35,000 for firing a pregnant woman on her first day of work.

You can find all the resources you need to understand employment law, stay up to date, implement policies and train your staff in First Reference’s expert-prepared HR products, The Human Resources Advisor and Human Resources PolicyPro. Try them for free today!

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Adam Gorley

Editor at First Reference
Adam Gorley, B.A. (Phil.), is a researcher, content provider and editor. He contributes regularly to First Reference Talks and Internal Control blogs, HRinfodesk and other First Reference publications. His areas of focus include broad human resources issues, corporate social responsibility, corporate governance and government policies, information technology and labour market trends.Read more
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