No Working During Interviews

“I have job candidates work with me for a day to determine if they have the skills for the job. If the day goes well, I hire them. If not, I pay cash for the day’s work. Are there any problems with this?”

When you are interviewing candidates for your job opening, you must still follow all the normal employment laws. While the candidate is not yet an employee, there are still protocols.

If the candidate doesn’t do well after working for you for a day, you’re paying them cash for their time. However, both the IRS and California would object strongly to this because they didn’t get their taxes from that money. When it comes to the workplace, you can’t just hand out cash and walk away. You need to put them on your payroll, even if it’s only for the day. That’s the legal way to pay for that time.

If you need the candidate to work a whole day before you can tell whether or not you want to hire them, you need to work on your interviewing skills. Not only are there a lot of questions you can ask to help determine just what this candidate does and doesn’t know, but there are other ways to test their skills.

We love to see interviews that include an “active” testing component. Examples include:

  • Administrative – Provide a letter with several formatting challenges and have the candidate duplicate it on the computer. Looking at the digital version will tell you how well they know the software you use.
  • Electrician – Provide an electrical plan and ask the candidate to identify the parts.
  • IT Help – Loosen a computer cable and ask the candidate to create a document on the computer. Learn whether they understand the protocol for determining why a computer isn’t working.
  • If a candidate needs to know specific software, create a test with that software and watch how well they can use the program.

When using these tests, make sure they are very job-specific and you are consistent by using the same test for every candidate you interview for that position. It only takes some imagination and thought to develop better questions and a test you can legally use. Learn to go deeper and deeper into how the candidate did something so you can tell if they were merely a part of the process or truly understand how it worked.

No matter how well the interview goes, you may not know how good this person may be as an employee until you have them on the job for several weeks. If things don’t work out, use that experience to determine what else you could have asked during the interview to have made a better choice. Interviewing techniques should be refined with each new hire so that, over time, you are making much better hires.

How to Set Goals for Employees

“I would really like to set goals for my employees but I don’t know how to create the process.”

Effective goal-setting is a complex yet logical process. The following steps will help you create a simple goal-setting plan for each of your employees.

  • Identify the long-term goals — These are typically goals you’d like them to achieve over the next year. It can be learning new things or improving productivity, efficiency, or accuracy. Include metrics with goals whenever possible so you can measure success or improvement, such as increasing productivity by 5%.
  • Break down the long-term goals into short-term goals — Think about what they could do each month or quarter to ensure success in each long-term goal. Help them understand how to take baby steps toward long-term goals by asking them to make a list of what they think they need to achieve these goals. Discuss this with them to make sure they don’t need something more from you to be successful.
  • Recognize obstacles — Rarely do things move along without disruption. Make sure the goals and goal planning include some thought about what might prevent them from achieving the goals. What obstacles might get in the way of their job, the department, or the business?
  • Set deadlines — Every goal needs a deadline and a detailed explanation of what is expected by that date. Deadlines help both of you know which short-term goals should be completed by a specific date. Failure to meet deadlines requires you to review the reason to make sure the next deadline won’t be missed.
  • Schedule follow-ups — You are responsible for ensuring your employees are meeting deadlines and goals. Please make sure to mark your own calendar with the deadlines and plan to meet with the employee to discuss the status of every goal and talk about how the process is working in general.
  • Modify as needed — While it’s great to have long-term and short-term goals, some companies are influenced by things out of their control. You need to be ready to adjust the goals while not losing sight of what you are trying to achieve with the employee.

Once you begin a goal-setting process, it’s important you keep up your end of it. This means you are checking on the status when deadlines are due, providing anything the employee needs, and discussing any problems with the employee. The moment you find you don’t have the time or interest to follow up, you’ll find the employee also loses interest. Then you both lose.

HR Needs It Signed on the Dotted Line

“I don’t like to do write-ups. Can’t a conversation with an employee work just as well?”

HR has so many forms and other written documentation because good HR processes are a company’s main defense against employee lawsuits. I’ve been told by employment attorneys that any paper in an employee’s file has little value unless the employee has signed it… their signature is your proof that the employee has seen that piece of paper. A conversation isn’t a usable defense because you can’t prove what was discussed.

What does signed documentation have to do with managing employee performance? It’s your backup, your proof, your evidence that you are trying or did try to help your employee’s performance improve.

