LEGAL ISSUES CAN HAVE A RIPPLE EFFECT FOR EMPLOYERS

Employers never expect to have trouble with an employee when they hire them. Yet, disputes are all too common and often inevitable. Working to resolve employee disputes can be stressful, but there are a few critical things employers must do. FOLLOW THE RULES This might sound like a simple enough task, but employers must take great care to ensure they understand and adhere to the rules. These rules fall under two categories: The law: Of course, as an employer, you ensure you follow California employment laws every step of the way. However, it is even more important to review what you must do when facing a dispute, as well as the rights your employees have in this situation. This can help prevent issues from escalating and prevent retaliation claims, for example. Your policies: Employers establish conflict resolution clauses and policies for a reason. You expect your employees to follow these procedures, and you must as well. Long before you face an employee dispute, it is a good idea to review the laws and your employee policies to make sure they remain up to date and relevant. It often helps to have an experienced employment law attorney review your policies as well. That way, you can approach and manage disputes much more effectively. COMMUNICATE CRITICALLY Communication is always essential. In terms of any relationship, not just employment or business relationships, communication is how you work through conflict more effectively, especially when pursuing alternative dispute resolution. However, you must also be strategic with your communication. For example, you may want to speak to other parties involved in the dispute through your attorney or only with your attorney present. There are many matters to address in employee disputes. These steps will be critical to remember with every issue that may arise. Do not wait to address disputes. Employers must take swift action in these cases. While you should carefully consider how you move forward, it will be essential to seek guidance as soon as possible.

Under federal law, if a worker is 40 or older, they fall into a protected class. These workers have specific legal protections against employment discrimination. Employers and employees alike may know this. Even so, those protections do not keep discrimination from happening – particularly age discrimination. In 2021, we discussed how this trend was increasing in the workplace. It seems to have become even more prevalent in the last few years. What should California employers consider? WHY IS THIS HAPPENING? AARP reported that nearly 64% of workers over 50 they surveyed witnessed or experienced age discrimination in 2024. There are several likely reasons for the increase of this discrimination, including: Later retirement: Simply put, many people over 50 cannot afford to retire just yet. This could be due to personal or economic factors, but many older individuals continue working. In turn, this leads to an aging workforce. Return to work: On top of that, many retirees are actually returning to the workforce. Some do this for financial reasons, while others might return to work just to fill their time. Generation gaps: As Gen Z enters the workforce, the gap between workers’ ages widens. This is not at all to say younger workers hold responsibility for age discrimination, but the existence of the gap between ages could be a contributing factor. While employers should be aware of the factors that could cause this discrimination, what they do to handle this trend is what is important. 3 STEPS EMPLOYERS MUST TAKE Employers cannot control every aspect of their business – or their employees. However, they can take matters into their own hands to reduce the risk of discrimination claims arising. It is essential to: Pay attention. Stay in tune with your employees and the goings on in your company. This can help to ensure a safe and healthy workplace and manage risk preemptively. Address behaviors promptly. If you receive a report from an employee, take action immediately. Review your policies. Specifically, take a close look at the hiring procedures and termination policies. Make sure they comply with state and federal employment laws and include terms to help prevent discrimination claims. Employers are responsible for maintaining the first line of defense against discrimination claims. To build or strengthen that line, it can often help to seek counsel from an experienced employment law attorney.

California employers are familiar with AB-5 by now. The law aimed to protect workers from misclassification. Employers have had to use the ABC test to reevaluate whether workers they classified as independent contractors are indeed contractors under these terms. However, new statistics indicate that the law may not be working as intended. What should employers know for the future? WHAT DOES THE RESEARCH SAY? According to the U.S. Chamber of Commerce, many lawmakers believed that AB-5 would lead individuals classified as independent contractors to become employees. It seems that did not happen, however. The implementation of the ABC test and the ensuing reclassification of employees led to a decrease in employment across California. Studies found that employment fell by about 4.4%. IT COULD BE AGGRAVATING THE LABOR SHORTAGE Since the beginning of the COVID-19 pandemic, employers of all sizes have been struggling to fill positions. There are various factors behind the country’s labor shortage, including, but not limited to: The effect of inflation and cost of living crises affecting workers’ decisions A higher rate of workers retiring than those entering the workforce Reduced worker retention, for several reasons The effects of AB-5 on employment could contribute to the challenges that many employers face in the job market today, making it even tougher to find talent. WHAT CAN EMPLOYERS FACING THESE CHALLENGES DO? It is natural and understandable for employers and business owners to worry about their bottom lines and the futures of their businesses. However, it is critical to remember that workers play a large role in that success. While employers must still comply with AB-5, there are ways they can manage the challenges they face. It may help to: Invest in their current workforce with new training or opportunities Reevaluate workplace benefits and incentives Foster a healthy work environment for workers and employers alike In navigating the rules of AB-5, it may help to consult with an experienced employment law attorney. That way, employers can ensure they are in compliance with the law, while also preparing strategies to manage the effects of a labor shortage.