Working Interviews

“I have a candidate work for a couple of days as a trial period. If I like them, I hire them. If I don’t, I pay them cash for the time worked. This has worked well for me so far.”

Your HR Survival Tip

In California, there is no such thing as a pay-in-cash trial period. There are interviews, tests, and other things you can do while making a hiring decision. But there are no trial periods where the employee actually works for you as part of the interview process.

When someone performs actual work for you, there are really only three options:

  • Volunteers — These are people who are unpaid but work to help out your organization. Only non-profits can have an unpaid volunteer. If you aren’t a non-profit, they must be a paid employee.

  • Employees — We all know this is someone on your payroll. They can be temporary, part-time, full-time, hourly, salaried, and whatever combination you choose. However, you and they are paying taxes on the money you pay them and they receive a W2.

  • Contractors — There have been many changes to the definition of who qualifies as a contractor. The basics are still holding strong… they operate as a business and offer similar services to other companies, they aren’t duplicating what employees do, and they have control over their work and time.

When paying cash for that trial period, you are legally acting as if this person is a qualified contractor. What happens the next time that person files for unemployment and lists you as one of their employers? They are thinking that the trial period is the same as a temp job. EDD (CA’s Economic Development Division) will ask why you weren’t paying payroll taxes. Then IRS will ask the same thing.

The proper way to have a trial period is to hire them for a trial period. You can do the minimum paperwork initially and then complete the rest a couple of days later if it’s working out. If your trial period is more than 1-2 days, how you explain it or what you put in the offer letter is the only difference between hiring them versus hiring any other employee.

There are no particular legal protections for you when you fire someone after 2 days or 2 years. In either case, you made a business decision and should have a legal reason for terminating their employment. Trial periods can be a great way to ensure the employee is giving you their best and you are paying attention to what they can and can’t do. Just make sure you aren’t causing more problems for your company by doing these trial periods illegally.

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