Now that the new year is here, employers should think about the top five mistakes they could make which could lead to employment litigation in 2013:
1 Terminating employees who request or are on leaves of absence
Does anyone work anymore? Most employers offer vacation, holidays and sick leave to their employees.
However, in addition, employees also have protected leaves of absence under federal or Iowa law for workers’ compensation, Family and Medical Leave Act, disability, pregnancy, jury duty and military service, to name the most common.
These laws provide protection against retaliation or other adverse employment actions while they are on leave. When an employer fires someone close in time to a request for such a leave, or while they are on it, the employer will get sued.
Timing is everything.
2 Failing to discipline and/or document performance problems
Employment is at-will in Iowa. An employer needs no reason to terminate someone for a lawful reason.
However, a well-documented personnel file with dated corrective action, a dated performance improvement plan and other helpful information is priceless. Judges, arbitrators and juries typically find this type of evidence more reliable than character witnesses.
The problem is that most human-resource professionals will tell you that 99.99 percent of all supervisors hate to write up employees or state something unflattering on a performance review. And, most of their company’s employment attorneys will tell you when the employer can no longer tolerate unsatisfactory performance, the employee’s personnel file does not document poor performance.
That leaves the employer without written proof to later justify the termination.
Even more troubling are those employees allegedly discharged for poor performance but whose personnel files contain glowing evaluations. Trying to “back date” poor performance or document it at the time of the termination looks awful, as it appears the employer is trying to “paper” the file.
Do it right or not at all.
3 Failing to obtain a signed release from a terminated employee
If an employer has a legitimate reason to terminate an employee, but fears a lawsuit, have the employee sign a release waiving all claims in return for some payment. The money you pay now may be pennies compared to what you could pay down the road.
4 Classifying all of your employees as exempt
Classifying all of your employees as exempt, refusing to pay them overtime and putting them all on a salary, may be easier for everyone. But a blanket rule is not a good idea and can get you involved in a costly wage-and-hour lawsuit.
Analyze and classify your employees appropriately and pay them as required by law.
5 Not giving terminated employees their final check
Many employers often fail to pay an employee’s final paycheck if that employee fails to return company property, does not give two weeks’ notice, appears to be violating a noncompete agreement, etc.
However, Iowa law is clear on when you can and cannot deduct items from employees’ paychecks. If you want to withhold a final check, you need to have a solid hiring process which includes having an employee agree — in writing — to withholding wages for failing to return her cellphone, uniform or other company property, for example.
Intentionally withholding an employee’s final paycheck without her consent could mean an employer will pay double damages and attorneys’ fees after a trial.
Avoid these five most common mistakes and you may avoid employment litigation issues in 2013.