4 Critical Employer Errors That Can Lead to Lawsuits

Employee lawsuits against employers are one of the most expensive costs your business could incur. Thus, make sure you don’t commit any of these hallmark employer errors that would lead your employees, resigned or still working, to file complaints against you.

Here is a list of these errors and how you can avoid them in dealing with your employees.

Treating Your Employees Unfairly

Labor laws prohibit discrimination. You shouldn’t base your employment standards on race, sex, color, disability, nationality, and other factors depicting a class. Objectivity should be your primary goal when hiring employees.

Meaning, hire your employees based on their work experiences, potential, or value they can bring to your business. You can detect an applicant’s potential through interviews. Alternatively, you can conduct a practical interview to gauge employee’s capabilities.

Fair treatment doesn’t end during the hiring process. It continues during the retention period while the employees work for your company. Every decision you make for employee-related matters should be just and equal.

Use the same standards when making decisions. Better yet, create an employee manual that would discuss everything from incentives to punishments. Employment contracts and collective bargaining agreements (CBA) are other alternatives for specifying rules and regulations with their employment.

Forgetting to Document Everything

Documentation is a must for a business owner. It will protect you against lawsuits as long as you do the due process and you’re treating your employees fairly. Every action you take should have corresponding documents.

Whether you hire, discipline, or terminate an employee, you document it. Memos and employment contracts are examples of documentation that is essential for a business.

You should also measure performance and behavior regularly with an evaluation. This documentation is essential, so you can tell the reasons you’re disciplining or terminating an employee.

Then, you should file each employee document in an organized manner. Each employee has their own 201 files, so it’s easy to retrieve information. If you can afford employee software and you have more than 50 workers, invest in one of those programs.

Bad Management

The manager is your frontline to your employees. They’re the ones who deal with everyday issues from tardiness to absenteeism, from disciplinary actions to performance appraisal.

Thus, make sure you have managers who have great skills such as communication and problem-solving. If your managers don’t know anything about management, your employee turnover will be high.

Employees resign despite great benefits because their manager doesn’t know how to handle situations. As a business owner, you have to listen to all your employees, regardless of their position in the company. If you have an HR department, you can ask how your employees are.

Indeed, you would know if one of your managers is mistreating his or her subordinates. Once you learn something is amiss, make sure to take action. Inactions will breed resentment, and resigned or suspended employees can use this against you.

Breach of Contract

Breach of contract is the most common reason workers sue their employees. Yes, it could happen even without a formal employment contract signed in black and white.

The employee manual, documents relating to performance rewards, and resolutions of benefits are considered employment contracts. Employees can use policy breach to sue you for unfair treatment. They can use verbal commitments made in front of so many witnesses to sue you for breach of contract.

Again, it would help if you treated your employees fairly. If you want to terminate someone, use the due process of law and document all actions so you have strong evidence if an employee sues you.

Bonus: Ignoring Insurance

So, you have done everything. Still, an employee threatens to sue you for damages. This could be possible, and the solution to this dilemma is a Santa Fe EPLI.

Employment practices liability insurance (EPLI) covers legal fees, damage awards, and settlements. Some policies include investigation costs and other litigation expenses.

With this policy, you’ll be covered with insurance that’ll save you the headache and expensive lawsuits.

Employees and employers are expected to strike a balance in the workplace. This balance should entail fair treatment, good management, and avoidance of conflict. Even if you have significant benefits to retain employees, you still need to protect your business with proper procedures and insurance for unexpected situations.

About Daniels Insurance, Inc.

At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.