When you set up this meeting to discuss continued problems with an employee’s performance, you’ll want to have a memo already prepared. This memo will:

  • be ‘to’ the employee (full name),
  • be copied to ‘Personnel File’ and your supervisor (if any),
  • use a topic of ‘Job Performance’ or something similar,
  • include any previous discussions you have had with the employee regarding these issues (and any paperwork), and
  • include exactly what your employee must do to correct these issues and appropriate deadlines.

The memo should not be more than a page and one-half if you have stayed on top of the employee’s performance and dealt with the issues as they arose. Deadlines are essential but it is equally important that you give them a fair and generous amount of time, depending on what the issue is. Tasks can be immediate; behavior takes longer.

At the bottom of the memo put “Received and discussed:” and below that put a line for the employee’s signature.

You want to obtain the employee’s signature for the memo to have the most HR value. Most people will sign it if you merely mention that their signature does not imply they agree with you. What you are trying to do is prove that the employee did, indeed, receive the memo.

If the employee refuses to sign, there is one other method you can try. In the bottom corner of the memo’s last page, handwrite “refused to sign” and ask the employee to initial that statement. Although you still don’t have their full signature, the initials add value. If there is another person in the room, they can make a note on it for you that they witnessed the memo being given to the employee. Otherwise, you need to make a note at the bottom that the employee refused to sign, then initial and date your note.

Keep Cupid Under Control

“How do I make sure office romances can’t hurt my company?”

There are no guarantees but there are things you can do to reduce your risks regarding office romances. Looking at the statistics, 65% of workers have had or are in a workplace relationship, 12% have dated their subordinates, and 19% have dated their superiors. It’s the last two that put your company most at risk.

We know employees potentially spend more time with coworkers than with their own family and friends so it’s no wonder romances happen. It would be great if your supervisory staff fully understood the dangers to themselves and to your company by engaging in an office romance. You can reduce your risk with a few simple steps.

  • In California, all companies with 5+ employees anywhere must provide compliant sexual harassment prevention training to all CA employees. This may help your employees understand what constitutes harassment… and the fact that the supervisory staff can be charged with harassment, in addition to the company.
  • Make a policy requiring all romantic relationships to be reported to HR. This step makes it easier to protect everyone. If a perceived romance isn’t reported, HR should ask the participants about their behavior.
  • Confirm the relationship is consensual. Have HR speak individually with each participant in the relationship and put in writing this is a consensual relationship. By meeting individually with each person, they have the opportunity to tell you it is not consensual. Having it in writing makes it much easier to defend any claim later.

Relationships can easily appear consensual but, as they often do, relationships end. Once a person is angry, they are more likely to strike back by filing a claim. Without the consensual relationship confirmed in writing, it can be difficult to fight the claim.

Friendly versus Friends

“I have a few employees who I consider to also be my friends. However, I’m noticing these friends don’t take me as seriously as my other employees do. How can I change this?”

We see each other at work almost more than our family so it’s no wonder that coworkers become friends. Some of these friendships can even last much longer than the job itself. However, there is a difference when you are the owner or a manager.

As you mentioned, “friends” often don’t take you as seriously as other employees. This makes it much harder to be a good manager. If you neglect to discipline your friend in the same way you would another employee, two things happen. One, you potentially have a discrimination claim, and, two, your management style and policies are altered to accommodate the friendship instead of protecting the company and properly doing your job.

If you treat everyone the same when they don’t do what you say or per your policy, the friend will be upset because they aren’t getting special treatment due to the friendship. Hopefully, that would be temporary and they would come to understand. In the end, for the good of your business, you need to let employees who are friends know they will not be treated differently in the workplace and they will be expected to follow all your rules, policies, and direction. The same applies to friends and family you are considering hiring. If they don’t understand this concept, you will either lose the employee or the friend or end up in a big fight.

It’s a tightrope you’re walking. And, as the saying goes, it’s lonely at the top. You do want to be friendly and accessible… and fair. But you may need to discipline, fire, or promote these employees in the future and must be able to fully justify your actions to them and others. Choose your priority… being a good manager/owner or being a good friend. It’s tough to be both successfully.

When an Employee is Too Good

“I have a fabulous employee who seems to want (and deserves) more than I’ll ever be able to provide. How do I handle this issue?”

Your HR Survival Tip

Is it possible for your employees to be too good for your company? Definitely. Especially when you have a small company. That may sound strange, but we’ve seen it happen several times.

You strive to hire people who are energetic, bright, and skilled. Everything works out great for a year or two and you’re patting yourself on the back about your brilliant recruiting abilities. In fact, you’ve already promoted this person once and they are ready for even more challenges.

