Navigating Employment Law Compliance in Remote Recruiting: Tips for Managing Pay Transparency, Background Checks, and Data

As we begin 2023, companies need to expand their employment law compliance efforts to include recruiting. With more companies allowing employees to work remotely, they may now employ workers throughout the U.S. and beyond, resulting in a patchwork of national, state, and local laws to navigate. Recruiting practices are also facing increased legal scrutiny and potential penalties. As a result, companies must take into account the significant financial and logistical risks associated with recruiting.
 
Expanding Employment Law Compliance Efforts in the Age of Remote Recruiting
 
1. Pay Transparency: Understanding and Complying with Job Posting Requirements
 
In the U.S., pay transparency in job postings is becoming an increasingly important area of employment legislation. Many states and localities now require companies to disclose pay ranges in job postings, including those that can be fully performed remotely. Employers, particularly those hiring remotely, should be aware of the variations in these laws as they can vary by location. For instance, Washington's pay transparency law includes a broad reach, as companies not conducting business or having employees in Washington are still required to comply with its unique job posting requirements.
 
Companies that may be subject to these laws can take the following steps to stay ahead of the trend:
 

• Survey the laws governing job postings for remote roles and understand their obligations under each.
• Design job descriptions and implement pay ranges strategically, considering the range, other benefits, and how the information will be perceived by applicants.
• Review existing postings, including on third-party sites like LinkedIn and Indeed, to ensure they include the required information.
• Train internal recruiters on pay transparency requirements and ensure external recruiters' contracts account for their legal obligations.
• Proactively address pay ranges among current employees and determine how to respond to questions about pay ranges. Disparities between current compensation and advertised compensation can affect employee morale.

2. Background Checks: Protecting Sensitive Company Data and Avoiding Negligent Hiring Claims

With remote and hybrid work becoming more common, employers must conduct thorough background checks on potential employees to protect sensitive company data and avoid negligent hiring claims. This is particularly important for employees who interact directly with clients or customers. Furthermore, states and local governments are implementing more regulations on background checks, including ban-the-box laws that govern when, how, and what disclosures need to be made regarding background checks. These laws vary by location and should be closely followed by employers.
 
Companies can minimize risks associated with background checks by:
 

• Incorporating relevant laws into their recruitment process, including considering the impact of remote work on compliance.
• Educating recruiters and hiring managers on appropriate interview procedures and how to handle candidates who disclose their criminal background.
• Ensuring that background check vendors are aware of local compliance regulations and limitations on the scope of reporting.
• Establishing a system for storing and retaining background check results.

3. Managing Recruiting Data: Balancing Compliance with Data Privacy and Security

There is a growing focus on how companies collect and store employee data, particularly in the context of recruiting. Employers must find a balance between gathering enough data to comply with laws and regulations while also not collecting more than necessary.

Proper storage of employee data is crucial, particularly when it comes to confidential information. This can be challenging when teams are dispersed across different locations and data is stored in various formats and platforms.

Companies that are not prepared to manage employee data risks may struggle, particularly if they are subject to laws that require timely disclosures. To proactively address these issues, companies can:
 

• Review relevant laws to understand their obligations related to HR data.
• Create a plan for storing and retaining HR data and identify responsible employees.
• Train recruiters and hiring managers on appropriate data storage practices.

4. Artificial Intelligence and Human Resources Technology

More companies are using AI-driven and automated recruiting technologies to screen and evaluate job candidates. While these technologies have many benefits, they also raise concerns about potential discrimination.

The U.S. Equal Employment Opportunity Commission and state and local legislators are paying close attention to this trend and many jurisdictions have begun to enact laws to address the issues that may arise from the use of AI in hiring. For example, New York City will join a number of other jurisdictions in regulating the use of AI and automated decision-making tools in the workplace and hiring starting in 2023.

To avoid violating these laws, companies should take the following steps:
 

• Prior to implementing new technology, ensure that users are familiar with how it works.
• Review relevant laws to ensure that proper processes are being followed and disclosures are being made.
• Conduct periodic audits and implement safeguards to ensure that the technology is being used appropriately and without bias.

5. Defining Job Expectations

The modern workplace has undergone significant changes in recent years due to advancements in technology and shifting cultural norms. Recruiting practices have also evolved, with many companies now hiring remotely for remote positions.

It is essential that companies clearly and accurately communicate the expectations of a role in job descriptions. In addition to listing the basic job requirements, companies should include details such as work schedule, in-person requirements, location of the office, and any physical or mental demands of the role.

Failing to be transparent about job expectations can lead to hiring individuals who are not able to perform the job, which can result in discrimination claims. To improve job descriptions, companies should form a multidisciplinary team to collaborate on the job description, taking into account legal and business considerations.

In addition to discussing job responsibilities, companies should include specific information about physical and scheduling requirements and train hiring managers and recruiters on how to handle requests for disability or religious accommodations from applicants or employees.

REFERENCE:
5 Recruiting Trends Shaping Employment Law's New Frontier
https://www.law360.com/cybersecurity-privacy/articles/1566221/5-recruiting-trends-shaping-employment-law-s-new-frontier