Unless you’ve been under a rock, the fact that many start-ups have recently found themselves on the wrong side of the litigation or threatened litigation “v.” should not surprise you. In fact, it is often the very things that make start-ups so appealing – their laid back culture, open floor plans, no dress code, lack of defined titles – that can create some of their worst HR nightmares.  With this in mind, here are my top five proactive tips for keeping your start-up out of trouble:

1. Harassment and Discrimination Training:  Routine training managers and other supervisors on how to respond to and act in certain situations can save start-ups from unnecessary litigation. Through training, start-ups can ensure that decision-makers prohibit workplace harassment and discrimination and shield against a hostile environment on the basis of any protected characteristic.

2. Create and Maintain an Employee Handbook:  All employers, regardless of size, should have an employee handbook to help ensure that employees receive important information about company guidelines, procedures and benefits.  A well-written employee handbook can set expectations with regard to performance and conduct, address routine employee questions and satisfy various legal and regulatory requirements by communicating certain information to employees.

3. Institute a Complaint Policy:  A complaint policy should include a detailed procedure through which employees may report an incident of harassment, discrimination or retaliation.  Employees who believe they have experienced harassing or discriminatory conduct should be encouraged to file a complaint before the conduct becomes severe or pervasive.  Employers should document all oral complaints or reports in writing.  After a complaint is made, employers should complete a prompt and thorough investigation.

4. Avoiding Wage and Hour Violations:  Wage and hour violations typically result from improper classifications of employees who have either been misclassified as exempt or as independent contractors.  Certain employees are “exempt” from overtime but exemptions are narrowly construed, and failure to properly classify status may lead to expensive claims. It is also critical to correctly determine whether individuals providing services are employees or independent contractors because independent contractors are not covered employees by the FLSA.

5.  Documentation and Recordkeeping:  Any event that is not documented did not happen.  As such, documentation is important to limit exposure to workplace litigation.  Employers should document all employment decisions and such documentation should:  (1) occur as close in time to the incident as possible; (2) show that the employer had a legitimate, non-discriminatory business reason for a possibly adverse action; and (3) put the individual on notice of any performance or disciplinary issues and provide the individual an opportunity to correct his/her performance or avoid future policy violations.

Originally published by the SHRMBlog, republished with permission.