Many companies will choose to create a new position for this stellar employee so they won’t lose them. But it’s a mistake you’ll pay for down the road. I can tell you that it’s tough to clean up a company full of employees with strange, made-up titles and inflated salaries.

Don’t promote promising employees into titles that can’t be sustained outside of your company. You aren’t doing anyone a favor by making them a senior manager with only the responsibilities of a supervisor. The title and level of responsibility should match up, both in your company and in others.

Your first responsibility is to your company. Ask yourself what positions are absolutely needed for maximum efficiency and production. If your best employees fit into those roles, great … promote them. But don’t make up roles just to placate your employees.

Small companies don’t have the number of departments and positions to allow much internal movement. Fighting this fact will only disrupt your company and lower employee morale due to perceived favoritism.

The best way to manage your stellar employee and extend the length of their employment is to find new challenges for them. Give them special projects that don’t belong to someone else. Have them help create training for others or give the training. Provide cross-training. Give them the task of coming up with ideas for expanding their position. Be imaginative.

If you are doing your job well, you need to be prepared to offer career advice that may take your best employees beyond your company. Sometimes, moving on is the only alternative for a good employee’s personal and career growth.


Many of you, like us, remember the “old” days when you only needed to buy a new employment law poster once every 2 or 3 years… and most laws went into effect on January 1st so we didn’t have to worry about those mid-year updates. Sadly, the old days are over and the poster information is changing randomly and frequently. This is why we always recommend the update service.

Since COVID, our clients have been managing more remote employees than ever before. Let’s be clear, a remote employee is someone who never or rarely comes to your facility. So even employees based out of your facility may be considered remote if they work in the field. This may make you subject to a couple of laws you never considered. Just in California, there are at least 30 different localities with different minimum wage and sick leave laws. Unbelievable, right? Even worse, your employees are often subject to those laws if they spend more than 2 hours a week at that locality.

Legally, every employee must have easy access to the information on the State and Federal employment law posters and that includes the relevant city/county posters. While it’s great that you put a new poster on the wall at your facility, you still aren’t compliant if you haven’t provided the same access to your remote or field employees. This has always been a big challenge for those with field employees and the increase in remote employees has made it more so.

The good news is we have discovered an online service that makes it easy for you. This remote service emails specific poster info and updates to the remote employees you’ve signed up for the service. Click here to learn more about it.

One word of caution: Since the service charges you per employee, remember only to count and list your REMOTE employees.

If this remote service still doesn’t work well for you because your employees don’t have access to email while working, consider putting a poster up at the facilities they service or in the company vehicle they use. You may need to get creative to ensure you’re compliant to avoid fines.

Legal Sales Reps

“I have a sales rep who is commission only. However, I heard something that made me wonder if I should also be paying wages. What is the rule?”

California has very specific rules about sales reps so it’s good you’re asking. We often see sales reps misclassified and this can be very costly to the company.

Inside Sales Reps are any sales reps who spend more time in your office, their home office, or on the phone than they spend meeting face-to-face with clients and prospects.

  • They must be paid hourly (not salaried) for all time worked.
  • They are subject to meal and rest break rules.
  • You cannot count commissions toward meeting minimum wage unless you pay that period’s commissions at the same time you are paying their wages for that period’s time. If commissions are paid, you must have a commission plan in place that meets California law. Commissions are a percentage of the sale but bonuses are flat amounts.
  • There is a possible exemption that would allow you to avoid overtime but it’s tricky so ask questions before implementing this.

Outside Sales Reps must legally spend at least 51% of their time out and about visiting prospects. We call this “knocking on doors.” They cannot conduct sales from their phone, home, or office; they must be hitting the streets. You can’t count time spent delivering the product, setting it up, etc. toward that 51%.

  • This position has no minimum salary required and can be paid commissions only.
  • Any paid time off benefits are calculated by the number of hours the sales rep is expected to work.
  • You must have a commission plan in place that meets California law.

Laws have not kept up with technology. Your sales reps may be much more productive when doing screen shares for demos or online meetings with prospects. However, based on current laws, this time does not count toward the 51% needed to qualify as an outside sales rep. Misclassifying an inside sales rep as an outside sales rep can result in a lot of penalties and fines.

Think about the difference between them this way… if they’re sitting down, that time probably won’t count toward the 51% the rep needs to qualify as an outside sales rep.

Salaries Up For Review

“I know the minimum wage is increasing but, when that happens, no one explains how it affects the salaries I pay.”

