When relatives work for the same employer, the potential for favoritism (nepotism) and conflicts of interest exists, especially when one relative has a supervisory role over the other. Whether favoritism toward a family member is real or perceived, it can have a negative impact on working relationships and morale. To help prevent nepotism, some employers develop a written policy.

Here are some guidelines to consider when adopting an anti-nepotism policy:

#1: State laws.

Many states prohibit employers from discriminating against applicants and employees based on their marital and/or family status. In these states, a blanket policy that bars any relative of an employee from working with the company may violate state law. Draft your policy carefully and ensure it isn't overly broad. For example, some employers limit the policy to situations in which an employee would have control over a family member's employment (such as hiring, promotion, and termination decisions), work responsibilities, performance evaluations, or compensation. Focus on preserving the integrity of employment-related decisions, maintaining a productive and fair work environment, and preventing conflicts of interest.

#2: Define who is covered.

Most anti-nepotism policies define family member broadly. Some include not only spouses/domestic partners, parents, siblings, and children, but also household members, grandchildren, aunts, uncles, nieces, nephews, cousins, and in-laws. Some policies also cover other close personal relationships, such as individuals in a romantic relationship, where there is a suggestion of a conflict in the employment relationship.

#3: Follow standard hiring procedures.

Ensure all applicants, including family members of employees, undergo the same screening and selection procedures. For example, if an employee recommends a family member for an open position, direct the family member to apply using the company's standard procedures. Note: Employee referrals should be just one part of a diversified recruiting effort. Exclusive reliance on employee referrals may create a barrier to equal employment opportunity for groups that are not already represented in the employer's workforce.

#4: Address family changes.

Consider whether you will require employees to report when family changes may result in a conflict of interest, such as two employees who marry. If employees are required to report the change in family status, let employees know how they should notify the company. With notice, the company can work with the employees to help avoid nepotism (see the Avoid Conflicts section below).

#5: Avoid conflicts.

If you have employees covered by your anti-nepotism policy, such as two relatives in the same chain of command, evaluate options that may resolve the conflict. For example, supervision, evaluation, and discipline responsibilities for one of the employees could be transferred to another supervisor, or you may consider transferring one of the employees to a different department. Make sure your decisions are based on nondiscriminatory reasons and consider consulting both employees for input on how best to resolve a potential conflict.

#6: Enforce consistently.

As with any other policy, enforce your anti-nepotism policy consistently. Upper management and/or human resources should review hiring decisions involving family members to ensure compliance with company policy and applicable nondiscrimination laws. Additionally, train supervisors on your policy, including how to handle potential cases of nepotism.

#7: Lead by example.

Many small business owners employ their own family members. In these situations, the business owner may be able to help avoid the perception of nepotism by holding their family members to high performance and conduct standards, ensuring they follow the same rules as other employees, and staying out of decisions affecting their family members as much as possible.

Conclusion:

An effective anti-nepotism policy can help employers avoid perceptions of favoritism. Additionally, make sure all hiring, promotion, compensation, and other employment decisions are based on objective factors, including an individual's qualifications, ability, and performance.