When it comes to hiring, compliance isn’t just a legal hoop to jump through; it’s about building a foundation of fairness, equity, and legality in your recruitment process. However, even well-intentioned organizations can stumble into common pitfalls that compromise their compliance efforts. From anti-discrimination laws to wage regulations, the legal landscape governing hiring practices is complex and continuously evolving.
Here are four significant errors that can derail your compliance strategy during hiring and some ideas on how to avoid them.
Error 1: Overlooking Applicable Laws and Regulations
The Mistake: One of the most critical errors in hiring compliance is not fully understanding or keeping up to date with the myriads of laws and regulations that apply to your recruitment process. This includes federal laws like the Fair Labor Standards Act (FLSA), Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and state-specific laws which can vary widely. If you don’t know your specific area’s rules and regulations, you may be in for a rude awakening.
Why It’s Detrimental: Ignoring or misunderstanding these laws can lead to discriminatory practices, whether intentional or not. For instance, failing to comply with ADA might mean not providing reasonable accommodations during the interview process for disabled candidates, thus excluding potentially qualified individuals. Similarly, not adhering to equal employment opportunity laws can expose your company to lawsuits and reputational damage. These can open you up to disgruntled employees, high turnover, or even legal trouble.
How to Avoid It:
• Stay Informed: Regularly review updates from the Equal Employment Opportunity Commission (EEOC), Department of Labor (DOL), and state labor departments.
• Training: Ensure HR staff and hiring managers are trained on current laws.
• Legal Counsel: Consider having an employment law attorney review your hiring practices periodically or when significant changes occur.
Error 2: Inconsistent Application of Hiring Criteria
The Mistake: Applying hiring criteria inconsistently across candidates can lead to claims of discrimination, even if that was not your intent. This includes discrepancies in interview questions, job requirements, or the evaluation of qualifications.
Why It’s Detrimental: Inconsistency can be interpreted as bias, particularly if it benefits or disadvantages certain groups over others. For example, if you require a degree for one applicant but overlook it for another due to subjective reasons like “fit” or “personality,” you’re on shaky compliance ground.
How to Avoid It:
• Standardize Processes: Develop clear, objective criteria for each position, including qualifications, experience, and skills. Use structured interviews where the same questions are asked of all candidates.
• Documentation: Keep detailed records of why decisions were made. This documentation can be crucial in defending against discrimination claims.
• Diverse Hiring Panels: Use panels with diverse members to evaluate candidates, reducing individual bias.
Error 3: Neglecting to Address Bias in Recruitment Tools
The Mistake: With the rise of AI and automated recruitment tools, a new compliance frontier has emerged. Many organizations fail to assess these tools for bias, particularly in algorithms used for resume screening or job matching.
Why It’s Detrimental: Automated systems can inadvertently perpetuate existing biases in data, particularly if they’re trained on historical hiring data that reflects past discriminatory practices. This can result in filtering out qualified candidates from underrepresented groups. Many HR professionals believe AI is helpful in eliminating bias, and that can be true—but AI is only as good as its programming. If you aren’t actively working to make sure you have unbiased AI, the opposite may occur. As more and more companies use AI in a variety of ways, it becomes incredibly important to ensure that your choice of tools is aligned with your morals, values, and goals.
How to Avoid It:
• Bias Audits: Regularly audit your recruitment tools for bias. This might involve working with tech providers to understand how algorithms work and what data they use.
• Human Oversight: Ensure there’s human review in the hiring process, especially when automated systems make decisions. Human judgment can catch what algorithms might miss.
• Diversity in Data: If possible, retrain AI models with diverse datasets that reflect an inclusive hiring goal, not just historical data.
Error 4: Failing to Properly Navigate Background Checks and “Ban the Box” Laws
The Mistake: A common compliance pitfall for employers is mishandling background checks or misunderstanding the scope of “Ban the Box” laws, which restrict when and how employers can inquire about a candidate’s criminal history. Many employers either conduct background checks too early in the hiring process or fail to properly follow through on the necessary legal steps. In several states and cities, “Ban the Box” legislation prohibits employers from asking about criminal history on initial job applications or during early stages of interviews. These laws aim to give people with past convictions a fairer shot at employment opportunities. However, they can be difficult to navigate, especially when combined with other state or federal regulations around background checks.
Why It’s Detrimental: If an employer violates these laws—whether by prematurely asking about criminal history or failing to follow the required procedures when conducting background checks—there are significant legal and reputational risks. In some jurisdictions, disregarding “Ban the Box” laws can result in fines and lawsuits. Furthermore, using criminal history in hiring decisions without following the proper steps under the Fair Credit Reporting Act (FCRA) can expose companies to legal action. For instance, the FCRA mandates employers provide candidates with written notice when a background check is performed, get the candidate’s consent, and offer an opportunity to dispute any discrepancies found.
How to Avoid It:
- Stay Informed: It’s essential for employers to be familiar with the specific background check laws in their state, city, or locality, as they can vary widely.
- Adjust Your Hiring Process: Make sure your hiring applications, interview scripts, and policies align with local “Ban the Box” regulations. If a job application form in your state asks candidates about criminal history upfront, you may need to update it to avoid breaking the law.
- Follow FCRA Guidelines: When conducting background checks, HR departments must adhere to FCRA regulations. This includes obtaining written consent from candidates before a background check is run, providing pre-adverse action notices if a decision is being made based on the findings, and allowing candidates the opportunity to dispute inaccuracies before a final hiring decision is made. Failure to do this can expose employers to legal risks and potential lawsuits from candidates.
- Use a Reputable Background Check Service: Partnering with a third-party background check provider can help ensure that you are complying with both “Ban the Box” laws and FCRA requirements. These companies are familiar with the legal landscape and can assist in ensuring that your hiring process adheres to compliance standards.
Compliance in hiring isn’t just about avoiding legal repercussions; it’s about fostering an inclusive, equitable workplace that attracts the best talent. The mistakes outlined above are not just compliance issues but also barriers to building a diverse and effective team. By addressing these errors with proactive measures like continuous education, standardization of practices, and careful use of technology, you can protect your business.
Claire Swinarski is a Contributing Editor at HR Daily Advisor.