Introduction
Employment law in Human Resources (HR) is one of the most important areas of concern for businesses, as firms can be held liable for a number of infringements and may put themselves open to suit if they fail to abide by employment laws, which cover everything from compensation to discrimination.  It is HR’s responsibility to know what the laws are and how to protect the firm from potential violations of the law.  This paper will discuss the ways that HR can predict conditions that increase business risk with regards to employment law.  It will provide suggestions on how to reduce this risk, what the early warning signs may be, and when and how the risk should be reported to governing bodies.

Ways to Predict Conditions that Make Business Risk for HR Employment Law More Likely

Businesses may be more prone to HR employment law risk if they are not taking the necessary steps to guard against violations.  Firms have to protect employees’ personal data; they must not discriminate against employees by favoring one ethnicity or religious groups over another, or by excluding disabled workers from certain opportunities to be part of an in-group, or by denying specific genders opportunities for promotion.  One way to predict whether conditions that increase risk are present is to analyze the organizational culture of the firm (Girling, 2013). Here, one can see the risk appetite of the firm, whether it is comfortable walking a fine line between legality and illegality, or whether it has clearly stated principles and values that serve as the crux of its mission, vision and culture statements.  A firm that has an internal reporting system in place, where problems regarding employment issues can be internally reported up the chain of command, is more likely to be focused on monitoring risk than a firm that has no such reporting system in place (Girling, 2013).  Managers play a large role, too:  management that is aloof and disconnected from the issues of employment law reflect a precondition for risk, while managers who demonstrate a “revealing hand” reflect a firm that is concerned with employment law and wants to make certain the business is operating by the book (Kaplan & Mikes, 2016).

Suggestion on How to Reduce the Occurrence of Said Risk

One reason risk grows unforeseen is that no one talks about it in the company and HR does not make it a priority.  Kaplan and Mikes (2016) point out that managers must be blatant and upfront about risk and make it part of the central dialogue of the firm if the firm is interested in reducing the occurrence of said risk.  By making this an important conversation between HR and upper level management in a business, the issue of risk can take its rightful place front and center of the business’s concerns.  It is when the issue of risk is ignored and not discussed that risk rises exponentially.  In general, therefore, having that dialogue and encouraging workers to be mindful of risk is one way to reduce its occurrence.

Another more specific way is for the firm to be mindful of areas...…all stakeholders in a business and when illegality is encountered they are all likely to want to know about it as each has some form of vested interest in the firm—whether it is managing it, buying from it or monitoring it to make sure it is in compliance with rules and regulations.  A whistleblower is one who takes information about internal doings in the company and makes them public with the intention of holding the firm accountable.  This occurs typically when firms offer know internal whistleblowing hotline:  offering such would allow whistleblowers inside the company to see the issue resolved without having to go public and damage the company’s reputation among the various stakeholders.  The Board of Directors should sign off on such a reporting system, as it can help the firm to maintain diligence, accountability, transparency, and respect for the principles it enunciates in its mission and vision statement.

Conclusion

Managing employment law risk is a necessary component of HR, but HR must work with upper level management in order to make sure that there is a suitable culture in place, a suitable means of monitoring and reporting on risk, and multiple safeguards in place to protect against violations—such as a digital security system or Data Breach Preparedness Plan.  The more that HR and upper level managers talk about and discuss employment law risk, and the more that they promote non-discrimination principles in the culture, the less likely the firm is to be exposed to said risks.

References

BBC News. (2015). Sony pays up to $8m over employees' hacked data.…