Is Your HR Department Understaffed or Unsure? Court Won’t Give Any Compliance Slack
Maybe your company is growing fast and your HR department is short-handed. Or maybe your HR staffers aren’t as up-to-date on compliance requirements as they should be.
As a pair of recent cases show, don’t expect any slack from the courts if you plead ignorance or overburden. In fact, not making an effort to learn the intricacies of HR law may be even more expensive than just breaking the law.
The legal risk of ignorance, along with new compliance duties and your growing workforce in this hot economy, may mean it’s time to add HR staff. You wouldn’t be alone—HR staffing levels are running at an all-time high (see chart below). And for six straight years, more HR departments in the United States have expanded their staffs than contracted, says a Bloomberg BNA study.
Two new court rulings illustrate the risk of an overburdened and underinformed HR department:
Case 1: A KFC restaurant worker in Pennsylvania sued, claiming interference with his right to take FMLA leave. He said that when he needed leave work after experiencing chest pains, no one explained the leave policy or his FMLA rights. He was fired six months later. The KFC franchiser had only one HR employee for all its new stores, which included 3,000 workers.
The court sided with the employee, saying that HR’s lack of involvement in the FMLA process could be evidence that management actively discriminated by withholding important information, thus interfering with his FMLA rights. (Abdelmassih v. Mitra, ED PA)
Case 2: Rather than pay workers by the hour, a New York store owner paid by “half day” shifts (up to seven hours) and “full day” (up to 12 hours). The owner didn’t track exact hours or keep records. When an employee sued for overtime, the owner said it was impossible for small businesses to understand the maze of federal, state and local rules. The court ruled against the company, also saying the owner who directly managed the store could be held personally liable for any damages. (Wu v. Natural Tofu, ED NY)
The bottom line: Courts won’t be impressed with the “Gosh, we were too busy to follow the law” defense. And because HR is the gatekeeper for many of those compliance issues, it’s possible that HR or top management could be held personally liable under certain laws. Make sure you (and your HR staff) know the law, and be prepared to call your attorney when in doubt. Educate decision-makers about their employment-law responsibilities.
Finally, follow the law, not just your marching orders. While it’s fine to be a loyal employee, you must ensure compliance with the law, even if execs want you to cut corners. Remember, personal liability means it’s your money at risk.