Industry Update
Opinion Article30 June 2020

The Nuances of Hiring and Training in Hospitality Industry

By Dr. Xiaoxiao Fu, Assistant Professor, University of Central Florida Rosen College of Hospitality Management and Gary L. Deel, Ph.D, JD, CHSE, CHIA, CHE, SHRM-CP, CFE Adjunct Professor Rosen College of Hospitality Management and UCF Global University of Central

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Gary L. DeelGary L. Deel
Dr. Xiaoxiao  FuDr. Xiaoxiao Fu

In hospitality, appropriate employment screening and management of ethical conduct are really important principles for avoiding liability and promoting safe and happy work environments. Unfortunately, some employees present huge risks for hotels through their unethical choices and tendencies. In this case study, we aim to assess the different tools that hospitality companies use for maintaining and promoting safe workplaces. Specifically, we will discuss background checks, credit checks, reference checks, and ethics training as tools to achieve ethics in hospitality businesses.

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It's important to clarify at the onset that an employer may make at-will employment decisions – including hiring and firing – for any reason or no reason at all, provided that, if a reason exists, it is not an illegally discriminatory reason. Those illegal reasons are constrained to a small group of classes protected by the law (Krieger & Fiske, 2006). Today, the federal government prohibits discrimination based on race, ethnicity, color, national origin, gender, disability, and age (only for employees aged 40 or older). Additionally, some states have passed laws that expand the list of protections to include classes such as sexual orientation and gender identity. But absent a reason based on one of these specific qualities, employers are free to do as they please. If they don't like the shoes an applicant wears to an interview, or an answer to one of their questions, these are both perfectly legal reasons not to hire such a person. And if an existing employee does or says something not to the employer's liking, that too is plenty sufficient for disciplinary action and/or termination. Again, a reason isn't even per se required. So if an employer just decides to downsize, and draws employee names out of a hat for layoffs, this is fine as well. Or if a supervisor walks into work in a grumpy mood and fires the first employee he sees out of anger, this too is totally permissible under the law. Granted, a separate discussion could be had about the wisdom – or lack thereof – in such behavior. But the law does not require employers to make wise decisions; it only requires that they follow the rules that have been established by law for fairness in the workplace.

It's also worth noting that employers should clearly articulate reasons when a termination or a denial of employment occurs, because in the absence of such reasons employees may try to infer the employer's motives, and their assumptions are seldom charitable. For example, if an employee is fired and no reason is given, the employee may suspect that it was due to their gender or race or other protected class. And from that point, all the employee has to do is contact the Equal

Employment Opportunity Commission (EEOC) to commence an investigation into the circumstances of the employer's decision. Such investigations can be expensive and time- consuming for employers, who are generally obligated to cooperate with them, so it's best to give the reasons for such decisions to the employees upfront.

One other point deserves discussion here, and that it that an employment practice need not be designed or intended to commit illegal discrimination. If a practice is engineered to discriminate based on a protected class, then it is illegal by virtue of its disparate intent. However, if the aim of a practice is innocuous, but it nonetheless has the effect of discriminating, the employer may still be liable in the same way as if the effect had been intended. So suppose, for example, that a hotel adopts a kind of physical fitness test that employees must pass in order to be hired. The fitness test involved push-ups, pull-ups, and weight lifting. The standards are not required to perform the basic duties of any of the jobs in the hotel, but all employees are required to pass the test nonetheless. Perhaps the aim of the employer is to try to hire healthy employees in order to lower its health insurance premiums. But if it is found that the physical fitness test has the effect of discriminating against, say, women – in other words, if it is found that men are more likely to pass the test than women are – then the test may be found to constitute illegal discrimination by virtue of its disparate impact, notwithstanding the employer's intent.

All that said, the bottom line is that employers face liability in employment decisions only if they discriminate – either through intent or through the effect of otherwise well-intentioned policies. Employers can do virtually whatever they want so long as they avoid these discrimination issues.

One of the most basic tools that any hospitality employer – and employers in any industry for that matter – should use to assess fitness in hiring new employees would be a criminal background check (Gerlach, 2005). According to recent surveys, 95 percent of all employers use employment background checks to screen job candidates. Depending on the company that an employer uses for background check services, and the state in which the employer operates, the information provided in such a report will differ. For example, most states permit information going back at least seven years on such reports, but some states allow records as old as ten years to be disclosed. In terms of different types of information, these background reports usually include, at minimum: criminal history and driving record, work history, and education history, if available. Some companies may add available information on a candidate's social media usage and medical history to the extent that it is publicly accessible.

