As the first point of contact for employee claims, HR directors often find themselves with the challenging task of assessing sensitive situations. This, coupled with ensuring both the company’s policies are followed, and employee’s concerns are addressed, can feel daunting. With HR directors playing a vital role in minimizing legal risks for their organizations, here are five key strategies to help mitigate claims and prevent costly lawsuits.

Stay Updated on Employment Laws

HR directors should review company policies on a regular basis to ensure compliance with evolving regulations and employment laws including federal, state, and local labor laws, including the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Americans with Disabilities Act (ADA). Conducting annual HR audits can help identify areas of non-compliance and help mitigate issues before they escalate.

Implement Strong Anti-Discrimination and Harassment Policies

Applying policies consistently helps to avoid claims of favoritism or discrimination. Therefore, employers should not only develop clear Equal Employment Opportunity (EEO) policies prohibiting discrimination and harassment, but they should also communicate those policies to employees and implement them in a consistent manner to all employees. Additional training for employees and managers on proper workplace behavior also helps communicate and enforce these policies. Another key process for HR directors is to establish a confidential and effective reporting system for complaints and promptly investigate all claims.

Document! Document! Document!

Documentation plays a key role when investigating a claim and, therefore, it is imperative to keep detailed records of employee performance, disciplinary actions, promotions, and terminations. Ensure that all documentation in personnel files is objective, factual, and free from bias in case of legal disputes, and that files are secure and comply with data privacy laws.

Handle Terminations Carefully

Terminations regularly lead to employment claims. Consequently, HR directors should ensure all policies are followed in terminating the employee, and that a legitimate, non-discriminatory reason exists (and can be established) for the employee’s termination. Additionally, employers should comply with progressive discipline policies if those policies exist. Progressive discipline is a concept that you start with a verbal counseling, then writing warning with consequences, then suspension if necessary, and finally termination. Lastly, offering severance payment in consideration for the employee signing a general release can help give finality to the employee’s separation. 

Promote the Employee Handbook

Employee handbooks are essential tools for communicating policies, expectations, and disciplinary procedures to all employees. When drafting a handbook, use language that is clear and helps answer questions employees may have about their employment. These documents have legal standing and can play a crucial role when mitigating a claim. And, of course, document that employees were provided and have read the handbook.  

By proactively addressing these areas, and establishing solid processes with consistent application, HR directors can navigate claims with confidence and significantly reduce legal risks for their companies.

This article was first published on HR Daily Advisor on April 4, 2025 and is shared with permission from the publication.