The Cost of Negligent Hiring

Negligent hiring is one of the hottest topics in present-day corporate and employment law. The average cost of settling a negligent hiring lawsuit is nearly $1 million. The highest cost recorded was $26.5 million. These rulings tell us that employers have a responsibility to their customers and employees alike to demonstrate a duty of care when bringing on a new team member.

Negligent hiring is a claim made by an injured party against an employer based on the theory that the employer knew or should have known about the employee's background, which may indicate a dangerous or untrustworthy character. Most employers would not knowingly put an individual to work if they thought the person in question was a threat to their employees, customers, or the organization as a whole. It’s the precautions that organizations fail to take that get them into trouble.

Let’s walk you through demonstrating the duty of care as it pertains to your hiring process. You’ve made sure the client is qualified for the tasks required of the position, but it is important to note that your job doesn’t end there. It is equally important to ensure that the new hire is not a threat to either your employees or customers. The risk associated with a failure to properly vet incoming employees is too high to ignore, so what can organizations do to mitigate the risk?

As stated before, the court looks at not only what an employer knows, but what an employee should know. In regards to the stipulation concerning what employers should know, if public record of past transgressions exists, that falls into the category of what an employer should know. For example, if there is record of a violent crime committed by an applicant or employee, then the employer should be aware of it. Having a thorough, consistent screening process is a great place to start in demonstrating that duty of care. It not only shields the organization from negligent hiring lawsuits, but most importantly, it helps keep employees and customers safe.

In the case of the $26.5 million award, the healthcare provider failed to perform a background check. A proper pre-employment screening procedure would have revealed a whopping six prior felony convictions, but the healthcare provider neglected to administer a background check. This unfortunately resulted in the death of the client and his grandmother. That is why the importance of background screening cannot be overstated.

Whether your organization is big or small, you owe it to your employees and customers to use every tool at your disposal to properly vet incoming talent. Background screening helps to provide a safe environment for both employees and customers. Not only will this provide peace of mind, but protect your organization from a negligent hiring lawsuit. 

Background Checks for Small Businesses

Managing your human resources department as a small business owner introduces even more responsibilities to your already diligent work schedule. Tasks like recruiting, scheduling interviews, managing employee concerns, and maintaining standard HR policies can be incredibly time consuming. One aspect you do not want to overlook however, is the process of employee screening before hiring.

As mentioned before, failing to conduct background checks can be costly to your business for a variety of reasons. As a small business owner, making these mistakes could result in your business failing as a whole. Being faced with complications like negligent hiring claims, unintelligible details as to what information you access of a potential employee, or violations of the Fair Credit Reporting Act in general are typically things that can be handled well by larger corporations. However, for entrepreneurs just joining the business world, a negative claim of any sort can prevent their ideas from ever leaving the ground.

Within small businesses, the relationships between employees and their employer can develop quickly, forming a tight-knit bond with a sense of trust, and dependency. Taking that into consideration, poor hiring decisions can have a much more drastic effect on the company. Running background checks on potential employees can ensure their effectiveness, values, and history as an employee, upon which you can decide whether or not they are a good fit for your small business. After that, screening employees during interviews gives you insight to their character. Further evaluation of potential team members can allow you to better judge how well they will work or get along with your already small staff.

Before hiring an employee, many small business owners rely on just an applicant’s resume and interviewing skills due to the fact that background checks can, at times, take longer than anticipated. Additionally, small business managers may see pre-employment screening as an expendable task that will save money and resources. Those who to do so tend to rely on social media or search results on the internet when making their hiring decisions. Not only can this give inaccurate information, but federal and state laws are set in place to prevent some employers from doing this altogether. These laws were established to prevent both legal and ethical problems, and we, as a third-party screening company, can provide the information you are seeking without violating the privacy of the candidate.

For small business owners who choose to implement background checks upon hiring new employees, a number of considerations should be taken into account. Be sure to establish a hiring and screening policy, clearly laid out within the job description for applicants. Through this, it is important to ensure accurate data, which you can accomplish by allowing the applicants to apply through an online portal, giving security and confidence throughout the process.

The Importance of Customer Service in B2B

Providing customer service as a business to a business can be much more complex than the standard business-to-consumer model. A great starting point is to help the business your company is serving with their clients. Proving that you are an asset to those that work closely with you will help in establishing your business as indispensable.

