If you are a business owner, you have a lot on your mind; running the business, meeting goals, managing expectations and most likely handling employees. Employees can present serious issues for businesses, especially small businesses. Here are 5 potential issues that arise with employee lawsuits that are likely to give any business owner a headache.
- Cost. The average employee lawsuit cost a business more than $160,000, and it is not uncommon for insurance to make zero payment. A lot of small businesses can't afford to take that kind of hit and continue operations as normal.
- Your Reputation is at Stake. It's not just legal issues and expenses you have to worry about, an employee lawsuit can hurt the business reputation. It's not uncommon for employee lawsuits to be based around discrimination, and that means people (customers) aren't going to want to be associated with your business, even by proxy. There is no keeping things quiet in today's social media driven world - news of a discrimination lawsuit could cost you current customers and potential new ones.
- Time. An employee lawsuit is not usually a quick and easy process. The average employee lawsuit takes 314 days to resolve, and depending on the type of suit and other factors it may take closer to two plus years. Of course, that isn't where all your time is spent, but if you own a business time is money, and if you're looking at a year or more battling a lawsuit, that's a lot of time that can be spent other business goals.
- On the Rise. Employee lawsuits are on the rise, increasing in both 2015 and 2016. Employees are quicker to file lawsuits against employers than ever before. If you are a business owner, that should mean one thing to you: it can happen. In Massachusetts alone, companies with employees between 6 and 14 people paid out half a billion dollars in employee lawsuits.
- Issues Come in Lots of Forms. There's more than one issue employers have to worry about when it comes to the legal side of employees; the top 5 are:
- Family and Medical Leave Act
- Americans With Disabilities Act
- Wage and Hour
- Discrimination
- Firing
Business owners have plenty to worry about without being in constant fear of what could go wrong with an employee. The smartest thing to do is take some proactive steps to reduce potential risks from employee lawsuits.