Follow laws when hiring startup staff

When recruiting and hiring staff to start your business, seven foundational federal laws and one state law pertain to record keeping. When both federal and state laws are applicable, the stricter of the two laws must be followed.

What the laws say

The Civil Rights Act of 1964, Title VII forbids employers with 15 or more workers to discriminate, harass or retaliate due to race, color, sex, religion or national origin. The Pregnancy Discrimination Act of 1978 is an amendment to Title VII and prohibits discrimination due to pregnancy, childbirth or a related medical condition. The Age Discrimination in Employment Act of 1967 mandates that companies with 20 or more associates not discriminate against people 40 years old or older. The Older Workers Benefit Protection Act of 1990 modified the ADEA.

The Americans with Disabilities Act of 1990, Title I requires that enterprises with six or more team members do not discriminate against qualified individuals with a physical or mental impairment that substantially limits one or more major life activities. The Immigration Reform and Control Act of 1986 forbids businesses with four or more staff to discriminate due to national origin when recruiting, hiring or discharging employees. All organizations must comply with the Fair Credit Reporting Act.

The Missouri Human Rights Act is similar to all of the federal laws, but compliance is mandated for corporations with six or more workers. Therefore, the Missouri law is the stricter in most instances. Missouri also includes ancestry and creed as additional protected classes.

Documentation requirements

All of these laws combined require myriad forms and documentation. The statutes also state the length of time each document must be retained. However, the vast majority of companies keep the data indefinitely as a best practice.

Job advertisements must be retained for one year. For all job applicants who are not hired, keep the following for one year: job applications, résumés and other documents submitted by candidates, any requests for reasonable accommodation under the ADA and the nondiscriminatory reasons why the candidates were not selected.

It is a best practice to have every interviewee sign a job description that consists of job duties, results expected and physical requirements. It should also include the knowledge, skills and abilities critical for success, such as dependability, initiative and loyalty, with each characteristic behaviorally defined.

For new hires, businesses must retain all of the information listed above and interview notes.

The following must also be kept for one year if you elect to use them: tests, a job offer letter, an employee handbook acknowledgment form and background investigations, such as reference and criminal conviction checks. Also, if it is legal to obtain a credit report for the job in question, and the company chooses to get one, it should be retained.

Obtain a work permit for anyone under the age of 16 and keep it for three years after the employee's hire date and one year after termination. An I-9 form must be completed within three days of the employee's start date in order to comply with Immigration Reform and Control Act of 1986, and it is a best practice to maintain all of these in a separate file.

While all of these practices can help business owners avoid problems, businesses should seek legal advice from an attorney.

Editor's Note: Part 2 of this article will be published in the Feb. 13 Banking & Finance Focus.

Lynne Haggerman is president/owner of Haggerman & Associates, a firm specializing in management training, retained search, outplacement and human resource consulting.