Employment of relatives (nepotism) policy template for hiring

An employment of relatives (nepotism) policy says who counts as a relative or close personal relationship, whether relatives may be hired, and the rule that matters most in hiring: no one interviews, scores, decides on, supervises or sets pay for a relative. It also covers what must be disclosed and when, how employees may refer relatives, and what happens when two employees later marry. Below is a copy-ready template with [bracketed] fields and the state marital status rules that limit it, as of October 2026.

This is the standing policy. For handling an internal candidate you already know, see interviewing internal candidates; for recording a conflict in the file a committee reviews, see the hiring committee packet.

What should the policy cover?

The employment of relatives policy template

Copy it into your own document and replace everything in square brackets.

EMPLOYMENT OF RELATIVES AND PERSONAL RELATIONSHIPS POLICY
[Organization]     Version [x]     Effective [date]
Owner: [name, role]     Legal review: [date]     Next review: [date]

1. PURPOSE
1.1 [Organization] hires on merit. This policy keeps family and close
    personal relationships out of hiring, pay, supervision and
    performance decisions, without excluding qualified people
    because of who they are related to or married to.

2. WHO THIS POLICY COVERS
2.1 "Relative" means: spouse or domestic partner; parent, child,
    sibling, grandparent, grandchild, aunt, uncle, niece, nephew,
    [first cousin]; the same relationships by marriage, adoption or
    step-relationship; and anyone living in the same household.
2.2 "Close personal relationship" means a romantic or sexual
    relationship, [a close friendship], or a financial relationship
    such as a shared business, that could reasonably affect
    someone's judgment.
2.3 The policy applies to employees, [contractors, agency workers]
    and anyone who interviews for [Organization].

3. HIRING RELATIVES
3.1 Relatives of employees may apply and are assessed through the
    same process, questions and scorecard as every other candidate.
3.2 [A relative may not be hired into a position where section 4
    would be breached and cannot be fixed by changing a reporting
    line.]
3.3 The application asks every candidate: "Do you have a relative or
    close personal relationship with anyone who works at
    [Organization]? If yes, give their name." No other questions
    about marital or family status are asked.

4. RECUSAL AND REPORTING LINES
4.1 No employee may take part in hiring a relative or someone with
    whom they have a close personal relationship. This includes
    writing the job requirements for them, screening, interviewing,
    scoring, attending the debrief, deciding, approving the offer
    and setting pay.
4.2 An interviewer who discovers a relationship with a candidate
    tells [the recruiter] before the interview, or as soon as they
    realize. The recruiter replaces them and notes the recusal.
4.3 No employee may supervise, approve the pay, promotion, schedule
    or expenses of, or audit the work of, a relative or someone
    with whom they have a close personal relationship.
4.4 [Relatives may not work in the same [team / department] where
    [safety / security / confidentiality] requires separation.]

5. DISCLOSURE
5.1 Employees disclose to [HR] any relationship covered by this
    policy with a candidate, a new hire or a colleague within [30]
    days, or before taking part in any decision covered by section 4.
5.2 Disclosures are kept confidential and shared only with those who
    need them to apply this policy.

6. REFERRALS
6.1 Employees may refer relatives. The referring employee has no
    further role in the process.
6.2 [Referral bonuses are not paid for referring a relative.]

7. WHEN A RELATIONSHIP STARTS DURING EMPLOYMENT
7.1 If two employees marry or begin a relationship covered by this
    policy and section 4.3 is breached, [HR] meets both within [30]
    days to agree a change: a new reporting line, a transfer, or
    a change of duties.
7.2 Who moves is decided by [the employees' preference / business
    need / an open role either can fill], never by sex.
7.3 If no change is possible, [the employees choose who will
    leave / other outcome], with [x] days to decide.

8. BREACHES
8.1 Failing to disclose or to recuse is a breach of this policy and
    may lead to disciplinary action. Decisions made in breach are
    reviewed and may be retaken by someone else.

9. REVIEW
9.1 [Owner] reviews this policy every [12] months.

How do marital status laws limit the policy?

Federal law does not list marital status among the protected characteristics in Title VII, but several states do, and a policy that turns on being married rather than on supervision and conflicts can run into them. Examples:

Public employers are a separate case. Federal agencies are bound by 5 U.S.C. § 3110, which bars a public official from appointing, employing, promoting or advocating for a relative in their agency, with a long list of covered relationships. State and local public employers may have their own nepotism statutes; check the one that applies.

How should recusal work in a real hiring process?

Recusal fails at the edges: a hiring manager who steps out of the interview but still "has a quick word" with the panel, or a relative who attends the debrief as an observer. Make it mechanical:

• Ask before the loop is built. When the recruiter sends the interview plan, each interviewer confirms they have no relationship with the candidate. One line in the invite is enough.
• Replace, do not reduce. A recused interviewer is replaced with someone who covers the same competencies, so the candidate gets the same assessment as everyone else.
• Keep feedback independent. Scores are submitted before the debrief, as described in independent interview feedback, so a related colleague cannot shape the room.
• Record it. The recusal goes in the hiring file, which is what shows later that the process was clean. A committee packet has a conflict note for this purpose.

The same rule belongs in the standard every interviewer signs; see the interviewer code of conduct. For interviewing a friend, former colleague or acquaintance rather than a relative, see how to interview someone you know.

Should employees be allowed to refer relatives?

Usually yes, with the referring employee out of the process. The risk is in volume rather than in any one hire: the EEOC's guidance on prohibited practices gives the example of an employer whose mostly Hispanic workforce recruits by word of mouth: that may violate the law if the result is that almost all new hires are Hispanic. The same logic applies to any group. Keep relative referrals in the same pipeline as everyone else, keep advertising roles openly, and check who your referrals actually bring in. Clause 6.2 also lets you decline to pay referral bonuses for relatives, so there is no incentive to fill teams from one family. The rest of the referral rules are in the employee referral program template, and the bias it guards against is covered in affinity bias in hiring.

What happens when two employees later marry?

Most of the time, nothing, because they do not work in the same chain. When one supervises or approves the other, clause 7 gives a short, predictable path: disclose, meet HR, change the reporting line or duties, and only if nothing else works, ask the couple to decide who leaves. The neutral rule in clause 7.2 matters. Title VII bars sex discrimination, and a habit of always moving the wife, or always the lower-paid spouse when that is usually the woman, invites a claim that a separation rule never needed to create.

How do you use this template?

1. Choose the definitions in section 2 and keep them the same in your conflict of interest policy, if you have one.
2. Add the clause 3.3 question to the application, and remove any question about marital status, spouse's name or spouse's employer.
3. Add a conflict confirmation to interview invitations and to the debrief agenda.
4. Brief hiring managers that recusal covers drafting the requirements and setting pay, not only the interview.
5. Check each state where you employ people against the table above and with counsel.