Compliant Employee Practices and Insurance Protection Have Become Critical for Businesses in the Era of the #MeToo Movement

By Lee Allphin, Employer Advantage Founder and Chairman of the Board

With the #MeToo movement bringing to light serious workplace issues, it is more critical than ever to ensure your business is following correct employment practices to protect your employees from sexual harassment. Additionally, it is crucial that business owners protect their businesses by obtaining Employment Practices Liability Insurance (EPLI) to protect your business against employee lawsuits.

Activist Tarana Burke, the founder of the Me Too movement, said in a 2018 interview with The New York Times that she began using the phrase “me too” as early as 2006, when she launched a campaign to give women a space to share their survival stories. The term went viral on social media in 2017 when actress Alyssa Milano tweeted, “If you’ve been sexually harassed or assaulted, write ‘me too.’” This declaration brought the Me Too movement to the general public, and has emboldened employees of both sexes to feel more confident in coming forward to make accusations of misconduct.

I. CREATING A SAFE WORKPLACE

 Establishing protective processes

Business leaders need to put the processes in place to make their organizations places of safety for employees and to protect the company from bad actors. These steps will not only help you avoid or handle sexual harassment issues but other common sources of employee complaints as well.

  1. Identify potential sources of loss exposures, or the areas in your organization that are most likely to experience incidents or legal claims. These are the areas that you should spend the most time on.
  2. Develop a screening and hiring process to weed out unsuitable candidates on paper before calling them to interview in person. Then use an appropriately rigorous process to ensure that the candidate is a fit for your organization.
  3. Provide an employment application that contains an equal employment opportunity statement along with a statement, that if hired, employment will be “at-will.” This means their employment can be terminated at any time, for any reason or for no reason at all, with or without notice. Also ensure that your employment application does not contain any age indicators, such as date graduated high school, as this could increase your risk for age discrimination claims.
  4. Conduct background checks on candidates before hiring them.
  5. Develop or refine an employee handbook detailing your organization’s workplace policies and procedures, including attendance, discipline, and complaints. Make sure the employee handbook contains an employment at-will statement and an equal employment opportunity statement.
  6. Help create a job description for each position that clearly defines expectations of skills and performance. This job description should be used to set expectations for job performance and as the basis for performance reviews.
  7. Conduct periodic performance reviews of employees and carefully note the results in the employee’s file.
  8. Institute a zero-tolerance policy regarding discrimination, substance abuse and any form of harassment. Make sure you have an “open door” policy in which employees can report infractions without fear of retribution. A true zero-tolerance policy means that a person is fired immediately when allegations are confirmed.
  9. Create an effective record-keeping system to document employee issues as they arise, and what the company did to resolve those issues.

 

Training your managers and employees

Training your managers will empower them to act correctly to prevent employment related issues or to handle them appropriately when they happen. Managers are often surprised at the range of employee issues that they are required to navigate and having the proper training beforehand it key to ensuring their success. Key trainings for managers include:

  • EEO basics
  • Hiring and interviewing lawfully
  • Performance management and discipline
  • Employee-complaint management
  • Investigations
  • Retaliation
  • Terminating lawfully
  • FMLA basics
  • Union awareness
  • Equal employment opportunity
  • Age discrimination
  • Religious discrimination
  • Religious accommodation
  • Race and national origin discrimination basics
  • Disability discrimination
  • Disability accommodation
  • Sex/gender discrimination
  • Pregnancy and FRD
  • Reductions in force
  • Harassment training
  • Workplace Harassment
  • Interviewing and Hiring
  • Employee Performance
  • Ethics
  • Workplace Bullying
  • Workplace Violence

In additional to regular manager training, employees benefit from some core training as well. Many workplace issues could have been avoided if employers took the time to teach their employees what is expected of them in the workplace.

  • Workplace Harassment
  • Diversity and Inclusion
  • Customer Service
  • Ethics
  • Workplace Bullying
  • Workplace Violence

 

II. PROTECTING YOUR ORGANIZATION FROM EMPLOYMENT LAWSUITS

 Benefits of Employment Practice Liability Insurance (EPLI)

EPLI insurance protects organizations when sued by employees for claims including discrimination, wrongful termination, harassment, and other employment-related issues such as failure to promote. We believe the EPLI is so important that we give all of our full-service clients EPLI through our master plan. This insurance generally covers the legal costs of responding to these claims and the settlement or damages that result.

