HR Question: HR Professional and Personal Liability

Q: Can you provide me with some information about how I might be held personally liable for employment law violations, as a company HR professional?

A: In order to reduce the risk of being held personally liable under either a federal or state statute, it is important for HR processionals to:
  • Acknowledge that risk exists
  • Determine the scope of the potential risk
  • Identify ways to mitigate risk and implement them

In order to understand and identify potential risks, HR professionals should have a good grasp of applicable employment law, along with an understanding of their business and the ability to maintain an ethical approach. Additionally, it is critical that HR professionals feel comfortable pushing back on the company when appropriate and vocalizing when something is not right, either legally or from a company values or culture perspective.

Federal Liability

Some of the areas where an HR professional may have exposure to personal liability are:
  • Fair Labor Standards Act (FLSA) – an individual can be held liable if they exercised sufficient degree of authority over an employee’s terms and conditions of employment. Typically this would more likely be a supervisor but it is possible for an HR professional to be held accountable as well if there is documented proof of awareness and no action was taken.
  • Family and Medical Leave Act (FMLA) – Interference with an employee’s ability to exercise their rights under the FMLA may result in individual liability.
  • Employee Retirement Income Security Act (ERISA) – HR professionals may be held liable for a breach of fiduciary duty if the plan is not correctly administered and an employee is improperly denied an ERISA benefit.
  • Consolidated Omnibus Budget Reconciliation Act (COBRA) – HR professionals can be held liable as plan administrators for not correctly notifying employees or qualified beneficiaries of their COBRA rights.
  • Immigration Reform and Control Act (IRCA) – An HR professional may be liable for completing an I-9 form incorrectly or for knowingly hiring an unauthorized worker.
  • Additional acts protecting individuals from discrimination based on age, ethnicity, race, etc.

State Liability

HR professionals may have exposure to liability under a number of state or common law statutes ranging from assault, defamation, intentional infliction of emotional distress, ignored harassment or discrimination, and more.

It is not unusual for a disgruntled employee suing an employer to seek individual liability in order to increase their chances of a settlement. Most liability insurance policies don’t cover employment law violations so it is not unusual for companies to add additional employment practice liability insurance (EPLI) to address these situations. You should determine whether your employer has such a policy and if your position and self are protected under stated company plans.

The best way for HR professionals to avoid personal liability is to:
  • Follow the law consistently.
  • Follow the company practices and policies equitably and consistently.
  • Avoid legal or ethically questionable shortcuts.
  • Adhere to a professional code of ethics.
  • Speak up when something doesn’t appear right.

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