Priority Number

The Fines and Penalties for Labor Law Poster Violations are Not Worth the Risk

Most employers know something about labor law notices. They know they’re required by law to post them. They know the notices list employees’ workplace rights. They also know that not posting the notices, or posting them incorrectly, is a violation. What employers might not know is how the seemingly simple task of displaying labor law posters can become precarious, and to what degree. 

The Basics 

Avoiding the risks associated with labor postings begins with knowing the specific requirements. Federal law requires six separate postings for businesses with 50 or more employees (five for businesses with less than 50). State laws add to that number — up to 14 depending where the business operates. 

Complicating the matter is that postings are issued by multiple agencies. The postings also change frequently, but the government typically does not notify businesses when changes occur. Since 2005, there have been approximately 150 federal/state posting changes each year. About 50% of those changes require either new postings or replacement of outdated ones. 

Staying current with labor postings is clearly time-consuming, but failing to do so can bring profound cost and complication most businesses cannot afford. 

More Than Fines 

The most obvious toll is steep government fines. Failing to comply with the federal posting on polygraph tests carries a civil penalty of $10,000. Other federal violations bring up to $17,000 in fines. 

Fines may just the beginning. Missing or outdated postings can significantly increase a company’s exposure in employment litigation. The first area of legal risk posting noncompliance creates concerns time. Being out of posting compliance expands the time frame for legal action. It’s called “equitable tolling” and it extends how long plaintiffs have to file lawsuits. Often, a case where normally too much time had passed is allowed to proceed to trial. Tolling also changes from how far back plaintiffs can recover back pay. 

The next area of legal risk deals with FMLA liability. The courts have come to equate simply failing to post required FMLA notices with actually interfering with an individual’s FMLA rights — strictly protected under federal law. This can lead to extremely expensive private lawsuits. 

The final area of legal risk affected by posting noncompliance relates to “good faith.” Government agencies, judges and juries consider an employer’s posting compliance as evidence of “good faith,” or generally acting honestly and fairly toward employees. Without it, penalties and sanctions from legal action are far more severe. 

In federal discrimination or harassment lawsuits, this may come into play as punitive damages, issued in addition to damages for back and front pay, emotional distress and legal fees. They are typically the largest portion of a plaintiff’s total settlement. Without good faith, employers may also have to pay “liquidated damages” in suits involving laws such as the Fair Labor Standards Act (FLSA) and the Equal Pay Act (EPA). This essentially means damages are doubled. 

Noncompliance: Not Worth the Risk 

Naturally, losing a legal action carries a substantial cost. That may be somewhat alleviated if the plaintiff loses, but simple involvement in a suit is no bargain either. A recent study looked at what preparing for a discrimination case costs an employer, on average.

If the employer settles before trial, they still spend 140 employee-hours on the claim process and investigation and $95,000 in legal fees. When cases proceed to trial, the employee-hours goes up to 200 and legal fees rise to $250,000. Bear in mind, that’s independent of the trial itself and before a verdict is reached. 

Clearly, it’s more important than ever to get employment law compliance right. Posting is one of the simplest yet most important aspects of compliance. Given the magnitude of legal exposure and other negative consequences associated with noncompliance, it’s not worth the risk to ignore or comply with posting requirements haphazardly. 

Lawsuits and agency proceedings against employers are at an all-time high, and employers cannot afford to open themselves up to additional liability by overlooking posting compliance.