Owning a business with employees can be incredibly challenging. It often means figuring out a way to work productively with many different personality styles and maintaining harmony across an organization. Certainly, this is no small task, which is why the increasing number of employment-related lawsuits can be concerning to many business owners.
Employers operating today face a nearly 12 percent chance of going through an employment-related lawsuit. While there is no way to eliminate the risk of being sued by a current or former employee, understanding the common problem areas is often the best way to ensure that your policies and procedures are structured and carried out in a way that minimizes your risk. Here is a look at the top 11 ways that employers can cause lawsuits.
Violating Wage and Hour Laws: Employees can seek damages if there is any violation of a federal, state, or local wage and hour law. Examples of this include instances of unequal pay for men and women, a failure to pay minimum wage or overtime, or the misclassification of exempt/non-exempt employees, failure to take required meals and breaks, or those who may be misclassified as independent contractors versus employees. In many instances, these violations are not deliberate but stem from not familiarizing yourself enough with all applicable laws.
Asking the Wrong Interview Questions: Asking questions about any protected status (such as race, gender, religion, etc.) before employment is not permitted. Employers may also not ask a pregnant woman if she is pregnant and when she is due. These topics should not be considered when determining the qualifications of the individual for the position. Training provided by an HR services specialist will prepare your team to avoid costly mistakes.
Discrimination: Federal and many state discrimination laws require that employers not discriminate against workers based on sex, race, religion, color, national origin, age, disability, pregnancy, gender identify, as well as a slew of other protective categories. These are protected classes, and employers may not legally harass, retaliate, take discriminatory employment action (such as refuse to promote someone based on their status in a protected class), or wrongfully terminate anyone in these groups due to their status. Again, blatant versus unintential actions may still cause legal action to be taken against a company regardless of intent.
Not Following Company Policy: Having sound company policies is excellent, but it is also important to ensure that all employees are following these policies and procedures and not inadvertedly placing the comapny at risk by violating these policies. Presenting a policy manual is no defense if an employee can prove that the policy was violated. Therefore, training, monitoring and addressing violations are just as critical.
Impulsive Reactions: When a workplace policy has been violated, or an employee has done something wrong, it can be easy to react impulsively and emotionally. But these reactions often lead to overly harsh discipline. Disciplinary actions taken should be fully investigated (the employee should have an opportunity to tell their side of the story), assessed by HR for leagla risk, and documented very well. and
Firing without Justification: Employers who decide to fire an individual must document the employee’s deficiencies adequately. Ideally, there should also be an internal review process to ensure that all termination activities are adequately supported and documented.
Misrepresenting Performance: For many business owners or managers, their weakness is kindness. This trait can often cause them to paint a rosier picture of an employee’s performance than is actually the case. Unfortunately, if that employee must later be terminated, the past performance reviews will fail to justify their claim and may open the door for a wrongful termination claim – even though the ocmpany was justited. This is yet another reason why proper trail of documentation and evidence is critical to paint an entirely consistent story
Mishandling Medical or other Leaves of Absences: Employees are legally entitled to several types of leaves. Employees with disabilities have additional protections under the ADA. Employers must thoroughly understand the Family and Medical Leave Act, the Americans with Disabilities Act, Pregnancy leaves, workers’ compensation laws, military and a slew of other federal and state-required and mandated leaves to ensure that companies are complying with all legal guidelines when an employee requests a leave.
Retaliation: An employee that complains a lot or makes the workplace unpleasant for those around them can drain you of all energy quickly. It may seem fair to ‘even the playing field’ by making their day a bit more challenging in response. But retaliation in any form is often a violation of multiple labor laws. Employers cannot take adverse actions against any employee out of spite, due to a grudge, or for asserting their workplace rights – especially if the comaplints made were regarding compensation, safety, discrimination, harassment, retaliation or other protected issues
Improper Handling of a Complaint: When an employee makes a complaint – no matter how baseless it may initially seem – the employer must thoroghly investigate the complaint and document the company’s response. If thecomplaint is stemming from discrimination, the Equal Employment Opportunity Commission may become involved, requiring a company to provide documentation about its investigation and post-investigationcommunication effortsactions. Worse yet, the comapny may have to defend itself against an indepth investigation by the EEOC or other federal or state agencies.
The threat of litigation is high for many employers, but prevention efforts can serve as a strong defense. Employers should follow all proper procedures for actions that span an employee’s life cycle that include hiring, training, promotions, performance managmemt, compensation, leaves, benefits, safety, and termination to name a few.g. Companies should also take caution to document everything carefully and correctly. It is important to remember that these documents may serve as the only record a company can use to defend itself against actual or false claims. Proper preparation and policies may not eliminate risk of being sued, but it can mitigate the amount of time and expenses that will need to be used in defending and the actions of certain employees or the company as a whole.
CA HR Services specializes in working with small and medium-sized companies to help develop legal, efficient and appropriate HR processes and procedures that meet state and federal labor law requirements. Contact us today for your human resource needs 858-228-5535.