It's difficult enough as it is in these trying economic times to run a business. The last thing you need as an employer is to be hit with a lawsuit by one of your employees. This is particularly so if the lawsuit could possibly have been avoided. Every day employers make mistakes in managing their employees which could expose them to liability. Such mistakes are often done with no knowledge that a law has been violated. It is therefore critical that employers be aware of, and comply with, their wide array of legal obligations. The following are a few common mistakes that can result in an employer being sued or at a minimum entangled with administrative agencies:
- Withholding an employee's final paycheck. You must pay a terminated employee within six days from the date of their termination. An employee who resigns must be paid by the next regular pay period. This must be done regardless of whether they owe you money or have not returned company property.
- Improper paycheck deductions. You cannot deduct from an employee’s wages without written consent. Also, the amount deducted must not result in the employee’s check being an amount less than what the employee would have earned that pay period if they were paid minimum wage. For exempt employees, there are only seven reasons, which are set forth in the Fair Labor Standards Act, for which you can make a paycheck deduction. Improper deductions can result in loss of exempt status, so seek legal advice if you have questions.
- Misclassifying employees as exempt v. non-exempt. This can result in costly claims for unpaid overtime and tax penalties.
- Failing to have written policies on issues such as: EEO compliance, sexual harassment and other forms of discrimination or retaliation, reporting policy on discrimination and harassment, drug testing policies, overtime policies and reporting improper pay issues, leave of absence policies and other policies which may be required by law depending on the number of employees you have.
- Failing to apply policies in a neutral, consistent and uniform manner. Allowing some employees to ignore the rules while disciplining others for the same infraction can result in discrimination charges. This situation can be difficult to defend absent some compelling non-discriminatory reason for the unequal treatment.
Albin, Yates, Balius & Roach is a full-service transactional and collaborative law firm dedicated to helping people avoid legal conflicts when possible, and resolving them efficiently and effectively when such conflicts are unavoidable. Please contact us for more information at www.ahrlawfirm.com.
