Hey now welcome to another edition of the inside BS show today We are going to talk about your employees and I know what you're thinking I don't want to talk about my employees. Please the last thing I want to do is talk about my employees But you know what we have to talk about your employees because there are some things you're doing wrong there are probably a lot of things that you're doing right, but there are some pitfalls that With a little knowledge you can watch out for and my guest today Susan Lawrence is gonna help us avoid those pitfalls and You're even gonna find out a couple of things that you didn't know that may be to your benefit So please join me in welcoming Susan to the inside BS show Susan thanks for joining us today. I can't wait to jump into this conversation.

It's great to have you here Thank you so much for the invitation. I really look forward to our conversation. All right, so first Let's talk about how you became an attorney who focuses on Employment law and then I want you to explain to the folks who are listening the folks who are watching There's two sides to employment law, right? People are on one side or the other and explain why you have to be on one side or the other, please All good questions So my path to the employment law space was predicated on my need for constant Stimulation frankly, I was doing general business litigation and it was great It got me into court a lot But it was sort of the same fact pattern, you know, someone signed a contract someone failed to pay for the goods and we need your money No disrespect at all to people who practice in that space But I was really missing the human aspect of it And I also fairly quickly realized that I didn't want to just be fighting all day long with everyone about everything the employment Practice at least in my firm is the best of both worlds because I get to be on the counseling side Helping people hire people fire people drafting employment agreements drafting termination agreements investigating sexual harassment claims Doing training What have you and then I also handled the litigation piece.

So it was a way for me to Keep my foot in the courtroom But also get to really know the clients and really help and be a trusted advisor to them sort of be there inside outside counsel and Human resource advisor all at once and so I love it. I truly love my job. It's a different scenario every single day I'm great at cocktail parties because I have stories for years and You know can can also then feel constantly enriched and and stimulated so You know, it's a great question if you need to be on one side or the other historically I practice on the employer side, which really gives me an opportunity to know Employers pain points and know what other employers are doing and bring that level of experience and Industry knowledge to my clients.

I definitely do represent employees though from time to time if they're negotiating employment agreements or if they are Coming to me to to determine whether or not I think they have a legitimate basis to say they've been wrongfully terminated and as much as that is not my Full focus. I think it is helpful that I know how the other side thinks I know how the employer approaches these situations And can bring that level of understanding into uh conversations and negotiations on behalf of employees, so I think you can shadow both both of the of the lanes Um, but admittedly I tend to assist with the employer side more than the employee side Yeah, and it makes a lot of sense because unless you have a huge natural presence It's hard to source really good employee side cases, but every employer needs your help. So Yeah, I mean frankly You're constantly hustling on the employee side because it's a one and done situation unless god forbid this poor employee keeps getting fired Time and time again, whereas my employees employers and clients You know call me every day five times a day to say, you know, so and so was late again What do I need to do and he's african-american and gay whether how does that play in? And then if that same employee gets fired and brings an eeoc charge I get to handle it throughout the entire life cycle So, you know, there's sort of a laziness component on my part that I don't have to keep Um finding a client Um for a one and done situation I can build up the relationship and follow them through the whole life cycle Well, we don't call that lazy.

We call that good strategy is what we call that. Thank you Thank you. I want you to help us with this.

Okay, so I grew up in the hospitality business and We had so much fun at work every single day and I think back and you know, susan We're talking about for me like 30 years ago. I think back to some of the things We said and we did at work and I feel in a way kind of bad because with the work environment in most places has become Has gone the other way has become sterile and Listen, i'm not saying that some of the things I said or some of the things My friends and I did were right or appropriate But I know a lot of business owners now a lot of successful people who are scared to death That they can't laugh joke and have fun So help us with some general guidelines about how we can keep a workplace fun Without crossing a line and making people feel uncomfortable I mean, it's a great question and i'm right there with you. I grew up Working in restaurants and you know, I was the Cute little co-ed, um at the hostess stand of a restaurant and would constantly get Inappropriate comments made my way and truthfully I didn't even think of them as inappropriate, right? That wasn't in our vernacular I gave it as good as I got And grew up in a law firm environment at a time when that wasn't completely Frowned upon either.

I mean you would constantly hear the stories of the older bosses You know complementing the young associate. I had a judge In the early 2000s. Tell me how nice it is that they're letting girls be lawyers, right? So this is not some archaic concept.

This is stuff that of course still goes on but um, it has a spotlight shined on it in a way that Never has before and um, I am constantly getting this question from my own clients of you know Part of the way we create a cohesive sticky type of work environment that employees want to stay loyal to and keep coming back to Is by forming bonds and relationships if we sterilize it Then no one's going to feel any sort of connection to their co-workers And the second someone dangles a little bit more money in front of that They're out of there. So how do we spread that needle and the reality of the situation is There is no law that says you can't hug somebody There is no law that says you can't compliment the way someone looks there is no law that says You can't have friendships. What you can't do is do anything.

