Background checks and skill tests for new hires

bear cub and skunkI have had my fair share of bad hires over the years; let me tell you. It has cost my law firm well into the six figures in wasted payrolls, management problems, lost opportunities, correction of problems, etc.  I do not spend a lot of time dwelling on it because I do not want to waste time thinking about lost investments on people.

For most businesses, the largest investment you make is in people. The biggest line item on your expenses is payroll. And your best chance at growing and making more money is through leveraging the time and labor of others.

So who you hire matters, and you should probably ask yourself a few questions before hiring a new employee and truly figure out if a potential employee can do the job you need them to do.

I admit, I do not always check references. Although I should. Probably half a dozen of my former employees had new employers call me on a reference check. Of those, more than half had lied to their prospective employers. This put me in an awkward position, because I am not willing to lie for people. But I wonder if there are other bosses who might do it just to be nice, to avoid conflict, because they want to get that ex-employee off of their unemployment account, or because the employer is afraid that telling the truth about their employees in a reference check will get them sued.  It is awfully tempting with some employees to be nicer about them than they deserve when responding to a reference.  (Of course, employers, be careful giving a positive reference about an employee whom you know is a serious liability just to get rid of them, because that could also come back to bite you.)

So that got me thinking.  Can you really trust references?  Probably not by themselves.  So I am trying something new: background checks and skill testing.

Background checks are a good idea, and I should have been doing them all along.  You need to know whether your new hire is lying about her college degree. California has some strict rules about background checks for potential hires, however.  For example, the potential employee must be given notice of the background search (with what will be looked at, in writing) whenever a background search agency is used. Also, the potential employee must consent to such a search, and he or she must have an opportunity to get a copy of the public records the employer gathers. If the employer gathers public records itself by way of doing a cheap background search, it must allow new hires to decide whether they want a copy of the public records gathered, or whether they want to waive receiving a copy (this is usually an option found on employment applications as a small box or initial line).

Most potential employees, of course, will not have any criminal records.  A bankruptcy may not indicate anything really bad, either.  Our own government cannot keep itself out of debt; can you really blame John Smith the Office Assistant for buying too many TVs? I’ve had employees with bankruptcies, criminal histories, arrests, alcoholism and other personal problems in their past and all have turned out to be great employees.

My bad employees tend to fall into two categories: (1) drama queens/anti-social or (2) incapable of doing the job, no matter how hard they try, but also incapable of seeing that.

So I am experimenting with skill, aptitude and personality testing now. I have had several former employees straight-up lie to me about what they could do.  After they were hired, they spent a lot of wasted time trying to figure out how to do things they stated that they could do already, or trying to hide their ineptitude. This not only wastes my time and money, it aggravates me because I cannot trust the person.

So far, every employee whom I have given a skills or aptitude test to has turned out well. I do not have a lot of advice regarding testing yet, because I am new at experimenting with it. But I am hopeful.

I will say this: make sure you use reputable testing agencies or batteries, especially if you are a big employer.  You do not want to get sued for discrimination because only white males from Princeton pass your tests.  I am very hopeful, however, that testing will help me identify the Dunning-Kruger Effect sooner.

By the way, I still advocate strict adherence to probationary periods, with formal reviews after 90 days!  Some people are just not good fits and will slip through the preliminary hiring cracks, only to fail abjectly once they enter your organization.  Weed them out!  Remember, there are reasons why big businesses do some of the things that they do… and it isn’t because they are just evil, Kafkaesque machines with too much money.  Sometimes they have things in place that small businesses should adopt for their own protection and success.

How Do I Find The Right Attorney For My Business?

Find An Attorney You Can Trust.Hiring a lawyer is a major purchase for most people or businesses. After all, a lawyer costs thousands of dollars and is handling some of your most difficult problems.

Learning how to hire the right people in any position is an art form. Hiring the right lawyer for you (or any professional, such as a doctor, dentist or accountant) is no different.

In fact, because there is much to say on the topic, I have created an entire five post series on the topic, called, fittingly, “How to Hire a Lawyer.”

