Most employers are aware that they must display certain labor law posters in a conspicuous location in the workplace — such as in the breakroom, by a time clock or in another place where employees are likely to see them. But here’s something many employers don’t know: In most cases, displaying these posters is not enough to meet their obligation to inform employees of their legal rights.

One legal obligation that is often overlooked by employers is the requirement to distribute federal and state employee notices (or handouts).

What Are Required Employee Handouts?

Employers are required by law to personally distribute handouts informing employees of their rights and responsibilities under various federal and state workplace laws. The handouts cover a range of topics, depending on the state — from paid family leave and hiring to sexual harassment and unemployment compensation.

To further complicate matters, the reasons for providing these notices vary. Under some laws, certain handouts may be necessary for newly hired employees. Others, however, are triggered by a specific event, which means you need to distribute them when an activity occurs.

Across the nation, there are more than 400 different federal and state notices that must be distributed based on different triggering events. The most common events are:

• When an employee requests time off for a protected absence, such as caring for a sick family member, or for an employee’s own pregnancy-related condition
• When a workplace injury takes place and you need to inform an employee about workers’ compensation benefits
• Upon an employee’s separation from the company where you would have to distribute certain notices if an employee quits or is terminated or provide unemployment insurance information
• When an employer makes a change in wage information or pay

Potential for Costly Mistakes

Many small companies fall victim to costly compliance mistakes because they assume employment laws apply only to larger organizations. While it’s true that some laws don’t apply to some businesses, making an incorrect assumption can turn out to be costly.

Similar to labor law postings, the penalties for noncompliance with required employee notices can be severe. Among the most common penalties:

• Federal penalties
  • Up to $20, 521 per violation
  • Daily penalties for late notices up to $110-$500 per day

• State penalties
  • Range from $100-$500 per violation

Government agencies rarely inspect businesses for the sole purpose of ensuring compliance with posting and notification regulations. However, if a government official should visit your business on another matter (based on an employee compliant, for example), he or she may ask to check for poster and notice compliance.

A Litigation Nightmare Could Be Lurking

Fines can add up, but the real danger with notice violations are employee lawsuits and disputes. Did you know that under some laws, you can lose or forfeit certain defenses if you fail to notify your employees of their rights?

Also, failure to comply with required employee notices may be used against you as evidence of bad faith. This can multiply the damages against you in an employment-related lawsuit, in addition to hurting your business reputation. That’s why it’s critical to stay up to date and get the right notices to your employees at the right time.

Stay Compliant, Protect Your Business

Labor law compliance is a complex but vital part of the employer-employee relationship, where the consequences of “getting it wrong” can be significant. And mandatory employee notices are just one part of this equation. Learn more about this requirement — and how to protect your business with proper handouts — by downloading our free e-guide: Mandatory Labor Law Handouts: What Employers Need to Know.​