Large corporations typically have substantial employment practices insurance coverage in place and are prepared to deal with just about any employment lawsuit. However, medium to small (or even new) businesses are often the most vulnerable to employment claims. That’s because they usually lack a legal department or employee handbook detailing the policies and procedures that guide hiring, disciplining or terminating employees.

Another overlooked fact is that new hires pose an employment practices liability risk. The entire employment processes from hiring to termination presents risks. Any business is at risk of an employment claim from the moment of the first interview with a prospective employee. For example, if you choose not to hire the interviewee, that individual could allege some sort of discrimination. Even if you hire someone and terminate them for a rule infraction, such as extensive tardiness, they can also allege some form of discrimination as well.

The cost of insuring a business for EPLI coverage depends on a variety of factors, such as:

  • The number of people employed
  • The number of prior suits lodged against a company
  • The percentage of employee turnover
  • Examination of established rules and practices in place

EPLI coverage is usually written on a claims-made basis. This means the incident resulting in the claim had to occur during the coverage period. Because employment claims often come months or even years after the alleged incident, it’s extremely important to obtain coverage as soon as possible.

Knowing employment law helps protect your business

A variety of laws are in place to protect the rights of people you hire or are considering hiring. While EPLI is a smart investment for many companies, it’s important to understand and carefully follow these laws as a way to further protect your organization.

  • Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, religion, national origin and sex. It also prohibits harassment.
  • The Equal Pay Act of 1963 prohibits employers from paying different wages to men and women who perform essentially the same work under similar working conditions.
  • The Age Discrimination in Employment Act of 1967 prohibits discrimination against individuals who are 40 years of age or older.
  • The Pregnancy Discrimination Act of 1978 prohibits sex discrimination on the basis of pregnancy.
  • The Immigration Reform and Control Act of 1986 prohibits discrimination on the basis of national origin or citizenship of persons who are authorized to work in the United States.
  • The Americans with Disabilities Act of 1990 prohibits discrimination against persons with disabilities.
  • The Equal Employment Opportunity Act of 1972 amended Title VII to place Federal government employees and applicants under its coverage – Prohibits employment discrimination based on race, color, sex, religion or national origin. Title VII also prohibits reprisal or retaliation for participating in the EEO process or for opposing any unlawful employment practice covered by Title VII.

 

III. GETTING HELP TO PROTECT YOUR EMPLOYEES AND ORGANIZATION

It is important in this new age of employee empowerment and transparency for your business to create a safe workplace and protect your organization from the bad actions of employees. Accomplishing all that we have laid out in this post can be daunting because it requires consistent effort and resources. As a result, many organizations choose to bring in outside help for their HR needs.

When evaluating an HR outsourcing partner or consultant, look for a partner with a strong track record of experience and success. Find a partner who can dedicate the resources you need and who understands your culture, industry, and employees. Partners like Employer Advantage who accept business risk with you are likely to be the most dedicated to your success.

WE’D BE HONORED TO PROVIDE YOU WITH A NEW PATH TO HR BLISS.

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About Employer Advantage

A New Path to HR Bliss — Trusted for more than 25 years, Employer Advantage frees business leaders from the administrative and compliance burdens of having employees so they can focus on what they do best: helping their business succeed. From energetic entrepreneurs to large corporations, we create a tailored and strategic approach to fit individual business needs and company culture.

More than a slick software solution — Employer Advantage’s dedicated service teams save businesses time and money, while providing employees with top-notch assistance and benefits. We enhance profitability while reducing the costs associated with employment laws and the often-significant penalties for the failure to comply with them. Our comprehensive suite of services manages payroll, employment taxes, health and benefits, retirement, human resources, employee manuals, safety, training, workers’ compensation, OSHA, DOT, and more.

Employer Advantage serves more than 400 companies throughout the country, with a special focus on the Midwest. We offer free consultations and strategic assessment of business needs, with quick-and-easy account setup and seamless transitions. 417-782-3909 | Toll-Free 800-467-3909 | info@EmployerAdvantage.com | Learn More: www.EmployerAdvantage.com