Top 4 HR Mistakes that lead to costly lawsuits


1. Misclassifying employees as independent contractors

The IRS and the Department of Labor have been paying a lot more attention to how companies are choosing to classify their employees. Although many employers may not want to pay for health insurance, overtime, or workers compensation, it is important to know when doing so is legal. In 2014 the Labor Relations Board made it easier for employees to claim that they are being misclassified.

2. Placing discriminatory language in job ads

Many employers in our society today want an employee who is tech savvy. This can be a huge problem in job advertisements because it can come across as discrimination based on age, because most of the younger generation is more technologically advanced. Even though you may not be purposfully stating that you want someone young, it may come across that way. Another example is when employers state that they are looking for “recent grads.”

3. Asking illegal, discriminatory interview questions

Although it can be pretty straightforward what questions you should avoid in an interview, sometimes there some grey area of what can and can’t be asked. If you do happen to find yourself in a lawsuit about this, the burden of proof will be on the employer to demonstrate that the company didn’t violate the law.

4. Being too passive about risk management

Many companies do the bare minimum when it comes to risk management and just post the latest Labor Department posters in the backroom or on a bulletin board. This is not good enough to provide the best risk management for your company. Communicate with your employees.

So, what does this mean for your business?

Make sure you are following the Fair Labor Standards Act. Check with an HR Professional about how you should classify your employees to make sure you are abiding by the law. For job ads, anything that could possibly come across as discriminatory is best just to avoid altogether. You can avoid this by listing a set of skills you would like in a candidate instead of any traits dealing with age, gender, or race. To avoid asking any illegal, discriminatory interview questions, it is best to just stick with a focus on the job requirements. Some of the topics to steer clear from are: religion, race, age, sexual orientation, marital status, or anything else that may be an indication of a protected class. Lastly, when dealing with risk management, go above and beyond and stay on top of the new laws and regulations. Don’t just post on the bulletin board, make sure your communicate to your employees and help them understand the meaning of new regulations


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kristi@skutvikconsulting.com 1077 PCH, Seal Beach, CA 90740

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