5 Legal Mistakes by HRs That Could Cost Companies Millions of Dollars

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Some departments cannot afford mistakes, and HR is one of them. Missteps by an HR can cost the company millions of dollars. Legal mistakes by HRs are hard to ignore and can barely be rectified, once committed. Therefore, if you are an HR and never want to have a stain in your career, try avoiding the 5 mistakes discussed in this blog.

ALSO READ: 5 Benefits of RPA in HR and Payroll

Legal Mistake #1:  Asking discriminatory questions during the hiring process

Anyone could come back with a lawsuit if you raised questions that implied discrimination during the interview process. It is never appropriate for interviewers or HR managers to ask applicants questions around age, race, sex, disability, etc.

In many cases where such questions were raised, applicants have come back with a lawsuit. They might use such remarks and claim that it was the reason behind their rejection.

Legal Mistake #2: Nasty terminations

Ever watched the movie Up in the Air starring George Clooney? The movie highlights the importance of making layoffs and terminations easy and non-disturbing. The same goes for real life. 

When things get ugly between an employee and the organization, the termination needs to be very smooth and easy. Any kind of negative comment can invite a heavy lawsuit against the company. This could be one of the costliest legal mistakes by HRs in the list.

Legal Mistake #3: Prohibiting discussion of salary details

Almost every company’s HR asks you to never disclose your salary details under any circumstances whatsoever. This is a clear violation of NLRB or the National Labor Relations Act.

Few years ago, in St. Louis, NLRB issued a complaint against a Diaper Supply business after it fired an employee who discussed wages with another fellow employee. NLRB made the company reinstate the employee’s job and change its policy handbook.

You cannot forbid employees to discuss their wages with each other.

Legal Mistake #4: Not documenting conflicts and issues

Conflicts are an everyday thing in organizations, but some of them may take an ugly shape. And, when they do, it is important for HR managers to accurately document everything that takes place. From the reason behind the issue to statements used by involved parties, documentation during conflicts is a bare necessity. 

Not documenting conflicts can prevent you from producing ample evidence when a rogue employee sues using false claims.  

Legal Mistake #5: Inconsistent performance evaluations

Inexperienced supervisors have been quite infamous for impartial performance evaluations. The fall, however, comes down on the entire company, when employees suspect discrimination.

If you have something that you can add to this “legal mistakes by HRs” list, then please comment.



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