Workplace Sexual Harassment: More HR Guidance Needed

From news anchors, to titans of the entertainment industry, to corporate executives, and elected officials, headlines show no one is above the fallout of sexual harassment in the workplace. Millions of dollars have been paid in settlements and the once mighty have fallen in disgrace.

Yet, a belated resignation or termination doesn’t absolve the employer from legal action—and often leaves the aggrieved and/or juries wondering how the employer might have handled the situation better.

How can risk managers, human resources (HR), executives and companies they serve help prevent sexual or other forms of harassment? The question becomes more pressing now with the “Ending Forced Arbitration of Sexual Harassment” bill. The proposed legislation voids forced arbitration and allows disputes to proceed in court rather than in a confidential arbitration setting. Proponents believe the prospect of making these cases public will reduce such activity in the workplace.

Smart employers aren’t waiting on legislation to make workplaces safer, however. They are planning and training now to reduce sexual harassment to mitigate risk, and therefore, potential damage claims affecting executives and employees across employer ranks. Ensuring such a workplace should result in fewer acts and reports of harassment and insurance claims. As all employers are interested in the bottom line as well as a positive work environment, a more defensible posture against future claims should be top-of-mind for every risk manager and HR Executive.

Old policies prohibiting harassment must be dusted off, reviewed, updated and publicized. These policies protect those whose accusations are proven to have merit or are brought in good faith, they create consequences for those proven to have abused others, and should clearly define expectations and ramifications.

These strategies can help risk managers, HR teams, and employers keep their organizations out of the headlines:

  • Review internal policies and procedures. When was the last time your organization reviewed the HR policies and procedures manual? Older manuals may ineffectively address the issue, including under the Equal Employment Opportunity Commission (EEOC) guidance. Once updated, make the document available to the workforce in print and online. However, a manual of policies is only the beginning.
  • Training is not a one-time event for select individuals. To paraphrase Aristotle, inclusion training in the workplace is not an act, but a habit. Hire a professional skilled in workplace diversity and inclusion training, and make courses mandatory from the rank and file to the C-suite. Refresh the training every few years, and make sure every new hire is trained as part of onboarding.
  • Create a “See something, say something” culture. Sexual harassment is avoided best in organizations with a culture of transparency and accountability. Management must welcome reports of unwanted sexual advances, and then investigate such claims. Such activity reported but not acted upon can worsen the environment, and become powerful evidence for claimants in harassment lawsuits.
  • Establish a realistic reporting procedure. If protocol urges an aggrieved employee to report harassment to a direct supervisor—and that supervisor is the alleged perpetrator—an obvious conflict arises. Encourage employees to speak directly to HR or a high level manager such as a division, general or plant manager. The reporting procedure should ensure that certain steps are taken so complaints are not swept aside.
  • Empower HR to investigate all claims. If HR receives a complaint, it has a legal obligation to investigate further. Even if the complainant fears an investigation could jeopardize the alleged harasser’s job, the law is clear that a prompt investigation occur to stop any alleged harassment from continuing. Termination or disciplinary action are not necessarily required; often, claimants just want the behavior to stop. It could be immature or otherwise benign playfulness that crossed the line—behavior a simple discussion could remedy. Follow up with the complainant to ensure the behavior has stopped and to document that follow-up occurred.

Effective policies and procedures in place and rigorously followed can help employees know the organization takes sexual, racial, and other forms of harassment seriously; insurers know you’ve established policies designed to protect both employees and the organization against incidents of harassment; and for those who might see million-dollar claims in the news and think they could be next, that you’ve set up your defenses.

The Riskiest States for Employee Lawsuits

In 2014, U.S. companies had at least an 11.7% chance of having an employment charge filed against them, according to the new 2015 Hiscox Guide to Employee Lawsuits. The firm’s review of data from the Equal Employment Opportunity Commission and its state counterparts found that the risk also varied notably by state, as local laws creating additional obligations—and risks—for employers led to charge rates up to 66% above average.

STATES WITH THE HIGHEST EMPLOYEE LAWSUIT RISK

State laws that are driving some of this increased employee charge activity include heightened anti-discrimination/fair employment practices, the use of E-Verify in the private sector, pregnancy accommodation, prohibitions on credit checks, and restrictions on inquiring about or requiring background checks.

