Lawsuits against employers are up, which makes it a poor time to cut some types of training.

 

As the recession has worsened, employers have looked deeper and deeper into their budgets for ways to cut costs. Things that once seemed critical to good business now often seem like luxuries.

One of the things that often gets sacrificed is training. Ironically, taking a look around at the headlines lately, it quickly becomes clear that training is more important than ever during this recession. For instance, while training for human resources staff on issues like wage-and-hour regulations is harder to fund, this economic downturn has been the launching pad for more wage-and-hour lawsuits than ever. This report from Martha Lynn Craver at The Kiplinger Letter should send a chill down a lot of HR spines:

Wage and hour lawsuits are rising, outpacing all other types of workplace class actions. The increase comes as more workers laid off during the recession seek legal remedies. The lawsuits typically revolve around allegations that hourly workers eligible for overtime are misclassified as exempt in violation of the Fair Labor Standards Act. Last year, the 10 largest private wage and hour settlements totaled nearly $364 million, 44% more than the 10 biggest settlements in 2008.

 

And that’s just the tip of the iceberg. The stats collected by  Lynn D. Lieber at Workforce.com are equally unsettling:

From 2007 to the end of 2008, employment claims filed with the Equal Employment Opportunity Commission increased by 14.5 percent, from 83,000 to 95,000. In 2008, retaliation claims filed with the EEOC jumped 22 percent, from 27,000 to 33,000 claims. Corporate counsel reported significant rises in employment disputes in the past year, with discrimination suits rising by 11 percent. The Department of Labor recently added of 250 new wage-and-hour field investigators—a staff increase of more than a third—along with additional new staff in the department’s Office of the Solicitor. In December 2008, Wal-Mart agreed to pay as much as $640 million to resolve 63 class-action lawsuits involving wage-and-hour violations across the nation.

Lieber argues that whatever a company’s financial situation, there are four kinds of training too essential to cut in this environment. One, obviously, is wage-and-hour training. She says it’s especially important because most violations are accidental, which makes them no less costly:

Current economic conditions have resulted in drastic cost cutting and the slashing of work hours and overtime, which can lead to unwitting violations of wage-and-hour laws. Wage-and-hour violations most frequently occur simply because employees do not have accurate information on how to properly record hours or supervisors lack training in wage payment practices.

The other types she declares uncuttable are trainings on violence in the workplace, ethics and sexual harassment. That last one is particularly interesting because last month Time Magazine did a feature suggesting that sexual harassment lawsuits are also on the upswing:

The story centered on the recent judgement against drug-giant Novartis, in which employees testified against a boss who they said refused to hire women because, as one quote from him put it, “first comes love, then comes marriage, then comes flex time and a baby carriage.” A dozen women were awarded $3.36 million, with the company assessed another $250 million in punitive damages:

The Novartis verdict is deemed precedent-setting because it went far beyond simple pay discrimination. Employees alleged discrimination based on pregnancy and motherhood, too — claiming that women were fired when they were on maternity leave and mocked by superiors if they were visibly pregnant. It’s these motherhood-related allegations that may have tipped the scales to the tune of the multimillion-dollar penalty.

Whether this will truly open the door, as the article suggests, to a flurry of new litigation remains to be seen. But one thing is for sure: it’s a whole new legal landscape out there, and, even in these tough economic times, solid training isn’t as expendable as some managers think.