Employee Working Interviews: Are They Legal?

Should you use them?  If so, what’s the best way?

What is a “Working Interview” and How Does it Work?

On the surface, the idea of bringing in job candidates for a few hours, days, or weeks, without actually having to hire them until they prove themselves sounds perfectly logical and fantastic, doesn’t it?  However, using a working interview to exempt yourself from your obligations as an employer does not work and can actually get you in a lot of trouble.

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First, let’s take a look at where the idea of a working interview came from.

The Origins of the Working Interview. A working interview is a marketing invention created by temporary employment agencies as a “try before you buy” option. Try out as many employees as you need from their stable, until you find one you like, then hire him or her permanently. A trial run is easier and less hassle than interviewing and hiring several candidates yourself.  And, it may be worth it to pay a small fee for pre-vetted candidates. Sound good?

Hold your horses! In this situation, the candidates are actually employed by the temp agency.  More accurately, the temp agency fulfills all of the new hire paperwork and employer obligations for you. Many employers forget this important fact. Then they cut out the temp agency in order to eliminate the middle man, and end up vulnerable to a host of problems.  These include not having coverage if the worker is injured while in your office, not having the protections of your handbook, misclassification penalties from the DOL or IRS, potential FLSA (minimum wage and overtime) violations, and more.  Moreover, if you do not hire the worker and they become disgruntled, they now have leverage over you to file a complaint because you have not complied with the law.

Working Interview or Valid Introductory Employment Period?

Instead of making it an unpaid interview or trying to call them an independent contractor when they do not fit those requirements, go ahead and Make them a Provisional EmployeeAfter a thorough interview process and background check, go ahead and put them on your payroll.  Put your new employee on notice that they are not eligible for benefits, must prove themselves, and may be let go during a certain period of time after hire, usually 90 days.  If you have this policy in your handbook, you can use it to get the same benefits you would get from a working interview (i.e., a valid trial period, with no obligation to continue employment), as long as you don’t forget one important rule.  If you’re not using a temp agency, and the person is not a valid independent contractor, once a candidate starts working for you, he or she IS your employee.

The Following Statements are ALL FALSE:

      You don’t have to pay workers if you call it a “working interview,” and it’s only for a couple of hours.
      No paperwork means they were “never there” and you fly under the radar, especially if you pay them < $600.
       Your workers’ compensation will automatically cover their injuries.
      You can just call them an independent contractor or “casual labor” and 1099 them.

Instead, to be legal and protected, once someone starts working for you, you should do ALL of the following:

  • Pay them no less than minimum wage.
  • Withhold payroll taxes.
  • Get a background check and verify their eligibility to work in the US.
  • Cover the employee for Workers’ Compensation, and notify your carrier to ensure coverage.
  • Provide a copy of your Employee Handbook.  The protections in it apply only to those who receive a copy.

Why can’t I just call them an independent contractor?  

We will go  into this larger topic more in a later trainer, however, for now just know that you can’t make someone an independent contractor just by signing a contract.  If they perform duties usually done in your office by employees, and do so under your control, using your equipment, in your office, and at the hours you request, they are an EMPLOYEE.  If you call them a contractor to avoid payroll taxes or other employment benefits, you have misclassified them, and you are subject to penalties from both the IRS and Department of Labor.  (Even if your accountant tells you otherwise! – Trust us on this.)

Know The Working Interview Laws & Agreements

Again, when you bring someone new on board, go through the full hiring process, including background checks, U.S. employment eligibility verification, and handbook distribution, etc. As appealing as it may seem, when you choose to fly under the radar, you have more liability – not less.

That’s our 2-Minute Trainer for today.  Now, go create a productive, harmonious, and profitable day!

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