Written By Ed Mills

How Companies Can Use HR Software to Minimize the Risk of a Lawsuit

April 20, 2012 | omniprise / business

Jennifer King, HR Analyst for Software Advice, interviews our very own Ed Mills. She writes about HR and employee performance software. Read her review of OmnipriseHRM Software. 

How Companies Can Use HR Software to Minimize the Risk of a Lawsuit

As a business owner, every potential job applicant, employee and former employee represents a potential plaintiff in a lawsuit against your company. HR software could be your best bet for avoiding litigation or increasing your chances of a successful litigation outcome. If your company finds itself in a lawsuit, will you be prepared with the important documentation needed to defend your business?

By taking advantage of HR applications that assist with documentation, time and attendance tracking, and employee evaluations, companies can minimize the risk of litigation.

Protecting Against Wage and Hour Claims

When dealing with claims related to Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), companies just need to be able to identify and calculate the number of hours an employee has worked in a given work week to determine if they owe an employee overtime pay, or the number of hours worked to be entitled FMLA benefits.

Workforce management applications help HR departments keep better track of employee scheduling, attendance and hours worked, which could be key in determining if a plaintiff is entitled to additional compensation or leave.

Protecting Against Failure to Hire Claims

While failure to hire claims aren’t as common as wage and hour or termination claims, companies can still take advantage of HR software to ensure they have the proper documentation and consistent processes in place to screen and interview job applicants.

In addition to being able to electronically manage the recruiting, interviewing and hiring processes, applicant tracking software can help companies implement a more consistent application and interview process.

Employers can enforce a company-wide online application and consistent interview processes based on objective criteria for evaluating candidates, and then formalize those processes within an applicant tracking system.

Protecting Against Wrongful Termination Claims

In lawsuits based on wrongful termination, usually a former employee is relying on a federal or state statute such as Title 7, which prohibits discrimination on the basis of a protected classification. If an employer chooses to let go of an employee based on poor performance, the company needs to be able to prove the employee was consistently evaluated and was not able to meet the position requirements even after communicating that feedback to the employee.

One of the ways employee performance evaluation software systems can help is by automating the time consuming task of regularly evaluating employees. These systems can track performance, help supervisors track and schedule monthly or yearly reviews and then share the information.

However, it’s up to the employer to evaluate employees accurately and communicate those evaluations to them.

Start Minimizing Risk Now

Workforce management, applicant tracking and employee evaluation systems are some HR applications that could minimize an employer’s risk in regards to wage and hour, failure to hire, and wrongful termination claims. But according to experts in the areas of employment law and HR systems, there are some simple steps companies can take using HR software to further mitigate risk.

For one, companies can make sure their employee handbooks or policy manuals are up to date and electronically available within the company’s HRMS.

Another tip for companies to minimize overall risk is to follow their application and interview process to a T, even if that requires extra time and energy to make sure they’re hiring the right people.

“I think a good HRMS will prevent companies from hiring people too quickly,” says Ed Mills, co-founder of Omniprise. “If you have a good process in place that hiring managers have to follow, you reduce wasted time and money spent hiring the wrong people.”

We caught up with Mills for a quick video interview to discuss the topics even further. Watch the video here.

The information in this blog post is for educational purposes only and should not be construed as legal advice. You should contact your attorney to obtain advice with respect to any particular issue related to employment law.

The above content was written by Jennifer King,  HR Analyst for Software Advice and used with permission.


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