How HR Compliance Software Can Help Avoid Lawsuits

Employment lawsuits are legal disputes that arise from employment relationships between employers and employees. These lawsuits can be initiated by employees, former employees, or even job applicants who feel that their rights have been violated or that they have been subjected to unfair treatment or discrimination in the workplace.

Employers are legally obligated to provide a safe and fair workplace for their employees and comply with all relevant employment laws and regulations. Failure to do so can result in serious legal consequences, including monetary damages, legal fees, and damage to the company’s reputation.

How Employment Lawsuits Can Affect a Business

Employment lawsuits are a problem that businesses should take seriously. They not only cost an employer a lot of money when a case gets to trial, but they also harm the business’s reputation.

As a result, employers must try to eliminate the possibility of lawsuits or, at the very least, reduce cases as much as feasible. Understanding the nature of the issue is the first step in resolving it.

Employee and termination lawsuits have grown 400% and 260%, respectively, in the last 20 years. The increase has been so dramatic that businesses are now three times more likely to be sued by their employees than to have a fire in the workplace. (M., 2012)

Most businesses don’t see why they should protect themselves from employee lawsuits. This is a huge mistake. If an employee files a discrimination claims against an employer and the case proceeds to trial, the company could be fined between $150,000 and $200,000. That amount could cripple the operations of a small company. (M., 2012)

Common Employment Situations That May Lead to Lawsuits

These are just a few everyday employment situations that can lead to lawsuits. Employers must take steps to prevent these situations from arising and promptly address any complaints or concerns raised.


Discrimination can take many forms, including age, race, gender, religion, disability, or other protected characteristics. Employers must ensure that all employees are treated fairly and that no one is subjected to discrimination or harassment.

Sexual Harassment

Sexual harassment can occur in many ways, including unwanted touching, comments, or advances. Employers must have policies in place to prevent sexual harassment and promptly investigate and address any complaints that are received.


When an employer takes adverse action against an employee who has participated in a protected activity, such as filing a complaint or reporting a violation of the law, this is referred to as retaliation. Employers must take measures to prevent retaliation and respond to complaints as soon as possible.

Wrongful termination

Wrongful termination occurs when an employer terminates an employee for illegal reasons, such as discrimination or retaliation. Employers must have clear policies in place for termination and ensure that all terminations are based on legitimate grounds.

Wage and hour violations

Employers must comply with all federal and state wage and hour laws, including minimum wage, overtime, meal times, and rest breaks. Failure to comply with these laws can lead to lawsuits and significant financial penalties.

Breach of contract

Employers must honor the terms of any employment contracts that are entered into with employees. Breach of contract can occur if an employer fails to pay agreed-upon compensation or benefits.

Ways That HR Compliance Software Helps Avoid Lawsuits

HR compliance software can be a valuable tool for businesses in avoiding lawsuits by helping them stay on top of their legal obligations and ensuring that their employment practices comply with all relevant laws and regulations. Here are some ways that having this software can help avoid potential lawsuits:

Automated compliance tracking

Automatically tracks compliance with federal and state employment laws and regulations, alerting businesses when they need to take action to stay compliant. This can help to prevent oversight and reduce the risk of non-compliance.

Customizable policies and procedures

Helps provide customizable policies and procedures tailored to the business’s specific needs, ensuring that they align with employment laws and regulations. This can help to reduce the risk of legal challenges related to employment practices.

Employee Handbook Builder

Enables organizations to create and maintain a comprehensive guide to their policies and procedures. An employee handbook is a critical tool for communicating expectations, providing guidance, and ensuring compliance with legal requirements. It streamlines the process of creating and updating handbooks, allowing organizations to easily customize their policies and ensure consistency across all employees. By providing employees with clear expectations and guidelines, an employee handbook can help prevent misunderstandings and conflicts.

Automated Chatbot Consultations

Improves efficiency with fast response times, and consistency. Chatbots can manage routine inquiries from employees, such as questions about benefits or time off policies. Chatbots can also provide instant responses, reducing wait times and improving the overall employee experience.

Federal, State, and Local Policies, Forms, and Charts

Federal, State, and Local laws and regulations are constantly changing, and businesses need to stay up to date with these changes to avoid legal and financial consequences. Having access to these changes enables employers to implement any necessary changes quickly and easily to policies and procedures, ensure compliance with applicable laws, and respond to inquiries from employees.

Why Companies Should Choose HR Compliance Software

HR compliance is more important than ever in today’s business environment. Employment laws and regulations are constantly evolving, and failure to comply with them can result in costly lawsuits, regulatory fines, and damage to a company’s reputation. Companies should consider implementing HR compliance software to reduce the chance of a lawsuit.

HR compliance software provides various benefits that help companies stay on top of their legal obligations and ensure that their employment practices comply with all relevant laws and regulations. By automating compliance tracking, providing customizable policies and procedures, managing important HR documents, providing training and education, and creating audit trails, it can help companies to avoid costly legal disputes related to HR practices.

This type of software is essential for any business that wants to reduce the risk of a lawsuit and create a workplace that is compliant, productive, and supportive of all employees. By investing in HR compliance software, companies can demonstrate their commitment to compliance and create a workplace culture prioritizing fairness, equity, and employee respect. This can lead to increased productivity, better employee retention, and stronger overall business performance.

Stay Well-Informed on Current Changes to Employment & Labor Laws

Employment and Labor Laws change quite often and it gets difficult for human resource teams to have confidence in their compliance systems. This can cause challenges and burnout in your HR team, however, VirgilHR has the solution to help ease your stress. We are revolutionizing the procedures in HR compliance and we want you to join us! Schedule a free demo of our software and see how we can help your team stay compliant with employment and labor laws.