Wednesday, June 15, 2011

BEWARE SMALL EMPLOYERS - TOP 10 WAYS TO AVOID BEING SUED

Lawsuits can be death for small businesses. In more than 20 years of legal advice to employers and employees, I have seen repeated mistakes by employers, most of which could have been avoided. Don’t despair if you recognize yourself in this list; most employers stumble on more than one. The solution is to change your procedures NOW, before a disgruntled employee takes action.

DO NOT:

1. Hold an employee’s final check “hostage” until return of uniform, cell phone, keys, and/or other company property.

2. Automatically characterize all employees as “exempt” from the overtime laws and pay them a salary.

3. Pay employees in cash. You still have to take withholdings, itemize, and document.

4. Allow employees to work through breaks and leave early.

5. Hire “independent contractors.” Most workers do not qualify as independent contractors and various taxing authorities are watching this closely.

6. Loan money to employees and then deduct whatever is still owing from final paychecks.

7. Have a “use it or lose it” vacation policy.

8. Fail to document your employees’ hours worked.

9. Ignore complaints that an employee is being “bothered.” Red flag. This is code for sexual harassment.

10. Fail to have an employee handbook. All employers should have one, even small employers.

While these may be my “top 10,” unfortunately there are many more ways that employers—especially small employers—can run afoul of the labor laws, sometimes with catastrophic results. Your best strategy is to be pro-active and get solid policies and procedures in place with the help of a knowledgeable professional. As the only employment law specialist in East Contra Costa County, I can help: Rhonda@alvisfrantzlaw.com or (925) 516-1617.

By: Rhonda Shelton Kraeber, Esq.

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