1. Hiring the Wrong Person
Hiring the wrong person can be one of the most costly mistakes you make in business. It can damage company culture, cost a fortune in training, and negatively impact the morale of the best employees.
It can be difficult to tell if someone will be a good fit based on a resume and a few interviews. Even if you do your due diligence, there is no guarantee that the person will perform well in the role.
When it becomes clear that an employee is not performing well, be sure to consult HR and a labor attorney to ensure that any corrective actions are in line with legal protocols and workplace policies. Act decisively to avoid a ticking time bomb that could explode in the form of dissatisfied customers or patients, unhappy co-workers, costly litigation, or, worst of all, violent workplace acts.
2. Mistaken Identity
Business identity theft is a rising problem for small businesses. Thieves often focus on stealing key identifiers and credentials such as officers’ names, personal contact information, federal tax employer identification numbers, state business filings, and business credit cards. Armed with this information, criminals can file fraudulent tax returns, obtain credit in your name, and even impersonate your company when dealing with vendors or obtaining loans.
One of the best ways to avoid this threat is by limiting employee access to sensitive documents and making sure paperwork is filed appropriately. Also, consider routing physical mail to a post office box and installing a secure mailbox lock system. If your business falls victim to this crime, promptly correct the unauthorized change to the entity’s registration on the Secretary of State’s registry. Contact all banks and credit card providers to report the unauthorized use of your business’s accounts. Also, compare your EIN/TIN to the one used by the hijacked company and report any differences to credit reporting agencies Dun & Bradstreet, Equifax, Experian, and TransUnion.
In the event your business is charged with a crime, it’s important to have a solid criminal defense team. One of the best strategies is to argue mistaken identity, demonstrating that a witness misidentified you through a photo array or lineup.
3. Wrongful Termination
Wrongful termination is a term that generally refers to firing someone for an illegal reason. This is an issue that can affect employees of all different backgrounds, and it’s important to understand the specific circumstances in which an individual may file a wrongful termination lawsuit against their employer.
In the United States, most employment is considered to be “at will,” meaning that an employer can fire their employee at any time for any reason. However, there are certain laws in place that protect workers from being terminated for wrongful reasons, such as discrimination or retaliation.
Discrimination-based wrongful termination occurs when an employee is fired due to their membership in a legally protected class, such as race, religion, age, sex, national origin, or disability. An employer must only make decisions based on job-related qualifications and performance to avoid a wrongful termination claim.
Another example of wrongful termination is when an employee is fired in violation of a contract or explicit promise concerning the duration of their employment or the circumstance under which they could be terminated. Individuals who believe they have been wrongfully fired could file a wrongful termination lawsuit against their former employers in order to receive compensation for lost wages and expenses related to finding new employment.
Finally, wrongful termination can also occur when an employee is fired in violation of governmental or public policy. This includes things like firing an employee for refusing to participate in unlawful activities, reporting illegal activity, or exercising their legal rights.
If an individual feels they have been wrongfully terminated by their employer, it’s essential that they consult with a qualified attorney immediately to discuss the possibility of filing a wrongful termination lawsuit. It can be difficult to prove wrongful termination, especially since many employers are not willing to admit that they have made an illegal decision in an effort to protect themselves from liability.
A skilled attorney can assess the evidence surrounding an individual’s case and determine whether or not it would be worthwhile to pursue a wrongful termination lawsuit against their former employer. If it is, the attorney will take all necessary steps to prepare and file a complaint against the employer, which could ultimately lead to compensation for the injured party.
4. Fraud
Fraud can be an extremely devastating problem to any business. It can result in costly lawsuits, loss of customer trust, damaged reputation and a host of other issues. Facilitating negotiations for deals and mergers is what attorney Eveland does in Sandy. Fraud is most commonly committed by employees, but it can also be committed by vendors, customers and other external parties.
According to the Bureau of Justice Statistics (BJS), approximately 10 percent of adults have been victimized by fraud in some way over their lifetimes. This includes credit card fraud, identity theft, forgery and more. These incidents are often the result of one of the following factors:
Pressure — The fraudster feels they are under some kind of financial pressure that they can’t solve legitimately, such as mounting debt or a large unpaid bill. This can cause them to begin considering fraudulent actions, such as falsifying expense reports or stealing money. Opportunity — The fraudster sees a chance to take advantage of their position within the company by using their knowledge or access to sensitive information for their own personal gain. For example, they may find out the password to a company account or a system and use this to make fraudulent purchases.
Identifying areas of risk, such as those in HR, accounting, sales and stock management is the first step in combating fraud. Once you know where the hot spots are, you can then put in place a series of checks and balances to deter or detect them as early as possible.
Regular communication with staff is another key factor in preventing fraud. It’s important to let them know that fraud is not tolerated and if it is discovered, there will be consequences for the perpetrator. Using a world-recognised standard like ISO 37001 is an excellent way to demonstrate that your organization has a framework in place to reduce risk.
Fraud can be a dangerous threat to any business, but small and mid-sized businesses are particularly vulnerable. The reason is that they typically have close relationships between staff members, few formal oversight procedures and less expertise on financial matters. This can lead to a higher likelihood of fraud and a greater impact on cashflow if it is not detected quickly.