That's unwelcome so if you don't know that that person wants to be hugged or Complimented on their new haircut or you know told they look like they've lost some weight Don't go there, right if there's this element of just sort of common sense That needs to be put into the conversation so that all of those Organic relationships can take place But the inorganic ones the ones that are forced upon somebody just don't so, you know I am never here to be the civility police. There's not a case law Lying in in the nation that says no friendships. No, no hats on the back.

None of that but if if you have to Ask eke did that person really find my dirty joke funny because she sort of stood there with her arms crossed and She leaned back and when she saw me coming the next time she exited stage left Then it's probably not welcomed and it's time for you to use your own common sense and be like, yeah No, i'm gonna i'm gonna dial it back It's it's so easy just to say well, I guess we can't have any fun in the workplace And that's just simply not not the case It's all about making sure you know your audience and that any such conduct is truly Welcomed not that I intended it to be welcomed not that I didn't intend to offend you Your intent my intent is completely irrelevant It's how the person receiving it is going to To feel and if if you don't feel comfortable that you can state affirmatively that I know my conduct is welcomed It's time to kind of um tweak the way you're interacting with your co-workers so Part of this is quid pro quo, right? It's the boss and what the boss is doing but there's another part of it too and it's creating a work environment, right? Talk about the difference between third party and quid pro quo issues because a lot of employers And I I work with entrepreneurs. I work with professionals and they think to themselves. Well, i'm not the offending behavior person So if you know if it goes on on the shop floor and i'm not there Well, what am I supposed to do about it? No, no, you you need to make sure that you're creating a workplace That doesn't make people feel uncomfortable explain third party, uh issues versus quid pro quo Sure, and I think it's a great question, especially in illinois where we now have a responsibility for all employers regardless of their size to do Annual sexual harassment prevention training.

So these are things that every employer Entrepreneurial startups 500 people companies needs to to be talking about So what you're really talking about are the two legal theories that are recognized both illinois and uh nationwide at the state and at the federal level quid pro quo Is latin for this for that right if if you sleep with me you'll get the promotion if you refuse to sleep with me I'm going to put you on third shift for the rest of your career and you're never going to advance out of it That has to be conducted by a supervisor to a subordinate If it's a co-worker to co-worker Kind of inter change that would not rise to the level of a quid pro quo claim. Um you know, I think the way I would explain the evolution of sexual harassment claims is that a lot of bosses and Co-workers got wise to the fact that that's a big no-no even even the neanderthals know that you can't be that overt So what you saw come out of that recognition is the hostile work environment theory of sexual harassment Which can be co-worker to co-worker does not require the supervisory relationship and to your point it could be third party So it could be your delivery person that's coming in and interacting with your receptionist every day It could be a client and those are really sticky thorny awful scenarios Because you might get advice from someone like me that says you have to part ways with that client I don't care if it's your you know, your largest client if they are Creating a house to work environment for your employee. You're just taking on way too much liability So that theory is essentially, um what you said that the behavior is unwelcomed And is so either severe or pervasive And i'll circle back to that in a second That it makes it intimidating or Unreasonably difficult for the person to do their job It doesn't matter the gender of the person either the um accused or the the victim sexual orientation.

What have you? Men can sexually harass men women to women women to men men to women The severe pervasive piece essentially says that either the conduct needs to be so severe Touching someone in an inappropriate place Making an extremely offensive Comment that it only needs to occur once to rise to that level of a hostile work environment If it's not that kind of conduct it needs to be pervasive throughout the workplace, but it's happening constantly you're constantly Looking at someone's rear end as they walk by you're constantly asking them about Their sexual history you're you're constantly sending inappropriate texts Then it would create a pervasive environment that could rise to the level of a sexual harassment claim And in those instances when it's not a supervisor to employee scenario The courts look at it from a negligent standard. So to your point about you know, this is going on On the shop floor. I don't know about it The standard for an employer to have liability is either we knew or we should have known So if it's the worst kept secret um, or Yes, the person hasn't come complaining to you But all you have to do is walk down the floor once and you see how she's being subjected to you know pictures that are posted on her station or You know cat calls or whatever else you as the employer are going to be Found to have had knowledge about the conduct and then you have to act you have to do something To ensure that the conduct doesn't continue um and that you are Um ensuring that the workplace is is free from that kind of harassment You cannot sit and wait for an employee to make a formal complaint You know, I hear often that employers will say she didn't really complain to me But she mentioned, you know, I don't know if you've noticed but I don't want anyone to get in trouble But I just think you should know this.

