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Five Steps to Help Minimize Employer Liability

November 30, 2022

Your employees are the core of your business and the key to your company’s success. That is why when an issue with an employee arises, it can affect not only that employee but also have a wide-ranging impact on your business. Workplace problems can quickly escalate if not handled promptly and effectively. To help ensure you act properly, there are several important steps you can take to minimize potential employer liability and avoid serious disruptions to your operations. 

Understand and Comply With the Law

The first step to minimizing employer liability is to ensure you understand and stay up to date with all federal, state, and local labor and employment laws and any industry or trade group requirements. If you have union employees, also pay attention to your obligations and additional employee rights that exist under that contract. 

Importantly, do not forget to post or disseminate required legal notices, complete mandatory employee training on time, and document your compliance with all legal rules. 

Develop Policies and Procedures for Addressing Employee Complaints

When an issue does arise with an employee, it must be addressed appropriately. To help ensure that happens, it is best to be proactive. Long before there is a problem, you should have clearly defined written policies and procedures indicating how you will handle issues that arise with employees. This will provide a structure for addressing complaints and also counter claims of disparate treatment or discrimination since by following the established procedure you should be treating employees fairly and equally. 

Document How You Handle an Employee Problem

Having written policies and procedures is not enough; you must show that you followed that process when a complaint was made. If the employee issue is not resolved internally and a hearing or litigation results, providing evidence that you handled the issue appropriately and in accordance with your internal process can help reduce your liability, or avoid liability entirely.  

Inform Employees About Your Policies and Procedures

All employees should be informed of the internal procedures for handling employment issues. This helps employees know what to expect, but also what they should do if they encounter an issue at work. A logical way to provide this information is in an employee handbook, which can include a wide range of relevant company information beyond the complaint process. All employees should be given a copy of the handbook and be required to sign an acknowledgment of receipt, which you should retain for your records. This serves as another way to document compliance with your own rules if the matter escalates. 

Consult an Attorney

Being proactive to reduce legal risks can save you substantial time and money. An attorney is in the best position to advise you on how to reduce potential employer liability and handle problems as they arise. While this is the type of work that an in-house counsel handles at larger companies, fractional general counsel can provide the same services to smaller businesses on an as-needed basis. Our general counsel services include conducting an initial legal risk assessment to identify areas of exposure and craft a plan to protect your business. Then, on an ongoing basis, we can monitor regulatory changes and work with you to quickly update your plan to remain in compliance as well as assist with workplace problems. This allows you to do what you do best, which is to run your business. 

Contact us to discuss how we can help your company.


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