For those of you who want the 60-second cliff notes, though, here’s a video. It’ll give you a place to start, but I still recommend signing up for the five post series in your inbox.

Video Transcript:

How do I find the right attorney for my business?

How do I find the right attorney for my business?” That’s a great question. The best attorney for you is someone who understands you, your business, your goals and strategies, and is someone whom you trust. You can research attorneys by checking with the state bar, looking at their website, reading articles or blogs they may have posted, or watching their videos. When you are ready, interview the attorney and do not be afraid to ask how they would deal with your most vexing problems. The attorney should interview you back, to understand your needs and determine whether they are someone who can genuinely help you. Go for an attorney who listens to you, understands your problem, and exhibits honesty, compassion and wisdom. Got more questions? Visit us at bellatrixlaw.com for more answers or to schedule a consultation with one of our business law attorneys or real estate attorneys, depending on your situation.

You can get more of Alicia Dearn’s videos and helpful insights on her YouTube channel.

Why Are Lawyers So Expensive?

Get An Experienced Lawyer.Lawyers are expensive because we all wear $1000 suits and want you to pay for it.

Just kidding. That’s definitely not true. I get most of my suits from Macy’s.

In fact, you may be surprised to learn that most small firm lawyers barely make a living after the expenses and regulations related to the practice of law. It is a myth that most lawyers are rich. There are rich lawyers, of course. But it is easier to be rich as a businessman than as a lawyer. (Hint: Business people are the lawyers’ boss because they are the lawyer’s customer.)

There are a lot of reasons why law and lawyers are expensive. But I try to sum it up in this 60 second video:

Video Transcript:

Why are lawyers so expensive?

Why are lawyers so expensive? Two reasons: First, really good lawyers are hard to get because they’re in demand. Cheap lawyers do exist, but do you really want a discounted professional to deal with some of your most important problems in life? An expert lawyer spends a lot of time thinking and crafting the best solutions for you. They have experience, contacts and are uniquely talented at law, which is not an exact science or just a matter of filling out papers. The second reason is, no matter who you hire, legal work is complex, detailed and precise, and generally requires a lot of effort to complete. It is necessary for lawyers to do a competent job and not just give you “close enough” because little mistakes can have big consequences. Got more questions? Visit us at bellatrixlaw.com for more answers or to schedule a consultation with one of our attorneys.

You can see more of Alicia Dearn’s helpful videos on her YouTube channel.

Six Things Entrepreneurs Neglect That Will Bite Them In The Butt

tornadoOn any given day you barely have time to use the bathroom. Now I’m going to ask you to think about doing some things that will not directly result in money in your pocket.

Why?

Because these things will help you make more money (or enjoy the money you do make).

Go through this list right now and see if there are a couple of things you’ve been putting off.

Annual Physical

There aren’t enough hours in the day to get all the work done so there is never a good time to go to the doctor.  Think about it. When was the last time you went to the doctor just for a check-up?

Your annual physical is going to involve investing time to get blood work done. Then you will need to drive to the doctor’s office and wait to be seen.  After that you will spend about 30 minutes in the examination room. Finally you’ll have to travel back to work.

All of this time away from work probably amounts to 4 or 5 hours, just to find out you’re perfectly healthy…you hope.

And that’s the reason you need to go every year.

Eventually, there will be something that needs observation, investigation or treatment.  It’s better to catch it early.

Dental Visits

Many people do not place a priority on their oral health.  I can list the reasons a visit to the dentist every six months is important but you only need two.

First: A clean white smile is one of the first things people notice when they meet you for the first time.

Second:  Your mouth probably smells like a swamp.  Entrepreneurs eat on the run and they don’t have time to floss as well as they should.  Investing 45 minutes every 3-6 months will not only keep your mouth healthy, it can keep you from turning people off with bacteria-laden breath.

Disaster Preparedness

No matter where you live, you need to be prepared to stay in your home for a couple of days.  Snow storms, hurricanes, wild fires, and heat waves can leave you and your family without power for a couple of days (or more).

