What You Don’t Know Can Hurt You: Identifying and Reducing Employment Law Risks

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If your organization has employees (or hopes to in the future), it’s important to be aware of the employment laws that may apply to your organization. Lack of knowledge in this area can lead to expensive fines and legal fees. Fortunately, organizations like Pro Bono Partnership of Atlanta (PBPAtlanta) exist to help you identify where your organization may be at risk of breaking the law.

In their most recent presentation at Foundation Center Atlanta, PBPAtlanta shared some tips for both identifying and reducing these risks. What follows is a brief summary of their presentation which should not be construed as legal advice.

The presenters discussed two of the major legal risks to employers when it comes to employment law:

  1. Misclassification of Employees; and
  2. Harassment, Discrimination, and Retaliation

Our presenters shared a handy acrostic of ways to help REDUCE these risks:

Review policies and practices with legal counsel
Educate yourself and your employees
Document performance issues and decisions
Uncover facts through investigation
Create consistency
Enforce policies

Let’s dig a little deeper into these risks and how to reduce them.

1. Misclassification of Employees

It’s important to ensure your employees, independent contractors, volunteers, and interns are classified correctly. The determination of appropriate classification is a fact-based inquiry, and depends on a number of factors. Misclassification can result in unpaid employment taxes, unpaid unemployment compensation insurance, unpaid benefits for employees who are entitled to them, and unpaid overtime. The associated interest, fees, and penalties can also add up quickly, creating an expense your organization is not prepared to pay.

REDUCE the risk using the first elements of the acrostic above:

  • Review policies and practices with legal counsel: Get help to classify correctly. Pay attention to the distinction between employees, independent contractors, interns, and volunteers.
  • Educate yourself and your employees: Do not allow employees to work unauthorized overtime. Compensate employees for all overtime worked.

2. Harassment, Discrimination, Retaliation

Lawsuits charging harassment, discrimination, and/or retaliation can come with hefty awards or settlement amounts. In 2014, the EEOC recovered $527.6 million from employers, and nonprofits are not exempt. Racial discrimination (including harassment), gender discrimination (including sexual harassment), and disability discrimination made up 70% of the charges filed in those cases. Additionally, retaliation claims are increasing and were included in over 40% of EEOC charges.

One way to help avoid costly lawsuits is to ensure that appropriate internal processes are in place to address and investigate concerns raised by employees. It might surprise you to know that research from the Ethics Resource Center found employees to prefer resolving these concerns internally and privately with their employer as long as the investigation and resolution process seems “procedurally fair.”

What does that mean?

  • Give employees a voice by creating opportunities to tell their side of the story in their own way and words.
  • Ensure neutrality on the part of the decision maker.
  • Treat employees with respect when they raise a concern.
  • Create an environment of trust where the decision maker is concerned with doing right for all involved and not acting out of self-interest.

So how do you REDUCE the risks of discrimination, harassment, or retaliation claims?

  • Review policies and practices with legal counsel: Be sure to review for both legal compliance and perception of procedural fairness.
  • Educate yourself and your employees: Have clear policies; train your board, supervisors, managers, and employees to understand and apply these policies.
  • Document performance issues and decisions: Ensure that employment decisions are based on documented evidence and are consistent with past practice.
  • Uncover facts through investigation: Have clear avenues for complaints. Investigate thoroughly, and document the steps taken. Conclude the investigation.
  • Create consistency: Be consistent in how employees are treated and employment decisions are made. Take action to address any violations uncovered in your investigation.
  • Evaluate employment decisions: Follow internal policies and procedures in making employment decisions. Ensure manages understand how to apply the policies and procedures.

Again, this is just an overview of ways to identify and reduce some of your employment law risks. Every situation is unique and one fact can change the outcome. Seek legal advice from your organization’s legal counsel or an organization like PBPAtlanta.