Whether handled by supervisors and managers or assigned to a centralized human resources (HR) department, hiring decisions are among the most important decisions made in any organization. Good hiring practices can eliminate or reduce many legal risks, reduce costs, increase productivity, and improve morale. Ill-advised hiring decisions, on the other hand, can result in turnover, duplicative training, missed opportunities, and lost customers. In addition, an ill-advised hire might well lead to employment termination; and every termination (no matter how justifiable and well documented) exposes the company to the risk of a wrongful termination lawsuit or discrimination claim from the disgruntled former employee. For all these reasons, it pays to take the time to find the right person for the job the first time around.

An employer's hiring strategy should have clear goals that are aligned with the goals of the organization. Hiring should not be a function that is considered only on the day that an employee gives notice, and there is an immediate need to fill their position. Particularly in a tight labor market, attracting and retaining top talent requires a thoroughly thought-out hiring strategy that is tailored to the individual characteristics and needs of an organization.

Before deciding what approach to hiring will work best, employers should consider the overall organization. For example, what is the organization's approach to growth? Is the employer looking to expand or merely to filling existing positions as they become vacant? Is the organization rapidly growing so that it can offer frequent advancement opportunities as operations expand? Depending on an organization's current status and its goals, it may benefit from hiring strategies that focus on finding employees at the entry level with potential and willingness to learn the business and develop necessary skills, and then training and promoting from within. Such a strategy allows the organization to hire employees at the entry level, where costs are lowest, and develop and tailor their skills to match the organization's requirements over time. On the other hand, an organization that grows slowly and therefore cannot offer as many advancement opportunities, is better served by a strategy that relies more heavily on outside talent at all levels.

As a part of an overall hiring strategy, an employer may want to take a look at each of its job classifications and determine what makes a person a good candidate for that job. Employers often look beyond essential job functions and consider the background and inherent characteristics that are likely to equip a person best to perform the job. An employer should consider existing and past employees who have performed best in the job at issue, and determine what was responsible for their success as part of coming up with a detailed profile of the ideal candidate. Employers must be very careful, however, to be sure that a profile does not include, either directly or indirectly, any characteristics that might be viewed as discriminatory. For more on this, see Discrimination-Free Interviews in this section.

Before embarking on a hiring effort, employers must consider the cost involved, and decide how much they are prepared to spend. Ideally, HR and management should work together in planning an annual budget for hiring efforts. Employers should consider the extent of projected hiring, the hiring tools that are most likely to be successful, and the average or projected cost of each.

There are innumerable sources that can be used for locating qualified applicants. When hiring for a particular job, it is important to match the hiring tools to the job being filled. For example, it may not make sense to use a costly professional search firm to fill an entry-level position involving manual labor; neither will it make sense to use a newspaper ad to fill a position for a website developer.

The following chart sets forth some of the benefits and drawbacks of various hiring tools.

Most of the time, the phrase “job posting program” is used to refer to internal posting programs designed to facilitate promotion from within the organization. However, the federal Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA) as amended by the Jobs for Veterans Act (JVA) requires government contractors with contracts valued at $100,000 or more to engage in an external posting program aimed at employing and advancing covered veterans.

When advertising or posting a job, employers should be careful to use job titles that will be readily understood by applicants outside the workplace. Ads should provide a clear description of the primary job requirements along with other tasks that may be required occasionally. The accuracy of the job description will have a direct impact on the quality of applicant responses.

Application forms play an important role in the hiring process. They introduce an applicant to a company, and at the same time, they give an employer initial information about an applicant. The form should be easy to read and should only ask questions that are job-related. Application forms that fail to meet legal requirements expose employers to liability claims and penalties for noncompliance.

Although employment application forms chiefly provide employers with information about prospective employees, the forms should also provide important information to job applicants, including notices of at-will employment and a statement about penalties for providing false information.

False promises. Some states have statutes forbidding false misrepresentations in inducing a person to take a job. In the absence of such a statute, however, employers may be found to have committed fraud when the employer misrepresented something to a prospective employee in the context of hiring.