Well, that's a complaint You don't get to wait till a document is signed and handed over Um, you know a legal head you have to act the second you either Get notice or you see something that puts you on notice And you know my theory as a as a manager has was always that you're you're never really off duty, right? So let's talk about and again, i'm going back to my own history like back in the day I ran a sales team and every time we would close a big deal I take everybody out in the office out for drinks, right? And then i'd be on the curb basically handing out 20 bills to taxi cab drivers to get these people home, right? Now though I realize that even in that environment you're you're like a cop on the beat You're never really off duty. So anything that would happen in that environment would have exposed me. Is that correct? It's a perfect statement and the way I explained it is The workplace is extremely broad and to your point you never take off your Um employer or co-worker hat when you are with your co-workers Whether it's off duty whether it's on weekends, whether it's at a happy hour off site Whether it's at a client meeting in a different country In the lobby bar after you've you've sealed the the deal um The workplace is an incredibly broad concept and it essentially Adheres to any time day or place where you are with your workers or clients or you know holding yourself out as their supervisor or their co-worker so Let me put it this way If our only defense in a sexual harassment claim is it happened at a bar and not in the office We're we're losing that case right out of the gate All right.

Let's let's shift gears a little bit and now Let's talk about Some of the things that need to be in place to make sure that we that we keep the work environment In a manner that allows everyone to be comfortable and productive, right? So the proverbial employee handbook I mean, can I like the handbook that I print off of the website that I get for? 3995 that has all those boilerplate documents on it. Is that that does that is that good? I mean, or does that get me in even more trouble because it's too broad too generic I think I would take a couple of steps back Um first there is no legal requirement that you have an employee handbook full stop Um, and frankly, I would only encourage you to have an employee handbook if you're going to adhere to it Do not put policies in place even the ones you download for 3999 if you're never going to look at them and you're never going to enforce them the name of the game in virtually all employment Um relation legal issues is consistency Across the board. So if you're going to have an employee handbook that's got an attendance policy But you allow the white man to come in 20 minutes late and you only Adhere to it for the pregnant female or the african-american gay guy or whatever it's going to be You're so much worse off than if you never had the attendance policy in the first place.

Number one Once you've gotten yourself to the point of okay, I need policies. It's the wild west here We got to have something in place that I can point back to when I want to discipline someone For taking too much vacation or whatever Um, you know consider this a plug for the employment lawyers in the world A 3999 off the web Employee handbook is as good as the paper. It's printed on right? Um, if it doesn't speak to your culture if it doesn't speak to the size of your Um organization right somebody with five employees cannot provide three weeks of paid vacation It's just not workable right a company with 500 might have to if they're going to stay competitive in the market So I really think if you've gotten yourself to the point where you need to have a handbook I think it's worth spending the time to go to a reputable employer side lawyer who's going to have these kind of conversations Tell me about the culture.

Tell me what's going to incentivize your employees Then let's put those policies in place, right? You don't need a robust expense reimbursement policy in your employee handbook If you don't have any sales people, so I think it makes sense to invest in that money But ultimately at the end of the day then you got to do the follow-through then you got to adhere to it on a consistent basis um, and then That sends the message also to the employees that okay. My employer has his act together She understands what the policies are and I now have clarity and visibility on the expectations Um, so I think there's a lot of benefits to it um, I just don't want it to be sort of a Afterthought that we'll just slap it on and expect that that's going to have some sort of get out of jail free card properties Yeah, like anything else if you're just doing it to check off a box. It's not going to it's not going to make a lot of sense Um, so susan I want to ask you about the remote work environment now and I want you to I want you to think about some differences From a from a remote work environment compared to uh in the office work environment before you answer that question I need to remind folks that today's show is brought to you by syndrowsky corporate advisors For over 35 years syndrowsky corporate advisors has helped people with some of the thorniest issues they face related to Their taxes if you own a business and you're thinking of selling your business There's nobody better to call than the team at syndrowsky corporate advisors.

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We really appreciate you being here. Okay, so Susan we talked a little bit about I mentioned remote work, right? What has changed? I mean, I could be at home in my fuzzy slippers and my bathrobe making sales calls and nobody's ever going to see me even worse I could have had, you know, a couple of shots at lunch and then been on the phone and start talking to customers How do we manage a remote workforce these days? I think we just manage it, right? I think this is a time where the managers have to step up and do their job as opposed to being able to Allow things to just happen organically Because we're all in the workplace. This is a time That we have to lean in a little bit more because Spoiler alert, it's not going away.

