Armanino Blog

Being An Employer Is Risky Business

by Jenn McCabe
December 21, 2017

Having weak human resources policies can be a real threat to your bottom line, because employers face a multitude of labor-related risks. Our Outsourced Finance and Accounting practice includes a team of HR specialists―we like to call them risk managers―who have seen firsthand the potentially pricey mistakes employers can make in this confusing area.

Want some tips from our savvy road warriors? See if any of these scenarios sound familiar:

  • You suspect one of your employees is pregnant. Keep your suspicions to yourself. No, you can't ask if there's a baby on the way, and not just because it's rude. Yes, you have to be ready to provide support for a disability claim, and you also need to be ready to provide a leave of absence (required in some states) during which you may need to ensure that the employee's job will still be there when they want to come back. Leave management (for a real baby or a food baby!) is tricky.
  • You bring bagels to a company meeting and one of your staff deeply and horrifically slices their finger while cutting them in half for you. No good deed goes unpunished, and while it's not your fault, it is your responsibility. You need to get them medical care right away and file the proper report with the proper authorities for a job-related injury.
  • You are interviewing a qualified candidate who has a tattoo that you're pretty sure indicates they've done time. Even if you're brave enough to ask who the tattoo artist was, don't. If you like the candidate but want to run a background check, go ahead―just pay close attention to fairness and timing. If you want to check someone's background, you also must do background checks for your existing employees and all the other folks you hire. Timing-wise, you can't do the background check until after you have extended a job offer, and you shouldn't have the person start work until the background check is complete.
  • You hire someone, but on their first day, they mention that their immigration status is a bit fuzzy. Send them home and give them no more than two additional days to provide documentation proving their right to work in the U.S. (the I-9 form). If they can't, rescind the offer. And for goodness sake, read the instructions on the I-9. For example, it states that the employer has to review the employee's original documents and sign the form. Also, you must pay the person for those days at home―even though it's not legal to pay them because they aren't legal to work. Go figure.
  • One of your staff tells you that their colleague is posting hateful updates about your company on Facebook. Nope, you can't safely do a thing about social media posts. Social media accounts are private. It's like eavesdropping on your staff in their living room without permission.
  • One of your ex-staff goes to the Department of Labor (DOL) or the state employment authority (in California this is the Employment Development Department, aka EDD) and files a claim for overtime pay because you let them work through lunch in order to beat traffic, or because they worked four 10-hour days instead of five eight-hour days to get a long weekend. Yes, you owe overtime pay and penalties for being so cool and flexible.
  • You want to fire someone for "apparently" being intoxicated at work, or for punching a co-worker in the coffee room when they used the last drop of milk. Pause, even if it seems obvious. Yes, you can terminate them, but you should have a written policy clarifying your expectations concerning conduct. You should also, in some cases, investigate the behavior and thoroughly document it. You can send the person home while you investigate the incident and figure out what you're going to do.
  • You want to fire someone for failure to perform their job well. Surprisingly, this can be easier than hiring them. In an at-will employment situation, documentation is less rigorous than you might think. However, you don't want the firing to come as an unexpected shock. If getting canned is a surprise to the employee because you were shy about communication, it could get ugly.
  • You want to do a friend a favor and let their kid intern at your company for the summer. Your pal is so grateful, he says it's okay not to pay the kid. Nope, not okay. Interns must be paid, on payroll. Make sure they're covered by your workers comp policy, too. In some cases, school credit can count as compensation, but the kid in this example probably isn't getting academic credits.

To protect yourself and your bottom line from situations like these, you need to have solid HR policies in place. And when in doubt, turn to an HR expert―it can save you money and headaches down the road.

Find more helpful insights from Armanino's Outsourced Finance & Accounting team.

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Jenn McCabe - Partner, Outsource HR - El Segundo CA | Armanino
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