Strategic collaboration between legal and HR can help reduce risk with the business' internal clients.
The human resources department deals is responsible for managing the company’s workforce and is a key department in ensuring the company's compliance with ever-changing employment regulations. It is responsible for lawful hiring practices, providing the best possible benefits with the least cost to the company. They also deal with all employee discrimination claims.
Win or lose, the bottom line is that employee lawsuits are costly. A 2017 study from Hiscox, Inc found that 24% of employment charges resulted in defense and settlement costs averaging a total of $160,000. On average, those matters took 318 days to resolve.
Ways Legal and HR can collaborate
Here are 6 ways legal and HR can collaborate and align cross-functionally:
Annual Policy Review
The legal team should work with the human resources team to audit their policies at least once annually, or whenever there is a change in law, per jurisdiction. The legal department can be a good resource for the human resources department when it is drafting a whistleblower policy, a sexual harassment policy, or an anti-retaliation policy, as examples.
The employee handbook should also be reviewed annually to ensure that any employment-related laws that have passed in each jurisdiction have been updated and contain the language they need to in order to protect the company.
Employment law compliance is a monumental task that grows more complex in larger workplaces. However, it doesn’t take much employment law expertise to try to do the right thing. The fact is, happy employees are much less likely to sue you for minor issues. For this reason, legal and HR can advise each other on risk mitigation strategies that promote employee happiness and reduce business risk.
One example of this is developing a standardized review process and personnel improvement plans (PIPs) throughout the company. Opening the lines of communication gives employees a chance to voice concerns before they become larger problems like retaliation or harassment claims, which is oftentimes the result of poor management.
Legal and human resources can work together to create educational trainings for managers about hiring laws, forbidden interview questions, spotting their own biases in the hiring process, and managing compensation targets. Human resources has the schooling and training to understand all the legal implications of unlawful hiring practices and they ought to share this knowledge with management.
Conducting Regular Trainings
A large portion of employee-related legal actions are related to harassment or discrimination. In order to prevent theses types of lawsuits companies should hold regular trainings with all of their employees to help them understand what constitutes harassment and discrimination. This is especially important for members of the management team who are often at the root of the claim. Demonstrating that you are sensitive to these serious workplace issues will go a long way.
Handling employee-related claims
A strong relationship between legal and HR means a quicker resolution of an employee-related harassment or discrimination claim. Legal will issue a legal hold, and HR will conduct their own internal investigation and gather documentation.
The most successful companies plan for these scenarios, have a procedure in place for issuing a legal hold, and drafted language for that hold. The discovery process in a legal hold is much easier when there is a single source of truth for necessary documentation shared between legal and HR.
Legal can advise on the risks associated with the use and storage of applicant’s and employee’s Personally Identifiable Information, or PII. A lot of these issues lead to privacy concerns which has been getting a lot of attention in recent years due to the General Data Protection Regulation (GDPR) put in place by the European Union.
Legal and HR can collaborate to standardize practices
Hiring and firing are sensitive matters and can come at great cost to the company if standard practices are not put into place. Although the human resources department leads the charge for the legal hiring of workers, both domestically and across borders, it is imperative that the legal department also has a clear understanding of the work climate for various employees within the company. When the two work together, the company is better insured against legal action against internal employees.
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