Do you know anyone who ever complained about their employer? Sounds like a stupid question because complaining to friends and family about your job is a very common event throughout most of our lives. Did you know that a significant number of individuals do a great deal more than just complain about how they are being treated at work, or situations at work that are unacceptable or make them uncomfortable and unhappy? To evidence this point, the United States Equal Employment Opportunity Commission (EEOC) reported that 91,503 charges of workplace discrimination were filed during the 2016 fiscal year. Believe it or not, this number of initial filings is an increase from the prior fiscal year.
More staggering statistics reflected the handling by the EEOC of more than 585,000 inbound calls to their free compliance hotline and 160,000 plus visits to enforcement agency field offices.
Over the past twenty years as a human resource leader and practitioner, I have been exposed to a wide range of organizations with leaders and managers at all levels who had very little comprehension or understanding of the way an employee can sue their employer. So often I was told that “the employee can’t afford to sue us” or “we are too small, it will never happen to us”. From time to time after providing guidance and strategic recommendations on enhancing their human resource infrastructure, policies, and procedures, I have been told not to worry so much because the company has employment practices liability insurance (EPLI). Generally, that was the moment I was forced to remind the business leader that insurance is used “after” an event, and was a reactive tool versus an intentional and proactive strategic approach to risk management of their employment practices.
Consider these facts. It does not cost an individual any money to contact and file a charge with the EEOC, or even the Office of Federal Contract Compliance Program (OFCCP) for that matter. There is also no cost to file a charge with the Department of Labor. Why? Because the charge is a report of alleged violations of laws and regulations that the EEOC, OFCCP, and the DOL exist to enforce. Therefore, the individual is simply initiating a process for the government enforcement agency to begin exploring and investigating if any wrong doing took place.
Why then, am I claiming EPLI is not enough? Simply, insurance is protection for when an event has already happened and is triggered long after steps should have been taken to mitigate the risks and protect the business through proactive and strategic development, implementation, and management of effective human resource management practices.
Now it is clear that each year we might expect over 90,000 new charges to be filed by individuals who allege their rights have been violated. This is a reality businesses must recognize, and yes, your business, no matter if you have just one employee or thousands, can be on the wrong end of a charge.
Here is another reason why EPLI will fail to protect you and your business as the sole risk management tool. The insurance policy does not educate, train, guide, or advise the business on how to manage the workforce and the employees and managers involved in various personnel and employment situations before the problem happens, while the problem is happening, or after the problem happened. In other words, it is simply insurance and not a replacement for effective and compliant policies, procedures, and practices for your workforce.
But wait, there is even a greater risk you may not be aware of or understand. Examining the breakdown of charges filed in fiscal year 2016, #2 were allegations based on race at 35.3 percent. Coming in at a close #3 were charges based on disability at 30.7 percent, #4 were charges based on sex at 29.4 percent, and the list goes on. Do you have any idea what type of charge is filed more than any other type of charge year after year? At 45.9 percent retaliation charges topped the list once again.
Retaliation, the action and behaviors of employers against employees who executed their rights to file a complaint against their employer based on their belief that the employer has violated a law or regulation. Retaliation is illegal – even if the initial claim is found to have no merit or is unsubstantiated, taking negative action against the employee for filing the claim violates the law and the rights of the individual. Unless you are looking to exhaust your EPLI coverage and dig into your pocketbook to pay the fines and damages when you lose your case, you should be thinking about how to establish appropriate risk management practices in the form of compliance and effective human resource management policies, processes, and procedures. You need to do this to ensure you are doing everything in your power as leadership to prevent and avoid discriminatory or harassing behavior and actions in your company, but also to educate and train your management team on appropriate actions and behaviors “after” an employee files a charge to avoid the risk of triggering an additional retaliation charge.
What does this all mean for your business? You do not want end up like other employers who contributed to the $482 million dollars secured by the EEOC through settlements and litigation during the 2016 fiscal year. You do not want to rely on your insurance as the one and only means of protection for your employment practices liability. You do not want to go on thinking you are not exposed, because if you have employees, you have the risk.
What you want to do is perform a compliance audit of your employment practices, identify the gaps, develop a comprehensive corrective action preventive action plan (CAPA), implement it, and then perform periodic reviews for adherence to established policies, processes, and procedures. It is highly recommended that you utilize a third party to perform the audit for an objective analysis and to leverage subject matter expertise that may not already exist in your company. Regardless of performing the audit with internal or external resources, failure to get a handle on your employment practices and ignorance of problems that exist will not be an acceptable excuse if sued.
Secure the necessary subject matter expert(s) who can guide and direct your business in building and maintaining effective human resource management practices that proactively protect your business, you will be thankful that you did. Want that guidance and support today? Contact SymbianceHR and our subject matter experts by calling 888.343.7340 or emailing us at email@example.com.