Employment & Labor Insider

What keeps your labor and employment lawyer up at night isn’t witches and goblins but avoidable employer mistakes that turn into long, disruptive, and expensive litigation.

These three common horrors stem from everyday practices and are far easier to fix before a claim is filed than after. Let’s take a closer look before they come to haunt you.

Horror No. 1: Classifying employees as “exempt” when they’re not.

Wage and hour compliance is one of the most common sources of employment litigation. Employers must comply with the federal Fair Labor Standards Act as well as state wage and hour laws, some of which give employees greater rights than the FLSA does.

Employers often assume that an employee is exempt from minimum wage and overtime requirements because the employee is paid a salary. But being “salaried” and being “exempt” are two different things. Exemption status depends not only on salary but also on the nature of the employee's actual job duties.

The real horror is that misclassification normally affects more than one employee. If one position has been misclassified, it’s almost certain that co-workers have been too. As a result, one mistake may result in a collective action lawsuit involving a large number of plaintiffs. And what seemed like a small amount of back pay, when multiplied, can become a small fortune. That’s scary.

Employers should periodically review job responsibilities and promptly correct any issues that are found.

Horror No. 2: Mishandling discipline and terminations

How an employer disciplines and terminates employees often determines whether a lawsuit will ensue. Employers who don't follow their own policies may find those decisions resurfacing later, in litigation. Eek.

Employers should have a progressive disciplinary system to address issues such as attendance, performance, and less serious misconduct. When the issue is more serious, employers should be able to move directly to termination, even with a progressive discipline policy in place.

An employee should never be terminated for a discriminatory or retaliatory reason. Just as important, employers should be able to prove that they acted for legitimate reasons rather than unlawful ones.

Horror No. 3: Overlooking the National Labor Relations Act

The NLRA is a federal law that guarantees private-sector employees the right to organize, to take collective action, and to raise concerns about their terms and conditions of employment, among other rights. What many employers don't realize is that many of the protections in the NLRA apply to nonunion as well as union employees.

As a result, many standard workplace policies, such as social media policies or rules prohibiting employees from discussing their pay, can violate the NLRA. Terrifying!

Employers who haven't recently reviewed their policies for NLRA compliance should do so.

A happy Halloween

Each of these issues is preventable, and a few preventive steps can significantly reduce your risk:

• Audit exemption classifications. Compare (and contrast) job descriptions with the duties employees actually perform, and correct any misclassifications promptly. Remember that state law may have more employee protections than the FLSA.
• Follow your own disciplinary policies. Apply progressive discipline consistently with appropriate exceptions for serious misconduct, and make sure you can show the legitimate, non-discriminatory reason for every termination decision.
• Review your policies for NLRA compliance. Pay particular attention to social media policies and rules about discussing pay, and remember that these protections apply to nonunion employees, too.

The good news is that you don't have to tackle this alone. Your labor and employment counsel can help you now, before a compliance gap turns into a real-life nightmare.

Now, go enjoy that candy corn!