Employment law issues are complex, and even law firms sometimes struggle to comply with state and federal laws that govern the workplace. In general, all employers should eliminate questionable practices, apply policies consistently, and properly document personnel decisions. Here are several specific suggestions for creating a fair work environment and avoiding legal trouble. Job Applications. Many firms do not require prospective employees to submit a job application but instead rely on a person's rèsumè. While rèsumès can be helpful, they should be used in conjunction with an application form tailored to your firm. A well-drafted application form will elicit useful factual data, and it can also protect an employer by, for example, including an agreement that requires arbitration of all employment-related disputes. These forms can also provide the requisite disclosures to comply with laws such as the Fair Credit Reporting Act as well as obtain consent to a reasonable background check. Employee Handbooks. Having a current, legally compliant employee handbook is a must. A good handbook contains the "rules of engagement" - what the firm expects from its employees and what they can expect from it. Be sure to include the firm's policies with respect to legally mandated items, such as meal and rest breaks. Without a handbook, it's difficult to prove a given policy was in place and understood by your professionals and staff members. Although solo practitioners and small firms may find some guidance at an employment law seminar, they may be better served by hiring a consultant who specializes in preventive employment practices. Indeed, having an experienced consultant prepare a comprehensive employee handbook is an investment every law firm should make. Independent Contractors. Uncertainty over whether a person is an employee or an independent contractor can pose substantial liability for employers. Recent legislation raises the stakes in certain cases: Effective this year, for example, California employers who willfully misclassify employees face the possibility of severe fines and "scarlet letter" posting requirements on top of existing wage and hour risks. (See Cal. Labor Code § 226.8.) Compensation Plans. Every law firm employee labors under an implied contract for compensation, and employers must share what their compensation rate is before a person starts working. Salary policies usually are included in employee compensation plans, which should be disclosed in writing. In particular, offices that offer bonuses should have compensation plans presented to and acknowledged by each employee. Any modifications should be in writing, and it's doubly important that employees understand that oral agreements do not trump the published terms. New laws now require employers to disclose in writing the rate of pay; the regular, designated payday; the employer's address and telephone number; the identity of the workers compensation insurance carrier; and "any other information the Labor Commissioner deems material and necessary." And if any of this specified information changes after the date of hire, employers must provide an updated notice within seven calendar days. (Cal. Labor Code § 2810.5.) Performance Evaluations. In a busy work environment, it is not at all uncommon for employee evaluations to fall by the wayside entirely. But employers that don't conduct regular performance reviews may have difficulty terminating problem employees-especially when there's a lack of notice regarding problems. One difficulty in this-law firms included-is the propensity of managers to inflate performance grades. Firms should train their evaluating managers to provide practical, realistic performance appraisals, including clear documentation of shortcomings. Employees should receive clear notice of poor performance; an expectation of how to improve; assistance to improve; and a reasonable time to do so. Then if they don't, the employer has at least set the table to implement disciplinary action, up to and including termination. Exit Interviews. If a law firm chooses to conduct exit interviews, they should be done every time someone leaves the firm. These interviews can be used to help defend a lawsuit if a disgruntled employee decides to sue. For example, if a departing employee signs an exit interview summary indicating everything was fine, it will be difficult to later contend things were amiss. Timekeeping. It's the employer's obligation to track hours worked by nonexempt salaried or hourly employees. These records are crucial to compliance with wage and hour laws. Employers should document employees' meal and rest periods in writing each day: when they were taken, how long they lasted, whether they were waived, and if so, why. One common problem facing law firms-particularly at smaller practices-is individual employees' desire to "work through lunch." The most effective way to deal with this issue is to document when and why an employee passes up a mandatory break period. Wage and Hour Laws. Employers must understand the interaction between state and federal laws, and know when to refer to the appropriate rules. For example, exemptions from overtime rules under federal law may not apply to certain states with stricter requirements; conversely, both federal and state laws may apply, depending on the situation and locality. Termination. A poorly administered employment termination with little or no documentation can present a serious problem for employers who later seek to show that the action was justified by legitimate, nondiscriminatory reasons. Always document the reasons for termination. Simply stating "at will employment" opens the door for a fired employee to allege any number of prohibited reasons for his or her termination. In such cases, the employer may have a heavy burden to establish after the fact that the termination was lawful. This short review can be especially helpful for small law firms. Complying with these legal requirements helps not only to run a business efficiently, but also to minimize the possibility of claims from disgruntled employees. Christopher J. Boman is a partner at the Irvine office of Fisher & Phillips.