Keep careful employee count—Exact numbers may pay off in lawsuit — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Keep careful employee count—Exact numbers may pay off in lawsuit

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You never know exactly when a lawsuit may strike. If that lawsuit involves several employees and Title VII violations, your legal bills could quickly grow. That’s because employees are entitled to compensatory and punitive damages.

But the law caps damages depending on how many employees an employer had during the year in which the discrimination took place or the year before. Employers with fewer than 100 employees during at least 20 weeks are liable for up to $50,000 in damages per employee. But break the 100 mark, and the total doubles to $100,000.

Recent case: The EEOC sued Everdry Marketing on behalf of 13 telemarketing employees who claimed their supervisors grabbed their breasts and buttocks and sucked their toes while they tried to sell the company’s basement waterproofing products. A jury awarded the women both compensatory and punitive damages, with several women topping $50,000.

The company was able to persuade the court that it never had more than 100 employees during any 20-week period. Therefore it was liable for only the first $50,000 of each employee’s award. (EEOC v. Everdry, et al., No. 01-CV-6329, WD NY, 2008)

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