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Reasons employees sue and how to prevent it

Business owners in Michigan have a lot of hats to wear, and being a good leader is one of them. When policies are not set in place, or employers do not follow federal and state laws, this can lead to a lawsuit brought forward by an employee.

Owners should be aware of common reasons employees take legal action and how they can prevent it from happening.

Discrimination and harassment

According to Inc., there are both state and federal laws that protect employees from discrimination and harassment. To prevent litigation, employers must follow these laws in regard to color, gender, race, age, national origin and disability. Employers must also understand they may not take action or retaliate if an employee reports harassment or discrimination.


It is important that employers follow laws regarding minimum wage, overtime, employee classification and record keeping. This means classifying an employee or independent contractor appropriately. This also means paying for all time worked and paying overtime wages. Employers must also understand when it is appropriate to take out deductions and when it is against the law.

When it comes to wage discrepancies, it is not only the employee who can take legal action. In cases involving misclassification or wage errors, the government can also sue the company, and this can be expensive.

Improper termination

Forbes discusses that another common reason employees sue is because of firing. Termination may become an issue if the employer does not give a good reason. If the firing occurs due to poor performance, there must be proper documentation to support this.

Delayed investigation

When an employee files an internal complaint, it is imperative the employer conducts an investigation right away. If not, this may be grounds for litigation.