Key state laws driving increased employee charge activity

These cases can be especially damaging for small- and mid-sized enterprises, with 19% of employment charges among SMEs resulting and defense and settlement costs averaging $125,000 and taking about 275 days to resolve. The average self-insured retention for these charges was $35,000, Hiscox found, and without employment practices liability insurance, these companies would have been out of pocket an extra $90,000. What’s more, 81% resulted in no insurance payout, giving even nuisance charges the potential to be a serious financial hit. While the majority do not end up in court, when they do, the median judgment is about $200,000, not including defense costs, and 25% of cases result in a judgment of $500,000 or more.

During the hiring process, written procedures that outline and comply with federal and state laws can help minimize risk, as can maintaining a customized employee handbook that all staff acknowledge in writing they have reviewed. In addition to risk transfer, such as an employment liability insurance policy, Hiscox offered several tips to best mitigate the risk of employment charges, including:

Independent contractors

Be careful when designating independent contractors. There are variations among states and areas of law as to the test for an independent contractor. It is possible for a worker to be considered an independent contractor for some purposes and an employee for others.

Leaves of absence and accommodation for disabilities

A medical condition can trigger federal and state leave and disability laws, which vary, as well as workers compensation laws. Make it a policy to recognize events or discussions that create an obligation to discuss accommodations or a possible leave of absence.

Employee performance

Ensure that all supervisors and managers are aware of the procedure for addressing unacceptable employee performance. Communicate to the employee about what they are doing (or not doing) that is unacceptable, and make sure they understand what constitutes acceptable performance. Document all communications. Conduct factual, honest performance evaluations. Develop and maintain a procedure for corrective action plans.

Termination

To minimize litigation around termination, avoid surprises. Make sure that all guidelines have been followed for addressing unsatisfactory performance, particularly the corrective action plan. Prior to termination, assess the risk for litigation: is the employee a member of a protected class, involved in protected labor activities, or a potential whistleblower? Is the employee under an express or implied-in-face employment contract? Gather and review the documentation that supports the termination and interview relevant players.

Why Employees Quit—And How to Keep Them

Why Employees Quit

Employee turnover creates tremendous risk—resources are lost in recruitment and training, productivity lags with insufficient staffing, intellectual property can be exposed, and no company wants to get a reputation as a place where no one can stay very long. Further, the implications for workers comp, lawsuits and insurance extended to employees can cause headaches long after a desk has been cleared out.

A few recent studies highlight some of the biggest factors contributing to employee turnover resultant human resources risk, and what managers can do to keep staff and avoid risk.

Why Employees Leave

A new “exit survey” conducted by LinkedIn among members from five countries found that top reason workers left their jobs was because they wanted greater opportunities for advancement. In a related study from the social network, the number one reason employees who were not actively seeking a new job would be willing to leave was for better compensation or benefits. Regular performance reviews and assessments that open up opportunity for advancement in both responsibilities and salary can help keep employees engaged—and prevent feeling they have to stray to stay on top.

Room to Improve

Another recent study from LinkedIn found that 69% of human resources managers thought that employees were well aware of internal advancement programs. Yet only 25% of departing employees said they knew about these opportunities. In fact, of those who stayed within the company and found a new position internally, two thirds found out about the opportunity through informal interaction with coworkers. Strengthening formal retention and advancement programs and improving awareness of these initiatives may go a long way toward getting employees to use them.

Why New Hires Quit

One in six employees quits a new job within six months — and 15% either make plans to do so or quit outright within that time frame, according to Time. HR software company BambooHR found that the primary factor was “onboarding problems”—in other words, HR or managers are failing to properly orient new hires and integrate them into the workplace. This may seem silly, but they could have reason to feel this is a fatal flaw: research from John Kammeyer-Mueller, associate professor at the University of Minnesota’s Carlson School of Management, found that there is only a 90-day window for settling in. If your new employee is not caught up to speed by then, you may see them walk out the door.

Getting Employees to Stay

CareerBuilder surveyed thousands of workers recently to gain insight into why they decide to stay or go. Of those who plan to stay at their jobs, the top reasons they did not want to leave included: liking the people they work with (54%), having a good work/life balance (50%), being satisfied with the benefits package (49%), and feeling happy with their salary (43%). Of those who are unhappy, however, 58% said they plan to leave in the next year. Making sure these bases are covered is a strong step to keeping your top talent at their desks.

Check out the infographic below for more of LinkedIn’s insights into why employees leave, and what you lose when they go: