Human Resource mistakes come in many different forms, even when you have solid HR practices and procedures in place. Employee lawsuits are the worst, as they tend to create and or leave behind a bad impression. Lawsuits take away time and resources left better spent on core operations.
With that in mind, here are some of the top mistakes being made that have the potential to spark expensive employment lawsuits and how you can avoid them:
1. Discriminatory Language When Hiring
It can be easier than you think to slip into discriminatory language when posting a job ad or performing an interview. Age and gender discrimination can creep in. For example, posting a job for “recent grads” could discourage older applicants. And there are some obvious discriminatory interview questions that are avoided by almost all employers but it can be easy to innocently stray into gray areas when trying to find out what you really want to know about the candidate.
Employers should stay clear of any comments or questions regarding ethnicity, religious or political affiliation, age, disability or illness, birthplace or background. Even the most innocent inquiry about their marital status, family life or where they live could be grounds for discrimination. Not all questions surrounding these topics are necessarily illegal, but it’s best practice to avoid unless you’ve done your research and have prepared the right questions.
While anti-discrimination legislation can feel like a minefield, it doesn’t have to derail your efforts in finding the perfect candidate. By preparing ahead of time and asking the right questions, you can avoid straying into potentially litigious territory.
2. Not Managing Workplace Risk
Risk Management is defined as the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact. Risk Management is a fundamental principle that should not be overlooked, and if left unresolved or not properly addressed, can leave your company vulnerable to costly lawsuits.
Efficiently managing work health and safety risks within a workplace means having a systematic approach. It is the company’s responsibility to identify any areas of concern through a risk management analysis and to resolve in a timely manner. Of course, prevention is always better than a cure and Human Resource professionals should be proactive, staying on top of new developments in state and federal regulation and compliance issues and regularly reaching out to department heads to educate them on how to prevent needless risk exposure to the company.
3. Misclassification of Employees
Many employers are tempted to hire individuals as independent contractors because they cost less money to employ, not having to pay for things like overtime pay, paid holidays or vacation time, health insurance benefits or workers compensation. But not everyone qualifies as an independent contractor.
The Department of Labor recently announced new guidelines meant to crack down on worker misclassification, and the determining factor simply boils down to control. Who dictates work hours? Who pays for office supplies? Who supplies work equipment, i.e. laptop or computer? You can help prevent the company from accidentally or deliberately violating the Fair Labor Standards Act by staying abreast of new regulations, keeping in mind that there is no set number of considerations that makes a worker one or the other and no one factor that stands alone in making this determination.
There are some tools for nonprofits out there that help walk you step-by-step to determine how to classify an employee, like the Employee Classification Tool that comes bundled with the UST HR Workplace.
4. Not Having an Updated Employee Handbook
It might seem like just one of those formalities of hiring to give new employees an employee handbook. But an employee handbook can protect you from all kinds of lawsuits and unemployment claims costs.
Do you have an anti-drug policy? Do you have an employee disciplinary process? Do you have a dress code? All of these things can come back to bite you if they aren’t clear in your employee handbook. If you fire an employee for not “following procedures” but it’s not documented anywhere and those procedures aren’t clear… you can be opening up your organization to litigation. Resolve to review your employee handbook, and get an outside opinion if needed. It could save you thousands, or even millions, of dollars in the long run!