Workplace discrimination is costly for small business employers and industries as a whole. Being sued for workplace discrimination can cost small businesses $50,000 from civil penalties alone. However, the damage to a company’s reputation with consumers can be far more severe. According to the U.S. Equal Employment Opportunity Commission, there were over 70,000 charges of employment discrimination in 2019, making it critical to focus on preventing discrimination within your company.
For this reason, every business should carry Employment Practices Liability Insurance. What is EPLI? It’s insurance that covers claims related to workplace discrimination, sexual harassment, and wrongful termination. In addition to acquiring EPLI coverage, you can take steps to reduce the chances of discrimination occurring. These measures are your first line of defense against employment claims and preventing discrimination.
The Definition of Workplace Discrimination
Understanding workplace discrimination is essential for knowing how to prevent it. What conditions can lead to a lawsuit? Firing employees or refusing to hire someone because of race, skin color, sex, age, religion, sexual orientation or disability is workplace discrimination. Here are several situations that can arise:
- Pregnancy: Business owners can’t fire, reduce the pay, or take away benefits from pregnant employees. If you pass over pregnant workers for a promotion (even with good intentions), thinking they won’t be able to handle the workload, it’s against the law.
- Harassment: One example of discrimination is when a manager harasses subordinates because of sexual orientation, mocking them or using derogatory terms. Racist remarks are another type of discrimination.
- Retaliation: If you believe an accuser is lying, it may seem normal to “punish” him or her in some way, such as by taking away some duties. Unfortunately, any kind of punitive action is grounds for accusations of retaliatory discrimination.
What many business owners don’t know is that anti-discrimination laws also apply to the treatment of employees within the workplace. This means that even current employees can file take you to court for discriminatory conditions. Having an EPLI policy is vital since any kind of unfair treatment can create serious legal problems.
Interestingly, employees can sue you, not just because of your actions as business owner, but also because of what their co-workers do. Tolerating racist behavior in the workplace can lead to legal trouble for your business. This highlights the importance of proper workplace training. Make sure your employee handbook talks in depth about discrimination, providing clear examples and showing what behavior you expect.
Team-building activities can be very effective at explaining discrimination and harassment in a serious but less-formal way. Company dinners, picnics, softball games and other events can provide an environment that promotes diversity among employees. If you receive complaints of discrimination, take them seriously. Review the accusation and investigate it, documenting each step you take, including any disciplinary actions.
The Importance of EPLI Coverage
Even if you take every step necessary to prevent discrimination from occurring, you can’t dictate the actions of your employees. You may end up facing lawsuits related to workplace discrimination, whether it’s unfounded or not. Having a Dublin EPLI is essential for local businesses. Expect the best, but plan for the worst.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.