Hiring and firing employees are unavoidable features of running most businesses, and these endeavors are legally risky. Missteps in recruitment, termination or employee management can compromise an enterprise’s public perception and trigger lawsuits.
Employers in Minnesota can benefit from familiarizing themselves with the common hiring and firing mistakes their counterparts have made. By understanding these pitfalls, businesses can more effectively protect their legal standing and secure a workforce that meets their company goals.
Misclassifying employees as independent contractors
Employers can unknowingly classify employees and independent contractors during the hiring process. When an enterprise hires independent contractors instead of employees, the company can save on:
- Payroll taxes
- Employee benefits
- Insurance costs
However, these savings are not worth the legal trouble the employer may encounter in instances of employee misclassification. Employers can use the following criteria to determine worker classification. A company should only treat workers as independent contractors if:
- They are not supervised when performing services
- They offer services not included in other employees’ job description
- They operate as independent professionals
Suppose a worker’s operation in the company does not meet all three criteria; they should be identified as employees in the company.
Failing to document performance issues before termination
Many employers may believe it’s harmless to terminate employees without proper documentation. This is because they assume that Minnesota’s at-will employment status allows them to fire workers for any reason.
Even though at-will employment is a valid premise, employees can make wrongful termination claims if they believe there’s proof of discrimination. Without documentation, employers may struggle to defend against these lawsuits. Employers should make sure the company secures records of performance issues and disciplinary actions.
On the whole, employers can benefit from routinely enlisting reliable legal support to review their hiring and firing policies. This can help ensure that they phase out any practices that might land them in legal trouble.