HR Glossary
Business Necessity

Business Necessity

Updated on:
August 23, 2022


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Table of Content

What is a Business Necessity?


Business necessities are the items a company needs to run its day-to-day operations. Business necessities include office supplies, cleaning supplies, furniture, equipment, technology, and vehicles.

A company needs business necessities to operate. These assets are essential for employees to perform their jobs. For example, a company needs office supplies, such as pens, pencils, paper, and envelopes, to perform the tasks that are necessary to running a business.

Businesses must meet three responsibilities under the law:

1. Produce documents that accurately describe transactions

2. Provide sufficient information for the buyer to make an informed purchase

3. Wait a reasonable amount of time for the buyer to make a payment

Examples of business necessities include:

* An employer may refuse to pay overtime wages to an employee because the employer needs the employee's services during a particular time.

* A worker may be denied a promotion or even termination because the employer needs the worker's services during a particular time.

* An employee may be denied access to company property because the employer needs the employee's services during a particular time.

What Are Examples of a Business Necessity?

Business necessity practices are quite common today. The following are some examples of hiring practices that could be protected by business necessity:

  • Educational requirements. Many job listings mention a minimum requirement for completed education. For example, physician and doctor’s positions require applicants to complete an advanced medical school degree, which excludes a large number of people.
  • Experiential requirements. Companies may also require job applicants to have a certain number of years of experience in a similar field. This ensures that applicants are properly prepared for the tasks that will be assigned to them. However, this also negatively affects the chances of a large number of potential applicants. 
  • Travel requirements. Some jobs require employees to travel long distances frequently throughout the year. If that’s the case, they may look for someone with good enough health to make those travel commitments. This may affect the chances of some candidates’ eligibility for the job.