The Dumbest Mistake Smart Utah Small Businesses Make


The vibrant Utah business landscape is teeming with intelligent, ambitious, and driven small business that are passionate about making a significant impact in their respective industries. These business are filled with owners and employees alike who prioritize their customers and who focus on strategic decisions to help them survive and thrive. 

But even the brightest minds in business can and often do overlook one crucial element that could potentially put their entire business at risk: an outdated or non-compliant employee handbook.

Recent studies show that small businesses in the US have a significant 11.7% chance of an employee-related lawsuit or penalty every year. Because of industry-specific requirements, risks to many small businesses in Utah are even more alarming.

Why Employee-Related Litigation is a Rising Threat

It’s no secret that society has become increasingly litigious. Today, workplaces are often at the center of legal battles. In 2022, businesses paid over $513.7 million relating to EEOC enforcement activities alone. Employees, more than ever, are aware of their rights and don’t hesitate taking legal action.

And here’s the kicker. Small businesses, particularly in certain industries, almost always underestimate the risk of employee-related lawsuits. While focused on their core services, these businesses may lack the resources or time to stay current on HR laws. Unfortunately, this oversight makes them easy targets for legal actions.

Successful Small Businesses – The New Gold Mine for Lawyers

Regrettably, some legal professionals view successful small businesses as low-hanging fruit for litigation. These attorneys can aggressively pursue employment-related lawsuits, seeking settlements or large awards even if the business did nothing wrong. For them, it’s just another opportunity for money. For Utah small businesses, it’s an incredibly dangerous financial threat.

In 2020, the average cost of an employment lawsuit for companies without a compliant employee handbook was $160,000 – a sum that could be devastating for many small practices. While we don’t have reliable numbers for more recent years, costs have certainly gone up.

Proactive Measures Can Save Your Business

Despite these alarming trends, it’s not all doom and gloom. With the right proactive measures, you can significantly mitigate these risks and protect your business from potential employee-related lawsuits.

You may be tempted to focus on any one of myriad ways to reduce employee-related risks. However, the smartest first step is ensuring you have an employee handbook that is up to date and compliant with both federal and Utah state laws and is personalized to your industry and company-specific needs. 

But, your employee handbook is more than just a mundane stack of policies – it’s an essential tool to protect your business from the modern surge of employee-related lawsuits. Afterall, a significant portion of these cases stem from a lack of clarity in company policies or from non-compliant handbooks.

Beware of ‘One-Size-Fits-All’ Solutions

Here’s where many intelligent Utah small businesses unknowingly falter. Its tempting to use an online, one-size-fits-all template for your employee handbook, which is understandable given their apparent convenience. However, such templates often overlook the unique nuances and legal requirements of different industries and states.

Whether you’re running a tech startup in Salt Lake City, a construction company in Ogden, or a retail store in Provo, your industry has specific employment regulations that must be considered. A generic handbook simply won’t cover these unique regulations. This leaves your business exposed to easily avoidable risks.

Stay Proactive, Stay Informed

In addition, employment laws are not static – they are constantly changing. Each legislative session brings thousands of new laws that potentially impact your employee policies. 

So, what happens if you miss a change? As millions of small businesses have learned, it can cost you big time. Ensuring that your handbook stays up-to-day with the most recent laws – both federal and specific to Utah – is not just smart; it’s crucial.

Sometimes It’s Better to Call In the Experts

The reality is that staying updated with the ever-changing landscape of HR laws can be overwhelming, especially with all that you have to do to keep the business running and growing. This is where finding an expert to help you can make a world of difference. 

By partnering with an expert who can understand your unique circumstances, you can ensure that your handbook remains compliant, reducing the risk of litigation and allowing you to focus on what you do best – growing your business.

So, the question is, “Are you, like many other smart Utah small businesses, putting your company at risk?” Sure, you have a lot on your plate, but don’t let the dumb mistake of not having an up-to-date employee handbook be what wrecks your smart business.

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