Steps Employers Must Take to Protect Themselves from Employment Lawsuits
By Julie Wootton - CEO | San Diego Human Resource Consulting, Inc.
1-760-438-8046 | julie@sdhrconsulting.com
With California facing double digit unemployment rates, more employees are filing employment related claims than ever before. According to the Equal Employment Opportunity Commission (EEOC), there has been a 9% increase in claims filed in 2007 from 2006. This is the largest increase since 1993.
The average cost of an employment lawsuit can cost approximately $250,000 for attorney’s fees and if the case goes to trial, jury awards range from $150,000 – $250,000+ and if the case doesn’t go to court and is settled, average costs are $95,000 in attorney’s fees.
In order to avoid being sued, smart employers should follow these steps to protect themselves from employment lawsuits:
1. Layoffs and terminations can lead to suits ranging from age discrimination to wrongful termination. Adopting fair employee policies and documenting your company’s termination procedures now will help prevent HR related lawsuits resulting from wrongful termination.
2. Wage and hour claims now outnumber all discrimination class action lawsuits in the work place. Make sure you are paying final checks on the employee’s last day of employment or paying final checks within 72 hours if no notice is received. Ensure that you are not withholding inappropriate items from final checks such as non-authorized loan payments, uniform deductions, equipment charges etc. In California, it is mandatory to make sure your hourly employees are taking their breaks and being paid overtime if working over 8 hours per day or over 40 hours per week and make sure all your employees are in the appropriate wage classifications for either exempt or non-exempt per the Department of Labor.
3. Ensure you and your managers are trained to prevent sexual harassment, discrimination and employment lawsuits from happening in the workplace. In California, it is mandatory for employers with 50 employees (including temps and contractors) to train all managers and new supervisors within 6 months of their assumption of a supervisory position, and thereafter, every two years.
4. Do you have an arbitration or mediation process in place to eliminate costly lawsuits and the negative publicity and media attention that goes along with lawsuits? During times of economic hardships, your employees may be desperate for money so make sure you are protected and have these policies in place, clearly spelled out, acknowledged and signed by your employees in your employment application, offer letter, confidentiality agreement and handbook.
5. Has your company incorporated the new 2009 HR laws such as the new Cobra stimulus plan, and the new I-9 form, the new required posters paying overtime for highly skilled technical employees and the new Family Medical Leave Act (FMLA) regulations, etc? It is important to audit your HR policies and practices at least annually to ensure that you have the most updated legally required posters, HR forms, processes, updated handbook, benefits and management training in place to protect yourself from frivolous and costly employment claims.
San Diego Human Resources Consulting, Inc. sees the insides of hundreds of companies and works to ensure its clients are following best practices to prevent HR-related suits. Companies of all sizes and industries will benefit from speaking with an expert in this area. Damages from wrongful termination or discrimination suits can be extraordinary and a little planning and procedure clarification can help pull a company through already tough times.
Julie Wootton is a guest blogger for GObackgrounds.com. She has been an HR consultant for nearly 20 years. The views expressed herein are solely from an HR consultants point of view. These views do not constitute legal opinion or advice. The reader should always seek advice from a competent lawyer to answer any legal questions concerning their business practices.
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