You should have enough supplies in your home to enable you to last a couple of days without power.  This includes:

  • Flashlights
  • Batteries
  • A portable radio
  • Back-up mobile phone battery
  • Ready-to-eat food (like canned tuna).
  • Important telephone numbers written down (incase your cell phone and computer batteries die).
  • Bottled water

There are other things you need to have on hand depending upon where you live.  Take a few minutes and assemble these items now and check them once each year.

Vacations

If you’re like me, it is easy to get caught up in work because you love what you do. Sometimes this is not good for your mental health.  Every so often, at least once each year, you should take a couple of days off.

Take some time to completely unplug, rest and relax.  Your business will survive and you will return ready and raring to go.   The break will allow your mind to “reset.” It will also give you an opportunity to reconnect with your family.

Not taking a vacation will increase your stress level and it will contribute to mental and physical fatigue.  These things hurt your business and personal productivity.

The Community

Every time you give back to the community you enhance your wealth attractiveness.  You’re probably wondering what this means and whether I have a secret woo side (I don’t).

I cannot explain how this works, it just does.

For example:  If you set up an automatic tithing of 10% of your annual income to a charity, your income will grow to make up for the original dollar amount and then some.

If you invest your time working with a charitable organization, you will likely position yourself to meet someone who will help your business grow.

This is just the universe’s way of taking care of people who consistently give back. Or maybe it’s a subconscious motivator to take opportunities and making more money.

If you don’t give back, the place where you live or work may not be as successful as it could be.  Since a rising tide lifts all boats, a strong community will benefit your business in many, many ways.

That’s why all employees at Bellatrix PC have charities that they pick to support as part of their job. We support several causes built-in to our business model. To learn more, click here.

Personal Growth

Where will your business be three years from now?  How will it get there?  You may be the perfect leader for your business right now, but if you don’t focus on your own growth, you will not be the person to lead your business in the future.

Life moves fast and business moves even faster.  Join a mastermind group of entrepreneurs who stay on the cutting edge.  They will help you with ideas and encouragement but more importantly, they will keep you growing.

These seven things are probably low on your list of priorities but they shouldn’t be.  Use this article as a check list and make sure you cross them off each year.  Doing this may not seem like a good use of your time but, in the long run, each of these activities will contribute to your success. For questions about a possible case having to do with your business or even real estate, contact our attorneys today.

Does It Matter If I Have An Employee Handbook?

4 Good Reasons To Have An Employee HandbookIt shouldn’t surprise you that an employment lawyer will advise you to have an employee handbook.

But it may surprise you is that I would rather you have no handbook than one you write yourself.

Why would I say that?

Well, a handbook is an important legal document in lawsuits and labor audits. If you have non-compliant policies, it can create presumed liability automatically. In other words, non-compliant policies are like an admission of guilt.

In some cases, no written policies (for example, with respect to certain breaks, required notices, and pay policies) can also create a presumption of guilt. But non-compliant policies are a greater danger.

By far, my recommendation is that you have a lawyer-drafted, compliant employee handbook. Here is a short video on four good reasons why:

So now you know why you should have an employee handbook. Is downloading one off of an internet resource good enough?

NO! Employment laws are complex and numerous. Boilerplate employee handbooks often have provisions that sound reasonable to you as the employer, but are in fact illegal in some jurisdictions or may mislead you into doing something illegal.

I write several handbooks a year. I have never found a good template off a website (and I have tried several). I ended up creating my own template and checklist for management decisions. (You can choose different policies depending on how you want to run your business, and I advise on the financial, business and legal implications of those decisions as part of the drafting process.)

An employee handbook is a 50 page legal document that you should not attempt to DIY. Call a pro. And keep it updated!

Video Transcript:

Does it matter if I have an employee handbook?