This is not a time where we're going to suddenly All get back to work five days a week It's just never going to happen and you know I've had some tough conversations with clients who have Said I need all my employees back in the office tomorrow and this is where I wear the counselor Side of the counselor at law title. I have to say to them You will have attrition like never before because your competitors are going to continue to allow the work remotely concept You are not going to be able to recruit top talent because your competitors are going to continue to allow it So if if if the reason why you are anti Remote work is simply because oh gosh, it's so much harder to manage my employees I'm sorry. That's that's just not an acceptable answer.

You have to just manage them that much more now I think what you're also asking is Are there privacy rights that we need to be cognizant of are do we have the ability to be asking for more? Check-ins and face-to-face zooms Yes to all of that. I mean there's really even in a state like, Illinois that is quite employee friendly Employers have a lot of rights and a lot of abilities to Ensure that their employees are productive and responsive and to then terminate their employees if they're not I recommend that you have those kind of regular check-ins and really start papering the file If somebody is not showing up for the zooms or they're refusing to turn on the camera Or they seem to be impaired or Things are not getting turned in on a timely basis Start doing yourself the favor of keeping track of that send yourself an email Do a follow-up email saying, you know per discussion. I'm waiting on these three reports that were due last week Once you have that kind of documentation You can move forward with terminating someone even if it's based on this this Personal belief that they're just not as committed because they're working from home Um, it is still fair to say that working from home is a privilege not a right So if you start having employees who are saying, you know, I don't want to come back in.

I only want to work remotely Once we get past the practical side of are you sure you want to say no to that because he or she's going to leave We need to take a look at why is that? And is it something that we can accommodate is it because of a disability or is it because Their kids are home and they don't have child care, you know We need to look at this on a case-by-case basis in some instances to make sure we're not running afoul any sort of discrimination or disability Um laws and then determine is there something that we can do to meet in the middle? But um, I just think it's very important for all employers Especially those who are in the service industry that don't have people, you know on a line building widgets to appreciate that We are in an unprecedented time where the concept of work-life balance has been Accelerated in a way that we never would have gotten to but for a global pandemic And I just think this is here to stay so it's incumbent upon managers to to just become that much more Engaged in the management process as opposed to just saying it won't work and moving on Yeah, and it's also important to remember too that there are there are companies that have pulled this off successfully for years I mean jet blue was a pioneer in the space They they hired people who work from home to be customer service reps to be reservationists and you know You had people who Would would take their guest room and pop a computer in there and a dedicated telephone line back in the time when we had Dedicated, uh, you know hard telephone lines and they would field reservation calls overnight in their house People have been doing this forever. So don't think that you're a pioneer in uncharted territory here I think common sense is uh is part of the part of the equation here that is often missing and susan to this point How and and we're gonna we're gonna get into another thorny area here after this But how do we so if I am i'm a firm believer myself personally i'm a firm believer in Focusing on outcomes with the people with whom I work, right? So and i've done this throughout my entire career even with hourly employees. I would say here's here's the final outcome that we're looking for You know, I appreciate that you're that you're punching a clock and I know you like some tasks better than others So this is the outcome for this task if you get it done in three hours, i'll give you something more fun to do Afterwards it doesn't have to take all day Can we compensate people based on outcomes in like a work from home environment in order to? Incentivize productivity like jobs that are typically hourly jobs.

And if we do that, how do we structure that? So that you know, we're we're in compliance with the law and we don't end up having any labor issues I mean that's a very very thorny issue. Um, and especially when we're talking about hourly Non-exempt employees meaning those that are entitled to overtime Record-keeping is of the utmost importance in those types of situations because the employer has the obligation to pay the employee For any work that they allowed to occur and include as well as work that they didn't allow to occur but that occurred um, so when you get into a situation of paying them not by the hour but by the Productivity the number of widgets bought uh built what have you you know, you need to make sure that you are still recording time Such that as soon as they work at least in illinois more than 40 hours, they're getting paid overtime So that means you have to figure out How that correlates if you are just paying them based on productivity That still has an hourly value when you figure out how many hours they worked And then that hourly value gets attributed to the overtime. So, you know at the risk of sounding like I'm trying not to answer your question This is one of those situations that should not be entered into lightly You really need to make sure you're staying on the right side Of the fair labor standards act if you're not going to pay someone on an hourly basis That being said if you are paying someone on an hourly basis and they are working from home I respect and appreciate that.

It's really hard to feel confident that the person is actually working the hours That they say they work and it again It's the employer's responsibility to maintain all of those records and then to pay them based on that so there's great, um technology out there at this point in time for people to be able to log in and log out you can rely then on On the technology maybe a little bit more than someone's Uh, you know scribbled post-it that this is the number of hours. I worked What I would say though is if you're starting to doubt the legitimacy of the hours You still gotta pay them for the hours. They say they will work and then discipline and you know, write them up for fraudulently Tracking their time and move towards termination, but you can't get into the business of just saying, you know What I don't believe you so i'm not going to pay you That's a quick ticket to the department of labor and an unpaid wage claim Okay.

