One of the purposes of good Human Resources is to prevent lawsuits. But your HR person and your employment attorney don't follow you around all the time. So, business attorney Josh Joel, Counsel at Stanton Law, put together a list of phrases that often come out of managers' mouths. When you start thinking this way, you're getting ready to be sued.
- "I'll just 1099 this employee."
- "He's salaried, I don't need to worry about overtime."
- "Non-competes are not enforceable, right?"
- "I'll handle this EEOC charge on my own."
- "This complaint is stupid, I'm not even going to respond to it."
- "Aren't you proud that we have an all-female [or any other protected characteristic] team?"
- "I'll just find an employment contract online."
- "I'm going to dock your pay if you...[fill in the blank]."
- "I'm a nice guy, I don't want to have that conversation."
- "Just tell them they are performing fine."
- "This employee is a problem, let's move them to a different role."
Here's why these phrases are such ominous signs.
" I'll just 1099 this employee." The IRS and the Department of Labor both have strict requirements that determine if a person is an employee or a 1099 contractor. You don't get to choose. And people who receive 1099s are never employees. Prepare yourself for a hit from the DOL or the IRS.
" He's salaried, I don't need to worry about overtime." Salaried doesn't mean exempt. Exempt employees must meet certain duties before you don't have to pay them overtime. Double-check with HR or your employment attorney to ensure that you pay your employees correctly.
" Non-competes are not enforceable, right?" While many non-competes aren't worth the paper they are written on, don't assume this is the case. Have your employment attorney double-check. States have very different laws around these--don't assume and have your new employee's former company come after you.
" I'll handle this EEOC charge on my own." You might as well say, "Oh, I'd like to lose this case." EEOC cases are tricky, and you can get yourself into a lot more trouble by not hiring an attorney. Contact an employment attorney as soon as you receive notification that the EEOC is involved.
" This complaint is stupid, I'm not even going to respond to it." It may be stupid. The complainant may be a whiner and a liar. It doesn't matter. Please don't ignore it. Investigate and consult with counsel.
" Aren't you proud that we have an all-female [or any other protected characteristic] team?" The law requires that you do not discriminate on the basis of sex, not that you can discriminate against men but not women. This is basically announcing that you engage in illegal discrimination.
" I'll just find an employment contract online." While this sounds cheaper than a lawyer, you know what's expensive? When you get sued or run into another problem because that online contract didn't reflect your actual needs. State laws are critical for employment law, and something you find online may not meet your state requirements. Plus, are you sure it's up to date? Spend the money to hire an attorney. Plus, it's just not that expensive to get a professional contract.
" I'm going to dock your pay if you...[fill in the blank]." There are only a few cases where you can dock pay. Unless your employment attorney already approves this specific thing, you'd likely be breaking the law if you dock pay.
" I'm a nice guy, I don't want to have that conversation." Do you know why managers make more money? Because they have to have these tough conversations. Whatever conversation you avoid now will get worse. If an employee has a problem, address it immediately rather than letting it fester.
" Just tell them they are performing fine." This goes along with the above problem. If you have a poor-performing employee and you tell the employee they are performing fine--something crazy happens--they believe you. And when you give them a "meets expectations" performance appraisal, you've documented that. And then, when you can't take their poor performance any longer and want to terminate, your employee won't believe it's for performance reasons. If they claim discrimination, how will you prove it wasn't? After all, their performance was "fine," according to your documentation.
" This employee is a problem, let's move them to a different role." Moving a problem employee from one department to the next doesn't solve the performance issues. This is different than finding a job the employee is more suited for--if I'm doing accounting work, I'll be a failure, but move me into HR, and I'll be running the place in a week. But, if your employee has a bad attitude, bullies, ignores regulations, or any other major problem, moving them won't solve the problem and will likely cause more.
So, if you find yourself saying any of the above phrases, it's time for a gut check and a call to HR or your employment attorney. Don't let these problems go on, and know your own limits.