When someone is newly hired to an organization, they should not simply be placed somwhere at a desk and immediately put to work. It is important and even necessary to follow some procedures before an employee begins the job. These activities help new employees understand the organization better, what is expected of them, and how to proceed.
New employees need to complete the necessary forms for work with their employer. They need to complete forms reflecting their hiring status such as the W-4 form. This helps to know if they are married or have dependents for income tax purposes. Other forms such as diect deposit options and special accomodations that may be needed. Designated employees who work in these areas should be present to answer any questions.
New hired personnel should be given the chance to look over an employees handbook. This should be a comprehensive book abut the policies of the company, vacation and leave time, and company issues. Employees should sign or at least initial the book confirming that they read it. New employees will have a better idea of what the company entails. If there are problems down the road, employees can not plead ignorance so to speak on topics because they read the guidebook. However, it must be made clear that employees understood what was read and if clarifications need to be made.
Employees should be advised in person and in writing what kind of health insurance programs are offered and what costs. A breakdown of companies and what they offer based on single or family coverage. If the organization has specified times of when open enrollment occurs, this needs to be added. Retirement programs also need to be introduced and explained.
According to The Wall Street Journal, in September of 2011, the House Judiciary Committee held a hearing on a bill called the Legal Workforce Act. Among the provisions of the bill is a requirement that all employers in the U.S. use a system called E-Verify when hiring new employees. The bill is suggested as an important method of fighting illegal immigration and ensuring that unlawful immigrants do not take jobs away from US citizens who need them.
The E-Verify Program
E-Verify is a government database system that has been used since the mid-1990’s. Some states already require that all employers use the database, including Arizona, but in other cases, the use of the database is voluntary. The database allows employers to run names and social security numbers through the database in order to ensure that workers they hire are legal U.S. citizens. If the bill passes, all non-agricultural employers will be required to use the database system for all new hires.
Employers, of course, are already required to check identification and to obtain legitimate forms of identification including a social security card and driver’s license or a passport or other forms of ID when they bring on a new employee. New employees are also expected to complete tax forms including providing their social security numbers and specifying their withholding information. The use of the E-Verify database will simply be one more pre-hire requriement that employers and HR professionals fulfill as part of their routine hiring process. According to the Department of Homeland Security, the process will be about as difficult as ordering books from Amazon.com for the first time, and simply requires employers to enter information in between 5-8 fields. The process of using the database is simple and can actually save employees time in verifying social security numbers that are required for tax time.
Proponents of the bill argue that this will keep jobs for US citizens who need them, although there is not a great deal of evidence regarding how many U.S. citizens are competing with undocumented immigrants for jobs. Opponents of the bill, on the other hand, argue that false positives could deprive legitimate citizens from taking jobs and that the use of the database could drive illegal immigrant workers into an underground economy where they work at cash jobs and pay no taxes.
Regardless of opposing political opinions about the bill, employers need to be aware of any new requirements to use the program if the bill passes.
According to a September article in The Boston Globe, the State House Committee in Massachusetts is considering making non-compete agreements unenforceable in the state. Bill S.932 proposes to render void any agreement placing restrictions on an employee’s employment after leaving a position, essentially making all non-compete agreements ineffective. Massachusetts would not be the first state to take such an action; non-competes are currently unenforceable in California and the ability to enter into such contracts is severely limited under other state laws throughout the US. The Boston Globe article suggests the change to Massachusetts law would be a welcome one and indicates that non-competes not only hurt the economy, but also hinder the ability of many employees to make a living, including not only top employees or people who have access to trade secrets, but also average employees in regular jobs as well. This limitation on people’s right to work is one reason why so many courts are reluctant to enforce non-competes. However, these agreements also serve an important purpose in protecting employers.
The Case for Non-Compete Agreements
While non-compete agreements have a bad reputation, when they are reasonable and when they are enforced, they provide an important measure of protection to employers. Without non-compete agreements,employees could potentially take clients from their former employees with impunity, essentially destroying the business of their employers. Employees could also work for years to perform research or develop technology, being paid by their employer all the while, and then take trade secrets or proprietary information to a competitor.
To avoid the possibility of employees engaging in abuses that could harm an employer, employers can and often should request that employees enter into a non-compete if any of the following are true:
- The employee has access to sensitive information, trade secrets or emerging research and technologies
- The employee has ready access to clients and contact information such that he could use client relationships and lists to strip a company of its customers.
If either of these is true for your business and employees, it is important you determine what the law is for non-competes in your state and that you take steps to make new hires sign a legally binding contract. It is cases like these that give pause to the Massachusetts’ legislature’s efforts to eliminatenon-competes. While doing so might help the economy in some ways by allowing greater employee flexibility and avoiding unemployment situations, individual employers could suffer significant harm. Employers who are unable to protect themselves might be unwilling or less eager to do business in Massachusetts when they could go to a different state and be better protected.
Drafting a Non-Compete
If you believe it is in your company’s best interests to make employees sign a non-compete, it is important to comply with all requirements so the agreement will be enforced. This means that, among other things, the agreement must be in writing and it must be narrowly tailored and limited in scope. In other words, it cannot prohibit the employee from doing anything in his field anywhere in the world. It must be specific to the geographic area where the employee would be in direct competition with your company, and it must be specific to the type of job where your former-employee could do you harm.