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From Hefty Penalties to Damaging Employee Lawsuits: Recognize and Prevent the Risks of Inadequate Workplace Poster Compliance

With all the labor law issues you must navigate as an employer, you may wonder if workplace poster compliance is that big of a deal. Who’s even checking if you’re displaying these postings?

It turns out poster compliance is a very big deal, and in more ways than you may realize. Proper compliance comes into play in almost every dispute regarding employee rights. Whether you’re involved in a government investigation or an employee lawsuit, you’ll be responsible for proving labor law poster compliance – or face greater consequences.

How a Single Employee Complaint Could Hurt Your Business

So how would anyone even know if you’re keeping up with labor law posters? While it’s true that government agents typically don’t visit a workplace just to inspect posters, they could show up for another reason.

Let’s say a disgruntled employee files a complaint with the Department of Labor (DOL) claiming you mishandled overtime wages. The DOL’s Wage and Hour Division (WHD) sends an investigator to your workplace. During a visit to review your time and pay records, the investigator also discovers that your mandatory workplace posters are missing or outdated.

First, your business could be fined – as high as $38,000 per location for federal violations, with state and local posting fines ranging from $100 to $1,000 per violation. Next, your noncompliance could lead to bigger problems if an employee lawsuit ensues. Failing to display the proper postings could extend the “statute of limitations” because you didn’t notify employees of their legal rights. This means your business could be forced to defend old claims that should have been dismissed or time-barred (two years under the Fair Labor Standards Act (FLSA), for example). This could result in higher damages and a longer recovery period for back wages.

Neglecting to display up-to-date labor law postings informing employees of their rights is a huge risk – legally and financially.

A Closer Look at “Good Faith” vs. “Bad Faith”

You also need to be aware of the concept of “bad faith.” Under various employment laws, you can incur additional damages for showing bad faith (or the reverse – have violations reduced or excused for “good faith”). Posting compliance is a factor courts will consider for this determination.

If you’ve acted in bad faith by not fulfilling your legal obligation to display current labor law posters, you could face significantly higher damages. In federal discrimination or harassment lawsuits, this may mean punitive damages, issued in addition to damages for back and front pay, emotional distress and legal fees. They are typically the largest portion of a plaintiff’s total settlement. Without good faith, you may also have to pay “liquidated damages” in suits involving laws such as the FLSA and the Equal Pay Act (EPA).

Year-Round Poster Compliance Protects Your Business

Clearly, it’s critically important to satisfy labor law posting requirements. With the dedicated service of Poster Guard® Compliance Protection, you’re guaranteed 365 days of hassle-free labor law posting compliance. You’ll receive an up-to-date federal, state and local poster set, along with automatic poster replacements every time a mandatory change occurs. Best of all, you’re guaranteed 100% compliance.

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