Avoid employee lawsuits and keep your business growing.
If there is one thing your business doesn't need, it would be a lawsuit – for a lot of obvious reasons. For one, going through a lengthy legal battle will cost you a lot of your hard-earned dollars and divert your attention away from running your business. Who needs to go through all that?
However, you need to know that small businesses are susceptible to the same worker complaints that are prevalent in the corporate world. More employees are filing complaints against their employers for violating wage and hours rule, wrongful termination, discrimination and sexual harassment. How can you avoid all these? Here are some rules to live by to make sure you don't get entangled in a messy legal battle.
Tips to Avoid Employee Lawsuits
1. Define work expectations. Small business owners are not mandated by law to document performance issues and progressive disciplinary measures but you need to conduct performance reviews and keep a written record of any unacceptable workplace behavior to avoid lawsuits based on wrongful termination.
2. Abide by the wages and hours rule. Generally, you should give overtime pay if your employees work more than 40 hours per week unless they are classified as exempt employees (those who hold executive, professional or administrative positions). Remember, working off the clock is illegal and will make you vulnerable to employee lawsuits. You should likewise keep in mind that exempt employees are not eligible for overtime pay but you should not dock their pay for missing partial days.
3. Be aware of discrimination laws. You should not discriminate based on race, age, gender, national origin, religion, disability and pregnancy status, among others. You should likewise provide all your employees a written policy that unlawful harassment and discrimination are unacceptable in the workplace.
4. Don't create unnecessary rules. Be careful when creating company rules, even if you have the best interest in mind. It might just open you up for a host of lawsuits. Focus on what matters most for your business.
5. Do everything by the book. Aside from following all the things mentioned earlier, you should post all labor and employment related materials in the workplace as required by the state and federal governments. In addition, you should seek the help of a trusted employment lawyer or human resources consultant in drafting an employee handbook for your company. These can help prove that you did everything by the book and improve your chances of winning or quashing a lawsuit, if ever one comes up.
Avoid employee lawsuits by all means. It wouldn't be good for your business.