Last week we heard the news of an improved economy because the July 5 report from the Labor Department and ADP, Inc., indicated that new jobless claims fell by 14,000 from the previous week and the private sector added 176,000 jobs in June. The very next day we heard that the economy was still stagnant because the nation’s unemployment rate remained unchanged at 8.2%. Regardless of how you view the economy, employment litigation continues to be the rise – whether from prospective employees who did not get a job offer, or disgruntled employees who felt slighted by termination. Since summer months are usually slower for employers, it is a perfect time to review your employment practices to make sure you have a fair work environment. Here are the things to look for during your review:
Job Applications—Most employers do not use them. However,these are useful to gather useful data and protect an employer, as well as provide disclosures to comply with laws such as the Fair Credit Reporting Act and obtain consent for any criminal background check.
Employee Handbooks—These are important because they put the employee and the employer on the same page so that each party knows their expectations. Without a well-drafted Handbook, it is difficult to prove a given policy was in place and acknowledged and understood by all employees. Keep in mind that not following the policies set forth in the Handbook will invalidate those policies.
Independent Contractors—Don’ttreatindependent contractors like employees. Contractors must have independent control over how the work is done, although the employer can provide direction as to how to reach the ultimate goal. Willful misclassification could cause severe fines and other penalties for your company.
Wage and Hour Laws—Employers should keep a record of employees’ hours work and meal and rest breaks to ensure that the employer is in compliance with wage and hour laws. Document when an employee voluntarily declined a meal or rest break.
Compensation—Compensation should be in writing. New laws require employers to disclose in writing to new employees the rate of pay, the regular designated payday, the employer’s address and telephone number, the identity of the workers compensation insurance carrier, and any other information the Labor Commissioner deems material and necessary. (Cal. Labor Code §2810.5). For a sample of the notice, click here.
Performance Evaluations–Without proper performance evaluations, it may be difficult for employer to substantiate termination of a problematic employee. Performance reviews should include realistic performance appraisals, identify any required improvements, set mini-goals for improvement, provide assistance on how to improve, establish a time line for improvement, and properly warn that failure to improve may result in further disciplinary actions including termination.
Hiring Decisions and Termination Procedures—Keep a written record of why someone was not hired, as well as reasons for termination in order to fend off any allegation of discrimination. California’s “at-will” employment is more accurately “at-will but you must document legitimate and nondiscriminatory reasons for termination”.
Exit Interviews—Either have one for all exiting employees, or do not have one at all. Exit interviews are simple interviews to vet any last comments. If a departing employee gives little or no sign of discontent, it will be difficult for the employee to later claim discriminatory practice by the employer.
A brief review of your policies may save you from a long drawn out battle of legal disputes from disgruntled employees.