Employers should make sure that application forms do not contain questions that are likely to elicit information related to legally protected characteristics such as disabilities, medical conditions, gender, and age. Although state and federal equal opportunity laws do not expressly prohibit employers from asking questions based on protected characteristics, the questions may be used as evidence of an employer's intent to discriminate, unless the questions can be justified by some business purpose. The Equal Employment Opportunity Commission (EEOC) "generally presumes" that employers will use the information obtained from applicants when making employment decisions. Examples of areas to avoid include:

Practical tip: Application forms should not request school graduation dates, as these inquiries may reveal an applicant's age. An employer may ask, "Did you graduate?" and "How many years did you attend?" because these questions are not likely to elicit information about an applicant's age.

According to guidelines issued by the EEOC, arrest records do not provide evidence of guilt, and a policy of refusing to hire an applicant with an arrest record may be considered discriminatory.

State law requirements regarding arrest records and criminal convictions vary widely and may be industry-specific. Some states and municipalities have enacted laws prohibiting employers from making any inquiry about an applicant's criminal history on application forms (often referred to as "ban the box" laws for the box on applications that asks about arrests or convictions). Please see the Background Checks section.

The final section of most employment applications contains authorizations for the applicant to complete and various notices and disclaimers from the prospective employer. The most common (and most necessary) of these are:

Notice of at-will employment. At-will disclaimers are intended to protect employers from wrongful discharge suits by employees who are not covered by a union contract or other written employment agreement. A typical statement on an application form might read as follows: “Nothing on the application is intended to create or imply a contractual relationship; if hired, the employee understands that employment is at will, i.e., that it is not for any specific time period or duration, and can be terminated with or without reason at any time. While employment policies or procedures may change from time to time, only a written agreement signed by the company's president can change the employee's at-will status.”

Employers should check that the disclaimer language is consistent with language in other company materials, such as recruitment literature and employee handbooks, and should verify that the state in which the application will be used recognizes the employment-at-will doctrine. Please see the Employment Contracts section.

Authorization to conduct reference checks. Application forms often have a statement that authorizes the employer to conduct a reference or background check of the applicant. A typical statement might be that the applicant understands that consideration for employment is conditioned upon the results of a reference check, and that the employer is authorized to investigate all statements made by the applicant on the application and to contact former employers and references. Failing to conduct background and reference checks can lead to a claim of negligent hiring if the applicant hired later injures someone and the injury could have been avoided by conducting a background check.

During the hiring process, background checks should be limited to only those applicants who have received a conditional offer of employment (conditioned on successful completion of the background check and any other preemployment screening). When employers hire a third party to conduct a background check or obtain reports from outside agencies, such background checks and reports are subject to the Fair Credit Reporting Act (FCRA). Detailed information on FCRA is available. Background Checks

Negligent hiring. Most states recognize an employer’s obligation to use reasonable care in selecting and retaining employees. That duty may be violated when an employer hires or retains an employee that it knows or should know is unfit or incompetent to perform the work required.

When an injury occurs due to an employer’s failure to properly screen employees to perform job duties, the employer may be subject to a negligent hiring claim. Such claims can easily occur if a company does not conduct proper background screenings before hiring an employee.

Notice of penalties for false or misleading information. Employers should include a statement that the applicant attests to the accuracy and truthfulness of the information provided, and that any misstatement of material facts will be grounds for disqualifying the applicant from further consideration in the selection process or, if hired, grounds for discharge.

Notice regarding drug-testing requirements. Employers with drug-testing programs should consider including a notice on the application that a drug test will be required after a conditional offer of employment has been made.

Federal laws and some state laws require employers to retain application forms and other documents obtained during the hiring process. The various laws, regulations, and rules (e.g., Title VII of the Civil Rights Act, OFCCP rules, wage and hour regulations) have different requirements for the types of documents and records employers must maintain, and for the length of time such records must be kept.

Once an employer has established effective and discrimination-free recruiting practices, the hiring focus shifts to the interviewing process. In order to maximize success in interviewing, employers should consider the following:

Employers should require all employees who will be involved in the hiring process to undergo training before they begin interviewing applicants. Training should cover the requirements of federal, state, and local antidiscrimination laws to help interviewers avoid preemployment inquiries that may be discriminatory. In addition, training should provide a consistent approach to the interviewing process and provide guidance on the types of questions that elicit information that will be helpful in finding the right employee for the job in question. All interviewers, from the person who does the initial screening to top management, should be aware of the following:

The process of interviewing should start well before the applicant arrives. It is essential that interviews focus on the applicant's ability to perform the job, rather than on nonessential personal matters that may offend, invade privacy, cause bad feeling, or lead to discrimination claims. The interviewer must be thoroughly familiar with the job. A good tactic is to prepare a list of the knowledge, skills, and abilities related to essential job functions that the applicant must exhibit. Job descriptions that accurately reflect essential job functions should be created before recruitment begins.

