While employers can never completely eliminate the risks associated with the employment relationship, they can dramatically reduce their potential exposure by tightening up their employee on-boarding practices. Key areas of exposure include:
Discrimination and retaliation claims. In fiscal year (FY) 2011, the Equal Employment Opportunity Commission (www.practicallaw.com/4-501-5853) (EEOC) received 99,947 charges of employment discrimination, harassment (www.practicallaw.com/2-508-3174) and retaliation (www.practicallaw.com/6-503-9612). This reflects an increase over the 99,922 charges filed in FY 2010 and a substantial increase over the 93,277 charges filed in FY 2009 , suggesting that discrimination and retaliation litigation is still at an all-time high. The EEOC also obtained more than $364.8 million through its private sector enforcement activities in FY 2011, which is the largest monetary relief ever obtained by the EEOC through the administrative process.
Theft of trade secrets and confidential information. A 2009 study by the Ponemon Institute revealed that of 945 US participants who were terminated or changed jobs in the prior 12 months, 59% admitted to taking their former employer's confidential, sensitive or proprietary information.
Immigration audits and fines. In March 2012, the Director of the Immigration and Customs Enforcement (www.practicallaw.com/1-504-4965) (ICE) agency announced that ICE audited more then 6,468 employers, debarred more than 521 companies, and imposed approximately $76.4 million in sanctions since January 2009 (see ICE: Statement of John Morton before the US House of Representatives, Committee on Appropriations, Subcommittee on Homeland Security regarding ICE's FY 2013 Budget Request).
Wage and hour class actions. The Department of Labor (www.practicallaw.com/2-501-6354) (DOL) is continuing its aggressive enforcement activities. In FY 2011, the Wage and Hour Division (WHD) of the DOL completed 33,295 compliance actions and collected more than $224 million in back wages for more than 275,000 workers. In addition, the plaintiffs' bar remains active in pursuing wage and hour litigation. For example, federal judicial caseload statistics, show that in the reporting year ending March 31, 2011, there were 6,868 wage and hour claims filed in federal courts across the United States, up from 6,081 claims in the prior reporting year and up from 1,961 claims in the reporting year ending March 31, 2001.
In the face of these risks, robust hiring practices and more rigorous compliance processes at the beginning of the employment relationship can help:
Minimize exposure to discrimination claims by appropriately handling candidate:
job interviews; and
Preserve an employer's competitive advantage by creating enforceable agreements that:
Avoid regulatory sanctions and class actions from the start of any employment relationship by complying with:
The Employee Hiring and Orientation Toolkit provides a number of continuously maintained resources designed to assist an employer in recruiting, interviewing and hiring employees.