It is generally accepted in the Human Resources field that there is a direct correlation between times of recession and dramatic increases in employee lawsuits. Even the best of companies are not safe from litigation. As employee unemployment pushes past 10%, it is natural to for employees to begin fearing for their future. Additionally, with employers scrambling to contain costs, reducing headcount is usually the first area to be considered. Employees, often feeling they have been wronged, will fight back. How? By filing a lawsuit.
The EEOC (Equal Employment Opportunity Commission) reported over 116,00 cases filed in 2008. These cases included wide range of charges including age, disability, race and gender claims. Employees won, on average, 60% of the time. Total claims paid out by employers was over $353 million!
How can you protect your company?
There are several simple steps that all employers can take to greatly reduce the vulnerability of their company. We will touch upon the key areas here and expound upon them in later posts.
1. Management must be educated. While a manager is often viewed as a leader, trainer, or director of their staff, they are often overlooked as an extension of the company. Management practices are considered employment practices, and a manager that takes a wrong step can be pinned directly back on the employer. Therefore, it is imperative that all managers AT THE LEAST should be aware of the laws, and to know when they are being violated. They are not expected to be experts, but they are expected to recognize a problem and bring it to Human Resources before acting.
2. Run an ethical organization. Employees are much less prone to file a lawsuit if they feel they have been treated fairly. Equitable and fair treatment of one employee to another will often defuse 90% of complaints; and they want to see employees that break the rules held accountable.
Remember the following – employees don’t usually quit companies, they usually quite managers.
3. Be a positive motivator and leader. Most employees are hired excited and ready to work. But as time passes, they fall into a rut and see the work as just a “job”. They lose interest, or worse, become disgruntled looking for a way out. It is imperative that managers enable their staff to maintain that enthusiasm. It may be hard, day in and day out, but with a positive attitude and a little creativity it can easily be accomplished.
4. Keep communication open. Employees who feel comfortable approaching their manager will feel less compelled to quit and file a lawsuit. A manager should be assertive – firm with set boundaries, but treats employees with respect – not aggressive. A hostile, “in your face” attitude makes employees afraid and defensive. If concerns arise, they will not approach their manager. Instead, they may quit and sue.
5. Document! In the Human Resources field there is a common refrain, “Document everything!” If something isn’t documented, then it never happened. From a casual, verbal observance (such as, “I’ve noticed you’re coming in late. Please try to be on time”) to a formal, written warning, documentation begins the paper trail that can ultimately make the difference between a successful defense, and a failed one. Consider the following interactions; all should be documented: acknowledgments, casual observances, written warnings, performance appraisals, and input from other departments.
With an attention to the five above key guidelines, managers will be well on their way to preventing lawsuits. While it is impossible to anticipate every eventuality, management best-practices will help reduce the possibility of lawsuits, and improve overall morale and productivity.
In upcoming posts we will delve into these areas in more detail.
The buzz on the street for small business has slowly been shifting from the economy to health insurance. While President Obama failed to push his health care agenda through Washington before the summer break, most believe it is just a matter of time before he succeeds.
Our last post introduced the High Deductible Health Plan (HDHP) and how instituting this plan can ultimately lead to reduced insurance usage, and lower premiums. Coupled with an HSA (Health Savings Account) the HDHP can have an ever greater impact on your bottom line.
Our last post looked at ways of creating a healthier workplace to reduce the soft costs related to employees’ health insurance. Most employers recognize that an attractive benefit package promotes loyalty as well as generates better productivity amongst the company’s employees. On the other hand, it also can easily be one of the most expensive costs an employer has to consider. Like most businesses in our tough economy, you are probably looking at ways to cut benefit premiums, pronto.
At a time when employers are carefully watching every dollar they spend, employee benefits are top on everyone’s mind. Especially with new legislation moving through Washington that may make benefits mandatory for all employees, you should begin to take the costs of your employee benefits very seriously.
