Companies that hire workers provide them with pay, benefits and valuable career experience. Workers can benefit substantially from even short-term employment arrangements with a business. Unfortunately, not all employees have positive relationships with their employers or former employers. Some workers actually end up taking legal action against the companies that pay their wages because they allege that the company violated either Texas or federal wage laws.
Such lawsuits can be very expensive for a company, as they may take months or possibly even more than a year to resolve. They can also do major damage to an organization’s reputation with the local community, including the pool of prospective employees. Organizations facing a lawsuit brought by an employee may benefit from performing the three steps outlined below as soon as possible.
Reviewing employment records and contracts
When an employee alleges wage violations, company records could help undermine those claims. Going over payroll records and the terms of a contract can help validate or refute a worker’s claims of unpaid wages. Companies should retain three years of payroll records and other employment information. The details in those records can help settle a dispute. Workers sometimes assume they should receive certain bonuses or raises without any contractual obligations to support those assumptions.
Exploring alternate dispute resolution options
Just because an employee files a lawsuit does not mean that the matter has to go to court. In fact, a large percentage of employee lawsuits actually settle outside of court or end up dismissed before they go to trial. The decision to work with an arbitrator or mediator could lead to a mutually-agreeable resolution for both parties.
Gathering evidence for court
Even while going over contract and employment record details and waiting for a mediation session, a company can simultaneously gather evidence supporting its position in a wage dispute. Employment records, company contracts and even payroll records can help a company effectively combat the allegations made by a dissatisfied employee in the civil court. It is often best to look for ways to settle outside of court while simultaneously preparing for the possibility of a trial.
Organizations that respond assertively to a worker’s wage-related lawsuit are less likely to suffer losses triggered by negative publicity and unfavorable court rulings when compared with those that simply assume that a judge should rule in their favor. Looking for ways to settle or limit the publicity of an employee lawsuit can largely mitigate the harm such litigation can inspire.