“Does it matter if I have an employee handbook?” Yes! Here are four good reasons why. 1. A handbook teaches your managers and your employees the proper and legal way to do things. It’s not always commonsense. 2. A handbook empowers you to politely tell an employee “No” to a special request because it is against policy. This keeps everything fair. 3. A handbook can be used to defend you, should an employee lie about a situation to a court or governmental agency. 4. Employers are required to provide certain notices in writing to their employees, and a handbook is a good way to do it. Failure to provide these notices can result in lawsuits, fines and even criminal penalties. So yes, a handbook is essential and it should be reviewed by an employment lawyer annually. Does your business need employment law help? Visit us at bellatrixlaw.com to apply for our Employer Protection services.

You can find the full video on Employee Handbooks on YouTube.

A Comparison of Buying vs. Leasing a Car

yellow porche and leasing a carI hear a lot that businessowners should lease cars for tax purposes. The tax treatments of leased versus owned cars for businesses and entrepreneurs is, unsurprisingly, confusing. I’m not a tax expert, even though taxes touch everything I do as an entreprenuer. But here’s a link to the best explanation I could find on how the deductions work, by an actual tax expert (or so she says… I don’t personally know her). She basically recommends buying over leasing.

The other day, I counted and learned that I have owned 10 cars and leased 1. I far prefer to buy (even though my lease was my best car ever). Like most Libertarians, I like tangible assets and don’t trust banks. But there are some definite perks to leasing.

The conclusion I made after going through more than a dozen car transactions in my life (I also help family members buy cars) is that buying is more financially sound but also more austere. A friend of mine recently said that he wanted a Tesla (and test drove one) but paid down his mortgage instead. He said “future me will appreciate that decision more than current me.” That’s what the buy vs. lease decision boils down to: you have to balance future and current happiness factors.

Advantages to Leasing

  1. No depreciation

For most people, buying a new car stands as the second largest financial decision they make.  Only the purchase of a home tends to rank higher than buying a car. The bottom line is that new cars do depreciate instantly once they are driven off the lot; this fact is not a myth. Opting to buy a used car to avoid depreciation may be a savvy financial decision, but is not nearly as much fun. Leasing negates this issue.

  1. No worries about maintenance

You don’t have to worry about maintenance when you lease a car (well, some contracts have you pay for oil changes and tires). There’s definitely a pampered feeling when you go to the dealer and drop the car off and they give you a loaner of some really high-end car — it’s a different experience than my normal Jiffy Lube run. And the car is under warranty the whole time. When the warranty runs out, poof, new car time.

  1. Always have a new car

Do you love the look, smell and feel of a brand new car? With leasing, you’ll never have to worry about driving a car that feels outdated. This also means you’ll always be able to benefit from the newest safety features and technological innovations.

  1. Change cars as your needs in life change

The one time I leased, I did so because I wanted a big firm lawyer car without the long term commitment. I planned someday to have a family, and so my sporty little Mercedes wasn’t going to cut it. Three years was the perfect amount of time to enjoy it. By then, I got a sporty husband and a sporty dog, and a truck became necessary.

With leasing, you don’t have to worry about making a huge mistake by picking the wrong make or model. If you end up selecting a car that you don’t like for one reason or another, your lease will simply run out and you will not be stuck with the car.

Advantages to Buying

  1. No mileage restrictions

Regardless of whether you opt for a new car or used car, the bottom line is that mileage matters.  If you know that you will be driving your car many miles on an annual basis, then buying is likely to be the superior option.

Leases have mile restrictions, which tend to be 9000, 12,000 or 15,000 miles a year. They charge overage if you go over these amounts. This factor can quickly turn leasing into a losing proposition.

2.  Free yourself from car payments

If you are hoping to some day be without a car payment, then buying is the way to go. I haven’t had a car payment (or a mortgage payment) for years and that gives me a lot of happiness. I highly recommend it.

  1. No wear and tear fees

Leasing can be stressful if you are prone to accidents or you want to put a spoiler or racing stripes on your car. If you spill your coffee or degrade the inside of the car, you’ll be charged fees to clean it up. That’s why people with small children or pets should probably buy. You can also be charged high fees for small dings and dents in your vehicle.

In the end, both options have their advantages, and the right pick depends on your needs, lifestyle and financial goals. If you do decide to lease, be sure to read the fine print in your contract to make sure you thoroughly understand the terms.