Most important to the aim of workplace ethics is arguably a criminal record. Not all criminal histories should be disqualifying. For example, someone who has speeding fines or unpaid parking tickets, but is not required to drive as part of their work duties, should probably not be excluded from hire. After all, who among us had not received a speeding or parking citation? And if it isn't relevant to the job, it shouldn't carry significant weight. However, if someone has a record of violent crimes, or crimes of dishonesty (e.g. perjury or fraud), these might rightfully be deal breakers. However, it's important to note that some criminal records may be sealed or expunged, so a record search that comes back with no results should not necessarily be viewed as an absolute guarantee regarding a candidate's character.

Another tool that hospitality employers sometimes use for employment screening is credit checks. Credit checks are a subject of much greater controversy than criminal background checks in hiring. Whereas nearly all employers use criminal background checks to screen their job applicants, only about one-third of employers use credit checks to fill some job positions, and only one-sixth use them for all job positions (Deel, 2020). The reasons that credit checks are more

controversial are the concerns that they may not be relevant to the candidate selection process and that they may also have a propensity for discrimination, intentional or otherwise. Proponents of credit checks argue that individuals with poor credit history may be unreliable with the management or oversight of money. They also argue that someone in a desperate financial situation may be more inclined to steal from an employer in order to make personal ends meet. Opponents argue that these assumptions are unfair and that just because someone has bad credit does not mean they are unreliable or untrustworthy. They also argue that the use of credit checks may unfairly disadvantage or discriminate against minorities that statistically tend to have lower credit scores than other groups. As a result of this debate, employers that wish to run credit checks on applicants are often advised to only use them for positions that either have access to or responsibility for financial assets. So for example, applicants for a restaurant server position that handles cash daily might be subjected to a credit check. And the hiring of accountants, comptrollers, or financial managers could certainly justify the use of such checks. But applicants for jobs that have no involvement with financial matters – plumbers, carpenters, janitors, etc. – should not be subjected to a credit check. And it also goes without saying that, if an employer decides to utilize credit checks for a particular position, all applicants should receive the same scrutiny so as to avoid any perceptions of discrimination.

Yet another tool that employers may use to try to identify the best candidates for their vacancies is reference checks. There are often two different kinds of reference checks that an employer may undertake. One is to ask each applicant for a list of character references, and contact information for reaching them. This may be helpful, but generally speaking, character references that an applicant volunteers are unlikely to reveal anything negative about a candidate (Ballam, 2001). Rather, such references are more likely to embellish the truth in favor of the individuals about whom they're speaking. After all, why would an applicant offer the names of anyone other than those whom they know will sing their praises? So references of this kind have limited usefulness, and their character testimony should be taken with a grain of salt. The other type of reference check is to contact past employers for the purposes of inquiring about an applicant's work history. This method is more likely than the first to yield honesty over puffery, but still, the results are likely to be limited. Regardless of whether an employee still works for them or not, employers are generally disinclined to share any details of an employee's history with anyone outside their organization, beyond maybe confirming the dates during which an individual was employed by them; in fact, they may not even offer that much. This is because employers fear legal consequences from sharing anything that could be construed as either breach of an employee's right to privacy or defamation of their character. And this fear is not entirely unreasonable. If an employer was to share, for example, that an employee was absent from work a lot for medical reasons, this could be a violation of the Health Insurance Portability and Accountability Act (HIPAA). Even though employers often subsidize health insurance plans for their workers, employees have a right to privacy with respect to their medical information, including absences resulting therefrom. In another example, suppose that an employer shared information about an incident in which an employee was involved. Perhaps an employee was fired because he was accused of lying on his timecard. If this isn't absolutely, verifiably true, the applicant could sue the employer for defamation of character or false light invasion of privacy. Due to these kinds of risks, employers generally follow policies of offering little or no information to anyone asking for reference checks; they reason that they can't get in legal trouble if they don't say anything.