Many B2B companies can deal with anywhere from a few hundred to a few thousand clients, and every transaction can result in revenue gained or lost. With that said, losing a customer could affect these companies’ annual earnings, or worse. B2C companies on the other hand, can financially endure losing a few customers here and there. Customer service plays an enormous role in B2B aspects for that reason. Keeping your clients happy and loyal is very important.

Loyalty among businesses is much more likely to span a few years compared to that of consumers and the businesses they are purchasing from. Long-term relationships in this sense can lead to either business taking the other for granted. Being aware of every interaction between employees and the businesses that your company serves is vital in providing great customer service. Should any problems arise, you will want to solve them as quickly as possible for every client. This will help build your reputation as a truly accommodating company.

91% of B2B buyers are influenced by word-of-mouth when deciding who wish to work with, but these referrals almost always depend on whether or not they had a pleasant experience as a customer. As word spreads about great customer service from a B2B company, that company’s reputation improves tremendously. Today more than ever, buyers seek input from their peers before making upcoming purchases. As referrals grow, so does your clientele.

An important consideration when differentiating B2B and B2C is the fact that the product hardly ever changes among B2B, seeing as their main service is brand loyalty, the innovations of which often need just a few small changes here and there. Taking that into account, B2B’s compete through quality of service. Companies of similar products must prove to potential customers that they not only provide the better service, but that they truly care about those who they are serving.

The phrase "the customer is always right" carries much more weight in business-to-business customer service, despite the controversy that surrounds it. Losing customers on a larger scale can negatively affect B2B's much more than B2C's, proving the importance of how you serve your clients.

California Amends Law Preventing Use of Juvenile Criminal History for Employment

Assembly Bill 1843 is an amendment to California Labor Code 432.7 that includes additional restrictions on employment-based inquiries into an applicant or employee’s juvenile criminal history. The new bill, effective January 1^st of next year, restricts employers from:

• Asking an applicant to disclose, either in writing or verbally, information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the individual was subject to the process and jurisdiction of juvenile courts/ law.
• Seeking from any source whatsoever, or using, as a factor in determining any condition of employment (e.g., hiring, promotion, termination, decisions related to a training program, etc.), any record concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the individual was subject to the process and jurisdiction of juvenile courts/law.

It is important to note that previous sections of California Labor Code 432.7 allowed employers to look into certain convictions and use them in adverse action decisions if federal law required. The amendment will prevent employers from making decisions based on those preexisting portions of the labor code. This amendment may cause a conflict with preceding federal laws and/or other legal requirements that require specific screening standards for employment. We will keep an eye on this bill as it goes into effect and examine how this conflict will be handled.

You can read Assembly Bill 1843 in full here.

LA Bans the Box

On November 30th, 2016, the Los Angeles City Council passed the Fair Chance Initiative prohibiting most employers from inquiring about applicants’ criminal histories until a position at the company has been offered. The notion was approved by a 12-1 vote, making Los Angeles another of many to instill this new law.

The city’s ordinance will apply to all employers who have at least 10 or more employees on staff, with the exception of careers in fields like law enforcement and child care. The decision was made to join a growing movement in helping those with criminal records find suitable employment despite their pasts. There are now 24 states with over 150 cities who have adopted this bill.

The Fair Chance Initiative was started by the Los Angeles based organizations Homeboy Industries and All of Us or None. Both groups provide support to previously incarcerated persons, fighting for their rights to rejoin the workforce in the United States; a very applicable stance to the ‘ban the box’ law. According to the National Employment Law Project, a 2011 study discovered that reentering 100 formerly incarcerated people back in the working world would increase their lifetime earnings by $55 million. This would also save $2 million annually be keeping these employees out of the criminal justice system.

However, as mentioned in a previous blog of ours, these policies bring forth the risk of increasing discrimination, as employers who are not legally allowed to research an applicant’s criminal history may consider denying him or her because of ethnicity a loophole. This fallback on stereotyping can have an adverse affect on those seeking jobs following incarceration, but the question of morality remains. Implementing the ‘ban the box’ law has led to a large increase in the hiring of those with criminal records despite these claims.

Now that Los Angeles has joined many cities around the country in this movement, the City’s Office of Wage Standards is expected to enforce this ordinance. If any violation of the new bill is reported, the applicant filing the report may receive up to $500, so long as the allegations are upheld.

For more information on the rising ‘ban the box’ movement, visit the National Employment Law Project’s guide here.

