Tips for Avoiding Employee Lawsuits

 Posted on November 21, 2014 in Employment Discrimination

A business owner never hires an employee expecting to be sued. Employment agreements are based on trust that both the employer and employee will act in accordance with the best interest of the company while adhering to all applicable laws. Over time, however, even the best employment-based relationships can break down, and in an ever-increasingly litigious environment, it is all too common for a disgruntled worker to file a lawsuit against the business owner.

Of course, many such lawsuits may be groundless to the point of frivolity, but they still require time, attention, and money to defend. While there may be no way to prevent frivolous litigation, there are some things a business owner can do to make sure neither employees nor the government have legitimate grounds upon which to file suit.

Non-Exempt Until Proven Otherwise

Employers should approach every employment relationship on the assumption that the employee is nonexempt from the wage and overtime requirements of the Fair Labor Standards Act (FLSA). If and when the business owner specifically decides the employee meets all of the appropriate criteria for exemption, the employee can then be designated as exempt. Employees that do not meet the criteria are non-exempt, period.

Exemption Must Include Some Flexibility

Tempting as it may be, an employer cannot dock or withhold pay from exempt employees for leaving early or taking an extended lunch. While employers are not required to pay overtime to exempt workers, the FLSA makes it illegal to deduct from their paychecks with certain exceptions, violations of this provision in the law can cause the employer lose the exemption and therefore be liable for paying overtime.

Discrimination Laws Matter

Business owners may have a “perfect employee” in mind when they look to hire, so it can be easy to forget there are laws that prohibit employers from discriminating on the basis of race, color, religion, gender, national origin, age, or disability. An employer who hires or simply creates the impression of hiring on any type of discriminatory basis puts the company at risk. Similarly, salaries and based on anything other than the specifics of the job, adjusted slightly for performance, may appear to be discriminatory. Workplace rules should be examined closely as well, making sure they address actual needs of the company. Unnecessary restrictions on clothing and appearance of employees may stray into potentially dangerous territory.

If They Work, They Get Paid

An employer whose hourly staff is so dedicated that they are willing to work off the clock may be shocked to end up facing a lawsuit. Even voluntarily working while punched out for lunch is a violation of the law, and the responsibility falls on the employer to make sure nonexempt employees are paid for all the time they have worked. There are examples of employees being fired for working off the clock, but their employers were still required to pay for the time worked first.