So now now we're uh, I want to I want to talk a little bit about contractor versus employer employer employee relationship, right? Yeah, so, uh, you know, I know about direction and control and and that sort of thing but You know, I I still get confused so like, you know realtors for example or uber drivers I mean those are some classic examples of Listen, i'm not telling them how to sell the house I just want them to go and sell the house and you know I'll give them the tools to do it and call me when you're done, right contractor employee How do we figure out if they're a contractor if they're an employee because we just want to do the right thing Let me tell you about this recent case that just came out that Really kind of highlights the complexities of this issue because this was a case brought by an individual Who asked the company to be deemed an independent contractor? This was not something that the employer prompted or recommended Um, and you know something is good as long as it's good, right? He recommended or requested that he be treated as an independent contractor fine. We went along and did that This was not my case, by the way Then the the relationship went south the parties decided to part ways The individual went and filed for unemployment and the company's response was not our employee No, unemployment was was paid in therefore He shouldn't be getting any unemployment and as often as the case that turned into a company-wide audit by the um, Unemployment agency and they blew the whole thing up So it wasn't any sort of defense to say look, this is what the individual wanted, right? so Again, the premise should always be the default should always be Employee unless we can clearly establish that we have no control or virtually no control over the individual's work product and Ideally that the work that the individual is going to be doing for us is so wildly different than what we are Uh doing at our core. So the example I like to give is I work at a law firm If my law firm wants to hire someone to create a new website for us We are not in the website designing business We don't have any specialty in that the individual that comes in to perform those tests Are going to be able to do those without any real oversight from us other than maybe saying, you know These are our typical colors.

This is the font we like but we're not going to get into the weeds on that That's uh an appropriate independent contractor relationship If I want to hire someone though, that is going to do some Research case research for me or some analysis on a file and yeah Maybe they also do this work for a different firm or maybe they only do this work on weekends Um, I can have a really hard time Um believing that either the unemployment agency the irs What have you would view that as an appropriately? Classified independent contractor and the road with this is it is subject to Cross sharing from agency to agency. So if an unemployment agency goes in and blows the whole Company up because they're going to do an audit of all of your independent contractors Not just the one person who brought the claim They can then share that information with the irs to say, you know what they should have been doing with holdings all along Um, they can look at whether or not someone should have been subject to Help care benefits and on and on and on i'd love to say these are hypotheticals But i've had unfortunately several clients who have said Um, you know what we're going to just run with this as long as we can They understand that they can't file for unemployment and then fast forward two or three years and suddenly it is worth so much more Problems than it was actually ever Benefiting the company in the first place. So my my overall recommendation is Don't go there Even when someone says I really would prefer to be deemed an independent contractor because I don't want taxes taken out I think it's you're in the best position to say I respect that but i'm not willing to take on that risk for my okay, so Question I have for you goes back to something that I used to teach people as a best practice But I I stopped doing it Because it became really hard for them to manage but i'm interested in where it would fall in the eyes of the law With a sales organization.

Let's say right they're hiring people and they get down to two or three candidates and they say okay Here's what we're going to do for these first two weeks. You're going to be an independent contractor. Go out and get three leads And I will help you close the leads if you get the three leads we're going to hire you Right and you're going to get paid.

Uh, you know a flat rate for the two weeks But we're not going to give you any direction. We want to see you see what you do We used to call this the tryout, right? Is that is that kosher in the eyes of the law or is that no longer a good practice to do? It's not kosher, um But it's one of those that I would tell my clients. We need to do The risk benefit analysis on that one because let's say Uh, you ended up hiring the person and you end up having a you know, two three four ten year relationship The likelihood of them ever being able to say remember that three week period Uh, you should have been paying me over time or I should have been getting health insurance and I actually had a claim During that time and had to come out of pocket.

I view that as such a de minimis risk that maybe you take it I would not advocate it frankly it to me It's just as easy to fire someone in that quote unquote trial period and still treat them as an employee all along So long as we're properly documenting things and following up with them about any performance issues That I don't really see that you're getting a whole heck of a lot by not treating them as a w2 right out of the gate but by the same token, um I think the fact that we then hired them in the exact same role that we were Um treating them as we're kind of admitting our own guilt, right? Aren't we admitting that they were an employee? We just didn't want to do the work That's what I would call a bad fact for us Right. I mean that is one of those things, you know courts will say how do we know whether you've misclassified? well If you have four people doing the same role two of them are independent contractors and two of them are employees That's a really bad fact that the person should have been an employee all along Okay. So one more scenario along these lines because a lot of entrepreneurs are doing this right? They hire a um Like a virtual assistant right and the virtual assistant is let's let's just say for arguments sake They're a u.s person and they work for three different people and what they're doing is they're billing, you know They're doing assistant work, but they're billing through their own company, you know, uh, joe smith llc virtual assistant company, right? That's a company that you're hiring.

