Follow Benton Linkedin Twitter
Email Benton Email
Legal Issues
May 1, 2015

10 Reasons Employers Get Into Legal Trouble With Employees

Sponsored Content provided by Benton Toups - Attorney, Cranfill Sumner & Hartzog LLP

In no particular order, I’ve compiled a list of the top 10 reasons I see employers get into trouble with their employees. Surely this list isn’t comprehensive, but over the last 15 years of practice, I’ve seen more employment lawsuits and agency charges spring from these circumstances than any others.

  • Incorrect exempt/nonexempt decisions – Generally, nonexempt employees are due overtime for hours worked in excess of 40 in a given week. Exempt employees are not. The proper classification depends on actual duties, not job title. Misclassification is dangerous, especially when an entire group of employees is misclassified.
  • Improper deductions from pay – Under the North Carolina Wage and Hour Act, deductions from employee pay may only be made under a limited set of circumstances, usually requiring written authorization from the employee.
  • Bad interview questions – I hear employers say over and over, “I knew from day one that employee was going to sue me one day.” Effective interviewing goes a long way towards weeding out the “walking lawsuit.” In addition to effective interviewing, employers must take care to engage in lawful interviewing. Some questions, like inquiring about ethnicity or age, are unwise. Others, like those inquiring about potential disabilities, are per se illegal.
  • Failure to pay everything owed in the last paycheck – Under the North Carolina Wage and Hour Act, employers must pay separated employees all wages due on or before the next regular payday following separation. This means all pay due, including wages such as accrued, unused vacation or PTO. There are, however, ways to control the amount owed through effective written policies. Pay special attention to employees paid by bonus/commission. Do your written policies address how such payments are to be made (or not) upon separation? If not, they should.
  • Improper classification of employees as independent contractors – Employees are employees, and independent contractors are independent contractors, regardless of what you call them. Misclassification adversely affects a wide swath of considerations, including wage payment, insurance premiums and tax liability.
  • Inaccurate evaluations – One of the more challenging circumstances I encounter is when I am called on to defend an employer’s decision to terminate an employee for poor performance, yet all formal evaluations are stellar. Providing criticism can be difficult, but (almost) no one is perfect; therefore, (almost) no performance evaluations should be.
  • White lies – I’ve written before about the importance of being honest when terminating employees. If you aren’t truthful, even in an attempt to spare feelings, chances are the recipient of the message will know it. In contemplating what the real reason for termination is, human nature dictates that the terminated employee will look outwardly, not inwardly, for someone to blame.
  • Uninformed front-line supervisors – Educated, informed office managers, human resources professionals and executives are great, but it’s the front-line supervisors who have the most contact with employees. As such, it is imperative that they receive training on your policies as well as the laws affecting how they interact with employees.
  • Running a large/growing business like a small one – As a business grows, the rules change. A business of 40 employees that uses the same employee handbook it did when it had five is asking for trouble. A business with 51 employees that uses the same handbook it did when it had 40 is almost per se breaking the law.
  • Failure to follow the golden rule – I saved this one for last because it’s the most important. Almost without exception, employees who file claims against their employers feel “wronged.” Avoid that feeling and you avoid lawsuits. Note this doesn’t mean I advocate being a pushover. The paramount consideration here is fairness. Employees who feel like they were treated fairly, even when they don’t like the outcome, can often come to respect the decision (and the decision-maker).
This content has been prepared for general information purposes only. This information is not intended to provide specific legal advice. Legal advice is dependent upon the specific circumstances of each situation. The information provided cannot replace the advice of competent legal counsel by a licensed attorney in your state.
Benton L. Toups is a partner at Cranfill Sumner & Hartzog LLP and serves as vice-chair of the Employment Law Practice Group. His practice concentrates on representing businesses in all aspects of labor and employment law. A firm believer in the adage that “an ounce of prevention is worth a pound of cure,” Toups counsels employers on day-to-day issues and assists them in developing and implementing policies to avoid employment litigation. To contact Toups, call (910) 777-6011 or email him at [email protected].

Wbj insights revised 0510
Ico insights


Susan 2 april242017

Realism, Preparation and Teamwork: Olympic Lessons for Investors

Susan Willett - Old North State Trust, LLC

Using a Supplemental Needs Trust for the Benefit of a Disabled Person

Kara Gansmann - Cranfill Sumner & Hartzog LLP
Lyleheadshot2017 1251720228

Why Can't You Just Write a Grant for That?

JC Lyle - Wilmington Area Rebuilding Ministry

Trending News

Off The Beaten Path, These Cafes Are Worth Special Trips

Jessica Maurer - Mar 14, 2018

Developer Again Seeks Military Cutoff Rezoning With 'less-intensive' Plan For The Avenue

Cece Nunn - Mar 16, 2018

Steak N' Shake Still Aiming To Establish Wilmington Presence

Jessica Maurer - Mar 14, 2018

Marina Grill Opens Today At Port City Marina

Jessica Maurer - Mar 14, 2018

Toys R Us Demise Could Put Valuable Wilmington Property On Market

Cece Nunn - Mar 15, 2018

In The Current Issue

Consistency Is Jimbo’s Key Ingredient

Jimbo’s – a play on Jim Boss – opened in 1977 and catered to a breakfast-and-lunch clientele as well as diners who wanted good food late at...

2018 MADE Honors Region’s Makers  

In the third year of our MADE Awards competition, the winners covered a wide range of products being conceived and produced in the local mar...

Local Craft Brewery Events Draw Visitors

It’s no secret now that craft beer is big business. And as the number of local breweries continues to grow, they’re impacting the area econo...

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!



WilmingtonBiz Expo - Keynote Lunch with John Gizdic, CEO, New Hanover Regional Medical Center
Wilmington's Most Intriguing People of 2017
2017 Health Care Heroes