When most business owners think about protecting the asset value of their business, thoughts naturally revolve around insurance:
Each of these has a specific purpose and, therefore, provides coverage for specific issues, but….
Is this enough to protect your retirement?
Today there is a BIG LIABILITY MONSTER that now represents an even greater risk to you.
This MONSTER is the risk and liability associated with lack of employment compliance. This MONSTER is putting businesses in financial jeopardy, perhaps even more than you may realize. Malpractice, liability and workers’ compensation insurance will be of no help to you.
You may have a strategy to minimize your risks. These strategies may include:
• “At-will” prerogative
• The very popular “just don’t put anything in writing”
Employers unknowingly undermine “at-will” by creating contracts with their employees that take away the flexibility to discharge “at-will.” Language such as…
….both verbally or in writing, may create a contract and undermine “at-will” prerogatives.
Incorporating, whether that be PC, LLC, S, or C, is designed to separate you and your personal assets from those of the business entity. Unfortunately, the “line” between you and your corporation is commonly blurred (auto expenses, vacations, supplies), making it easy for an attorney to “pierce the corporate veil” and join you personally with your corporation.
The advent of arbitration for resolving disputes was an attempt to solve problems in a more amicable manner, and without the protracted legal expense involved to fight claims such as wrongful discharge, discrimination, harassment, and the like. One mistake that employers make regarding arbitration is thinking that it covers all disputes, which it doesn’t. The Supreme Court has upheld the EEOC’s right to pursue victim-specific judicial relief, even when an employee has agreed to submit discrimination disputes to arbitration. Thus today it appears that arbitration doesn’t fully protect you anymore.
The “Just Don’t Put Anything in Writing” idea is a huge mistake. Unwritten policies can often result in inconsistent treatment of employees, which can lead to charges of discrimination. In this situation, employees begin questioning why others received something different, in most cases more beneficial, than they did. When they cannot conclude that the inconsistent treatment was based on legitimate reasons, they conclude it had to be based on discrimination and may think the remedy is to file a claim against the employer. A court or a government agency will generally expect the employer to have a personnel policy manual in place and will request, among other information and documentation, to review it.
DON’T LET THE LIABILITY MONSTER EAT YOUR PROFITS! PROTECT YOURSELF BY APPLYING PROPER EMPLOYMENT COMPLIANCE PRINCIPLES INTO YOUR BUSINESS!
Download the entire article referenced in this post by Bent Ericksen & Associates.
Protecting Assets part 1
Protecting Assets part 2
Protecting Assets part 3