Managing human resources can be challenging, but one misstep could transform a simple oversight into a costly, time-consuming lawsuit. Did you know that, in 2023, the U.S. Equal Employment Opportunity Commission (EEOC) handled over 522,000 calls regarding inquiries and complaints against employers? These ranged from unsafe working conditions to complex discrimination cases.
Navigating HR compliance doesn’t have to be scary, though. The key is understanding potential pitfalls and having the right systems in place to avoid them.
In this post, we’ll review 7 common HR mistakes that could lead to employee lawsuits and how to avoid them in 2025. Whether you’re a small business or a growing organization, we’ve got you covered.
HR compliance can have serious ramifications – but taking proactive steps to develop a robust process can help you avoid costly mistakes. Being proactive about developing – and documenting – HR processes teaches your staff how to comply with the law and helps you keep updated with changing regulations. Appointing compliance representatives or maintaining up-to-date employee handbooks can simplify this task!
Understanding the difference between exempt and non-exempt employees or independent contractors versus employees is no small task. Yet, these distinctions are essential under the FLSA and a critical facet of employment law. For instance, declaring an employee as exempt without meeting the specific salary threshold and job requirements could lead to fines and back pay.
How to stay compliant:
States often have their own laws regarding overtime pay, minimum wage, and child labor. It’s not one-size-fits-all, so be sure to check locally too!
Workers’ compensation is mandatory for most businesses, but compliance can sometimes falter due to poor record keeping, payment delays, or extensive workloads. An employee injured at work has the right to timely and fair compensation, and failing to provide it can result in legal action or hefty settlements.
How to stay compliant:
Quality workers’ comp protects your people during unfortunate accidents and helps you reassure them that you are looking out for their well-being.
Negligent hiring can pose serious risks, especially if an employee's past behavior or qualifications were overlooked during the hiring process. For instance, not running background checks could result in hiring someone who might subsequently create harm, leading to lawsuits.
How to stay compliant:
A proactive, well-documented hiring process can mitigate risks before they even arise and ensure you hire the best people for your company.
In 2024, the EEOC filed 48 cases on behalf of workers with disabilities. Employers must provide reasonable accommodations for employees with disabilities and avoid discrimination during hiring and employment processes.
How to stay compliant:
It’s not uncommon for employers to under-prioritize safety regulations. But Occupational Safety and Health Administration (OSHA) violations, whether it’s missing safety training or ignoring hazard concerns, can lead to accidents—and lawsuits.
How to stay compliant:
No matter the industry, a safe workplace benefits everyone—physically and financially.
Employees have the right to form, join, or assist labor unions, and interfering with these rights is a guaranteed way to attract legal trouble. Threatening, discouraging, or retaliating against employees involved in union-related discussions violates their rights under the NLRA.
How to stay compliant:
Respecting and supporting employees’ rights is the foundation of a positive and compliant workplace.
The Genetic Information Nondiscrimination Act (GINA) prohibits employers from using genetic testing information when making decisions about hiring, firing, or promotions. Even collecting this data without reason can lead to complaints.
How to stay compliant:
When in doubt, it’s better to be overly cautious about how you handle sensitive information.
The rules governing employment might feel overwhelming, but compliance doesn’t have to be daunting. With the right systems, policies, and support, you can protect your business while empowering your team.
At PRemployer, we work as an extension of your HR team to make compliance simple, efficient, and stress-free. From creating automated tracking systems for workers' compensation claims to offering expert guidance on ADA accommodations, we’re here to identify risks and give you peace of mind.
Reach out to PRemployer today to learn how we can help your business avoid costly mistakes and build a compliant, thriving workplace.