The average total cost of an employee lawsuit in 2017? According to the Hiscox business insurance group, $125,000! Admittedly, this number takes into account more than just the cost of settlements — attorney’s fees and other secondary expenses can add up quickly, as far too many business owners have learned the hard way. Moreover, as anyone with a background in statistics knows, the average number in such cases is usually higher than the median, as one or two huge settlements from large corporations can alter the average in misleading ways. All the same, make no mistake about it: an employee lawsuit can ruin you financially.
In most cases, the financial cost is only one aspect of the damage done by employee lawsuits. Recruiting good employees in the future can become more difficult, for example — and particularly contentious cases can even spark a backlash from customers, investors, vendors, etc.
The bottom line? Organizations should work hard to avoid lawsuits from the start. An ounce of prevention is worth a pound of cure, as they say — or, in this case, a few hours of preparation could save months in court! There are many types of employee lawsuits, ranging from safety violations to unpaid overtime, etc. But discrimination and harassment may very well be the most common: and they have been receiving a lot of attention in the news as of late. Below, you will find a brief guide that well-meaning business owners can use to protect themselves and their organizations.
Workplace Discrimination Defined
When hiring, firing, and assigning duties, many factors must be taken into account — ranging from an employee’s experience, to their educational background, to their personal aptitudes, to their willingness to work in specific conditions, etc. Every company’s priorities vary.
However, barring a few very specific exceptions, federal law prohibits employers from taking any of the following factors into account when making such decision: race, sex, pregnancy, religion, national origin, disability, age, military affiliation, bankruptcy, genetic information, and citizen status. Moreover, depending on your state, the following statuses may also be protected: sexual orientation, gender identity, marital/family status, medical conditions, political affiliations, and use of lawful products.
Most discrimination lawsuits begin when an employee or job candidate receives news an unfavorable hiring, firing, or job assignment decision and suspects that the decision was based not on their aptitude, but on a protected status. The best way to protect yourself against such accusations? Documentation. Here are a few important items that should be recorded carefully:
- Upon beginning the hiring process, document exactly what you are looking for in an ideal candidate.
- Document interviews carefully, and record your reasons for making a final hiring decision.
- If an employee fails to complete their duties or commits a serious error, issue a formal, written reprimand. In the case that you later fire or demote that employee, this written warning will help you show that the decision was based upon performance rather than a protected status.
- In general, making decisions in committee rather than on your own can help protect you from accusations of abuse of your power.
Harassment: Your Duties
Physical, verbal, emotional, or sexual aggression in the workplace is also strictly forbidden. Most employers realize that actually committing an act of harassment will land them in hot water — but not all employers realize that it is their responsibility to prevent such acts from occurring at all. If customers, vendors or employees are committing workplace harassment, you are considered complacent unless you take serious and direct action to prevent this!
Learn more about employer/employee relations and your legal obligations by visiting Jadestone Solutions online today!