The 2-Year Rule: Why Compliance Matters for Ohio Businesses

Casey Webster

Did you know that in Ohio, employees can file discrimination claims for incidents that occurred up to two years ago? Known as the 2-Year Rule, this timeframe means that even issues you may not remember can come back to haunt your business.

For small businesses, where informal processes and undocumented policies are common, this extended liability can lead to costly legal battles.

 

Let’s explore how the 2-Year Rule impacts your business and why having compliant HR practices is essential for your protection.

 

What is the 2-Year Rule?

The Ohio Civil Rights Commission investigates charges of employment discrimination under state laws. Employees or former employees can file a claim for incidents such as:

  • Discrimination during hiring, promotion, or termination.
  • Harassment or a hostile work environment.
  • Unequal treatment based on protected characteristics (e.g., race, gender, age).

And here’s the catch: Employees have up to two years to file a claim after the alleged incident.



What Does This Mean for Small Businesses?

If your business doesn’t have documented policies or procedures in place, you’re leaving yourself vulnerable. Two years is a long time, and without clear records, it becomes challenging to defend your business against claims—regardless of their merit.

 

 

How the 2-Year Rule Impacts Small Businesses

1. Legal Policies Create Legal Risks Scenario: A small retail business terminated an employee due to poor performance but lacked a formal termination policy or documentation. Two years later, the employee filed a claim alleging discriminatory termination. The business had no records to defend itself, resulting in a $30,000 settlement.

The Fix: An employee handbook with clear policies on discipline and termination ensures your actions are defensible if challenged.

 

2. Inconsistent Practices Lead to Claims Scenario: A local café allowed managers to approve time-off requests verbally. When one employee was denied time off, they claimed discrimination. Two years later, the business had no records to prove that the decision was consistent with company policy.

The Fix: Written PTO policies and acknowledgment forms protect your business by ensuring consistent and transparent practices.

 

3. Poor Onboarding Leaves Gaps in Compliance Scenario: A small business in Troy hired employees without collecting I-9 forms or completing formal onboarding. When a former employee filed a discrimination claim two years later, the lack of documented compliance hurt the business’s defense.

The Fix: A standardized onboarding process ensures you meet compliance requirements and avoid penalties.

 

Why Compliance is Non-Negotiable 

The 2-Year Rule underscores the importance of having:

  • Written Policies: Employee handbooks that outline workplace expectations and anti-discrimination measures.
  • Documentation: Job descriptions, onboarding checklists, and performance reviews to provide a record of compliance.
  • Consistency: Standardized procedures for hiring, promotions, discipline, and terminations.

These measures don’t just protect you legally—they also create a fair, transparent workplace that attracts and retains top talent.

 

How to Protect Your Business Today

The best way to safeguard your business against the risks of the 2-Year Rule is to take proactive steps now. That’s where our HR Foundations Workshop comes in.



Don't Let Time Be Your Enemy

The 2-Year Rule means that the actions (or inactions) you take today could affect your business years down the line. Protect yourself and your team by building the HR foundation your business needs.

 


HR Foundations Workshop Details:

Dates: February 11 & 25, 2025 

Time: 10:00 AM - 1:00 PM EST

Location: Troy, Ohio
Cost: $3,000

 

What You'll Walk Away With:

  • Customizable Employee Handbook
  • Job Description Template
  • New Hire Onboarding Checklist
  • HR Confidence and Knowledge
  • Actionable Solutions

 

Read On