Ten Fatal Mistakes Business Owners Make – No. 8: Failure to Follow Prudent Employment Practices

You started your business because you had a passion for providing valuable services or products.  As your business grew, you added employees to strengthen your business and enable you to better serve your clients.

Every time you add an employee, the challenges of operating a business increase exponentially.  The dynamics of your company change with each new employee.  If you don’t take care of your employment practices, you can easily find yourself on the wrong end of a law suit.

Your employment practices are critical to the success of your business.  

State and federal law create an alphabet soup (ADA, FMLA, ADEA, OWBPA, and others) of employment obligations that raise serious concerns to all business owners.  These laws and their corresponding regulations present challenges for even the most sophisticated employer.

Prudent employment practices begin before you hire your first employee, using sound interviewing and hiring policies.  Those policies and procedures include well-drafted employee handbooks with comprehensive policies and procedures, followed by thorough and continuous training to ensure that those policies are followed.  Implement appropriate disciplinary procedures and, when necessary, dispense discipline even-handedly and fairly.

Employment disputes arise in many contexts.  Most of the disputes start innocently enough, but quickly expand if not handled immediately.  Consider the following real-life situations:

  • Do your employees understand your policies on how they earn and take vacation or other paid time off?
  • How do you characterize employees as exempt or non-exempt for purposes of wage and overtime law?
  • Have you unintentionally changed your employee’s at-will employment status?
  • What questions can you legally ask an applicant in a job interview?
  • Can you meet the requirements for proving that your employees are legally authorized to work in the United States
  • What constitutes good cause for terminating employees?

Review your practices and procedures regularly to ensure that they meet the ever-changing legal requirements.  Develop prudent employment practices, and your business will boom.

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