It's only a matter of when...not "if."
By Tyler Wirth
- Alexandria, MN
“Exasperation” doesn’t even begin to describe the collective feelings of many a business owner with respect to the latest news out of the Department of Labor (not to mention the IRS and the EEOC).
If one looks at our national debt, it’s absolutely mesmerizing to even try and keep track of the first six digits, and business owners should know how a great deal of our government money is being spent: Enforcement Initiatives.
There are a number of things going on that add more edges to the many-sided sword employers face in today’s hiring environment. Let’s try and wrap our fingers around some of this before we run out of band-aids:
- In December 2010, the Department of Labor launched their “Bridge to Justice” program, which is essentially a government-sponsored “Approved Attorney Referral System,” (i.e. a quick way for a person to get an initial consultation with an attorney regarding any sort of wage and hour dispute).
- In 2011, the federal government announced the addition of 270,000 workers – great for “job creation,” but the vast majority will be working to help non-government workers record and justify complaints against their employer.
- While the overall Department of Labor spending will be down 5 percent in 2012, worker protection regulating bodies will see their spending increased by about $1.8 billion (yes, that’s “billion” with a “b.”) Agencies include: The Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), Employee Benefits Security Administration (EBSA), and the Office of Federal Contract Compliance Programs (OFCCP).
- The IRS added about $600 million to its budget and plans 6,000 audits of worker classifications this year alone.
Coupling the above with the current widespread entitlement mentality is akin to lighting a match to find your way in the dark only to smell the gas fumes just after the match ignites. It’s an explosive hiring environment, and the possibility of having to answer to an enforcement issue is no longer “if,” it’s more of a “when.”
All of this sure gives the impression that employers have increased their “abuse” of employees dramatically over the last few years, but my Secretary of Labor Issues Ultimatum to Businesses piece argues differently. EEOC charge statistics may continue to rise, but I argue that the number of cases thrown out because of no merit seem to be rising at a higher percentage.
As a business, the biggest thing you can do to spend as little time and effort as possible on this is to protect your company. There are a few ways to do this and it’s critical that you consider these areas.
Good Policies – without good policies, a lawsuit (with or without merit)
will likely be crippling to your business.
It only takes one misstep to create a situation in which you might have
to answer to a call from the Department of Labor or the EEOC.
Consistently Enforce – having good policies is one thing, consistently enforcing them will add another layer of critical protection so labor pool predators can’t take advantage of you. Even if a new hire feels like family, they may take advantage of you.
Document Disciplinary Actions – Quite often, this is where a lawsuit can significantly gain, or lose, traction. Poor documentation can shoot your good policies right out of the water. Good documentation will only help enforce them.
Hire the Right Employees – According to hrthatworks.com, the #1 mistake that managers make that can lead to lawsuits is hiring the wrong person. There are a number of ways that businesses can be sure they’re hiring the right people--too many to get into here and certainly a topic for another blog piece—but a good starting point is to make sure you’re diligently screening and placing the right people for the job vs. impulsively filling open spots. Also, look at your business and ask: am I in the business of hiring people, or am I in the business of creating xyz product/providing xyz service? If the answer to your question is the latter, take a serious look at outsourcing some of your hiring functions.
One of the last pieces of advice I can pass along is, if you’re not already, start working with a reputable staffing firm. Not only can this help shield your business from a potential lawsuit, but it can help increase flexibility as you build the overall quality of your workforce. When you do so, it’s extremely important to be sure they partner with you to diligently screen and place the right candidates vs. impulsively filling spots.
Call me to learn more about how The Work Connection can help your business be prepared.