We won’t sugarcoat it: trying to navigate the very intricate web of employment laws and regulations often feels like walking a tightrope. As HR pros, it’s our responsibility to balance the needs of our organization with the rights of employees, all while ensuring compliance with a legal landscape that loves keeping us on our toes. But even some of the most seasoned HR pros have stumbled, making legal mistakes that have led to costly consequences for both the organization and individuals involved.

From mismanaging employee classifications to overlooking proper documentation in investigations, these pitfalls can undermine workplace trust and expose your company to significant legal risks. Understanding the common legal missteps and learning how to avoid them is crucial if we care about maintaining a fair, compliant, and thriving workplace. So without further ado, here are 8 common legal mistakes HR pros tend to make — and how to avoid them.

1. Failing to document properly

Mistake: In the chaos of HR’s day-to-day responsibilities, documentation can sometimes fall by the wayside. Unfortunately, this oversight can lead to challenges if a workplace issue escalates to a legal matter, since proper documentation typically serves as a primary defense in disputes.

How to avoid it:

  • Develop a robust documentation policy.
  • Consistently document disciplinary actions, performance reviews, complaints, and workplace investigations.
  • Use clear, objective language and focus on facts rather than subjective opinions.
  • Train staff to follow consistent documentation practices, ensuring that all documentation is timely, thorough, and stored securely for easy access if needed.

2. Inadequate training on preventing sexual harassment

Mistake: HR professionals sometimes assume that they or their team have a comprehensive understanding of their state’s requirements on sexual harassment training (if applicable) without revisiting or updating this knowledge regularly. This can lead to biased decision-making or inadvertently allowing a hostile work environment.

How to avoid it: Regularly schedule sexual harassment prevention training for all employees. Training should include awareness of unconscious biases, protected classes, and workplace-specific scenarios. Updating training annually — or whenever significant changes to the law occur — will keep everyone informed and reduce the risk of discriminatory practices.


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3. Misclassifying employees and independent contractors

Mistake: Misclassifying employees as independent contractors or exempt employees as non-exempt (or vice versa) is another common error. This can lead to violations of the Fair Labor Standards Act (FLSA), resulting in penalties, back pay, and potential lawsuits. Eek!

How to avoid it:

  • Understand the legal definitions and tests (such as the Department of Labor’s “economic reality” test) for determining whether an individual is an employee or an independent contractor.
  • Regularly audit your company’s employee classifications to ensure compliance, especially if an employee’s role has evolved over time.
  • Consult your legal counsel for any ambiguous cases to ensure that your classifications are solid and justifiable.

4. Having an outdated or lackluster employee handbook

Mistake: An outdated or incomplete employee handbook can lead to misinterpretations of company policies and confusion regarding workplace expectations! Worse, it might omit critical legal protections for your company and employees, increasing legal exposure.

How to avoid it:

  • Review and update your employee handbook annually, confirming it aligns with current employment laws and reflects any changes in company policies.
  • Topics like harassment, retaliation, social media usage, confidentiality, remote work, and termination should be detailed, accessible, and easy to understand.
  • Make sure each employee acknowledges receipt of the handbook, either in writing or electronically, to confirm that policies have been communicated.

5. Improper handling of employee terminations

Mistake: Improperly managed terminations, whether due to lack of documentation or failure to follow fair and consistent procedures, are among the leading causes of wrongful termination claims. Hastily handled terminations, especially without sufficient cause, can open the door to potential lawsuits.

How to avoid it:

  • Standardize your termination process.
  • Conduct terminations professionally. Don’t forget to have valid documentation for the decision.
  • Offer a fair explanation, involve a witness from HR, and consult with legal counsel in more complex situations.
  • Maintain open communication with the departing employee, providing severance packages or outplacement services when appropriate to ease the transition and reduce hostility.

6. Ignoring reasonable accommodations requests

Mistake: Failing to recognize or respond to accommodation requests under the Americans with Disabilities Act (ADA) can lead to legal claims. Ignorance of an employee’s need, the perceived “unreasonableness” of a request, or delays in providing accommodations are common pitfalls.

How to avoid it:

  • Develop a standardized process for accommodation requests, starting with a clear channel for employees to make these requests.
  • Make sure that HR staff and managers understand what qualifies as a reasonable accommodation and engage in an interactive process with employees to determine what’s feasible.
  • Maintain detailed records of each request and the company’s response to ensure transparency and compliance.

7. Not staying current with employment law changes

Mistake: HR laws, especially at the federal and state levels, are always subject to change. Failing to stay updated can result in non-compliance with newly enacted laws, which could impact your company’s policies and overall HR practices.

How to avoid it: Make it a priority to stay informed on relevant employment laws by subscribing to legal newsletters, attending webinars, and joining HR organizations that provide regular legal updates. Engage with legal counsel when needed, particularly when major regulatory changes occur. Proactive learning and adaptability are key to maintaining compliance.

8. Overlooking the importance of data privacy

Mistake: With sensitive employee information on file, HR is often responsible for significant amounts of personal data. Inadequate data protection can lead to breaches of privacy laws like the GDPR or CCPA, which can carry hefty penalties.

How to avoid it:

  • Implement strict data privacy and security protocols, ensuring that employee information is accessible only to authorized personnel.
  • Regularly update cybersecurity training and consult with IT to ensure compliance with the latest data privacy regulations.
  • Document all data management practices and ensure transparency with employees regarding how their information is stored and used.

The bottom line

Navigating the complexities of employment law can feel daunting, but with careful attention and proactive policies, HR professionals can sidestep common legal pitfalls. By regularly updating policies, maintaining open channels for employee feedback, and consulting with legal experts when needed, HR can protect both employees and the company from legal risks, fostering a workplace that is compliant, inclusive, and fair.

Avoiding these mistakes doesn’t just prevent lawsuits; it strengthens company culture and builds trust between employees and HR. When HR takes the lead on compliance, it sets the tone for a respectful, legally sound, and employee-friendly workplace.