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Small Business
Weed out bad applicants
July 1, 1999: 3:48 p.m. ET

'Succeeding in Small Business': A weekly column by Jane Applegate
By Jane Applegate
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NEW YORK (CNNfn) - Here's a scary scenario -- your new delivery boy runs a red light, hits a parked car and smashes up the company van.
     When your insurance company refuses to pay the claim, you find out his driver's license was revoked months ago.
     Or worse yet, the same delivery guy assaults a co-worker in your parking lot, and it turns out Mr. Hot Temper had been convicted of a similar offense a few years ago.
     The injured co-worker names you, the employer, as a defendant in a multimillion-dollar negligence lawsuit, and your entire business is in jeopardy.
     "The courts are ruling that if you hire somebody, you are responsible for their actions at work," said George Scharm, a former police officer who is founder and president of TSS Consulting Group, a Gurnee, Ill.-based firm that conducts employee-background checks. (A professional background check can cost between $65 and $500 or more, depending on how in-depth it is.)
     While the courts do not expect employers to take extraordinary measures to ascertain information about an employee's work history, you do have to take reasonable steps, such as calling references and checking driver's licenses and court records.
     Beyond lawsuits and damage claims, you might also be found in violation of U.S. Occupational Safety and Health Administration standards if one employee harms another, because federal law requires you to maintain a safe workplace.
     If you are reluctant to hire a professional to do a background check, employment experts say you can take some simple steps to avoid hiring a bad apple:
  • Obtain an applicant's permission to conduct a formal background check. If they refuse to sign the release form, don't hire them.
  • Require job prospects to fill out a detailed job-application form in addition to submitting a resume.
  • Carefully check several references. If former employers are reluctant to answer your questions, speak to colleagues or vendors who dealt with the person at his or her former company.
  • If the job requires driving, check with your state's Department of Motor Vehicles to confirm that the person has a valid license, and, if necessary, the type of license required for driving commercial vehicles.
  • Check public court records for civil and criminal lawsuits filed against the person. The records provide a wealth of information.

     Doing your homework before making a job offer can eliminate major headaches down the line.
     Unhappy, unsuccessful job candidates file only 3 percent of labor lawsuits, while former employees file 80 percent -- and 33 percent of those involve wrongful-termination claims, according to labor experts.
     "Firing someone is much worse than hiring someone," said Dr. Mark Goulston, a Los Angeles-based psychiatrist who specializes in workplace relationships.
     He and others say having a clear, written company policy is the cheapest way to protect yourself from misunderstandings and lawsuits.
     You can write a company policy yourself, or buy a software program that helps you spell out all the policies and procedures you expect your employees to adhere to.
     Detail how to handle attendance, tardiness, absenteeism, vacation, sick pay and sexual harassment. Spell out clear prohibitions about taking drugs or drinking on the job.
     "An employee handbook is vital to a small business -- it gives you something to fall back on," said Martha Thomas Flynn, director of legal compliance products for G. Neil Co., a Sunrise, Fla.-based firm that supplies human-resources products and services to about 850,000 businesses.
     When an employee violates a company policy, you must document in writing the time, date and nature of the offense. You should also document your counseling and the action taken. Documenting everything is essential when it comes to creating clear grounds for a legal termination.
     Dr. Goulston recommends giving a problem employee 30 days to shape up.
     "It takes 30 days for a change in behavior to become a habit, and six months for a habit to become the automatic way a person does things," Goulston said. "If they haven't changed in 30 days, it's not happening."
     Experts also advise employers to be clear about "at will" employment.
     Although laws vary state by state, most states allow either the employer or employee to terminate a work relationship at any time, for any reason.
     Be very careful not to turn a job offer into a binding contract. Always have an experienced labor lawyer review every document before you present it to a potential employee.
     George Scharm also reminds business owners not to treat employees like family.
     "You don't want an employee to think the business is his family," warns Scharm. "When they are fired, they feel like they've been thrown out of the family. This can lead to workplace violence."
     If you have tried counseling, warnings and documented the problems but firing is inevitable, be very careful when it's time to do it. Be sure to be courteous, polite and have your termination discussion in private.
     "You want to treat people with respect and remember they are a human being," said Scharm. He suggests conducting a short exit interview and being generous with severance pay, even if the person doesn't really deserve it. It helps to do everything you can to end on a civil note.
    
Briefly ...

     More than 1,200 people attended Avon's annual "Women of Enterprise" awards ceremony in New York City recently.
     The WOE program, co-sponsored by the U.S. Small Business Administration, honors women who have overcome tremendous obstacles to achieve business success.
     This year's winners were Sarian Bouma of Lexington Park, Md.; Marion Bren, Corpus Christi, Texas; Maria de Lourdes Sobrino, Huntington Beach, Calif., Janet Lasley, Rocky Hill, N.J., and Ronda Howerton, Bethany, Okla.
     "When I listen to these women, it makes what I thought were my hard knocks now feel like little nudges," said keynoter Whoopi Goldberg. She said one of her heroes, Madame C. J. Walker, was the first black woman to become a millionaire. Walker made her fortune by selling beauty products.
     "(Walker) told black women that they don't have to be less than they are capable of being," said Goldberg. "I try to uphold that standard." Back to top
     -- with reporting assistance by Robin Wallace and Carla Ceasar
     (Jane Applegate's syndicated "Succeeding in Small Business" column will appear weekly on CNNfn.com beginning the week of July 5, 1999. Applegate, author of "201 Great Ideas for Your Small Business" and a business owner herself, also regularly contributes to CNNfn's Small Business section and maintains her own Web site, janeapplegate.com.)

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.