In developing a list of specific questions to ask each applicant, start with questions about the knowledge the person must have to perform the job rather than about the abilities it would be nice for the applicant to have. These questions are likely to be fairly direct, requiring only “Yes” or “No” answers or short responses of a few sentences at most; e.g. “what software packages have you used?” Then prepare a list of open-ended questions. These may be used to assess the applicants' ability to think, to formulate an organized response, and to communicate effectively--presuming these abilities are job related (see list of open-ended questions following).

By reviewing these documents ahead of time, the interviewer is better prepared to ask specific questions about jobs held, duties performed, and related matters beyond the scope of what is merely indicated on paper.

Automated prescreening transforms how potential employees are evaluated and selected. Options run from filling out a short answer form online to a computer-assisted interview. Proponents of this method claim that candidates are screened more quickly and efficiently than with face-to-face interviewing techniques.

In some ways, the use of algorithmic decision-making could cause results that violate the Americans with Disabilities Act (ADA), intentionally or unintentionally. The Equal Employment Opportunity Commission has provided guidance on the use of software, algorithms, and artificial intelligence to assess job applicants and employees in a manner consistent with the ADA at https://www.eeoc.gov/laws/guidance/americans-disabilities-act-and-use-software-algorithms-and-artificial-intelligence.

The process. Generally, computer or telephone prescreening involves having candidates answer key details about themselves with a series of “Yes” or “No” answers. The prescreening is then followed up with a face-to-face interview with those candidates who meet the qualification requirements.

Assuming candidates have been thoroughly telephone-screened, the purpose of the in-person interview is not to verify the résumé or application form. It is to learn about the candidate, evaluate the candidate's ability to perform the job, and determine whether the candidate will fit well in the job and in the organization. Some HR professionals put more emphasis on talent and chemistry than experience, since experience can be gained through on-the-job training, at least in certain circumstances.

It is generally agreed that interviews are more effective when the applicant is put at ease and the interviewer establishes a friendly atmosphere. Once this is accomplished, the interviewer can proceed with the prepared list of questions that indicate the applicant's general fitness for the position as well as reviewing the applicant's education, experience, and other job-related matters.

The actual format of the interview will vary with the type of job. For example, an interview with an entry-level/nonexempt worker might last 30 minutes or so, and the questions will be rather direct, requiring relatively short, specific answers. Interviews with professionals may run in excess of one hour and be more in-depth and nondirective. Generally the rule is for the interviewer to maintain control, but let the applicant do most of the talking. The interviewer maintains control by keeping the objectives of the interview clearly in mind while firmly guiding the applicant into a discussion relative to those objectives.

Some companies stress highly structured interviews where interviewers have little leeway to vary from a planned format. This approach may yield more reliable and valid results than a nondirective approach. However, an interview that is too highly structured may fail to create rapport with the applicant and detract from spontaneity and openness. This can be overcome to some degree by establishing a supportive atmosphere at the start of the interview.

Some interviewers prefer to invite at least one other person to sit in on the interview and have several other staff members meet the applicant. To ensure consistency, many interviewers use the same interview questions for each candidate. Responses to open-ended, situational interview questions (typical on-the-job problems) can be compared to the effective behavior described by the incumbent employee, the supervisor, or other sources. Such “behavioral” interviewing questions include:

Be sure the interview process allows time for applicants to ask questions. In fact, this is a good way to end the interview. At a minimum, the applicant will want to know about the specific job, the company, and why they should consider joining it. Employers should plan to have time for this at the end of the interview, and let the applicant know at the beginning of the interview that they will get an opportunity to ask questions. In this way, the interviewer is able to keep the interview “on track” and still allow the applicant an opportunity to learn what they need to about the organization. Additionally, letting the applicant know in advance that they will have an opportunity to ask questions at the end will give the applicant a chance to formulate questions and give the interviewer a chance to evaluate the applicant's level of interest in the organization.

