Compare your current Payroll and HR services with ManagePAY’s options. FREE QUOTE

Nepotism: Treating Related Employees Fairly

The dangers of nepotism are this:

  • When a supervisor has authority over an employee who is a relative or with whom he or she is romantically involved with, it can create dissatisfaction among co-workers.
  • It can lead to charges of favoritism and to complaints of unlawful employment discrimination and sexual harassment.
  • Similar complaints can arise when two employees in the same department, or working together on the same team, are relatives or are romantically involved.
  • The result can be lowered quality, lowered productivity, legal expenses, and damage to the employer’s interests.

Sample Nepotism Policy #1

Our company hires qualified relatives of employees if the employment does not create an actual or perceived conflict of interest. No relatives will work together in a supervisory/subordinate role or as coworkers in the same department. For purposes of this policy, “relative” means any individual related to an employee or to the employee’s spouse by blood or by law.

Sample Nepotism Policy #2

Our company does not employ relatives of employees. In addition, our company prohibits dating and romantic involvement between supervisors and individuals they supervise, and between employees working in the same department or on the same work team.

For purposes of this policy, “relatives” means the following persons related to an employee by blood or by law: A spouse, child, parent, brother, sister, aunt, uncle, grandchild, grandparent, son-in-law, daughter-in-law. Also, for purposes of this policy, “relative” means a domestic partner, that is an individual with whom an employee is cohabiting. It also means the following persons related to the domestic partner by blood or by law: A spouse, child, parent, brother, sister, aunt, uncle, grandchild, grandparent, son-in-law, daughter-in-law.

When employees working in the same department become romantically involved, begin cohabiting, or marry, management will first attempt to offer comparable employment in another department to one of the individuals. If comparable employment is not available, management will terminate one of the employees.

The employees involved will be offered the opportunity, together, to decide which employee will move to another department, or which employee will be terminated. If the two employees together cannot reach a decision on the job move or on the termination, management will make the decision based on the best business-related interests of the company.

Employees who initiate a romantic involvement, who initiate cohabiting, or who marry while working for the company are treated according to the guidelines in this policy.

A part-time employee, hired for a period of less than six workdays in a three-month period, is not subject to this policy.

Narrowly defined, nepotism is showing favoritism to relatives. Broadly defined in the workplace, nepotism is giving jobs to and showing favoritism to relatives and to a coworker with whom one is romantically involved or living with.

Here are just two examples of problem situations which can occur when closely related individuals are employed in the same workplace or department.

1. If one relative is accused of wrongdoing, can the employer be confident of getting an unbiased statement from the relative who is a witness?

2. If the employer has to discipline one relative, will the other relative show animosity and engage in negative behaviors in the workplace?

So, what should an employer do? Some employers adopt policies which prohibit or limit:

  • Employment of relatives.
  • Dating or romantic involvement between supervisors and employees they supervise
  • Romantic relationships between co-workers in the same department or working on the same team.

However, some states and some localities prohibit or have limitations on such policies. Such a policy may also be illegal if, in a workplace, it is used to limit the job opportunities and advancement for women or other protected classes.

What to Do Before Adopting a Nepotism Policy…

If you’re reviewing or drafting a policy on nepotism keep these things in mind:

  • Make sure your policy doesn’t discriminate against a protected class. Know how your state and local law treats the hiring of relatives and bans on dating among coworkers. Some states and localities have laws banning discrimination based on marital status. Whether or not your policy might violate this type of law could depend on how the law defines marital status.
  • Define relative in your policy. Some definitions are quite broad and include aunts, uncles and cousins. Other definitions are narrow and limit relative just to spouse and child.
  • Will your policy prohibit the hiring of relatives and romantic relationships to just certain instances or situations, such as supervisor-subordinate relationships? For example, some employers prohibit the hiring or relatives if one will supervise the other, or if one relative pays the company’s bills and the other balances the checkbooks.
  • If two employees become romantically involved, or if they begin co-habiting or marry, do you want to offer one of the individuals alternate employment?
  • Rather than put a ban on employment of relatives, and romantic involvement between employees, do you want to adopt a simple policy making supervisors responsible for using good judgment and impartiality when they supervise relatives?
  • Will you permit employment of relatives, and persons romantically involved with employees, for temporary employment of limited duration?
  • Will you be able to show you have a business-related reason and a business necessity for adopting your policy?





brought to you by ManagedPAY 2020
[NOTE: Information and guidance in this story is intended to provide accurate and helpful information on the subjects covered. It is not intended to provide a legal service for readers’ individual needs. For legal guidance in your specific situations, always consult with an attorney who is familiar with employment law and labor issues.]

Secure File Send

Select which division to send your files.

HRO Division

Send Files

Payroll Division

Send Files