So there's no risk there. Am I correct in assuming that? Well, you know well enough to know no lawyer is going to tell you there's no Classified as and they're working for five other people you're not restricted They're not restricted to just you the company is the is the entity sending the invoice and You know mit romney said corporations are people right? So the company is a separate entity. So Isn't the risk minimized in that in that scenario? It's a much less risky proposition There's no doubt about it the mere fact that the person's doing the same tasks for multiple other people is a is a positive fact Different scenario is you are using an actual agency who's sending you the people in that case The agency is the w2.

There is a w2 Taking place there is an employer That you can point to to help bolster the fact that you are not the employer now without getting too far into the weeds There are joint employment issues in that scenario where you're both going to be deemed an employer if something goes sideways But the more that you can distance that and show that they have the trappings of Someone that you're not controlling you're not preventing them from doing the same or similar work for somebody else The stronger your case is going to be you can put some protections around that insofar as you can Um include language in the independent contractor agreement, which Sidebar, please have a written agreement. It's it's not a get out of jail free card, but it's going to be so helpful to you if and when you need to end the relationship, but Um, what I would say is that you are allowed to have non solicitations within those kind of agreements Meaning they can't come and solicit your employees or your clients I would not recommend having a non-compete However in those agreements because right there you're shooting yourself in the foot The whole concept is supposed to be that they're able to go work for a bunch of different companies so be mindful When you approach those kind of relationships and make sure you're appropriately documented. Okay.

Um, let's talk briefly about Background checks right now. So where we're concerned we want to get the right people Uh set aside drug testing. It's a separate thing I don't want to talk about and I don't I just don't want to get into it's We could talk for an hour about drug testing.

We're not drug testing, right? All the best candidates would be unavailable if we drug tested. So we're not going to Drug test but but we want to do a background check. We want to make sure that the employees aren't compromised.

Um, so That means that we're going to ask for references We're going to call the references and my best practice there and I want to hear what your opinion is on this When I call references, I don't I don't care what that person says because this is the person that the the candidate gave me I asked that person who else they worked with and then I call those people So when i'm calling to check references, is it permissible for me to ask the reference? Hey, who else did you guys when you guys work together at win dixie? Uh, or or shop right? Um, who else did you work with? Oh, we worked with jane. Oh, do you happen to have jane's number? I'd like to call her and then I call jane. Is that is that permissible as i'm doing a background check? So when I hear background checks, I think of criminal and credit background checks.

So let's well Yeah, I was gonna get I was gonna get to that but this is This is uh, you know me checking to see their work style and that that sort of thing I would have done so to your point. I probably would have done criminal first. Um, you know I've never done credit but I know other people who do credit so talk about credit Criminal and then my little method of being in sneaky peat and figuring out what whether they were a good worker or not Yeah, absolutely.

So what what you're describing to me feels like reference checks Which yeah, you know not to get marred down in the vernacular but from a legality perspective There are different implications and we'll talk about those in a second when you're doing a criminal background check and or a credit check So a reference check is fairly unregulated. Um, there's nothing to prevent you from doing that There's no privacy interests that are implicated um I would say that anyone who has done these on behalf of companies have probably been told by people like me That when you get a call like that, you should really just give dates of appointment and last position held do not get into Nobody ever Nobody ever sticks to that. That's the beauty of it When I was at mariad, it was beaten into our heads Do not ever do anything other than confirm dates of employment But you know what if it was my friend that was going for another job I would say what a great employee they were I would never badmouth anybody But if if somebody if it was somebody I liked I would want to do everything I could to help them But sure you're right.

You should never do any of that stuff and even more so now in illinois, you should never tell them and Conversely in your scenario, you should never ask for how much they got paid So illinois now has a paid transparency act which essentially says The hiring employer cannot ask or or know Um how much the person made because the thought is that that perpetuates paid disparities between genders and ethnicities So don't ask don't tell at all on that when you're calling when dixie and and That person's 27 best friends. Just don't go there. Try to get more about Personality wise don't ask about what year did they graduate from high school? Don't ask about their political affiliations.

