Providing protection with legislation

United States employment law tries to protect from discrimination particular categories of vulnerable employee. Kenneth J Rose and Scott Wenner of US law firm Littler Mendelson examine the key differences from the UK and issues relating to recruitment Stateside

British companies doing business in the United States are subject to both the US federal labour and employment laws, and employment laws of the states in which their US operations are located.

These laws apply to formation of the employment relationship and to the employment itself. No legal requirement exists under federal or state laws for a written employment contract.

Nevertheless, British companies with US-based employees must be aware that the recruitment and hiring process is highly regulated at federal and state levels. US hiring practices must be non-discriminatory, may not improperly impinge on applicant privacy, and must otherwise satisfy many federal and State laws.

California and New York, which contain the most important financial and business centres in the United States, have state laws, and even municipal codes, which augment and complicate federal strictures on hiring.

The federal, California and New York equal employment opportunity laws require the selection of prospective employees to be non-discriminatory. Under federal and Californian laws, employers must consider applicants for employment without regard to race, colour, gender, sexual orientation, religion, creed, national origin, ancestry, age (over 40), disability, medical condition or marital status. New York law also protects applicants under 40 from age-based hiring decisions.

To be non-discriminatory, a hiring policy must use recruitment and selection procedures that neither intentionally nor inadvertently exclude protected group members.

Recruitment through employment agencies is equally regulated: it is unlawful for an employment agency to fail to refer for employment any individual based on any protected classification, nor may an employment agency honour its customer’s request to exclude minorities from referral.

Interviews should be job-related, objective and standardised to avoid violating discrimination or privacy laws. Applications may not include questions that would be unlawful if asked at an interview.

Employers can require a pre-employment medical examination, or inquire about an applicant’s health, only after offering employment. Employers may condition an offer on the results of medical examinations provided:

• all applicants offered similar positions are subjected to the same examination or inquiries;


• any medical criteria used to disqualify applicants are job-related and consistent with business necessity;


• any applicant disqualified by a medical examination has an opportunity to submit an independent medical evaluation before the employer’s final determination is made; and


• the examination results are maintained confidentially and separately from the applicant’s personnel file.

The employer may withdraw a job offer based on the results of a medical examination if they show the applicant cannot satisfy the employer’s job-related physical/psychological criteria with or without reasonable accommodation.

An employer’s right to screen applicants for illegal drug use is less clear. While there is no federal, California or New York law that directly prohibits employers from requiring applicant drug screening, court decisions applying constitutional and common law notions of privacy are inconsistent, and applicant screening may not always be permissible.

The California Constitution elevates privacy to a right that restricts employer action; New York recognises no such sweeping right to privacy in the workplace.

Employers may conduct pre-employment background investigations subject to compliance with rigorous statutory provisions.

Federal, California and New York statutes regulate an employer’s gathering and use of information concerning an applicant’s financial history, reputation and character.

These laws require employers to provide notice before investigating, and demand compliance with other procedures before employment is denied based on the investigative findings.

Federal, California and New York laws prohibit mandatory polygraph exams as a condition of employment, each of these jurisdictions also prohibit employers from asking an applicant to disclose arrest information where no conviction resulted.

US jurisdictions do not require written employment contracts or that the employment relationship be of any fixed duration.

While unionised worksites generally have collectively-bargained agreements applicable to new hires, non-unionised employers rarely have written employment contracts other than with executives, though most companies require new employees to sign confidentiality agreements committing them to protect the company’s proprietary information.

If a written contract is employed, the form and content of the agreement can be freely negotiated between the company and the employee. However, certain statutory protections such as minimum wage and overtime laws and family and medical leave laws protect eligible employees regardless of whether they are included in any written contract.

Private sector employment in the United States is terminable “at will” in the absence of an express or implied agreement to the contrary. “At will” employment permits the employer to dismiss the employee without “cause” or notice, provided the termination does not violate any statute, such as the anti-discrimination laws and does not otherwise offend public policy. An “at-will” senior employee may have no greater job security than a newly-hired worker. Employers in California and New York may maintain “at will” employment by taking precautions during the recruitment and selection process to avoid any implication that “cause” must exist or notice must be given before an employee may be discharged. Also, employment applications, applicant interviews, offer (appointment) letters and employment contracts given new hires should unmistakably inform applicants/new hires that employment is on an “at will” basis. “At will” disclaimer language used consistently and prominently throughout the hiring process may later preclude claims for wrongful termination.

British companies seeking to employ non-US nationals at their US operations cannot employ anyone who has not obtained a work visa. Visa categories most frequently used for business personnel are the Temporary Business Visitor (B-1), Treaty Trader or Investor (E-1 or E-2), Temporary Worker or Trainee (H-1B, H-2, or H-3) and Intracompany Transfer (L-1).

US immigration law obligates employers to inspect documents that permit them to verify the identity and authorisation to work in the US of every new hire, without discriminating against anyone on the basis of citizenship, as distinct from eligibility to work. Verification records must be maintained on each new employee. Regulations specify the kinds of documents employers may accept as proof of identity and work eligibility.

Further information about U.S., California and New York laws affecting employment is available at the following web sites: our law firm’s site – www.littler.com

The U.S. Department of Labour

The U.S. Equal Employment Opportunity Commission

The US Immigration and Naturalization Service

The California Department of Industrial Relations

The New York State Division of Human Rights