Best Practices to Mitigate Employment-Related Risk – Part 1: Your Hiring Process

Prevention is the first step to minimizing employment-related risk, including improving control when it comes to workers’ compensation claims fraud.

In our 3-Part Series, we explore ways to be proactive – specifically in hiring, safety, and compliance. Let’s begin with Part 1:

 

Hire The Right Person for the Job

Establishing thorough hiring and selection practices with high quality standards is key to quality control in staffing. Doing so allows you to have effective risk management and loss prevention. Plus, with the right fit for the job, you are better able to excel in customer service and strengthen customer trust and loyalty!Magnifying glass over employee options

Use Job Descriptions

The hiring process is an opportunity to manage liability, and job descriptions are a helpful tool in this process. No state or federal law “requires” job descriptions, yet they can be critical tools for practical and compliance reasons.

Staffing firms, perhaps more than any other type of business, often rely on job descriptions to help identify the right employees for a job. Job descriptions can identify particular skills, abilities, and/or physical demands that a position requires, as well as the environmental pressures related to performing the job.

After reading a job description, some applicants may decide that they are not interested in the job or are not a good fit for what’s required. If an applicant withdraws his or her application, then a prospective employer cannot be held liable for any “adverse action” under any applicable laws.i

A well-written job description sets clear expectations and can help an employer comply with numerous legal requirements. According to The National Law Review, job descriptions relate to the following statutes:

  • Fair Labor Standards Act (FLSA) – The FLSA requires overtime pay for hours worked over 40 in a week by non-exempt employees. The exempt or non-exempt status of an employee is determined, in part, by an employee’s duties. A job description or title alone is not enough to satisfy the exempt requirements, but an accurate list of essential functions can go a long way in confirming an employee’s exempt status.
  • Americans with Disabilities Act (ADA) – It is a violation of the ADA to fail to provide reasonable accommodation to the known physical or mental limitations of a qualified individual with a disability, unless to do so would impose an undue hardship on the employer. The duty to accommodate relates to the employee’s essential job duties. In other words, the disabled employee must be able to perform the essential functions of the job, with or without accommodation. If a disabled employee is unable to perform an essential function of the job, even with an accommodation, the employer is not required to retain the employee in that position. In this regard, it is important that an employee’s job description identify the position’s essential functions.
  • Federal and State Discrimination Laws – There are many state and federal statutes that prohibit discrimination based upon a protected status. When faced with a claim of discrimination from an employee, a well-written description can help support the challenged decision, whether it be related to compensation, promotion, discipline, or discharge.
  • Family and Medical Leave Act (FMLA) – The FMLA requires that the employee’s health care provider certify that the medical condition for which the employee is seeking leave renders the employee unable to perform one or more of the employee’s job functions. The FMLA further provides that, under specified conditions, an employer may require a return-to-work certificate from the employee’s health care provider before the employer is required to return the employee to work following an FMLA leave. To assist the doctor in his/her assessment, the employer may attach a job description to the medical certification form. A complete and accurate list of essential functions will enable the health care provider to give an informed opinion.

 

Maintain Hiring Procedures to Reduce Exposure

Establishing a process is important and maintaining it is essential. To maintain compliance and reduce claims, a fair and legal hiring procedure must be consistently followed. Since many elements of hiring and employment are regulated at the state and/or federal level, some best practices you could follow are actually statutory requirements.

To ensure consistency, quality control, compliance, and accountability, every job applicant should complete the same process and be assessed in the same, organized way. Costly claims, fines, and litigation can result if an applicant perceives that a legal requirement has been violated. For example, an applicant feels that their race, sex, or background impacted their ability to get the job.

In addition to statutory requirements, best practices for loss prevention suggest the use of certain hiring procedures and selection controls (e.g., integrity testing, understanding gaps in employment history, etc.) designed to:

  • Reduce exposure to employment-related liabilities
  • Reduce personnel-related problems, client issues, and performance or disciplinary issues
  • Improve the overall quality of the field or temporary workforce

 

Keep Risk Mitigation on Your Mind

Establishing a strategy for risk mitigation will allow you to effectively minimize negative consequences (i.e., legal action, fines, penalties, etc.) while optimizing business results. Furthermore, critically important to staffing, you can manage risk in ways to improve talent prediction and hire the best-fit employees to maximize customer satisfaction.

 

FURTHER READING:

Up next… Part 2 in this series where we’ll focus on ways to stay vigilant!

You can also check out “5 Ways to Mitigate Risk with a Pre-Hire Prevention Plan



[i] “Why You Should Have Job Descriptions,” SHRM, https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/why-you-should-have-job-descriptions.aspx