Hiring Employees FAQ

What laws must I follow when hiring new employees?

A variety of state and federal laws govern what you can and cannot do during all phases of the hiring process, including interviewing, investigating, testing, and selecting new employees.

Generally, you must:

  • avoid illegal discrimination
  • respect the applicant's privacy rights
  • refrain from making promises you can't keep
  • follow the legal rules for hiring immigrants, and
  • follow the legal rules for hiring young workers.

When I hire someone, do I have to use a written employment contract?

No. The law does not require you to make written contracts with your employees. However, using a contract can be a good idea, especially if you are hiring for a high-level position and want to make sure that the employee sticks around for a while.

Do any special rules apply if I'm hiring a teenager?

Yes. Because most teenagers are in school and many don't yet have the physical capabilities and stamina of adults, federal and state laws restrict the types of jobs they can be hired to do and the hours they can be required to work. Most hazardous jobs -- those using heavy machinery or potentially dangerous chemicals, for example -- are off limits to teenagers, as are jobs that would require younger teens to work more than three hours on a school day.

Can I take an applicant's disability into account when I'm hiring?

Only if the applicant's disability makes him or her unable to perform an essential function of the job. For example, you can refuse to hire someone who is unable to lift things if one of the essential functions of the job is heavy lifting. However, the Americans with Disabilities Act (ADA) puts limits on what and how you can ask applicants about disabilities before you make a job offer.

Can I ask where an applicant was born or whether he or she is a U.S. citizen?

Not in so many words. Because it is illegal to discriminate against applicants and employees based on their national origin or citizenship status, you shouldn't ask about these things during an interview. However, you can ask whether the worker is legally authorized to work in the United States.

I want to know whether applicants have ever been fired or stolen from a prior employer -- can I require them to take a lie detector test?

No. A federal law called the Employee Polygraph Protection Act (and the laws of many states) prohibits almost all employers from asking or requiring applicants to take a lie detector test. The only exception is for employers that deal in controlled substances or provide certain types of security services, who are allowed to require certain applicants to take a polygraph (a particular kind of lie detector test).

What should I do before hiring my first employee?

There are a number of legal and practical steps you should take when hiring for the first time. For example, you will need to get an employer ID number for tax purposes, register with your state's labor department, and post required notices. Among the practical matters to take care of are setting up payroll withholding, getting insurance, and getting started on good personnel practices, such as setting up employee files and drafting policies. For more information, see Nolo's article Hiring Your First Employee: 13 Things You Must Do. 

What first-day paperwork requirements do I need to handle with new employees?

You should have new employees complete required government paperwork, such as completing Form I-9, on which employees verify that they are eligible to work in the United States, and IRS Form W-4, on which employees tell you how much federal income tax to withhold from their paychecks. For more information on these requirements -- as well as tips on providing a welcoming atmosphere for new employees -- see Nolo's article What to Do on Your Employee's First Day. 

How far can I go in running background checks?

When doing background checks, you must be careful not to invade the privacy of applicants -- and to respect the legal limits that apply to certain types of records and information. For example, some states don't allow employers to use arrest records in making job decisions. In response to the recent economic downturn, some states also restrict an employer's right to check an applicant's credit report or use a negative report as a basis for not hiring an applicant. For more information, see Nolo's article Running Background Checks on Job Applicants. 

What is a job description?

A job description is a document that clearly lays out a job's duties and requirements. Job descriptions can take many forms, but they typically include at least these four sections: a brief summary of the job; a list of job duties; the requirements for the job (such as required certifications or fluency in a particular language); and any other important information about the job, like travel requirements or unusual hours. An accurate, up-to-date job description can help you make sure you hire the right candidate; they are also helpful in other aspects of employment, from setting compensation to evaluating performance. For more information, see Nolo's article Writing and Using Job Descriptions. 

Can I check an applicant's credit report?

Federal law allows employers to check credit reports, but only if the applicant consents. Some states, however, do not allow employers to check an applicant's credit or refuse to hire someone because of poor credit. In states that allow employers to check credit reports, employers generally comply with the consent requirement by asking all applicants to sign a written consent and submit it along with their employment applications. If you decide not to hire someone based on information in the credit report, you have to let the applicant know and explain his or her right to challenge the contents of the report.

To Learn More

For a complete guide to your legal rights and responsibilities as an employer, read The Employer's Legal Handbook: Manage Your Employees & Workplace Effectively, by Fred Steingold (Nolo).

If you want some advice from a lawyer, Nolo's Lawyer Directory can help you find a local employment lawyer.

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