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Although workforce law may be a complex and rapidly evolving topic, no HR professional can afford to ignore it.

According to 2015 research from specialty insurer Hiscox, nearly 12% of small and medium businesses based in the US will find themselves on the wrong side of labor laws. Also, tougher labor laws in certain states make it 66% more likely that a business will need to settle the matter in court.

For smaller businesses especially, employment legislation issues can be financially devastating. For companies with 500 employees or fewer, the median judgment is approximately $200,000 for lawsuits that reach the courts.
Here are three ways to ensure you’re creating HR practices that reflect employment rights legislation and protect employees from discriminatory and unfair treatment in the workplace.

  1. Perform a job analysis

While job analysis alone doesn’t offer absolute protection, it is a key part of designing HR systems that can stand up to legal challenges. A strong job analysis process enables you to recruit, assess, develop, and even discipline or fire employees based on their job performance and nothing else—not their family status, religion, sexual orientation, disability, or any other criteria excluded by employment rights legislation.

The job analysis process involves gathering information about the duties and requirements of the job by:

  • Interviewing the relevant employees and supervisors.
  • Observing and analyzing job tasks.
  • Collecting data from O*NET and other occupational databases.

These job analysis methods will create and maintain job descriptions that are detailed, accurate, and legally defensible.

  1. Document the hiring process

Remember that your organization can be sued by the people you DON’T hire as well as by employees.

In one recent case involving the BNSF Railway Co., a candidate revealed during a job interview that he had sued his previous employer—another railway company—for wrongful dismissal. BNSF didn’t hire this candidate, and the man sued, claiming he was denied the job because of his previous legal action and not because he didn’t meet the qualifications.

However, BNSF kept interview notes showing that the candidate was rejected because the level of experience he claimed during the interview didn’t seem accurate or trustworthy. Because the process was documented, the candidate’s lawsuit was unsuccessful.

By documenting the hiring process at every step, you can demonstrate that decisions are based on qualifications only, reducing the risk of legal consequences.

  1. Conduct regular (and honest) evaluations

No laws directly govern the employee evaluation process. However, these evaluations are a critical piece of the puzzle in ensuring your HR processes conform to labor rights law.

Conducting evaluations can protect against legal action by ensuring that:

  • Employees know when they’re underperforming.
  • Employees are given time to improve.
  • Employee dismissals are based on performance.
  • Every employee is treated in the same way.

Evaluations must also link performance to appropriate rewards and consequences. For example, if an employee receives top ratings and is subsequently fired, the organization is left open to a lawsuit. A new multimillion-dollar lawsuit launched against Yahoo by a former employee hinges, in part, on the fact that employees with excellent evaluations had been fired.

Employment legislation poses a major HR challenge; it’s complex, changes quickly, and varies widely between states. However, many issues related to work regulations can be avoided by including these three practices outlined above in your HR toolkit. With thorough job analyses and consistent, well-documented hiring and evaluation processes in place, you can protect your company against some of the most common labor-rights law issues.

Click here to discover our Slideshare Presentation and learn more about the requirements and best practices in performing a job analysis, understanding labor laws and their impact on recruitment!

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  • Mila I. says:

    The press presents only the big companies that are involved in legal disputes with employees who felt discriminated against. But never think smaller business are not affected by such acts. Don’t think it won’t happen to you because you aren’t working for one of the top 1,000 companies. 

  • Cora S. says:

    Great advice! Some think the laws are made to protect the employees only, but respecting them also helps companies avoid disgruntled employees or candidates. It is not easy to put all the practices into place, but once it’s done, your business will be better protected. 

  • Delaney says:

    Discrimination is present everywhere. It may be more obvious in workplaces because those affected by it can fight back with the help of the law. HR leaders need to make sure they have practices and policies in place that ensure fair treatment. They also need to communicate with unhappy employees and stop bad actions from continuing. 

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