One last point worth mentioning on the subject of reference checks is that, with either kind, employers should always ask permission from applicants before contacting volunteered character witnesses or past employers, and such permission should be documented in writing. In doing so, prospective employers protect themselves from liability if their contact with the referencing parties causes any damage to the applicant. For example, suppose that a prospective employer calls a current employer – who also happens to be a competitor – to ask about the employee. When the current employer learns that the employee has applied to work elsewhere, it terminates him over concerns that he might be planning to leave and take valuable business with him. Without documented permission to contact the current employer, the prospective employer could face liability for getting the applicant fired from his current job, so it is always best to get permission first.

Assuming a hospitality company has used best efforts to screen job applicants and identify the best candidates for their openings, they should also leverage an array of ethics training tools to ensure that employees are aware of the expectations of the employer, and that they have the skills and tools necessary to behave ethically in the workplace. This kind of ethics training often includes in-depth discussions on topics such as sexual harassment, workplace violence, security protocols, information privacy policies, and other topics (LeClair & Ferrell, 2000). For example, if a company is publicly-traded, then it should also include training on securities law and insider trading issues. By offering these kinds of training in the workplace after hiring, employers ensure that employees cannot later say that they didn't know a) what was expected of them or b) how to navigate different legal or ethical situations in their jobs. For this reason, all employees should be required to sit through the required training, notwithstanding their prior experience or credentials. This is the only way that employers can ensure each one of their workers possesses the requisite knowledge and skills in these areas. Furthermore, employees should be required to undergo this training before they ever begin their work duties. Scheduling convenience may tempt employers to allow employees to work on the job before they attend ethics training in groups. For example, if the ethics training is held on the first day of each month, then an employer might want someone who is hired on the second day of a month to begin working and just attend the training when it comes around again the following month. But this exposes the employer to risk because anything that happens during the period between the start of work and the ethics training will fall squarely at the feet of the employer. If the training could have prevented a harmful incident, but the employer put operational needs before ethics, the employer will own the consequences.

And of course, legal claims often hinge on what training was actually done and whether it was effective, so employers should take two additional steps. First, employees should always be required to sign off on training documents to confirm that they've received the information and that they understand it. The documentation with employee signatures should be kept in permanent employee files so that whether an incident arises 20 days after hire or 20 years, the company can show what was done. And second, employers should ensure that employees actually understand what they think and/or say they understand by administering some kind of assessment at the end of the training program, with a minimum score required in order for the employee to be released to work. This ensures that employees not only sit through the training, but also that they pay attention and absorb the information therefrom.

On that note, it's important to emphasize that training should not be a one-time occurrence either. Employees should be trained upon hiring, but as human beings, we must recognize that we are at the mercy of our limited and imperfect memories, and with that in mind employers who wish to avoid liability in perpetuity should plan for ethics training to be an annual routine. Such training

need not be terribly expensive either. It can be done in an automated self-paced fashion through technology, which alleviates the need for labor dollars dedicated to training facilitators. A typical ethics training "refresher" course might take an average employee between two and four hours to complete, depending on how in-depth the training goes.

References

  • Ahearn, T. (2018). NAPBS Survey Reveals 95 Percent of Employers Conducting Employment Background Screening in 2018. Employment Screening Resources. Retrieved from https://www.esrcheck.com/wordpress/2018/07/02/napbs-survey-reveals-95-percent-employers- conducting-employment-background-screening-2018/
  • Ballam, D. A. (2001). Employment references-speak no evil, hear no evil: A proposal for meaningful reform. Am. Bus. LJ, 39, 445.
  • Deel, G. (2020). The Controversy Over Credit Checks in Employment. HG.org Legal Resources. Retrieved from https://www.hg.org/legal-articles/the-controversy-over-credit-checks-in- employment-54678
  • Gerlach, E. A. (2005). The background check balancing act: Protecting applicants with criminal convictions while encouraging criminal background checks in hiring. U. Pa. J. Lab. & Emp. L., 8, 981.
  • Krieger, L. H., & Fiske, S. T. (2006). Behavioral realism in employment discrimination law: Implicit bias and disparate treatment. California Law Review, 94(4), 997-1062.
  • LeClair, D. T., & Ferrell, L. (2000). Innovation in experiential business ethics training. Journal of Business Ethics, 23(3), 313-322.

Gary L. Deel

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Dr. Xiaoxiao Fu

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