Hiring a new employee to work in a small business is process
fraught with legal issues. The federal government and most
states have anti-discrimination laws in place protecting
applicants and employees from hiring and employment
decisions based on race, color, religion, national origin, sex,
pregnancy, age, disability, union affiliation, or veteran status.
(Some states also prohibit discrimination based on other
categories, including sexual orientation, marital status, and
arrest record.) Would-be employers must comply with the law at every step of the hiring process.
Advertising the Position
In order to attract the most qualified applicants or employees, ads and job descriptions should
avoid words that suggest the employer prefers applicants of a particular race, sex, religion,
national origin, age, or other protected trait under the relevant state or local law. For example,
an ad that employs the phrase “recent college graduate” instead of “college degree required”
could imply a preference for young people and discourage older applicants from applying.
Likewise, using the term “salesman” instead of “salesperson” could suggest that only men
Employers should also use care when deciding how to disseminate information about available
jobs. The method an employer uses to get out the word about job openings can create problems
if that method has the effect of foreclosing certain classes of applicants. Employers can avoid
problems by disseminating news of job openings as widely as possible. Placing ads in newspapers
and magazines with wide circulation bases and using employment agencies or state job-service
divisions can help employers reach a wide variety of qualified applicants.
The Americans with Disabilities Act prohibits an employer from asking any questions relating to
the applicant’s physical or mental health. Questions that seek such information either directly
(such as “Do you have any health problems?”) or indirectly (such as “Have you ever filed a claim
for workers’ compensation?”) are forbidden. Rather, employers should ask all applicants if they
can perform the essential functions of the job. For example, if the job requires sitting down for
eight hours a day, the application should ask whether the applicant is physically able to meet that
The National Labor Relations Act prohibits any questions about union membership or activities.
For example, questions such as “Do you belong to a labor organization?” or “Have you ever
participated in a strike?” are against the law.
Employers should take careful notes during interviews. Besides being helpful in defending hiring
decisions if they’re challenged in the future, keeping accurate, job-related interview notes
improves the quality of the selection process. However, employers only write notes that pertain
to an applicant’s ability to perform the functions of a job.
Both federal and state laws regulate the ability of employers to request references and other
information. Reference checks that unnecessarily request private information or use
unreasonable methods to gather data may subject an employer to liability for invasion of privacy,
though such liability is admittedly rare. As a rule, when conducting reference checks, employers
should inquire only about issues relating to an individual’s past work performance.