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The Small Business Guide to Avoiding Discrimination and Harassment in the Workplace

9. June 2014 08:43

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As you may have read in previous posts such as “Hiring an Employee? Know What Can Go Wrong,” Equal Employment Opportunity laws are no joke. According to the Equal Opportunity Commission’s Enforcement & Litigation Statistics for fiscal year 2013, employers paid out $372.1 million in monetary benefits related to employment discrimination allegations – and that number doesn’t even include payments awarded through litigation!

Most small businesses can’t afford the cost of any legal claim, let alone an employment practices liability claim, one of the most costly disputes around. Luckily, there are ways for you to stay on the right side of the law. Below, we explore the best ways to create and maintain a work environment that is free of discrimination and harassment.

Where Can Workplace Discrimination & Harassment Occur?

Before we delve into risk mitigation, let’s explore where in the workplace discrimination and harassment can occur. Here are a few common situations that are ripe for EEO issues:

Recruitment and Hiring

It is illegal to bar certain individuals or groups of people from employment based on race, color, sex, national origin, religion, age, or disability. Sometimes, the tools you use to recruit people could implicate you in discrimination allegations. In other cases, pre-employment screening tests may break anti-discrimination laws.

Additionally, your job postings cannot contain discriminatory language. Let’s say an employer posts a job ad that reads, “U.S. citizenship required.” Unless than employer can prove that U.S. citizenship is necessary for the job, they could be hit with charges of discrimination.

Dismissals and Restructuring

Obviously, there is nothing inherently wrong with dismissing an employee if you’re doing it for legitimate reasons (e.g., poor work performance or the restructuring of your business). But “wrongful termination” cases can turn up if an employee feels their dismissal is a front for discriminatory practices.

Let’s say that someone owns a successful pet grooming shop. After 30 years in the business, she’s decided to scale back, sell her brick-and-mortar shop, and only keep a few clients (and, unfortunately, employees) at her new home-based business.

She decides to keep on the employees who have worked the longest with her business. Unfortunately, many of the newer employees are minorities. She says that her neighborhood has diversified over the past few years, giving her the opportunity to hire employees of many races. The newer workers say they’ve been wrongfully terminated, citing the fact that the older workers tend to come in late and cut corners.

Compensation, Promotion, and Training Opportunities

When it comes to salary, promotion, and skill-advancement decisions, employers can be charged with allegations of discrimination. This area of employment is tricky because these decisions are often subjective.

For example, let’s say a female employee who’s been with a business for seven years is passed up for a promotion in favor of a male colleague who’s only been around for two years. After noting that there hasn’t been a female manager in this business in the past 20 years, she files a sex discrimination claim with the EEOC.

Maternity Issues

If your place of business does not have any accommodations in place for mothers (including maternity leave and breastfeeding breaks), your business could face a sex discrimination case. Let’s say that a female employee at a business finds out she’s pregnant. The establishment doesn’t include time off for maternity leave and this employee doesn’t have any personal days to use. Because she misses several weeks of work, she is fired. She then promptly files a complaint with the EEOC.

Workplace Harassment

When there are gender, racial, religious or other tensions are present at work, harassment can occur. Historically, sexual harassment has been a particularly big issue for women in the workplace. For example, let’s say that a new hire is making advances to one of your female employees. He says the flirting is mutual, but she says it’s not welcome. As soon as you are made aware of this kind of harassment, it is your responsibility as an employer to intervene.

Best Practices: Avoiding Workplace Discrimination

Now that you understand the most common situations that trigger workplace discrimination suits, let’s take a look at how to avoid them:

Best Practices: Avoiding Workplace Harassment

Under EEO law, all employees have the right to a safe, healthy work environment, free of harassment based on race, color, age, sex, national origin, or disability. Employers who allow harassment to go unchecked risk low productivity, low morale, and lawsuits.

That’s right: employees who are made to feel upset, afraid, or otherwise uncomfortable in the workplace have the right to sue their employer. Here are some things you can do to promote a welcoming work environment:

Small Business Safety Net: Employment Practices Liability Insurance

Sometimes, the above best practices just aren’t enough to prevent an employment practices liability lawsuit. That’s when you’ll need your Employment Practices Liability Insurance (EPLI) policy. This is a special type of Errors & Omissions Insurance that helps pay for lawsuits related to workplace discrimination and harassment. To learn more, read “What Is Employment Practices Liability Insurance (EPLI)?

This post is part of an ongoing series on Employment Practices Liability Insurance, the high cost of employment discrimination lawsuits, and EEOC laws. Stay tuned for more on what can go wrong when hiring (and firing) employees.

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EPLI | Errors and Omissions Insurance | Risk Management | Small Business | Small Business Risk Management | Tips for All Small Businesses

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