Recently, a business owner asked me if it is illegal to hire relatives to work in his company.  I replied, “No, but sometimes it is.” Confused, he continued, “A few of the people who already work here are related to other employees, but should I establish a policy prohibiting nepotism?”  My response was, “Yes, but maybe not in the way you think.”  There is no easy answer to the question of how to handle nepotism in the workplace.  Employers must strike a balance in their policies and practices to avoid pitfalls on both sides of the issue.

During these tough economic times, many employers understandably want to help struggling family members by offering them employment opportunities.  Generally, in the private sector, nepotism – which most people understand to mean favoritism directed toward relatives regardless of merit – is not illegal.  Therefore, no one has a legal cause of action against…