Marijuana Legalization and its Effect on Your Drug Screening Policy

Whether you were a Trump supporter, Clinton supporter, or none of the above, the election is behind us. The results of the November ballots resulted not only in the election of Donald Trump as our president, but also the legalization of recreational marijuana use in four states in what the media is calling a big win for marijuana reform.

California, the United States’ most populous state, along with Massachusetts, Nevada, and Maine, approved the use of recreational marijuana on Tuesday, November 8^th. Overnight, the number of states permitting recreational use grew from four (Alaska, Colorado, Oregon, and Washington) to eight, doubling the amount of states in which use of marijuana is legal. So not only has the most populous state legalized marijuana, but the movement for reform has made its way out to the east coast.

Recreational use was not the only marijuana-related question on the ballot either. Medical marijuana usage was approved by three new states (Florida, North Dakota, and Arkansas), pushing the number up to a whopping 28 states. Nine different states had marijuana on the ballot, so we will talk about the impact these bills will have on your drug screening policy.

Whenever a new bill is passed relating to marijuana, we get questions about how that will impact your corporate drug screening policy. We’ve written about it in the past, and the answer remains the same as before. Until marijuana is removed from the list of Schedule I drugs under the federal Controlled Substances Act, employers should still be able to test for the substance as they see fit. That is because the states that have passed these laws permit taking adverse action if the employee is under the influence of marijuana at work.

Now some may ask, “Don’t these new laws prohibit adverse action (firing of an employee) for the off-duty use of marijuana?” The answer is yes, but determining whether it was used during work hours or after hours can be tricky. The problem lies in the testing methods used for marijuana. Unlike alcohol, there is no known threshold for impairment. Testing for marijuana, depending on the method, can detect use from as far back as 30 days. For hair tests, the window of detection is larger. Therefore, a positive result does not necessarily mean the applicant/employee is impaired. However, there is no way to be sure.

In conclusion, due to the limits of drug screening for marijuana and the drug’s inclusion in the list of Schedule I drugs under the federal Controlled Substances Act, employers can still take adverse action against employees and applicants for a positive drug test. So for now, employers can still maintain a zero-tolerance policy for the drug should they so choose. Whether the spread of this marijuana-related reform or the development of new drug screening tools will change this remains to be seen. We recommend that companies at the very least review their policies and, should they continue to enforce a zero-tolerance policy, communicate to their employees that marijuana use could still result in the termination of employment.

Separating Good Employees from Great Employees When Interviewing

The process of interviewing can become a monotonous task for employers in need of hiring, sifting through countless applications. To avoid falling into a generic routine comprised of run-of-the-mill interview questions and potentially hiring a damaging employee, take the following evaluations into consideration when interviewing in order to truly gauge an applicant’s worth.

What is their vision?

Asking an interviewee where they see themselves in 5 or 10 years leaves the door open for common, overused answers. Elaborate on this topic by asking what their professional vision within the company is. How can he or she contribute something that hasn’t been done before? An applicant who can quickly and thoroughly answer questions regarding their future, and what they can bring to the table is typically a visionary who can recognize his or her own value.

Why did they leave their previous job, and did they attempt to find a solution?

Whether or not candidates you are interviewing left their previous place of work due to inadequate pay, or problems with coworkers, asking if they’ve tried to rectify the issue at hand will allow them to show their problem solving abilities in situations that call for such skills. If the problem they faced led to them quitting the very next day, that may show their inability to cope with difficulties. However, if they are simply exploring their options within the working world, you do not want your business to be seen as a negotiation for higher pay, leveraging against their current position. Be sure applicant’s want to work for your company specifically, and are not merely weighing their odds in order to find any job they can.

What is something new they learned within the past month?

Questions pertaining to an interviewee’s self-development forces them to consider how aspects of their personal lives relate to their professional careers. Rather than listing bullets on their resumes one by one that relate only to their work history, candidates should be able to show an eagerness for growth outside of the office. Ask them to teach you something. As vague of a question as that is, it compels the interviewee to dive into their personal interests, showing their enthusiasm for learning. An applicant that takes ownership of his or her personal growth is typically one that can be trusted to successfully grow within your company.

Going above and beyond in the interviewing process can yield extremely beneficial results for employers looking to find their next great employee. Look to stray away from standard interview questions that almost all applicants can answer with ease. Candidates that can translate well to your business’s needs will manifest themselves through these unique questions by showcasing their skills and ability to think quickly on their feet.