Posts Tagged ‘Workplace Laws’

Unintended Consequences of Workplace Laws

Thursday, August 4th, 2016

courtgavelThe following post is by Bruce Clarke, CAI’s CEO and President. The article originally appeared in Bruce’s News & Observer column, The View from HR.

Our nonprofit association helps employers understand and comply with employment laws. We talk with lawmakers about workplace realities and the unintended consequences of well-intended rules. Employers understand the lawmaking process is chaotic and bears little relationship to a high school textbook on government. Still, the cumulative impact of thousands of laws and rules is a crushing burden to smaller employers.

Putting Out a Fire

State legislators are good firefighters, much better than Congress.   Show them a problem nearing the point of no return, and they will act. Workplace examples include workers’ compensation reform and unemployment insurance overhaul. Both became so unaffordable and unsustainable, difficult changes were made under Democratic and Republican leadership. True, if acted on sooner, the reforms could be gentler, but it is just not the nature of the legislative beast.

Solving the Real Problem

Many thoughtful legislators work hard to draft a solution to a significant, complex issue only to see additions or deletions gut the original intent. Sometimes, just the title from the original bill remains while the final text avoids those issues or addresses new ones entirely. When we ask human resource leaders to speak to committees about workplace bills, employers are surprised at this incongruence.  “What problem is the bill now solving?” and “What problem is the bill now creating?” highlight the squirrely journey from concept to reality, or on to legislative oblivion.

Protecting an Industry

State law contains many specific protections sought and maintained through smart lobbying. Tobacco companies won the “Lawful Use of Lawful Products” statute years ago to prevent employers and others from turning no-smoking rules into no-smokers rules. “Lawful products” were protected rather than the less-sympathetic cigarette. Lobbyists seek statutory licensing requirements for all-manner of trades and vocations with part of an eye on consumer-protection but both feet planted in competition-reduction: private investigators, cosmetic artists, nutritionists, massage therapists and lawn irrigationists are examples. North Carolina has over 100 tightly restricted trades, one of the highest numbers in the nation.

Pet Peeves

More often than we realize, a lawmaker’s idea for a bill is based on a single anecdote. A contractor in a lawmaker’s district did not get paid by a homeowner, so a bill was introduced to require paycheck deductions to repay all types of consumer debts. Imagine every employer withholding payroll dollars on past due credit card bills statewide, all because this one contractor was not paid?!   The bill failed, but each session brings a rash of next-door-neighbor bills and some do become law.

For these reasons and more, on balance, new laws tend to have more unintended than intended consequences. Some of those unintended consequences are good depending on your perspective. Others cause employers and consumers expense way out of proportion to any good accomplished. There are some great people in public service. Listening more to the people regulated or restricted by new laws, rather than primarily the isolated complainer (or well-financed advocates), would lead to better legislation.

CAI helps 1,100+ North Carolina employers with HR compliance, guidance, local survey data, training, tools, templates and more.

Bruce Clarke c

Bruce Clarke serves as CAI’S President and CEO, and has been with CAI since 2001. Bruce practiced labor and employment law with the national labor law firm of Ogletree Deakins for 18 years. He is listed in The Best Lawyers in America and was selected as one of North Carolina’s Legal Elite by Business North Carolina Magazine. Bruce is 100% committed to helping companies maximize employee engagement and minimize workplace liabilities.


How to Avoid Employee Lawsuits

Tuesday, October 5th, 2010

While the 2010 numbers will not be available until early 2011, Jury Verdict Research reported that the median award for all employment-related claims in 2009 ($326,640) was 60 percent more than it was in 2008.

In addition it’s widely expected that the number of employee lawsuits will continue to increase, in part due to the recession.  Another contributor to that increase is the growing presence of attorneys who specialize in filing lawsuits for employees with grievances against employers, and not just claims regarding hiring/firing practices, but also charges of discrimination, defamation and several other issues.

An employee lawsuit can deplete your time and money when those resources should be better spent. It also can result in substantial damages to your business should you lose the suit.

To minimize the likelihood of an employee lawsuit happening in the first place, take the following actions:

1)     Treat all employees with fairness, dignity and respect. Create an atmosphere of positive employee-employer relations.

2)     Have signed documentation from the employee that he or she has read the employee handbook and agrees to follow it. The handbook should include an antidiscrimination and harassment policy as well.

3)     Communicate company policies on a continual basis. Do not just give employees a handbook and never address the policies again.

4)     Put safety standards into place and make sure employees know they exist. The N.C. Department of Labor has a guide explaining how OSHA standards work in the state and what employers can do to comply with them.

5)     Train your managers on workplace laws. Make sure they are aware of the many laws that apply to the workplace and that they follow them stringently.

6)     Consistently enforce company policies. Do not let some employees slide while disciplining others for the same violation.

7)     Document the progressive disciplinary process. Notify the employee in each case about what they did wrong along with filing this information securely.

Even if you follow all seven steps above you may still be sued by an employee.  You may want to check with your insurance carrier to see if they offer employment practice liability insurance. More insurers are offering this benefit. Details on what a plan can cover can be found at the Insurance Information Institute website.

For additional information on how to avoid employee lawsuits, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: U.S. Department of Defense