Job interviews, in particular, are legal landmines. A biased interviewer, an illegal question, or even a seemingly innocent question that elicits personal information unrelated to the job can trigger a discrimination complaint. Interviewers should be carefully trained to not make statements or promises that may be construed as oral contracts that may be legally binding on the employer. Training should include information on applicable federal, state, and local laws that prohibit discrimination.

Federal civil rights legislation, and comparable legislation in most states, requires employers to observe hiring practices that do not discriminate on the basis of race, color, creed, age, sex, national origin, or disability. The laws in most states expand the protected categories beyond the federal law. The key to avoiding such discrimination is to be familiar with state and local statutes and to use objective, job-based criteria for all hiring decisions.

The Equal Employment Opportunity Commission (EEOC) has issued guidance on hiring and employing individuals with cancer, diabetes, epilepsy, and intellectual disabilities. The four separate documents can be found at EEOC's website.

This guidance basically reminds employers that they may not ask an applicant about a medical condition. Further, applicants need not disclose an impairment unless they need a reasonable accommodation during the application process. However, these prohibitions do not prohibit an employer from asking whether the applicant can perform the essential functions of the job with or without a reasonable accommodation.

Genetic information. The Genetic Information Nondiscrimination Act (GINA) prohibits discrimination against employees or applicants because of genetic information such as family medical history. Employers must make sure that their medical inquiries do not impermissibly request family medical history, including making such a request through a contract medical examiner. Please see the Disabilities (ADA) section. section.

Criminal history. Enforcement guidance issued by the EEOC recommends that employers not ask about criminal convictions on job applications. During an interview, the information may be disclosed by a prospective employee, or it may be revealed in a background check. According to the EEOC guidance, if an employer chooses to exclude an applicant because of a criminal conviction, the employer must be able to show that the exclusion is job related and consistent with business necessity. One way to satisfy this requirement is to develop a targeted screen that takes into consideration the nature of the crime, the time elapsed, and the nature of the job. In addition to the targeted screen, employers must conduct an individualized assessment consisting of:

Please see the Background Checks section. section.

Educational requirements. The EEOC has also issued an informal discussion letter outlining when the requirement of a high school diploma may violate the ADA. Because ADA regulations include learning as a major life activity, an individual who has a physical or mental impairment that substantially limits the major life activity of learning will have an ADA disability. If that disability prevents the individual from getting a high school diploma, an employer may violate ADA regulations by using a diploma requirement to screen out applicants.

In an effort to make the interview process less subjective and less prone to discrimination claims, many organizations provide training in interviewing skills for supervisors and others involved in the hiring process. Many employers have written policies with detailed, step-by-step employment interviewing guidelines, including specific questions that should and should not be asked during the interview.

Many court decisions have indicated that applicants may allege discrimination if the interviewing process eliminates a significant number of members of a “protected group” (i.e., those groups specifically given legal protections by state and federal civil rights laws). In other words, if a selection procedure has a disparate impact on a protected group, it may be the basis of liability for discrimination.

Some ground rules for successful interviewing are:

Interviewers should also be reminded to avoid such common errors as:

Other problem areas. In addition to the characteristics protected under federal law, some states and municipalities have laws protecting individuals based on characteristics such as medical condition, military status, genetic predisposition, sickle cell anemia, credit rating, sexual orientation, immigration status, domestic partnership status, and familial status. Many jurisdictions have adopted statutes that protect individuals based on gender identity. Seeking information about any of these protected categories could be considered discriminatory. Further, some state laws protect applicants from inquiries about credit history, workers’ compensation claims, salary history, social media, and use of legal products while off-duty.

It doesn't take an instance of blatant racial or sexual discrimination to trigger a lawsuit and potentially a huge damage award. A rejected applicant might interpret casual or thoughtless treatment as discrimination. To avoid potential litigation, employers should periodically audit their hiring process to gauge its effectiveness and to check for subtle forms of discrimination.

The time to make notes about an applicant is immediately after the interview. It's too easy to forget facts about specific applicants in the course of a busy day, especially if the interviewer sees a number of applicants. Interviewers should use the list of questions that was prepared before the interview and rate each applicant against each question. All ratings and remarks should be strictly job-related. If several interviewers see the same applicant, they should do their own evaluation and compare notes. This should be a relatively easy process if each interviewer worked with the same set of questions; areas of agreement and disagreement will be readily apparent.

