Employee Liability Management - ABC's of Small Business

Employee Liability Management

“We the jury, find for the plaintiff and award damages in the sum of $10 million.”

This is one of the most dreaded scenarios in business today. It can hit your company suddenly and from many different angles -- a manager makes sexually suggestive comments to a secretary or an employee, bypassed for a promotion, alleges discrimination. You thought you had everything under control -- until the lawsuit hits your desk.

In today’s litigious society, informal or “understood” policies on matters like sexual harassment, drug use, and discrimination are insufficient. What is required are documented human resource policies with clearly defined steps for action and implementation. Individual personnel files containing regular performance appraisals and signed acknowledgments verifying that employees have read and understood company policies are also needed.

But how does a small business owner manage such a task along with all the other responsibilities of being an employer? While having your own human resources department sounds ideal, it is not cost-efficient for most organizations with fewer than 100 employees. So, is there an affordable alternative?

Yes! A growing number of businesses are turning to Professional Employer Organizations (PEOs) to better manage their employer risks and responsibilities.

How does this work? It’s simple. Instead of the traditional employer/employee relationship, the PEO establishes a co-employer relationship with you and the employees. This allows the PEO to provide a full range of services, and assume or share the many employer-related liabilities.

As a co-employer, a top-quality PEO can also provide employees with the fringe benefits of a Fortune 500 company. You gain the HR advantages of a large company while retaining the warmth and flexibility of a small business setting, a proven formula for attracting and keeping productive employees.

With respect to managing employer-related liabilities, here a few examples of how a PEO can help your business:

• Sexual Harassment Awareness: Administaff can conduct an in-house sexual harassment awareness seminar to educate staff and management on this important subject. Definitions and guidelines are presented in the context of a zero-tolerance policy. Also, a written policy will be integrated into the employee handbook for all employees.

• Substance Use: PEO's can provide substance abuse prevention training seminars, enhancing employee understanding about the dangers of substance abuse in the workplace. A substance abuse/drug testing policy with proper implementation and supervision can significantly reduce the threat of employer liability in this area.

• Discrimination: Specific job description and performance review policies keep potential hiring, firing and promotion liabilities to a minimum. A PEO can help your company stay current on the laws and regulations related to discrimination matters.

• Employment Process: PEO's offers pre-employment testing, scoring and reporting to help identify the best candidates for the job. Background and reference checks are also available.

In today’s competitive business environment, small businesses need to be aware of the HR issues that could jeopardize their organization and take steps to minimize potential problems. A PEO can provide this important service and more, allowing you to focus on your business.

Administaff, one of the nation’s leading PEOs, serves as an off-site, full-service human resources department for a large number of client companies across the country, including many banks and financial institutions. Founded in 1986, today Administaff is a billion dollar company serving tens of thousands of worksite employees and is the only PEO listed on the New York Stock Exchange.

Administaff’s eight point Personnel Management System covers a wide-range of premium quality services including recruiting and selection, performance management, training and development, benefit management, owner support, employment administration, government compliance and employer liability management.