Every morning, while enjoying my Starbucks and settling in to the day, I take a peek at the labor & employment dailies to see what’s happening in the exciting world of employment law…Clearly, I need to get out more, but I digress. This morning, my jaw dropped at the verdict, settlement and demand numbers published.  It’s not just employees of Fortune 500 companies seeking the big bucks, but also small professional services firms, hospitality companies, franchisees and non-profits that are being hit…hard. A survey I found identified 43% of small business owners as involved in a law suit or threatened law suit.

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It’s even more upsetting when I get calls weekly from small business owners being threatened with legal action who try to do the right thing, but just can’t figure out how to navigate the craziness of California employment regulations. So, while the budget for compliance may be non-existent, there are a few key preventative and low-cost tactics you can take to minimize risk and ultimately, costs of litigation:

1) Review your pay stubs.  Take a few sample stubs from the past two years and ensure they include all the requirements so you can minimize PAGA claims.

2) Implement three essential employment documents, a handbook, confidentiality agreement and arbitration agreement.

3) Address employee complaints as they arise.  Frequently, an employee will complain to a manager or small business owner but the demands of running the day-to-day business prevent timely investigation and resolution of these complaints. Sometimes, complaining employees just need to be heard and treated respectfully to avoid pent up frustration and subsequent legal action.

4) Consider a wage & hour audit.  Have an expert take a look at your overtime practices, payment on termination and employee classifications so you can fix problems before they become law suits.

5) If you worry that a decision could lead to litigation, run it by an attorney. Sometimes a brief conversation will enable you to avoid mistakes that could cost you a great deal of time and money.