Employment law only becomes more complex with time, posing significant challenges for business owners. Even if you have good intentions, mistakes are inevitable without legal counsel. Between lawsuits, regulatory penalties, and reputational damage, you can’t afford to slip up. Nothing about employment law is self-explanatory, and if you don’t know the law, there’s a chance you might do something wrong.
Here are 5 of the most common mistakes that can be avoided with the help of an employment attorney.
1. Vague handbooks and contracts
Although many employees don’t read their handbooks, it’s your responsibility to ensure your documentation clearly outlines company policies, procedures, and what you expect from employees. A well-crafted employee handbook can work in your favor, should you find yourself named in a lawsuit. On the other hand, without a handbook, you’ll have a hard time defending yourself in certain types of lawsuits. A legal professional can draft or review your handbook to make sure it’s thorough and legally compliant.
An employment lawyer can also help tighten up your compensation and benefits packages, and write a fully compliant employment contract. You need contracts that align with the law and work in your favor should you need to pursue termination.
2. Misclassifying employees as independent contractors
Although the details vary by state, there are clear distinctions between independent contractors and employees. Just because you hire someone who signs a contractor agreement doesn’t mean they are, in fact, a contractor. If they meet the legal requirements for being an employee, you are required to treat them as such.
Generally speaking, contractors have full control over the work they perform, including how, when, and where they work. They control their working hours, supply all their own tools and equipment, and are typically hired to do specialized work. It’s cheaper to hire contractors because you don’t have to pay for benefits, overtime, and employment taxes, but if a contractor falls under the scope of an employee, you could be subject to serious tax liabilities, fines, and lawsuits.
3. Not documenting employee performance
Not documenting employee performance can hinder your ability to defend yourself against a future wrongful termination or discrimination lawsuit. It’s crucial to maintain detailed records of performance evaluations, disciplinary actions, and communications. Your company needs a uniform documentation practice that applies to all workers, and if you don’t already have one, a lawyer can help you develop a plan that meets your needs.
4. Non-compliance with wage and hour laws
Wage and hour violations like unpaid overtime or missed breaks can result in serious consequences, including fines, regulatory penalties, and lawsuit judgments. For instance, employers commonly treat exempt and nonexempt employees incorrectly, resulting in a failure to pay for all hours worked. Later, when the employee files a lawsuit, the employer has to cover all unpaid wages plus penalties. Consulting with an attorney is the best way to avoid this costly mistake.
5. Improper termination procedures
The specifics of state laws vary, but improper termination practices are common. For instance, at-will employment is often misunderstood. Even though you can fire someone for any reason or no reason at all, discriminatory reasons are always illegal. Before you terminate anyone, it’s best to consult an attorney to make sure you do it properly.
6. Overlooking reasonable accommodation requests
The Americans with Disabilities Act (ADA) requires employers to make reasonable accommodations for employees with disabilities. While you can reject some requests if they meet the legal criteria for placing an excessive burden on your company, most requests need to be granted. Failing to grant reasonable requests can result in a lawsuit. Since the law is complex and not all disabilities are visible, you’re better off asking a lawyer how to handle requests.
7. Inadequate supervisor training
The people you hire to be supervisors and managers should be trained to avoid mistakes that can expose your business to legal liabilities. Unfortunately, many supervisors are only trained to perform job-related duties and lack legal awareness. This opens the door for them to unknowingly violate both state and federal labor laws.
For example, if one of your supervisors doesn’t provide employees with proper rest and meal breaks, one lawsuit can cost you thousands of dollars. An employment attorney will tell you exactly when rest and meal breaks are required so you can train everyone in a position of authority to be compliant.
Getting legal guidance is a smart business move
Employment law is complicated and constantly evolving. No matter how well-meaning you are, mistakes can lead to lawsuits, fines, and reputational damage. To avoid the consequences of non-compliance, consult an employment attorney to protect your profits and your reputation.
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