Every time the minimum wage changes in any state, you must review exempt salaries. State and federal laws have always used the same calculation to determine the minimum amount an exempt salaried employee can be paid in each state. The calculation is:

2 X state minimum wage X 2,080 = minimum salary

There are two important things to remember about salaried exempt employees:

  1. According to law, you must pay an exempt (salaried) employee at least twice as much as a minimum wage non-exempt (hourly) full-time employee, regardless of how few or how many hours the exempt employee works.
  2. The minimum salary is truly the minimum. That means there can be no unpaid days or hours off if you’re only paying the minimum. So if they take a day off or run out of sick time, you must keep paying the full salary. The moment you pay less than that minimum, you automatically turn that employee into a non-exempt hourly employee. This is why your exempt positions should really be earning more than the minimum.

You need to determine if each exempt salaried position is worth more than the minimum salary to your company. Yes, there is a limit to how much a position is worth. If it is worth the new minimum, you may already be paying your employee that amount or more. If the value of that position is below the minimum salary to you, get help to start making plans to convert the position to non-exempt (hourly).

When we say pay exempt salaried employees more than the minimum, consider at least $5,000 above the minimum. This gives you breathing room if the employee needs more time off and may help you avoid another increase when the minimum wage increases again. If you are ever paying below the minimum, get professional help to correct it because there are many things to consider to avoid claims.

New Laws for 2024

California’s legislature and courts have been busy making new laws and decisions. You are required to implement most of the legal changes listed below on January 1st, 2024. Some changes will affect your Employee Handbook policies so plan to have it updated.

  • Increased Wage and Salary – The minimum wage throughout California will be $16/hour. Local laws may increase that amount. The minimum salary will be $66,560 no matter how few hours the employee may work. The minimum wage for computer software professionals increases to $55.58/hour and the minimum salary for them will be $115,763.35. Don’t make anyone salaried (exempt) without confirming they legally qualify for the exemption.
  • CA Sick Leave – Sick leave has been increased throughout California to a minimum of 40 hours per plan year. The hourly accrual rate has not increased, just the maximums. If you are using the accrual system, you must allow employees to accrue up to 80 hours but can limit usage to 40 hours per plan year. The extra accrual ensures the employee will have sick time available at the beginning of the next plan year. If you are front-loading, change the amount to 40 hours for ALL employees and new hires (yes, even part-time employees).
  • Unlimited Vacation – Court decisions have changed how this can work and, it would appear, make it less attractive to employers. In the simplest example, if Sam uses less unlimited vacation than Joe, you may have to pay Sam the difference. It’s even worse with unlimited PTO because Joe could use it for long-term medical leaves and you might need to pay Sam an even bigger difference. If you’re thinking of any unlimited paid time off benefit, please talk with an employment attorney first.
  • Reproductive Loss Leave – This is a new, separate leave for companies with 5 or more employees. It allows up to 5 non-consecutive days of unpaid time off for employees who have worked for you for at least 30 days. Eligible reasons include failed adoption, failed surrogacy, miscarriage, stillbirth, and unsuccessful assisted reproduction.
  • Cannabis Use – CA discrimination laws have expanded and protect employees who may use cannabis when not working. If you are doing drug testing, make sure the cannabis test is only for active impairment/THC. Building and construction trades are exempted. You can still prohibit cannabis use or impairment during work hours.
  • Joint Employers – The National Labor Relations Board (NLRB) has released its final rule, making it easier for workers to be considered employees of more than one company. When there are joint employers, those employers may be subject to shared responsibility for certain labor and employment matters. Simply, if one of the joint employers gets in trouble, the other might share that burden.
  • Employee Agreements – If you use an Employee Agreement, severance and release agreements, non-disclosure agreements, or non-compete agreements, you’ll need to have them reviewed and updated based on recent court decisions.
  • Minimum Wage for Fast Food Employees – As of April 1, 2024, this affects fast food chains with 60 or more establishments. Their employees must earn a minimum wage of $20.00/hour. There is movement on making the minimum $22.00/hour and that should be decided next year.
  • Minimum Wage for Health Care Employees – As of June 1, 2024, a wide range of healthcare facilities will have new minimum wages from $18.00 to $23.00 per hour. Please review SB525 to see where you might fit or speak with an Employment Law attorney.
  • Mandatory Workplace Violence Prevention – Effective July 1st, 2024, you probably need a Workplace Violence Prevention Plan (you may add it to your Illness and Injury Prevention Plan) and provide training. There are a few exceptions but it’s best to review this law with your Employment Law attorney.

You have a lot of new laws and regulations to review so you are compliant on January 1st. Now is the time to prepare for any needed changes to your policies, practices, or Employee Handbook.