A company fired someone for too many absences and found itself in trouble with the EEOC.
Your new business is a success and you’ve hired your first employees. As you juggle growing responsibilities with new hires, you may be tempted to leave things like employment policies and procedures until later, when your company is bigger.
That’s a costly mistake too many entrepreneurs make, says Stefanie Camfield, assistant general counsel at EngagePEO. Ignore the need for policies, procedures, and clear goals and benchmarks for your employees and you could find yourself on the receiving end of one or more lawsuits.
In an interview with Inc., Camfield describes the mistakes she most often sees entrepreneurs and small-business owners make around employment law.
1. No anti-discrimination policies.
“The lack of policies and procedures is probably the most common error I see,” Camfield says. The question of policies is a bit of a balancing act, she acknowledges. “As you’re building your company, you don’t need to have the whole repertoire of policies and procedures that don’t necessarily apply quite yet.”
However, you should have anti-harassment and anti-discrimination policies almost from Day One — and they’re an absolute requirement if you have 15 employees or more. If an employee files a complaint and the Equal Employment Opportunity Commission (EEOC) conducts an investigation, they will take the presence — or absence — of these policies into account. And, Camfield says, once you have the policies, don’t just throw them in a drawer. It’s important to communicate them to your employees and to provide training about them.
2. Not setting benchmarks and goals for every job.
Having job requirements is a good first step, but every job at your company should also have well-defined goals and expectations, as well as metrics that determine good or bad performance, Camfield says. Many small companies and new companies lack these things, she adds.
“I see this over and over again, particularly in smaller companies that are starting to build out,” she says. “They’re very concerned with the product but they don’t really have a way of measuring the work that goes into that product. Particularly when it comes to service-based products.”
For one thing, this is bad management. Employees need to know how they’re measuring up to expectations and whether they’re doing their jobs badly or well. Not giving them explicit goals can lead underperforming employees to feel overconfident and highly performing ones to feel insecure.
It also leaves you vulnerable to lawsuits. “It’s difficult for a manager to coach or discipline an employee for poor performance if there’s no way of measuring performance,” Camfield says. “If you’re trying to say someone is doing a bad job, what are you basing that on?”
Imagine, she says, that you have two employees, one performing well, the other performing poorly, and so you terminate the poor performer. “And for whatever reason, that person is a member of a protected class and has the ability to file a claim against your organization,” Camfield says. That could lead to trouble. “They were treated differently from the other person, and you don’t have the data to back up the difference between a good performer and a bad performer.”
3. Having inflexible policies, especially about attendance.
For many employers, the Covid-19 pandemic was a lesson in why your attendance policies should encourage people to stay away from the workplace if they’re not feeling well. But, Camfield says, there are still many companies that provide a limited amount of paid time off and require employees to come to the workplace if they’ve used up that time.
In a previous role, Camfield worked with a company that had such an attendance policy. “On the first two instances of being late or an unexcused absence, you received a verbal warning,” she says. “On No. 3, you got a written warning. On No. 6, you got a final written warning and a period of suspension without pay. On violation No. 7, the policy required termination.”
An employee had six unexcused absences and had received the final warning and suspension. Then they were absent again — because they were in the hospital — and the employer terminated them in accordance with the policy. “Subsequently, the company found out that, not only was this person in the hospital, but they were in the hospital for an illness that could be considered a disability,” Camfield says. “The employee found an attorney who was willing to assist them and they filed a claim of discrimination.”
Sometimes, she adds, employers write policies like this one without fully considering the ramifications. “You’ve got to make the common-sense decision that this person was sick, it was dangerous for them to drive, they were in the hospital — whatever the reasons are, they’re not going to come to work that day.”
While it’s important to have written policies, she adds, “you also need to make sure that there is some flexibility in them so you can comply with the law and with other compliance considerations.”
And if you’re going to have strict policies around punctuality and attendance? “Work with an HR professional or even legal counsel,” she says. “Particularly if you’re getting to the point where you’re ready to terminate somebody.”
By Minda Zetlin