Don't ask about how many kids they have do they want to have kids, you know, they're 27 they've got to be thinking about it. Don't go into anything that tips into a protected characteristic because as soon as you do that a court's going to infer that you either refused to hire or decided to hire because of one of those protected characteristics, but just Doing a little due diligence and asking um questions so long as you're staying outside of those thorny areas is is totally permissible Once you get into the true Background check piece meaning you are using the third party to conduct those background checks You now are subject to the fair credit reporting act Um, that means you need to get Written authorization before you run the background check. There's a specific form.

Don't go Getting creative and drafting your own form. These are statutory forms that you need to use And you in illinois can only use it after a conditional offer of employment has been made So sure you can put the acknowledgement On the app on a separate page, but on the application. It cannot just be at the bottom of the application It gets that granular But you can't run the background check until a conditional offer of employment has been made Also in illinois you can only rely upon convictions you cannot rely upon arrest records The eeoc and title seven then comes into the fray to say you really can't look back more than seven years I have no idea what's so magic about seven years Um as opposed to five or ten But you're not supposed to run the check longer than 10 years and you're excuse me seven years without being that We base our criminal justice system on rehabilitation.

And so if there have been no issues Since then, um, you can't look back that long The truth of the matter is if it's something serious enough, they're probably still going to be in jail if it happened Much sooner after that seven-year period Then you need to before you can Decide not to hire someone remember you've already given them a conditional offer. So now you're going to revoke the offer Before you can do that you under the fair credit reporting act you have to give them a pre-adverse action letter again It's a statutory letter. You don't have to reinvent the wheel.

It's going to say we found some stuff We think it's you You've got 10 days to tell us why it's not and maybe it's you interposed two numbers in their social security number Maybe it's you know You found their dad and not them whatever it is You were supposed to give them time to prove that to you now The truth of the matter is if you've ever have to had to go to one of these credit agencies Or background check companies nothing happens in 10 days. Nothing's going to be cleaned up in 10 days But you still have to go through the motion Once the 10 days is coming on if they haven't been able to assuage your concerns Then you send them the adverse action letter again statutory letter It's got all kinds of required language and at that point in time you can formally revoke the offer Before you can do any of that though title seven and now illinois law. This is a relatively new illinois law says that you have to do a Person by person case by case analysis in order to be able to establish that the crime for which the person was convicted Not arrested convicted bear some relation to the job you're hiring them for So if you're hiring a receptionist who happens to have a dui There's not a lot of job relatedness there You're not going to be able to say this is going to call into question their ability to do their job So my legal advice to you would be you probably have to hire them anyways um You know that that's got all kinds of tricky elements to it because you know someone's in a safety sensitive role and they Have a theft Um on their on their record is their job relatedness.

They're working around equipment But it's not you know, a bodily harm kind of crime We need to go through that analysis and the reason is African americans and other minority groups are found to be disproportionately convicted of crimes So if we are just having across the board, we don't hire convict policy, we will be disproportionately Preventing different demographics from entering into our workplace The credit check I won't bore you with all the minutiae, but suffice it to say illinois really restricts Those types of employees that you can do a credit check on if you don't have an employee that has unsupervised access to funds in excess of 1500 dollars Um, you probably can't do it back. Excuse me a credit check. If you don't know someone that is writing checks on behalf of the company or Monitoring bank accounts or whatnot.

You probably can't do a credit check and it's for the same reasons We want to make sure that we're not Adversely impacting certain demographics from entering into our work and susan i'll tell you something the best sales people I ever hired were deep in debt and they were they were the hungriest They were the hardest workers They would kill themselves for the extra cash because they needed it I would tell them go out and buy an expensive car do what you buy a new house Do what you got to do because I know that's going to keep you motivated So I would never that in a sales role. I probably would never unless they had access to classified information, which I can't imagine I would never I would never think of doing that last question. I have about this specific area What about like what about public records, for example, like things that are things that are a matter of public record? I mean that could Can I can I use that as a reason to exclude them from from the position? So let's say they were you know, they were uh, there was something negative about them in the paper and I read it Can I say look I don't want all that drama in my workplace and and just decide not to hire them.

It's a great question because Everybody's googling Everyone's going on linkedin, you know I can tell people till they're telling blue in the face. Just don't do it or better yet have hr do it And then hr will know that they should only be sharing information with the hiring manager. That is safe information non Protected information meaning you're not going to find out the person's Age or race or religion from doing that kind of a google search Uh, but the long and the short of it is most of these laws certainly the fair credit reporting act only kick in if you're using A third party to do the search.

So technically speaking you're not confounded by the same Um limitations when you're doing your own personal search. It's just such a thorny issue because You could have found information that turns out not to be true. There was a relatively recent study that found.

