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The Importance of Good Employment Law Foundations

ByChris Porteous,
business.com writer
|
Nov 06, 2019
Pattanaphong Khuankaew / Getty Images
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Here's why it's of the utmost importance to lay good employment law foundations if you want to avoid future legal peril.

Most business owners understand the importance of complying with the law, yet few of them are sure of how to protect themselves from potential accusations of legal wrongdoing. This is because many entrepreneurs who are incredibly talented in commercial affairs are understandably ignorant when it comes to the complexities of employment law. Nevertheless, you can't afford to ignore employment law – this will end up costing you significant sums of money and could even jeopardize your commercial existence.

Case law that demonstrates the risks

American case law demonstrates that any employer who doesn't have a strong understanding of employment law could be in serious trouble sooner rather than later. When we discuss "case law," what we're talking about is previous legal decisions, which have established a precedent that could impact you if your company is ever involved in a serious legal dispute. Various cases demonstrate that employees could successfully sue your company if you don't lay down a solid legal foundation for your business that will keep everyone happy and on the same page.

When Sen. Elizabeth Warren detailed her account of losing a job due to her pregnancy, for instance, it led to a plethora of people coming forward to share their stories of pregnancy discrimination. In some instances, workers have successfully sued companies on the basis that they were fired for being pregnant. This shows that you must clearly establish when someone's contract ends if you don't want to end up with a legal calamity on your hands.

It's not only American case law that shows this, either: In the U.K., Laura Gruzdaite recently won £28,000 for discrimination related to her pregnancy because a company didn't clearly explain in her contract that she was only a seasonal worker. The company initially hired Gruzdaite as a seasonal worker who was planned for eventual dismissal, but she was able to persuasively argue that she was fired on the basis of her pregnancy because she signed a contract that mentioned no specific dates of employment. British legal precedent often intertwines with American legal precedent – the American legal system is, after all, based on the British one – meaning that both sides of the Atlantic can benefit from studying this case.

Now that you know you could face serious employment law disputes in the future, how can you actually protect your company from lawsuits and discrimination claims? The primary answer is to draft crystal-clear contracts that take most possibilities into consideration, even if it means hiring a legal expert to help you with the process.

The importance of treating your employees right

It may seem ludicrous to even have to say it, but many businesses don't realize how much protecting and treating their workers right will pay off. This is because workers who have no issues with your company won't have much legal reasoning to stand on if they want to sue you; mistreated workers with shoddy contracts, however, can take you for all you're worth under certain circumstances. This is why it's worthwhile to read up on why employment law is essential for small business owners. Far too many entrepreneurs make the ugly mistake of thinking that employment law is something that only corporations need concern themselves with. When it comes to how many people you hire, how you make hiring and firing decisions, and how you treat your workers, even small business owners can find themselves in legal jeopardy if they try to bend the rules too much in their favor.

Giving employees periods of leave, for instance, may seem unproductive at first but will pay off in the long run. Forcing employees to take leave allows your company to argue you're looking after their wellbeing. After all, they can't argue you're overworking them if you mandate occasional breaks and relief periods wherein they're not expected to show up to the office. This is another way that a good employment law foundation gives your business a fighting chance if it ever finds itself in legal hot water.

Other standard elements of employer protection include documenting everything that happens in the workspace to the greatest extent possible. If someone is injured, you can't cover it up; you must clearly address what happened, why, and how you intend to move forward. Recordkeeping isn't always easy, and it sometimes demands a dedicated specialist, but the detailed records will pay for themselves as time goes on. You might avoid an incredibly expensive lawsuit because you held on to a contract with terms clearly favorable to your legal argument.

It may seem obvious that you need a legal expert to help you establish good employment law foundations, but few entrepreneurs know where to start when it comes to soliciting the services of good legal counsel. Lawyers come in all types, after all, and finding an effective yet affordable one can be a real nightmare if you're unfamiliar with the ins and outs of the legal industry.

How to find an excellent lawyer

It's worth turning to expert advice when determining which lawyer you should hire. Personal referrals are popular for one simple reason: If a legal expert helped out a friend or company related to yours, there's a strong chance they can help you out of whatever legal bind you find yourself in. Nevertheless, you shouldn't be afraid to search far and wide for good legal representation, especially if you own a business in a niche industry that may be difficult for everyday legal professionals to navigate. Finding specialists usually entails spending more, but I'll say it again: Expensive legal foundations for your business pay for themselves by helping you avoid disastrous court rulings that could ruin you financially.

Contracts and policies should always be crystal clear and easily accessible to workers, so if you hire a lawyer who tries to confuse employees in order to legally outwit them, you may have made a terrible decision. Remember that transparency and honesty aren't only morally right, but they will likely pay off in the legal arena by proving that your company did everything possible to accommodate employees who feel as if you've wronged them.

Of course, it must also be said that you can't expect to get away with bending the rules. If the people at the top of the food chain don't care for the rules, your pristine contracts and established policies won't mean anything. Being responsible and fair is essential for any business owner who wants to ensure their company doesn't end up in court, as even the best lawyers can't always protect you from your own misbehavior.

Paying employees fairly, giving them the benefits they deserve, clearly illustrating the details of their contract and relying on excellent legal advice will go a long way in keeping your business safe. As you move forward into a tumultuous market, remember the importance of good employment law foundations.

Chris Porteous
Chris Porteous
See Chris Porteous's Profile
I'm a serial entrepreneur and owner of three internet ventures, including My SEO Sucks. A contributor to ZeroHedge, Entrepreneur.com, Forbes, Inc.com, and dozens of other media outlets, I believe in SEO as a product. I developed a proprietary technology fueling the #1 rankings of My SEO Sucks clients. In guest speaking ventures across North American, I advocate for organic search traffic as the backbone of any comprehensive digital marketing strategy.
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