Are Employee Legal Woes Costing Your Business a Fortune?

Print Friendly, PDF & Email

Employee legal issues are a hidden cost and they may be costing you a fortune. If your employees are struggling with legal problems, they can easily become your headache, too. CCH, a leading provider of human resources and employment law information, reported an estimated 67 percent of unscheduled absences are for reasons other than illness. No-shows cost money. Yet many employers still don’t analyze the benefits of an employee legal plan, which can save the company thousands of dollars.

Segments of our population call attorneys for advice every day. Wealthy Americans, business owners and leaders of organizations don’t make decisions without legal review. But for the middle class, the only affordable way to access the legal system may be through a legal service plan. Take the Fresno school employee who saved hours of haggling with an online loan provider when a promised refund of $367 was denied. Her legal plan attorney wrote a letter and, within a week, a full refund was received. The cost of consultation and the letter were covered as part of her employee legal plan.

Another Fresno legal plan user was subject to a tax audit. His legal plan provided an attorney who accompanied him to the audit. The attorney’s fees totaled hundreds of dollars and the legal plan covered the cost. The audit was resolved and the employee was better able to stay focused on his job as an ironworker.

The American Bar Association estimates that seven out of 10 employees are in need of some kind of legal advice annually, but most don’t provide the details of their legal matters to their employers. Most, however, would benefit from using an attorney to help navigate legal issues.

Typically, legal matters cannot be resolved in the evening or on the weekend. According to EAP Consultants, Inc., each year, employees spend 22 hours on the job resolving property-related events and 29 hours on the job resolving personal financial events. In 2010, LegalShield, formerly Pre-Paid Legal Services, a 40-year-old provider of employee legal service plans, reported 2.1 million calls from their members to provider law firms, with more than 360,000 calls specifically asking for help with real estate issues.

Indirect costs resulting from substitutes, scheduling, rework, lost productivity and diminished morale may exceed the direct costs of wages and benefits paid during an employee’s absence. The feelings of helplessness in legal and legal-related issues may dramatically increase stress levels. Author Ravi Tangri reports in Stress Costs, Stress-Cures that stress can be attributed to approximately 60 percent of worker’s compensation awards and 40 percent of turnover rates.

Robert L. Heston, Jr., CEO of Legal Access Plans, L.L.C., writes, “… an employee legal plan [offered either as a voluntary benefit or as an employer-paid benefit] can help insulate an employer from the liability of employee mistakes, accidents, and the cost of work productivity in some instances.” During the recent economic crisis, employees suffered devastating legal and financial losses. Loan modifications, foreclosures, repossessions and credit card debt soared and continue to do so. Furthermore, issues such as family law matters, consumer problems and assistance with medical plans each take time away from the job and add significant stress to workers. Employees are taking time off work to deal with their legal and financial woes and, by necessity, are making calls while at work.

So how do you keep your employees on the job doing what you hired them to do? Work-life programs reduce stress and help employees feel appreciated. Employee assistance plans (EAPs) are helpful with a few consultations per year, offering initial counseling. Another practical choice is a comprehensive employee legal plan. It’s reasonable to consider that the more time and money an employee saves having affordable access to legal counsel, the more time and money their company will save in lost work time.

According to attorney Paul A. Samakow, host of SamakowLaw, a legal analysis radio show in the Washington, D.C. area, “What makes an employee legal plan a no-brainer for employers, beyond the needed access to the justice system and resulting higher productivity among employees, is that these plans typically have virtually no cost to the employer.”

About Becky Mello 1 Article
Becky Mello is an independent sales and marketing associate with LegalShield. Mello is a native of Fresno, Calif. Contact: 559.313.5075,

Be the first to comment

Leave a Reply

Your email address will not be published.


CommentLuv badge