Um Fictional or or fraudulent so you can't yeah, right you can't rely upon the information you're finding on the internet and you then just missed out on a potentially good opportunity while also Uh finding out information that you never would have known about the person and then the person could say That's why they chose not to hire me It's because they found out that i'm gay by doing their google search or they found out Um that who I voted for in the last election because I talked about it on my facebook page That's why I tell clients if you are tempted to do that Make sure it's not the person making the decision whether or not to hire someone that's doing the search that person can vet it And say look I was able to confirm where they worked because I went on LinkedIn and sure enough I'm seeing positive things They're not happening to mention that, you know There was a rainbow flag in the picture behind them or things that could really trip an employer up If they then choose either not to hire the person or Sometime in the future they decide to terminate the person and they want to be able to insulate themselves from any discrimination Okay, so basically what you've done with us in the 45 50 minutes that we've been together This was a this was a consultation basically So if someone wants a specific consultation from you is that can they reach out to you and just do a one-off consultation? Is that like a gateway engagement for hiring you? What is the what is the best way? For people to you know, get to know you and like I don't want people to I'm sure people do call you when they're in the middle of litigation or when a litigation springs up But really they should have a relationship with you and you should be familiar with their business in advance So that you could hit the ground running if there's a litigation matter So what's the best way for people to engage you to become familiar with their business in advance? I could not agree with you more and I Always tell people it's so much cheaper to call me Before the you know, what hits the fan Then after it's already spinning around even though everyone thinks of these things is hypothetical and they don't like Spending the money until it's a real urgent situation money. You're not spending money You're not by engaging. No, there's they're they're they're keeping themselves from it I would have made like 16 mistakes before we had this conversation.

So you're saving them money. You're preaching to acquire I agree and and I really like to Get to know the business and help them through the entire process Frankly to avoid these kind of situations which works against my favor because obviously I make more money if I have litigation You know, they're gonna screw up anyway They could hire you ask for your advice ignore it and then call you later and go well You know susan you told me this but I decided to do it better by myself I feel like you've been eavesdropping on some of my conversations lately. Uh, yes people can absolutely call me I'll have to do some preliminary Conflict check kind of questions to make sure that it's kosher for us to move forward, but I am more than happy to have introductory sort of audit what's going on kind of conversations before we go forward with any formal retention You can find me on my firm's website, which is tops and coburn or you can Um, uh, my email is S-l-o-r-e-n-c as in cat at thompson coburn.com Um, i'm all over the web and more than happy to help out in any situation all of susan's contact information All of it is down in the show notes right below Um, I highly encourage you look susan's been so generous with the advice that she's given us today I highly encourage you to reach out and and talk to her now susan usually I play some music here and I say There give us three things that we talked about today that people should take away But here's the thing folks, okay Susan and I did the first like 45 minutes of this show two days ago and then we came back and did the last 15 Today, so I can't remember all the stuff we talked about.

So here i'm gonna give you Here are the three things. I think you should take away that I remember from our conversation with susan rather than put susan on the spot the first thing is look if you want to Make sure that you're on the if you want to make sure you're on the right track Don't put a policy in place that you're not going to enforce That was a that was a big takeaway from the first part of our conversation So you think you need an employee handbook? Well, I mean, maybe you do need an employee handbook But unless you're going to enforce every single thing in that handbook I think just create specific policies for the things that you are prepared to enforce. Am I good there susan? Is that right? I am right there with you.

Second thing that I learned from susan that you need to take away is The difference between uh an independent contractor and an employee the line is finer than you think. Okay so Just because you You know are going to ignore the person that doesn't mean they're an independent contractor. Okay So what you need to do is if you if you're going to do this pervasively with several people And there's you know, you think there might be some significant risk call susan vet it with susan first and then you can determine whether they're an employee or an independent contractor because it only takes one lawsuit And you're going to end up blowing your entire budget for the year To defend yourself if this person files a claim, right? And then the final thing the third thing I would say that we can take away from our our time together is About background checks, right? So if you're going to do the if you're going to go on facebook You're going to go on linkedin you're going to google the person The hiring manager shouldn't do that somebody in hr or somebody separate and apart should do it Because you don't want to be tangled up in in that mess If uh, if they end up filing a claim that you know You didn't hire them because you saw something online that gave away something you shouldn't have known How did I do? Was that those those are three good things? I mean i'd hire you tomorrow You can come where susan.

It was such a pleasure. Listen, you are a a fountain of information and it was so valuable And I greatly appreciate your time. Thanks for joining us Absolutely.

Thank you so much for the invitation. This is all right folks We are remember the show is brought to you by syndrowsky corporate advisors so if you are Starting a business where you're thinking about selling your business or you have inherent risk in your business and you want someone With financial perspective solid financial perspective to evaluate it. You got to call syndrowsky corporate advisors You can reach out to them at eight six six Seven one seven one six.

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