This story originally appeared on Business on Main
It’s confirmed that all employees can make an honest mistake which will cost their employers some cash. These simple mistakes and miscalculations are forgivable. However, there is a different type of employee error which can be emotionally and financially devastating to small-business owners. The worst ones, of course, need a phone call to a lawyer.
Listed below are three types of unwelcome employee-caused gotchas that may easily get rid of a small-business owner’s year-end profit and bonus pool. Are you adequately protected? Continue reading to determine.
Co-worker harassment Federal regulations prevent a wide selection of workplace harassment, including bullying, coercion, intimidation and unwelcome sexual advances. Employers may become liable if a worker harasses a subordinate or if the employer does not correct behavior or activity which makes a workplace a "hostile environment."
A sexual harassment claim can occur in a big corporation or a little web page design company. And even if a case does not have any legal merit, companies still need to spend time and income defending the company and its own reputation. The resulting legal bills can run an easy five figures.
The starting place for minimizing the incidence of employee harassment claims is to instruct supervisors and workers just what constitutes workplace sexual harassment. That is also a great time to create rules forbidding employees from visiting porn sites on company time or transmitting suggestive emails to co-workers. Furthermore, business owners can buy a jobs practices liability insurance (EPLI) policy that generally covers employee sexual harassment, discrimination and wrongful termination claims.
Traffic accident liability Do you or your workers conduct business by cellular phone while worries? You can do inside our mobile economy. But imagine if an employee member becomes distracted on a business call and may be the cause of a vehicle accident where someone is seriously injured or killed? Who’s responsible for a wrongful injury or death claim — your company or your employee’s auto insurance carrier? The answer is currently working its way through the court system, meaning that some businesses are spending of pocket for hefty legal bills.
In the past, Oprah Winfrey publicly announced that her employees could no more conduct business by cellular phone while driving in an automobile. Further, she also asked vendors never to talk to her company while driving in an automobile. Should you be not yet prepared to institute a ban on business-related cellular phone use while driving, take the time to take into account the unthinkable. Speak to your business insurance professional about worst-case-scenario coverage, including legal costs. Companies that don’t possess specialized liability or fleet insurance might not have any coverage because of this sort of disaster.
Employee theft and fraud The numbers are difficult to verify but different studies estimate the price of employee theft, especially in retail businesses, to maintain the billions. Workplace theft is more sophisticated and costly than employees simply poaching low-cost office supplies. Employees can receive kickbacks from vendors who pad invoices, bill for unworked overtime, withhold payments from cash customers, or divert goods from offsite supply chain partners.
Years back, I caught a fresh accounting employee who forged my name for some pilfered company checks. The fraud was caught fast only because I monitor accounts receivable and accounts payable just like a hawk — obviously much better than my chief financial officer. Other companies I know aren’t so lucky. One colleague lost a lot more than $600,000 over many years through clever payroll fraud.
The simplest way to uncover employee theft is to shake up any office routine rather than assume that your entire accounting, inventory and payroll management workers are entirely honest or inclined to report dishonest co-workers. Consider hiring an unbiased security or forensic accounting firm for a surprise overview of your company’s operations. When employees know the most notable boss is watching, they might be less inclined to risk adding a criminal history with their post-pink-slip resume.