As an employer, you have many legally imposed obligations and requirements for dealing with your employees. From workplace safety to paying wages, there are a host of issues that you need to acknowledge and monitor. Employers often encounter trouble when you address those issues reactively instead of proactively. Also, you may deal with a problem once and then never address it again because you think it has been resolved. That can be very dangerous because the workplace is a constantly changing environment and the law evolves with it.

It's important to continue to deal with certain issues and the potential problems that may engender. Failing to regularly address those issues or modify your actions to match changes in the law can lead to large-scale problems. This article highlights some legal issues that you should constantly review and consider.

ERISA

Employee Retirement Income Security Act (ERISA) regulations have become voluminous. Many legal practitioners don't know the inner details of ERISA; without a doubt, most employers don't understand the large scope of the law or its ramifications. As a result, many people are ill prepared for dealing with ERISA and often don't understand the consequences of not complying with it.

ERISA generally covers employee pension benefits plans (e.g., 401(k) plans) and employee welfare benefits plans (e.g., health insurance plans). A "fiduciary" is anyone who exercises "control" over the plan, like the administrator of a 401(k). But that term can also refer to someone who has the authority to retain or terminate a plan administrator even though he doesn't actually participate in administering the plan. Therefore, big companies can have a rather large group of people that are considered fiduciaries under ERISA, including managers, directors, officers, and members of a board of directors.

Why should you concern yourself with ERISA? Because it imposes personal liability on fiduciaries in many situations. The law's regulations have generally been interpreted to require fiduciaries to act in the best interests of employees, not the company. Anyone who doesn't will expose himself to personal liability.

You should also be cognizant of your ERISA obligations because the U. S. Department of Labor (DOL) is stepping up its monitoring efforts. Recent accounting scandals at several big-name companies have moved ERISA to the forefront of employment issues. Violations of the law will likely lead to significant monetary exposure for your company that may not be covered by standard employment-related insurance policies. As a result, you should regularly review your ERISA compliance when dealing with employee benefits and administering benefit plans.

Sexual Harassment

Sexual harassment is a major issue in the workplace today. It's unfortunate that anyone has to deal with it. Nevertheless, the law has clearly stated that sexual harassment won't be tolerated, and juries have been liberal in awarding monetary compensation to its victims.

The most basic step you can take to protect yourself from legal liability is to create and implement an effective sexual harassment policy. Many employers set out a policy prohibiting sexual harassment but do nothing else. That's a mistake. It's imperative to take additional steps to protect yourself after implementing your policy.

Providing your employees with sexual harassment training is an essential means for protecting your company from liability as well as educating your workforce. For certain employers, sexual harassment training is required. Proper training can be an effective way to advise employees of the legal requirements on both of you and highlight situations that can lead to problems. You should also regularly conduct training to stress the importance of this issue and provide education about changes in the law or other concerns. Simply providing training to new hires isn't enough.

Be proactive when taking steps to prevent sexual harassment. A reactive approach will only lead to problems later on. You should actively demonstrate that you won't allow workplace harassment. For example, if someone complains that she has been sexually harassed, you must investigate her complaint. If you find it has merit, the offender must be disciplined. That discipline should be commensurate with his conduct and severe enough to demonstrate that your company doesn't tolerate harassment.

Employee handbooks

Employee handbooks are an effective way to disseminate employment-related information, including your workplace policies. You should regularly review your handbook to ensure not only that it effectively spells out your policies but also that it's legally compliant. As issues in the workplace evolve, the law will adapt and you may need to modify your policies to adjust to the law's changing aspects. Regularly reviewing your handbook allows you to ensure that that happens.

An effective handbook will protect you from liability for your employment actions. An ineffective handbook can lead to legal problems and financial obligations that you didn't anticipate or desire. Be sure you evaluate your handbook regularly so you can maximize your benefits and minimize your potential liability.

Overtime

The DOL recently issued new regulations for the Fair Labor Standards Act (FLSA) overtime provisions. The government is hopeful that its regulations will make it easier for you to comply with the FLSA, but their interpretation and enforcement are an unknown to some degree. As a result, they may not solve all the problems the DOL hopes they will.

You should regularly review your payroll to ensure that you're in compliance with the FLSA's wage and overtime requirements (if they're applicable to your business). Not following the law could expose you to liability and significant damages. It's important to be sure that you're complying with the FLSA and properly paying your employees for their work. Performance reviews You should perform regular employee performance reviews, particularly if you tell your employees that their work will be routinely critiqued. Monitor your employees' performance and document any problems on a daily basis. Failing to contemporaneously document poor performance can make it difficult to prove later that an employee didn't meet your expectations and deserved whatever discipline she received. Therefore, your review should be thorough and contain input from as many sources as possible.

Many times, employers don't want to take the time to perform proper reviews of their employees' performance. That's a dangerous omission. A formal annual review of each employee's performance, combined with daily observations, will go a long way toward developing an effective and efficient workforce and will aid you in making key personnel decisions.

Bottom line

You must understand your obligations toward your employees on a host of legal issues. Although you may not encounter those issues every day (we hope), you should address them regularly. Employers will often take steps to protect themselves in certain situations but won't expend the extra time or money to stay constantly prepared for potential problems. Problems don't disappear simply because you've addressed them in the short term. You should regularly review your ability to deal with employment issues. That way, you'll be prepared to handle problems in the long run – and maybe even avoid them altogether.