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How a PEO Helps Protect Businesses From 3 Common Workplace Lawsuits

Business owners sometimes find themselves in legal trouble despite their best intentions to be good employers. There are several things that employers can do to help protect themselves from workplace lawsuits, including keeping up with all relevant employment and discrimination laws and enforcing a harassment-free work environment.


There is a long list of federal, state and even local labor laws that every business owner must comply with in order to avoid legal issues. These laws affect lunch breaks, paid holidays, sick pay, the minimum wage, overtime pay and much more. It would be challenging enough if new business owners were required to learn all relevant labor laws just once before opening their first business, but the reality is that employment and labor laws change every year. Partnering with a Professional Employer Organization (PEO) is a great way for small businesses to make sure that they are staying in compliance.

3 Common Workplace Lawsuits


Here are 3 common workplace lawsuits that can usually be avoided with help from a PEO:


1. Discrimination


Nobody wants to be faced with a discrimination lawsuit. The good news is that they can usually be avoided by following all federal and Hawaii discrimination laws and making sure that your discrimination policies and procedures are available to all employees in a clear document. In addition, employers should protect themselves by documenting and keeping records of all employee reviews, performance reports, and warnings / plans for correcting unwanted behavior.


In Hawaii a potential employee may not be discriminated against or harassed for many reasons including their race or national origin, their religion, the color of their skin, their pregnancy status or gender (including gender identity), disability, age, sexual orientation or marital status. Under the act, Hawaiian employers must also provide reasonable accommodations for certain protected classifications including pregnancy, disability, and victims of domestic violence.


2. Harassment


Unlike a discrimination lawsuit, a harassment claim is not based on whether the employee is a member of a protected class. Anybody can be the victim of harassment, though harassment is more commonly directed at people who fall into a protected class. Harassment can take on many forms, including hateful or sexual comments and physical actions such as groping.


Employers are obligated to provide a safe working environment for their employees, free from harassment. Managers and owners must always act in a respectful manner that follows all Hawaii workplace harassment laws. If harassment is reported to management, actions must be taken to protect the accuser and investigate the complaint in a fair and thorough way.


Business owners can help protect themselves from harassment lawsuits by creating and making available an employee handbook that lays out expectations for company conduct. Annual review of the book along with employee training are two of the best ways to remind managers and employers of what is not considered acceptable behavior in your workplace and what actions will be taken against anyone who violates the rules.


3. Overtime


Overtime is hours worked outside of normal working hours. While this sounds straightforward, it can actually be a little complicated to track overtime hours. The Fair Labor Standards Act (FLSA) is a federal law that sets the rules for overtime pay requirements for non-salaried, hourly employees.


In order to prevent overtime lawsuits, employers should create systems or processes that help employees and employers accurately track hours worked for each non-salaried, hourly employee. In addition, employers should never ask or require their employees to work overtime without providing compensation that follows FLSA regulations.


How a PEO helps protect businesses from common workplace lawsuits


A PEO offers prevention and protection from workplace lawsuits. A PEO helps their partners track compliance, eligibility, hours, wages, leaves, unemployment claims and more. Businesses also benefit from access to a team of expert labor law attorneys to review claims and provide guidance, and pre-negotiated fees for local external labor attorneys when needed. PEOs may also provide additional protection with Employment Practices Liability (EPL) coverage for all clients.


Disclaimer: This article was written for the purpose of providing general information. This article is not intended to be taken as legal advice.


Partnering with Makai HR


Not excited about employer laws? That’s okay; we’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are compliant with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long and changes happen). When choosing a PEO to partner with, there are many things to consider including cost, services, and technology solutions.


With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet, or phone. We can truly improve your employees’ work benefits while freeing you up to run your business.


What are you waiting for? Companies that partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!

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