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CANNABUSINESS

How To Avoid A Workplace Lawsuit, Audit Or Investigation During This “Interesting Time” Midway Through 2022

By: Adam D. Kemper, Managing Partner of The Workplace Law Firm, PLLC

Gas prices are at historically high levels, inflation is impacting pricing in many areas and industries, people are still getting sick from COVID-19, and many products are noticeably unavailable due to supply chain and product shortages. Welcome to the midway point of 2022.

When coupled with all of the adjustments made to recruit and retain workers during a time noted for historic levels of employee resignations (also known as “The Great Resignation”), employers are left with tremendous challenges to overcome in the coming days.

Employees feel that they have leverage in this climate as they can simply bounce around from companies who offer them the “better deal.” Many such employees also see no perceived downside to pursuing a claim against their employers after they speak to lawyers who offer to take a case for them against their employers for no up-front fee.

Additionally, during this political regime, governmental agencies have been active with the U.S. Department of Labor (“DOL”) having increased resources to address “worker protection” activities and also having information sharing arrangements with the Internal Revenue Service (“IRS”) when, for example, one of the two agencies finds an issue with worker misclassification (which has an impact on payroll withholdings and wage and hour obligations).

The fact of the matter is workplace lawsuits and/or penalties from workplace audits can effectively put a company out of business or at the very least, set a business back substantially financially.

When faced with going out of business or significant financial setbacks, it pays to take the time and spend some resources working with appropriate subject matter experts to become properly informed on legal obligations (which also contemplates employee retention). Here are ten considerations which may help your business avoid a workplace lawsuit, audit or investigation (and very likely result in employees sticking around a bit longer):

1. Stay informed on changes to workplace laws that may impact your business by regularly consulting with trusted employment law counsel. Note that laws (especially in the area of labor and employment law) are subject to change and as such, it is incumbent on employers to stay abreast of all legal changes and to make adjustments accordingly.

2. Ensure you have adequate and accurate timekeeping and payroll records to track employee time worked and to show how employees are paid. Proper records can make or break a wage and hour audit and/or a wage and hour lawsuit.

3. Don’t “hire” independent contractors (i.e. 1099s) unless they are true “independent contractors” as recognized by applicable federal and state law and based on the advice of counsel. Misclassification is a major point of emphasis by a number of governmental agencies.

4. Pay your (non-exempt) employees (at least) minimum wage and overtime. Remember, the rule is that all employees are entitled to minimum wage and overtime as a matter of law. The exception to that rule is if employees fall within a legally recognized exemption. Consult with counsel before you rely on a minimum wage and/or overtime exception to ensure you are paying employees properly.

5. Audit your pay practices to ensure you are compensating people fairly. Equal Pay Act (and other discriminatory pay practice) claims have been on the rise over the last few years and if similarly-situated employees who perform the same work under similar conditions are paid differently, it could at the very least appear to be discrimination (which may lead to a lawsuit).

6. Be open to flexible working arrangements and other workplace accommodations, especially for those individuals who suffer from disabilities and/or medical conditions. If your business previously allowed employees to work from home during the height of the pandemic, it should be open to such opportunities moving forward, especially for those individuals who are in need due to accommodations due to medical reasons.

7. Focus on keeping your employees happy and retained in your organization. Remember, the fewer employees who depart unhappy, the fewer potential plaintiffs.

8. Update your workplace policies and remind employees about such policies, especially those policies on anti-discrimination, anti-harassment, anti-retaliation, time-keeping, and all of your company’s methods for employees to voice their concerns (free from retaliation).

9. Be mindful of your company’s reaction to an employee raising a concern or complaint. Retaliation claims continue to be one of the most common claims received by the U.S. Equal Employment Opportunity Commission (“EEOC”).

10. Continue to be proactive with workplace safety, including the handling of illnesses in the workplace even if it seems like “the pandemic is over.” OSHA is also making its rounds to workplaces around the country who fail to follow their safety standards.

Of course, there are many other important considerations for business owners to take into account in order to be compliant with applicable workplace laws. Take the time to consult with subject matter experts who can assist your business with not only understanding its legal obligations, but also to assist in implementing appropriate workplace policies and procedures.

Adam Kemper can be reached via email at akemper@theworkplacelawfirm.com or via telephone 561-805-3529.

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