It’s the law Yet you’d be surprised how many small businesses ignore the importance of workplace labor law postings. They mistakenly think that no one is checking these posters, or that the chances of getting “caught” are low.

What these employers underestimate is the growing awareness workers (and their attorneys) have about employee rights. All it takes is a government investigation related to these rights – and you’ve opened the door to potential fines and legal complications.

Impact Could Be Devastating for Small Businesses

It’s true … federal, state or local agents typically don’t visit a workplace just to inspect posters. However, when they show up for another reason, such as a Form I-9 audit, OSHA inspection, EEOC onsite investigation or Department of Labor (DOL) follow-up to an employee complaint, they absolutely will check posting compliance.

Posting fines can be steep, especially for small business owners. Federal violation fines can amount to $34,000 per location, and state and local posting fines range between $100 and $1,000 per violation. (Each posting carries its own fines, because every agency and posting law is different.)

With increased media attention around high-profile lawsuits and heightened government enforcement, more and more employees are paying attention to their workplace rights (and violations). Educated employees likely will notice when employee postings are missing or outdated, and they may conclude employers don’t take compliance seriously. With every termination, layoff, demotion or other negative employment action, there is a risk that affected individuals will seek legal advice or contact government agencies.

Once that happens, your posting compliance may be scrutinized, and the financial impact to your business for violations could be crushing.

An employer sued for discrimination, on average, faces the following costs just to defend a case:

  • Attorneys’ fees if the case goes to trial: $250,000
  • Attorneys’ fees if the case settles before trial: $95,000
  • Manager time expended in the claim process: 40 hours
  • Employee time expended in the claim process: 40 hours
  • Employee time spent investigating the claim: 60 hours
  • Employee time spent preparing for trial: 60 hours

Compliance Provides a Powerful Line of Defense

Familiar with the term “statute of limitations” pertaining to labor law postings? It’s an essential concept, because it can mean the difference between avoiding a lawsuit and being involved in one.

The statute of limitations is a benefit because it allows you to dismiss a claim that was filed too late. For example, the statute of limitations for a federal discrimination claim is 300 days. For an FLSA overtime case, it’s two years. So, typically, if your business gets a claim from a former or current employee outside of the established time period, you can move to have it dismissed.

However, this only works in your favor if your postings are compliant. If you have an outdated poster—or no poster at all – courts may decide the statute of limitations doesn’t apply because you didn’t notify employees about their legal rights and responsibilities. This can force you to unnecessarily defend old claims that should have been dismissed as time-barred. It also expands potential damages for back pay or lost wages by extending the recovery period and the number of affected plaintiffs.

Your best defense: Courts recognize compliance with labor law posting requirements as evidence of “good faith.”

Here’s another term to familiarize yourself with: “bad faith”, under various legal standards, you may incur additional damages for bad faith (or the opposite—have violations reduced or excused for showing good faith). Depending on the law in question, courts look at a variety of factors to determine bad or good faith, such as whether you had written policies in place, whether you trained your managers on compliance matters, what actions you took to prevent and respond to violations and, yes, whether your postings were compliant. Proper posting compliance is not only a sign of good faith; it can also be your first line of defense in a lawsuit or agency investigation.

Let’s look at a case that drives home the importance of being compliant. In Lopez v. Aramark Uniform & Career Apparel, the court specifically referred to the employer’s failure to post the required EEO notice as a factor that precluded it from asserting a “good faith” defense. The employer’s noncompliance with posting requirements provided evidence of its “indifference” to the plaintiffs’ rights and to EEO compliance in general. As a result, the court supported the jury’s decision, which included $260,000 in punitive damages, along with damages for lost wages, emotional distress, attorneys’ fees and costs.

While this case involved a large organization, it still illustrates the impact that noncompliance can have on a company.

Get Compliant, Stay Compliant

Every U.S. employer has an obligation to display labor law postings informing employees of their rights. Neglecting to meet this obligation is simply too big a risk — legally and financially. Fortunately, businesses can easily maintain compliance with an online resource like the Poster Guard 1 Smart App. It addresses all posting and employee handout requirements for your specific location, with the guarantee of 100% compliance with the latest federal, state and local regulations.

Key Takeaways
  • Posting compliance isn’t an option; it’s the law.
  • Increased awareness of workplace violations means more employees understand their rights (and know when they’re not being met).
  • Fines and lawsuits could severely impact your small business.
  • Statute of limitations and good/bad faith are important legal considerations.
  • Poster Guard 1 provides all the necessary postings for guaranteed compliance.
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