Managing employees without getting sued: Do's and don'ts for employers

We often hear businesses refer to their employees as “one big happy family.” If your business is one of them, take heed. While this is a pleasant concept intended to boost morale, it could actually land you in court. Every supervisor needs to remember that he or she is the boss—not a family member or friend. You may not think of yourself as a boss, but if you have final authority as to your employees or even a voice in management decisions, you are considered a supervisor under the employment law. Supervisors’ actions bind the company, and how you manage your employees could cause the company to either face liability or avoid it. Here are some guidelines for you.

1. Do document management conversations and decisions. Issue coaching and discipline when it is warranted. This puts the employee on notice that he or she needs to improve. Coaching can be an email reminding the employee that you discussed what they need to change. If the coaching doesn’t result in the change, a good disciplinary write-up will include specific ways that the employee can improve. It also creates an important paper trail for the company if a lawsuit arises down the road.

2. Don’t gripe with subordinates about work or about other employees. This only encourages your employees to gripe and certainly doesn’t improve morale. You don’t want to do or say anything you could regret later.

3. Do report issues to your supervisor or human resources—especially if the issues have to do with discrimination or harassment. If you know of a problem, even if it is in another department or you just heard a rumor, report it. Those issues rarely go away if ignored. Also, report the problem to the right people—don’t vent about it to your subordinates. You want your employees to know that the company will fix problems. Your commentary on decisions (even if not yours) could result in or contribute to a lawsuit.

4. Don’t play favorites—or create the appearance that you are. If you are old friends with a subordinate, for example, you may be tempted to go to lunch with that person. Either socialize with all of your subordinates or none of them.

5. Do make sure that your employees are properly compensated under the Fair Labor Standards Act. It is the company’s responsibility under federal law to keep records of all non-exempt employees’ time worked and pay received. If you know that employees are working, the company has an obligation to pay them—even if it is “just a few minutes” or they are “volunteering” and know you can’t approve the overtime. If a lawsuit arises, the company needs these records to show an employee received all compensation owed, including time and a half for overtime worked. Be sure an employee is paid for all time worked—not less, not more. If you round up in calculating paychecks, you may feel like you are doing your employees a favor, but you are actually calling into question the accuracy of your payroll records. Time and pay records need to perfectly match.

We want your business to maintain good morale and for your employees to feel valued, and we think you can best achieve this by following these guidelines. If you remember that you are the boss rather than a friend, your employees will respect you as a supervisor who treats them fairly and holds everyone to the same standards. Your business will be a better place to work, and your good practices will help the company best defend a lawsuit if it comes up—and hopefully avoid one altogether.

This article, “Managing employees without getting sued: Do's and don'ts for employers,” first appeared in the Birmingham Business Journal on July 21, 2017.