As you know, eliminating errors and omissions on your state and federal new hire forms helps protect your company from getting in trouble during an audit. However, an effective onboarding system can also protect you in the event of an employee lawsuit. How does that work? Let’s take a look at the Wage Payment and Collection law in Maryland as an example.

Prior to 2008, an employee could successfully sue if unused vacation time wasn’t paid out upon termination. This was because of a 2007 appellate court ruling stipulating that any accrued leave was a wage – no exceptions. The potential award could include not only the unpaid compensation but triple damages and attorney’s fees!

Now, Maryland employers can once again choose the circumstances under which they will pay out accrued leave. For example, it is common to require employees to give two week’s notice or forfeit the right to be paid for unused time off. Employers can also make a distinction between vacation time and sick days.

What’s the Catch?

This legal protection only applies if the employer has a written policy outlining if/how unpaid leave will be paid out on termination. Most important, a copy of this policy must be provided to the new employee at the time of hiring. Employers can’t just wait until a worker quits or gets fired to clarify this point. Information about the policy has to be distributed to each employee during onboarding.

Such a policy can be included in the handbook. However, the way to be really safe is to obtain a signed acknowledgement to keep on file. That’s why it makes sense to use a system that lets you decide which policies should be uploaded as virtual forms that require an electronic signature. With our Emerald Software Group’s universal onboarding platform, you can include as many forms and policy notices as you like.

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