When working with small business I generally suggest they do an HR audit. While doing the HR audit I found also problems with some of their business practices. What are those business practices that may get your business in trouble and open your business for liability? What are some of the bad business practices I have seen? Are you doing any of the following?
First, the business owners are not providing training about sexual harassment and discrimination to managers and supervisors. Educating your workforce is one of your best defenses against lawsuits. If you have more than 50 employees you are required by law to provide two hours of training on sexual harassment for your supervisors and managers (AB1825).
Second, I have encountered business owners that terminate an employee while on a protected leave, such as workers’ compensation, pregnancy, disability, family and medical leave, military leave, jury duty etc. The law also protects workers from retaliation for taking the leave.
Third, I have seen business owners provide a loan to employees and then try to deduct the money from their paycheck each pay period. Labor Code 224 allows you to deduct those authorized by law and those authorized by the employee; loans are not included! Also, I have seen businesses that create a “use it or lose it” vacation policy; this kind of policy is not allowed in California. Under California law, earned vacation time is considered wages; therefore, all earned and unused vacation must be paid to the employee at his or her final rate of pay. Limit your liability. Solution? Place a reasonable cap on the accrual
These are some of the bad business practices I have seen and they are easy to solve. Take the time, review your business practices and make changes as needed, in the long run it will be worth it! Don’t allow the enforcement agencies fine you for something you can avoid.
