By Maisha Shaw and Pam Nehring

With more than 100,000 new veteran hires in the past year, American businesses are striving to lower the high unemployment rate of returning veterans. But with the unemployment rate for the most recently returned group of veterans at 10 percent as of October 2012—higher than any other veteran group and the national unemployment rate of 7.9 percent—hiring initiatives such as the White House’s "Joining Forces" campaign hold great promise in returning veterans to the workforce.

Now is a critical time for businesses to hire veterans, but private employers need to consider both the legal benefits and challenges associated with hiring veterans.

Employers benefit from hiring veterans in a number of ways, including tax credits. President Obama’s 2011 Returning Heroes and Wounded Warrior Tax Credits, set to expire at the end of 2012, allow businesses to receive $2,400 to $9,600 per veteran hire, depending on the veteran’s circumstances.

Under the Returning Heroes Tax Credit, business receive a $2,400 per veteran tax credit for hiring veterans who have been unemployed for four weeks or longer and a $5,600 per veteran tax credit for veterans who have been unemployed for more than six months.

The Wounded Warriors Tax Credit allows businesses to receive up to $9,600 per disabled veteran hired if the veteran was unemployed longer than six months and has a service-related injury.

While these tax credits are set to expire at the end of this year, a new bill passed by the U.S. Senate Committee on Finance calls on congress to extend the time for which employers can receive a tax benefit for hiring veterans. The Family and Business Tax Cut Certainty Act of 2012 is currently before the full Senate for consideration and would extend these tax credits through 2013 if passed by congress.

While employment laws provide some great incentives, private employers should beware of potential legal pitfalls in the hiring process, such as avoiding preferential treatment to veterans, averting discrimination claims based on disabilities and making reasonable accommodations.

Every business should recognize that private employers generally cannot show preference in the hiring of veterans, although there are exceptions. Title VII of the Civil Rights Act prohibits preference to veterans as unlawfully discriminatory due to the potential disparate impact on female applicants. This is a result of the longstanding federal statutes, regulations and policies that have excluded women or limited women’s eligibility to serve in the armed forces. Consequently, preference in hiring veterans tends to operate to the advantage of men.

There are exceptions to this rule. If the right to veterans preference is created by a federal, state, territorial or local law—as in the states of Washington and Minnesota—private employers can show preference to veterans in their hiring upon meeting certain criteria.

Once a company has chosen to target veterans for recruitment, employers have many platforms to publicize a position. Companies have long recruited employees through traditional channels such as advertising in print and online, job fairs and through industry organizations. But with the social media explosion, employers have increasingly been turning to social media platforms to attract highly qualified veteran job applicants.

By utilizing Facebook, LinkedIn and other social media sites, employers make it significantly easier for applicants to find aggregated information about careers, employment opportunities and job fairs in one site. For many applicants, social media job posts are much more accessible and user friendly than traditional recruiting channels.

While social media is gaining strength as a recruitment technique, employers should be cautious to avoid discrimination claims. Social media profiles, especially Facebook, disclose personal information that a prospective employer should not consider in a hiring decision.

For example, a Facebook page may contain pictures or information about a candidate’s race, gender, religion, national origin or disability. If a potential candidate subscribes to an employer’s page by "liking" it, then the employer would have the ability to view that individual’s Facebook profile, including personal information that would otherwise be protected. This could give rise to a "failure to hire claim" if the candidate could demonstrate that personal information on his or her Facebook page was a factor in the potential employer’s rejection of the candidate’s application.

One effective way to avoid social media-related "failure to hire" claims is to assign different individuals to manage the social media page from those making the hiring decisions. That way, those who are making hiring decisions do not have access to potentially protected information about applicants.

Additionally, when crafting the job description, employers should thoroughly describe the position and qualifications to avoid discrimination claims. Employers must comply with the Americans with Disabilities Act, which prohibits discrimination against individuals with disabilities. Since the ADA requires that an individual with a disability’s qualifications be evaluated in relation to the job’s essential functions, the job description should explicitly note if a position calls for physical activities.

Employers may not ask disability-related questions until a job offer has been made, but employers can ask about an applicant’s ability to perform specific job functions, qualifications and skills.

In the application process, employers have an obligation to make reasonable accommodations to enable applicants with disabilities to apply for jobs and participate in the interview process. Additionally, an employer must also be aware that if an individual with known physical or mental limitations is hired, the employer is required to provide reasonable accommodations to that employee. As a result, employers may require medical information, once a job offer has been made, to substantiate the employee’s need for a reasonable accommodation.

An employer is not required to provide accommodations if it would create an undue hardship on the operation of the business due to significant difficulty or expense; nor is it required to reassign essential job functions as a reasonable accommodation.

After an employer has made a hire, federal law requires employers to retain personnel and employment records pertaining to hiring of applicants for one year from the date the record was made.

If a discrimination charge or action has been made against an employer under Title VII or the Americans with Disabilities Act, the records should be preserved until the final disposition of the charge or action. State laws may also impose additional record retention requirements.

For further resources about hiring veterans, visit the U.S. Department of Labor’s website, www.AmericasHeroesatWork.gov, which offers the information and tools that employers need when hiring veterans.

For further information about veterans employment issues, contact Maisha Shaw at mshaw@daleymohan.com or Pamela Nehring at pnehring@daleymohan.com.