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What Employers Need to Know About the Legal Obligations of the Working Interview

What Employers Need to Know About the Legal Obligations of the Working Interview

The typical job applicant will put their credentials on a job application or resume and the employer has to decipher through the job interview and background review process whether the credentials accurately reflect the applicant’s abilities and maybe more importantly, whether the applicant is a good fit for the company. A working interview is where an applicant comes to the office/place of employment and works for the employer prior to being hired to determine if the applicant has skills necessary for the position. It seems like a great opportunity to get to know whether the applicant has the needed knowledge and skills. But, working interview comes with legal obligations. Here we analyze those legal obligations of the working interview for the employers’ perspective.

Workers Must Be Compensated For Work Performed

The Department of Labor and state regulations require that anyone who is working for your company be paid. The obligation to compensate the worker begins with acts performed for the benefit of the company, which during a working interview precede an offer of employment. The method and means of paying depends on if the applicant will be an employee or an independent contractor.

If the applicant would be hired as an employee, the rate of compensation must meet the minimum wage requirement of the US Department of Labor, state and local minimum wages, and also comply with the overtime laws. The applicant must fill out pre-employment paperwork, including completing an I-9 and W-4. The employer must set up payroll for the mandatory tax withholdings. Even if the position pays above minimum wage, you can pay minimum wage for the time worked so long as the wage complies with all applicable minimum wage laws.

If the applicant would be hired as an independent contractor, the individual is still entitled to compensation. Generally, if the applicant is working in your office, under your control, using your equipment, they are an employee. Merely calling them an independent contractor or having them sign a contract does not make them an independent contract if they perform duties usually done in the office by an employee. If the applicant meets the definition of an independent contractor, the company must still collect a W-9 and report this information to the IRS depending on the amount of compensation. When a business pays an independent contractor $600 or more over the course of a tax year, the company is required to report these payments to the IRS on form 1099-MISC. If the company misclassifies them and calls them an independent contractor to avoid payroll taxes or other employment benefits, it may be subject to penalties from both the IRS and Department of Labor.

Labeling Applicants as Volunteers, Interns and Externs Does Not Avoid Obligations

Merely classifying an applicant as a volunteer, intern, or extern for purposes of the working interview will not alter the obligation to pay for the working interview. If the applicant would be hired as an employee or independent contractor, the same obligations apply regardless of the creativity of the label. Moreover, misclassifying a worker as a volunteer, intern or extern may result in higher penalties.

Labeling Applicant as a Temporary Employee Does Not Avoid Obligations

Classifying an applicant as a temporary employee will not relieve the employer of its obligation to pay wages. The above wage laws apply for "temporary" employee. Additional laws may apply as well. Some states and local entities have additional requirements for companies that hire “day” or “temporary laborers”.

Risks to the Working Interview

When an employer does not adhere to the legal obligations while conducting a working interview, the employer risks of being involved in employment litigation. There are several risks to consider before doing a working interview. Below are just a few that should be considered no matter the industry.

  • The applicant has the same civil rights as other employees, including the right to file claims related to conduct during their working interview, as well as a discriminatory failure to hire.
  • The applicant could be injured during that the working interview. As the employer, you would be liable for a workers’ compensation claim. If the employee was not properly reported and paid, your workers’ compensation carrier may deny the claim.
  • The applicant could file for unemployment if you do not hire them for additional work after the working interview. Unemployment tax is generally tied to the applicant’s wages during the preceding year, not to the employer. That said, the shorter the period the person is employed by your company, the lower the amount they will draw from your unemployment account.
  • The applicant could see confidential and proprietary information that would otherwise be protected by an employee confidentiality and anti-compete agreements.
  • The applicant is not qualified to perform the requested tasks and places other employees or the company at risk. Measures should be taken to verify that the applicant can be trusted to safely and competently perform the tasks before allowing them to demonstrate their skills. Under OSHA, the employee is entitled to be trained in a language the employee understands, work on machines that are safe and be provided required safety gear, such as gloves or a harness and lifeline for falls.

Exception to Compensating Applicant – A Skills Test

If the applicant performs any work for the employer that provides a benefit to the employer, the applicant must be paid. The same is not true if the activity performed is a skills test. A skills test can be used to evaluate the applicant’s knowledge, skill and ability to perform the job duties. Where the applicant is not performing work for the employer and the employer is not receiving any benefit from the testing, a skills test is part of the interview. If you do a “skills test”, make sure the tests do not open you up to employment litigation. The tests should be job-related and provide an accurate predictor of performance in the position; administer the same tests under the same conditions for all applicants for the same position; and accommodate applicants with disabilities by modifying the test/testing conditions to meet all reasonable accommodations.

Best Practices For a Working Interview To Avoid Employment Litigation

If you choose to engage in a working interview model, the following should be considered before beginning.

  1. Have the applicant complete a Form 1-9 and W-4 (employee) or W-9 (independent contractor).
  2. Complete all mandatory state and federal background checks required of employees in a specific industry prior to the working interview.
  3. Verify that the applicant holds any required federal and state licenses prior to the working interview.
  4. Pay the applicant a rate that is equal to or exceeds all applicable federal, state and local minimum wages.
  5. Discuss wages for the working interview prior to the beginning of the working interview so that there are clear limits to when the working interview begins and ends.
  6. Consider whether the employee will need HIPAA training or other privacy protection training to perform the work.
  7. Have payment ready to present to the applicant at the end of the working interview.
  8. Provide working conditions that equal or exceed applicable federal, state and local working guidelines, including OSHA, which sets and enforces protective workplace safety and health standards.
  9. Accommodate applicants with disabilities by modifying the working conditions to accommodate their disabilities pursuant to the Americans with Disability Act.
  10. If multiple applicants will be engaging in a working interview, as best as possible make the job duties and responsibilities the same for each applicant.

As with every other aspect of the interviewing process, review the laws related to hiring applicants including the federal laws as well as the state human rights laws to assure that nothing in the working interview runs afoul of the human rights guaranteed to all employees.

McKenna Storer attorneys have extensive experience in helping employers with all aspects of employment law defense and employment policies. Contact Kristin Tauras for questions about this topic or other employment defense questions.

If you found this information helpful, read some of our other Employment Law posts.

Categories Employment Law

One Response to “What Employers Need to Know About the Legal Obligations of the Working Interview”

  1. Avatar

    Vicky casillas

    Good morning. I had an incident happen yesterday, where my employee nailed his knee. We work at a pallet business, this was his second day on the job, the first day was more like a working interview he had only worked 7 hours on Monday 4/3/21. He asked if we can pay him under the table, I said no we can’t so I gave him the W4 form for him to fill out, to bring it back the next day & he never gave it back to me to submit into payroll. On 4/4/21 is when the incident happened. We take our break at 9:30, he left our premises for his break. After break is when the incident happened. I have suspicion that he was under the influence because as I was taking him to the hospital being in a closed space is where I smelled marijuana on him.

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