6 EMPLOYMENT LAW MISTAKES THAT CAN COST YOUR BUSINESS
Employers are subject to a wide array of federal, state and local laws, all of which carry stiff penalties and potential liability for noncompliance. It can be especially hard for small and mid-size businesses to keep up. Common mistakes that can get employers into trouble include:
- Not keeping up to date on employment law changes. Every year brings new laws and enforcement priorities from the government with respect to regulating the employer-employee relationship. Employers must keep abreast of these changes to avoid liability. For a recap of some of the recent changes, read Employment Law Changes Employers Need to Know for 2018.
- Miscalculating employee wages and hours. Wage and hour laws are complex, change regularly and carry significant liability for noncompliance. Employers must ensure they classify workers correctly as exempt or nonexempt, follow wage and overtime rules and keep careful documentation of hours worked. A good payroll and recordkeeping system is essential.
- Neglecting to have or update an employee handbook. A handbook lets you inform your employees about your workplace rules in an efficient, uniform way. It also provides crucial legal protection in the event an employee files an employment claim against your company. As a first step, you can minimize your risks by avoiding these Top 10 Employee Handbook Mistakes.
- Failing to discuss performance issues with employees and keep documentation. Best practice is to provide regular feedback to employees regarding their performance particularly if there are potential issues. Documenting conversations and complaints and providing employees with the opportunity to respond and improve performance can protect employers from potential claims.
- Ignoring sexual harassment. For employers, these claims can result in substantial liability as well as reputational damage and productivity and morale issues in the workplace. In addition to federal laws, New York recently instituted new sexual harassment requirements for employers. More details on the law are to come in the next few months. In the meantime, the best defense is to take affirmative steps to prevent and respond to complaints. Also keep in mind that you must protect employees from harassment by customers, vendors, subcontractors or independent contractors as well as protect such third parties from harassment by your employees.
- Misclassifying employees as independent contractors. The growing use of independent contractors has come under heightened scrutiny from governmental agencies. Liability may arise under various federal and state labor, employment and tax laws. In New York City, additional laws apply to freelancers. Overall, misclassification may lead to heavy fines and penalties, and litigation expenses against your company.
Are you making any of these mistakes? If you are concerned about your employment law practices, contact us for a consultation.