Six Common HR Mistakes to Avoid

June 17, 2025

There is no magic pill that completely shields a company from an employment lawsuit. However, avoiding the mistakes below will certainly help bolster your company’s defense should a claim arise.

Mistake #1: Not Documenting Employment Issues
The lack of documentation relating to disciplinary and/or performance issues is the biggest mistake an employer can make. Documentation that is contemporaneous with the employment issue is the best evidence a company can present to establish it was having problems with the employee long before any adverse employment action was taken.

After every discussion with an employee about their performance, conduct, or attendance, it is critical you document the conversation – even if the employee is not being “formally” disciplined. Documentation should include the following: The date of the conversation; People present for the conversation; The problem that was discussed with the employee (including when the problem occurred); Improvement(s) the employee is to make; For performance or conduct problems, make suggestions on what the employee can do to improve; and Identify the consequence(s) if improvement is not made.
– For example, “Failure to improve performance may result in further correction action, up to and including termination.” The document should be placed in the employee’s file and a copy provided to the employee. It is essential to maintain consistency across your company in terms of documentation and discipline, ensuring that all employees are held accountable to the same standards.

Mistake #2: Ignoring Training
A company’s training program should begin on the first day of employment. Start the employment relationship with onboarding training, where you teach new employees not only about their day-to-day tasks, but also about your corporate culture (i.e., introduce them to key people, identify company goals and values, and integrate the employee into their department). As a part of the company’s values, provide the new employee with sexual harassment prevention training.

Additionally, throughout the employment relationship, provide employees with training relevant to their job duties, equipping them with the necessary tools to succeed in the workplace. This is especially important for supervisory staff. Provide them with basic training on the ADA, FMLA, timekeeping, handling employee complaints, sexual harassment, etc. so they are prepared to address issues arising in the workplace properly. Optimum offers many online training courses to increase your employees’ knowledge and skills.

Mistake #3: Poor Recordkeeping Practices
The employee file is intended to contain the “story” of an employee’s employment with your company. The employee file should be stored in a secure location and should contain all relevant paperwork related to the employee. However, it is recommended – and in some instances required – that employers create separate employee files for health and welfare-related matters and for investigations into employee complaints. In addition, all employee’ I-9 forms should be together in their own file/binder. If you use electronic onboarding, all onboarding documents can be found in the employees’ accounts within the system.

What should be in the employee files?
Personnel File: Job applications/resumes, offer letters, W-4s, performance reviews, disciplinary documents, counseling memos, training records, confidentiality agreements, signed handbook acknowledgements
Medical File: Insurance benefit forms, medical leave of absence information, Doctors’ notes, Benefits enrollment papers, workers’ compensation information
Investigation File: Employee complaints, communications with complainant (accused & witnesses), interview notes, investigation reports

Mistake #4: Outdated Employee Handbook
It is best practice for all companies to have an employee handbook, but once one is in place, it is equally important to ensure the handbook is kept up to date. It is best practice to review your handbook on at least an annual basis and make any necessary revisions to keep your handbook compliant with state and federal law. Partner with your Optimum HR Professional for handbook review or updates.

Mistake #5: Poor Hiring Decisions
Selecting the right candidate for an open position is the most important task an employer can perform. Not only do you want someone who can perform the job duties of the open position, but you also want to select someone who will fit into your corporate culture.

When seeking that perfect candidate, do not simply focus on the skill-based questions. Be sure to also ask behavior-based questions so you obtain a better understanding of how a candidate will fit into your company culture. For example, instead of asking “How are your customer service skills?” Ask: “How did you work through a difficult customer service situation in the past?” The candidate’s response will not only enable you to spot potential red flags in knowledge, skills, or competencies, but it will also help you evaluate whether this candidate is a good cultural fit for your organization.

Mistake #6: Ignorance of the Local/State/Federal Laws Governing Your Company
The most critical mistake an employer can make is being unaware of the laws governing their company. Ignorance of the law is not a defense to a lawsuit. A company that is unaware of a law may not escape liability with “but, but Your Honor… I didn’t know!!” An employer who avails itself of the privileges of doing business in a jurisdiction is tasked with knowing and complying with the laws of that jurisdiction, even when local, state, and federal law all apply.

The most effective way to reduce your company’s risk of a claim is to familiarize yourself with the law. Keep abreast of new law changes by reading Optimum’s monthly newsletter and attending offered webinars and be sure to partner with your Optimum HR Professional before making any employment decisions to ensure they are compliant.

By following these best practices, as well as cultivating a positive work culture, you can significantly reduce your risk of an employment claim.

This article is for informational purposes only and should not be relied upon for legal advice.