Does My Small Business Need To Worry About Sexual Harassment In The Workplace

Jun 20, 2020 | Business Insurance, From The CEO

In the wake of the #MeToo movement, awareness of sexual harassment has increased, but not necessarily at small businesses. 

The #MeToo movement was one of the most recent social media hashtags that led a viral global awareness about sexual assault of women as well as sexual harassment. Every year cases of sexual harassment have been increasing no matter how small or big a business is. 43% of employees in the US work for small organizations. Unlike their larger counterparts, small businesses are more vulnerable because fewer people are working here. The majority of people thought that they have lower chances to adopt such acts. Apparently, they are more susceptible to this case since there will be frequent encounters with the same people every day each time they go to work.

The proximity between employees can start an undesirable scenario which may result in harassment. Even the tasks can be extremely affected if you have to separate them to stop the situation from becoming worse. Although federal law exempts small businesses with less than 15 employees from the requirement to have a sexual harassment policy, it’s in their best interest to establish one. 

What is sexual harassment

To put it simply, sexual harassment is violating a person through unwanted sexual advances. In the workplace, the most common type of sexual harassment is the quid pro quo (this for that). It pertains to sexual favors as a requirement to return another favor such as firing an employee if she doesn’t agree to sleep with the boss or date him. 

The other type would be a hostile work environment. It means unwanted sexual content is created within the working environment by the employees. An example of this is posting nude photos or wild pictures that make other employees uncomfortable and upset at work. Other forms of sexual harassment could be throwing sexual jokes which may be taken as offensive, unwelcomed touches, and comments that suggest sexually.

How can my small business handle this problem?

With the increasing number of cases and lawsuits against sexual harassment, small businesses must do something to avoid this situation. Most of the small businesses have no HR department that can handle employees’ welfare and development. They have no one to turn to aside from the executive or the boss. 

You, as the owner, is the one who is responsible for taking care of their needs and their rights as an individual. A single case might ruin the business reputation and also your finances since lawsuits are quite costly to handle. Here are some tips you can apply that might help in creating a safe environment for everyone.

  • Establish a working policy that states intolerance of sexual harassment in your business and the corresponding penalties for violation. It must be written in your Employee Handbook and everyone must have a copy to ensure that they are aware of the existing policy you made within your business.
  • A reminder is a great way to avoid sooner unwanted events. Each time a meeting or training is held, make sure to include the policy on the topics that have to be discussed. It would create a mark of strict implementation. Execute reprimanding each one of them from causing sexual harassment.
  • Let them know that you are with them and they can approach you or any superior in charge in case a certain act of harassment happened within the working area. Sometimes they just fear to reveal the truth and the discrimination they might experience from co-employees around the workplace.
  • You must act right away upon knowing the complaint. Investigate thoroughly and know the details of what had happened. You may opt to hire an investigator to dig in deeper. Let them know that each party will be treated equally and with the utmost respect.
  • Provide protection against counterattacks. This way, they’ll be comfortable to talk to you about the case knowing you got their back. Some are reluctant because they are afraid to lose their job. It would ease their worry to approach you and eventually put the case on the go.
  • List down all the government agencies and hand it to them. It would comfort them to know that aside from work, there are other organizations that can help them through sexual harassment complaints.
  • Everything must be handled confidentially. Confidentiality of both parties is important to respect their privacy. Keep the case away from others’ knowing to protect their images as well.
  • Conduct comprehensive training about sexual harassment to all employees. It must focus on how to prevent harassment and not on how the company could avoid legal matters concerning sexual harassment. The training must have suggestive ways to make your employees equipped with skills in rejecting harassment if they happen to experience or witness it on hand. 
  • Purchase a sexual harassment insurance policy to ensure that your business can handle the costs of a lawsuit including court fees, defense costs, and settlement costs in favor of the complainant. These are all part of Employment Practices Liability Insurance which you can bundle with your business owner’s policy.

EPLI or Employment Practices Liability Insurance protects businesses against claims and lawsuits caused by events from the past and in the present like:

  • Sexual harassment
  • Invasion of privacy
  • Breach of employment contract
  • Libel and slander
  • Mental and emotional torture
  • Discrimination (age, disability, gender, race)
  • Negligence on employee benefits
  • A mistake on deciding about employee termination or discipline

EPLI cost varies depending on these factors:

  • Type of business
  • Number of employees
  • Size of the company
  • Business location 
  • Company’s length of service
  • Previously filed a claim of sexual harassment
  • If EPLI policy is occurrence-based or claims-made

Does your small business need to worry about sexual harassment in the workplace? The answer is YES. The working environment becomes toxic when sexual harassment happens. It eventually lowers productivity and affects employees’ behavior. It doesn’t just affect the mental and emotional state of the persons involved but moreover, the whole organization itself. A small business might face financial loss due to complaints and lawsuits that cost higher than you expected.

With all the necessary procedures to stop this situation, strict implementation and monitoring must be observed. It won’t be effective if you would take it easy around. Sometimes there are incidents that won’t be reported and you might miss the details resulting in a surprising lawsuit out of hand. Obtaining a sexual harassment insurance policy or EPLI would cover your business for your safety against higher costs of legal fees and settlements.

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