By David A. Torres, J.D.
Journal Guest Writer

With layoffs, downsizing and stressed-out employees, it is more important than ever for employers to focus on the legal aspects of hiring, managing and terminating workers.

At a recent seminar sponsored by Invensure Insurance Brokers of Irvine, Calif. for human resource managers, business owners and others responsible for hiring and monitoring new employees, we explored issues that should be on every employer's mind when it comes to hiring practices, tracking employee performance, use of an employee handbook and areas of litigation.

The message was quite simple: The hiring of new employees is an important step for any company. But the work doesn't stop there.

Singer-songwriter Stephen Stills wrote in 1966, "Paranoia strikes deep. Into your life it will creep."  Now, more than 40 years later, nowhere has paranoia crept deeper than in the hiring habits of today's employers, who so live in fear that they may not be in compliance and become targets for litigation that they forget it's their business. That should be the number one priority.

This happens all the time. Instead of developing a process and a system to safeguard their company from lawsuits, they end up relinquishing control of their company by focusing more on potential pitfalls than making sure they have hired the right employee. And after that, it's often too late.

There are several reasons why this happens. First is the high litigation potential that exists in our culture-everyone is looking to sue someone. Second, the government wants to tell you how to run your business, or at least that's how it seems. On the surface, they are telling you "this is how it's going to be." But they're never really telling you how to do it. That, as owners, you control. At some point, you have to say, "It's my business and I am in the best position to know what's best for it."

That control, particularly when hiring new workers, is all about communication. It's what creates a healthy and safe working environment, while at the same time decreasing both the need for termination and filing Workers' Compensation claims.

For instance, employers make their first mistake when they hire a forklift driver and automatically assume because it says on his resume he drives a forklift that he knows everything about the job he is going to do. What he doesn't know is your company, because you never took the time to explain it. He doesn't know your product, he doesn't know the facility, he doesn't know your best clients, and he doesn't really know what's expected of him.

That's not all. He doesn't know (and the employer may not know, either) that he has been set up to fail due to lack of communication. And with 80 - 90 percent of workplace injuries occurring within three months on a new job, the employer has laid some dangerous groundwork for Workers' Compensation claims.

I once worked with a company with more than 400 employees, and the owner of the company made it a point to spend 30 minutes on the floor with each new employee to make certain they understood everything they could about their new job, and what was expected of them. As a result, there was a drop-off in terminations and job-related injuries.

Communication is also a key element when evaluating an employee's performance. Unfortunately, for many employers this procedure takes on a bureaucratic quality in which evaluations are rigidly structured as formal reviews once a year or once every two years.

Evaluations should be conducted as often as possible. The foreman or manager should take the initiative to sit with an employee whenever possible to say, "This is how you do the job correctly." It should be constructive criticism, and it should be verbal, not just written.

Time after time, however, the foreman or manager lacks the resolve to confront employees about their performance, to let them know if they are doing a good job or need to show improvement in certain areas. Then, a year later, the unsuspecting employees are handed a negative review they fail to see coming and they are out the door. Suddenly, the company is missing a worker and faced with training a new one.

What comes next is a lurking fear that the suddenly terminated worker may be seeking legal options. All of which could have been avoided through proper communication.
          
Toward the end of the seminar, someone in the back of the room raised a question. "How important is it for a company to have an employee handbook?" It was a good question and one that had a very short answer: "Not very important at all."  Needless to say, that quieted the room down a bit.

An employee handbook isn't as important as many companies think it is, and at best, it's overrated. It's all about open communication, not the pages in a book that will probably sit in a drawer. In fact, very often it's the employee handbook that causes trouble for the employer.

For instance, California is an employment-at-will state, which means as an employer you can walk in tomorrow and fire anyone and never have to give me a reason why.

Yet, companies will put things like this in a handbook: "If you're late one day you get a verbal warning, two days a written warning, and three days a termination notice." You can see what's happening. By including these criteria in a handbook "employment-at-will" is taken out of the mix. Such written terminology becomes "reasons" for termination. The employee now thinks there has to be a reason to be terminated, since it's all outlined in the employee handbook. This is dangerous water to be treading in because a handbook sets expectations that aren't really necessary.

What is necessary when looking to avoid costly employment mistakes in a down economy, where workforces are getting leaner and every worker becomes increasingly valuable, is very simple ... just good communication.

David A. Torres, J.D., is a senior partner with the Advocacy Division of Employer Support Services Group Inc., 9140 Haven Avenue, Suite 105 Rancho Cucamonga, Calif. 91730. He can be contacted at (909) 948-9500 or davidt@employersupportgroup.com.