It is expected that all applicants will be told whether they got the job—one way or the other. Letters sent to rejected applicants should be crafted carefully. It is generally best to avoid detailing the reasons a person was not selected. There is no law requiring an employer to tell rejected applicants specifically why they weren't chosen (unless the decision not to hire was based on a consumer credit report). The applicant may disagree with the reasoning and claim that the reason provided was a pretext for discrimination.

Please see the References section. Veterans’ preference. In federal hiring, veterans who are disabled or who serve on active duty in the Armed Forces during certain specified time periods or in military campaigns are entitled to preference over non-veterans (5 U.S.C. § 2108).

Under Title VII of the Civil Rights Act of 1964 (Title VII), employers may use “any professionally developed ability test,” provided that the results are not used to discriminate on the basis of race, color, religion, sex, or national origin.

Disparate treatment. Title VII prohibits intentional discrimination based on protected characteristics. Requiring only members of a protected group to take certain tests is an example of disparate treatment that violates Title VII.

Disparate impact. Tests that are facially neutral but have a disproportionately adverse effect on a protected group also violate Title VII, unless the test is job-related and justified by business necessity.

Under the Americans with Disabilities Act (ADA), tests that are job-related and are intended to measure an individual's capacity and propensity to successfully perform a job may be given at any time. However, if they are designed to assess mental impairments or general psychological health (or used for that purpose), they may be considered medical exams under the ADA. Employers may not require medical exams or make disability-related inquiries until after a conditional offer of employment has been made, and then only if the inquiry or exam is required of all employees in that job. After a conditional job offer has been made and before an applicant begins work, an employer may require a medical exam and make disability-related inquiries as long as it does the same for all entering employees in the same job category.

Physical agility tests in which applicants demonstrate ability to perform actual or simulated job-related tasks are not considered medical examinations and may be administered at the pre-offer stage. The ADA also requires employers to make reasonable accommodations to a qualified individual with a disability, including accommodations needed to administer a test, unless to do so creates an undue hardship.

Drug testing. A test to determine the illegal use of drugs is not considered a medical examination under the ADA. This means that administering such drug tests to applicants and employees will not violate the ADA. However, if a drug test reveals information about an individual's medical condition—for example, that they are taking a lawfully prescribed medication for a particular condition—that information must be treated as a confidential medical record.

Although the ADA does not regulate or prohibit drug testing, some employers may be subject to collective bargaining agreements or state laws that restrict drug screening. For other employers regulated by federal agencies, drug testing may actually be required.

The Age Discrimination in Employment Act (ADEA) also prohibits employers from using tests and selection procedures that discriminate against applicants or employees who are at least 40 years of age. If a test or screening procedure has an adverse impact on older applicants or employees, the employer must show that it was based on a "reasonable factor other than age."

To help employers determine the proper use of tests and other selection procedures, the EEOC has issued the Uniform Guidelines on Employee Selection Procedures (UGESP) (29 C.F.R. 1607). The guidelines apply to all selection procedures that are used as the basis for employment decisions, but testing is generally the procedure that is of most concern to employers.

The UGESP provides guidance to help employers determine if their tests and selection procedures have an adverse impact on a protected group. In addition, the guidelines provide information on test validation (i.e., methods that are used to demonstrate how a test or screening procedure is job-related and consistent with business necessity).

A guidance document detailing required and recommended state and federal forms that should be provided to employees upon hire is available.

Under the federal Immigration Reform and Control Act of 1986 (IRCA), all employees must complete Form I-9, the “Employment Eligibility Verification Form,” issued by the Immigration and Naturalization Service. On this form, applicants attest under penalty of perjury that they are either U.S. citizens or aliens authorized to work in the United States. The form also lists certain documents that applicants must provide to verify their identity and work eligibility. Employers should make sure that they are using the most current version of Form I-9, as it is periodically updated. IRCA makes it illegal to hire undocumented workers, and the employer is responsible for ensuring that Form I-9 is properly completed and the required documents are produced.

As part of the comprehensive welfare reform legislation known as the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, every state must operate a child support enforcement program (42 U.S.C. § 653a). Under the PRWORA provision, employers must report each newly hired worker to a state “directory of new hires” within a prescribed time, typically within 20 days of hiring. Required information generally includes the new employee's name, address, Social Security number, and date of hire. The state agency in turn must report this information to the national directory of new hires at the U.S. Department of Health and Human Services. Multistate employers can designate one state registry for filing all new hire reports.