Lesson Last Updated: July 23, 2024

Lesson Highlights

Working interviews and skill assessments are utilized in many career fields that require technical skills, bedside manner, or other aptitudes that can’t be captured clearly through traditional interview techniques. Unfortunately, while legal, these are high risk areas that come with drawbacks. 

In this lesson, we discuss:

• The difference between a working interview and a skills assessment; and
• Payment obligations for either; and
• Additional information to be aware of before using either option.

How a Working Interview Differs From a Skills Assessment

A working interview is an interview technique that allows employers to evaluate a candidate’s skills and fit through hands-on experience. As the name suggests, the employer is able to do this by putting the candidate to work. Typically, this means asking the candidate to complete tasks or projects relevant to the position they are applying for. These tasks are completed in real scenarios, not hypothetical situations, and this means that the candidate literally works for, or alongside, the employer and is then evaluated based on their performance. 

An example of a working interview could include:

• Asking a prospective server to wait on a handful of tables at your restaurant; 
• Asking a prospective administrative assistant can field client calls for an hour or two; or even
• Asking a dental hygienist to come in and brush a few clients’ teeth! 

As you can see from all of these examples, the employer may be receiving an economic benefit here because their business is functioning in part thanks to the temporary efforts of the candidate.

A skills assessment, on the other hand, is hypothetical-based. It does not involve “real” work but instead is more like a role playing exercise, and can be performed either in-person or remotely. Similar to a working interview, the employer is able to evaluate the candidate’s skills and fit, but through an exercise that does not involve the actual clients/customers of the employer, which means there’s no plausible economic benefit derived from the assessment by the employer. This is the key difference between a skills assessment and a working interview!

Both techniques are legal in California, but one is more onerous than the other to use, so get comfortable and keep reading for the breakdown! 

Your Payment Obligations

In California, anyone working for an employer, even in an interview setting, must be compensated for their time and effort. This is why it’s important to understand that a working interview is considered “work” for the employer. Because the candidate is given real tasks within the workplace, they must be compensated at least the minimum wage for all time spent within the interview. 

However, because skills interviews are not considered “working” for the employer (remember, they’re hypothetical situations that the employer derives no economic benefit from), they are not required to be paid for. 

So with that in mind, let’s pretend you decide to ask a candidate to come in for a working interview. How do you classify them for payment purposes? Our recommendation will always be to pay them as a temporary employee, not an independent contractor. If you’re interviewing them to hire them as an employee, then an independent contractor classification here does not make sense, legally speaking. We get it, it’s just easier to cut them a check and not have to deal with the taxes, but this is almost certainly out of compliance. And you’re reading this because you want to stay in compliance, right? Right!

If the employer is a nonprofit organization, it may be appealing to classify the candidate as a volunteer during the working interview. However, keep in mind that volunteers are only true volunteers if there is no promise of economic benefits to the volunteer, and if there’s a job on the horizon for them, this may not be the case. Speak to an attorney before doing this, and proceed with caution. 

With a skills assessment, it may still be wise to pay the candidate, but the general consensus among legal/HR professionals is that if the employer isn’t deriving an economic benefit, this can be unpaid (just like a regular interview without any special assessment would be). If you are extremely risk averse and you have the funds to do so, consider this and speak with your attorney to talk through the specifics of the skills assessment!

Other Important Information 

If you decide to move forward with a working interview, take note of the following important information:

• Communication and clarity is as important here as it is with any other type of employee, temporary or not. Make sure you have some sort of written documentation outline the nature of the working interview, how long it will take, how much they will be paid, that they will be classified as temporary/provisional and they are not being offered a permanent position (nor is one guaranteed by completing the interview), etc. Have them sign an acknowledgement form confirming they understand these terms before the interview is scheduled. 
• Legally required documentation is also important here! Talk to your CPA about which tax forms are required here (most likely a W-4) and ensure that the candidate completes an I-9 prior to the interview’s start (this would be a good time to visit our lesson about I-9 verification!). If your industry requires background checks, you’ll likely need to perform one in compliance with applicable laws. 
• Keep in mind that because they’re being “hired” for even a short amount of time, this can have an effect on your employer payroll tax rate. If the candidate files for unemployment in the near future, they will technically have to report you to the EDD as an employer. Unemployment tax is generally tied to the applicant’s wages during the preceding year, taking into account every job they’ve held; it does not matter that they only worked for you for a single day. That being said, the shorter the period the person is employed by an employer, the lower the amount they will draw from your unemployment account, which means your tax rate may not increase by very much. Just be aware!
• The candidate potentially also has protection and rights under the Fair Employment and Housing Act, harassment prevention laws, workplace safety laws, etc. So make sure your workplace is in order and everyone acts professionally.
• Be ready to pay them at the end of the interview for all hours actually worked. If you told them in advance that the interview would take three (3) hours but it actually took four (4), you need to pay them for four (4) hours. And if you said three (3) hours but it actually took two (2), you need to pay them for three (3) hours unless the document outlining the nature of the interview specifically said that it may take less time than estimated and they will be paid for actual time spent in the interview.

And for both working interviews and skills assessments, keep the following in mind:

• Be consistent in how you evaluate skills. Establish objective evaluation criteria and use them consistently for all candidates for the same role. If you fail to do this, there could be a discrimination claim in the making by any rebuffed candidate!
• Relatedly, assess whether your evaluation procedures are biased against any protected group. If so, determine whether there is an equally effective evaluation procedure that has less adverse impact and do that instead.
• Be prepared to make reasonable accommodations for people with disabilities or relevant religious/spiritual beliefs. For example, if you want to conduct the skills assessment on a Friday evening but a candidate’s religion prohibits work after sundown on Fridays, it may be appropriate to schedule the assessment at a later date. 
• Ensure that your evaluation procedures are job-related and appropriate for your purposes. For example, a proofreading test might be appropriate for a social media manager, but it would not be a relevant test for an electrician.
• Make sure whoever is administering the interview/assessment is trained appropriately to do so, and that they understand everything we’ve described here!