Every business owner wants to avoid litigation — not only because of the expense, but also for the time and attention litigation can divert from your business. Employee lawsuits are one of the most prevalent sources of business litigation, so taking steps to avoid these types of claims can save you significant time and money.
Here are some strategies you can use to reduce your risk of employee litigation:
Adhere to nonexempt status. If employees work more than 40 hours per week, they are entitled to overtime pay unless they meet strict criteria for ineligibility according to the Fair Labor Standards Act. Generally, most employees are nonexempt and must be paid overtime if they work more than 40 hours per week. Employees cannot waive their right to overtime pay.
Execute employment contracts for key personnel. Protect key business information and assets, and clearly delineate the responsibilities of management and key personnel by executing employment contracts.
Don’t discriminate. Employers are not allowed to discriminate on the basis of race, age, gender, national origin, disability, religion or pregnancy. Some states also forbid discrimination on the basis of sexual orientation.
No working off the clock. Hourly employees must be paid for all the time they work, even if an employer has not asked them to do it.
Make reasonable rules. All workplaces need rules to govern behavior and manage expectations, but be careful about making rules that could lead to a discrimination lawsuit. Keep rules limited to workplace performance standards.
Base pay on job requirements. The salaries you pay should be based on market standards, not on what someone made in their last job or other variables that are questionable. Two people performing the same job should make roughly the same pay, with allowances for experience and performance.
Employment law can be complex. Skilled representation is necessary. Williams Mestaz, L.L.P., is a law firm with decades of experience in commercial litigation, including employee lawsuits, IP infringement, business divorce, aviation, and high stakes litigation. Contact us at (602) 256-9400 and schedule a time to meet with us today.