Human resources is a high-risk, high-reward sector. While financially and professionally rewarding, a career in human resources requires you to be part manager and part lawyer. In many cases, the future of the company relies upon skilled human resource personnel knowing how to avoid legal trouble. In many cases, ignorance of the law or even small oversights can cripple a company with lawsuits.
With such high stakes, those with an HR-focused MBA are expected to know employment law -- from local ordinances to state mandates and federal regulations. While it may seem like a task for a lawyer more than for an MBA grad, human resources is the last line of defense before lawyers get involved. It is a human resource manager's understanding of employment law that saves the company from ever needing to hire a lawyer.
Mandriva, a French competitor of Microsoft Windows, learned this lesson the hard way. According to Business Insider, after 17 years of operation, the company was at "a point of profitability when employee lawsuits forced @the company into bankruptcy." There were certainly other factors that contributed to Mandriva's decline, but once the company had to start laying off a few workers, legal issues with human resources locked the company into a downward spiral.
Often, the cause for lawsuits is not malice on an employer's part, but instead ignorance of changing laws and best practices. These lawsuits can stem from misunderstanding the legal implications of language or just being unfamiliar with handling sensitive situations such as hiring and firing. MBA courses in employment law help students avoid common pitfalls. What can be polite conversation in other contexts can be a liability when interviewing.
For example, many technology startups these days offer Beer Fridays as an employment incentive. And there is nothing wrong with employers offering alcohol to their employees under safe conditions. Asking a potential hire if she or he would enjoy that benefit, however, could be illegal. Alcoholics are covered by the Americans with Disabilities Act, and "an employer may be required to provide an accommodation to an alcoholic," according to the U.S. Department of Justice, Civil Rights Division.
The Americans with Disabilities Act is just one of many employment laws covered in MBA programs for human resource professionals. The Fair Labor Standards Act, the Occupational Safety and Health Act, the Federal Employees Compensation Act, and the Family and Medical Leave Act are just a few of the laws that govern over 10 million employers and 125 million workers in the United States. And these are just at the federal level. Each state has specific statutes that outline worker's compensation law, for example.
It does not take a law degree to gain a better understanding of employment law, and MBA programs could be the best way to start, especially for those HR professionals attempting to boost their careers. A better understanding of employment law means a better workplace for workers and a better way for employers to avoid costly litigation.
Learn more about the UL Lafayette MBA with a concentration in Human Resource Management Online Program.
Sources:United States Department of Labor: Summary of the Major Laws of the Department of Labor
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