Expanded Workplace Laws Heighten Employment Practices Liability Exposures

chef kitchen workplace lawsAccording to recent evidence, 89% of hospitality industry workers reported having experienced one or more incidents of sexual harassment on the job.1 With stories of sexual harassment in the workplace and the #MeToo movement dominating the news cycle for nearly a year, state and local governments have responded with expanded workplace laws that require employers to take action.

Businesses, including restaurants and other hospitality venues, are subjected to a widening collection of federal, state and local workplace laws, such as the Americans with Disabilities Act, the Civil Rights Act, the Age Discrimination in Employment Act, and Title VII of the Civil Rights Act – just to name a few.

In addition, just this past October, New York State finalized its guidance on the mandated sexual harassment prevention policy and training program with which every employer in the state must comply with.

Key features of the state model policy that must be reflected in any applicable employer policy include:

  • An introduction that unmistakably pronounces sexual harassment an illegal form of workplace discrimination and that all employees have a right to work in a harassment-free environment;
  • Notification that the employer’s policy’s protective scope extends beyond employees to also include job applicants, interns, contractors and other worksite visitors;
  • Unambiguous prohibition against employer “retaliation.” Moreover, an explanation that not only is the employee protected from retaliation, but the policy also precludes retaliatory behavior that targets anyone who assists in a sexual harassment investigation in good faith or engages in “protected activity” (which is further defined);
  • A promise of a “prompt and thorough” investigation of any claim of sexual harassment. Although the rules direct that investigations should immediately commence and result in swift corrective action, the final rules offers greater employer flexibility to perform investigations by nullifying the original 30-day deadline for investigation;
  • Detailed instructions explaining how employees should report sexual harassment using New York State’s new complaint form (see discussion below);
  • Detailed examples of what can constitute sexual harassment;
  • A declaration that anyone, regardless of gender or station, can be the target of sexual harassment;
  • A declaration that workplace sexual harassment can occur both at the workplace and outside of it. This includes a warning about inappropriate messages sent using personal devices and which might be transmitted during non-work hours;
  • A detailed explanation outlining other possible legal avenues available for an employee to utilize under state and local workplace laws, including specific contact information.
  • This policy (or a similar, employer-generated one) must be given to all current employees by October 9, 2018. New employees should be given this form upon hire.

The cost of defending employment practices liability (EPL) claims could be financially devastating for many small to mid-size businesses who will take a disproportionate loss when it comes to these new edicts. The Society for Human Resource Management (SHRM) reports that 41% of all EPL claims are brought against employers with 15 to 100 employees.

Create a fair work environment for everyone

As an employer, you must do everything in your power to treat your employees fairly and maintain a non-hostile, harassment-free environment for all. Ideally, this can happen through the formal creation of policies and procedures that the company – including senior managers – takes seriously and abides by. A critical piece of this policy will be to take all employee complaints seriously; following through to both make the employee feels comfortable and stop the behavior in its tracks.

China VMF December 2018 728×90

But, even if you do everything right and comply with all federal, state and local workplace laws, there’s still a chance you could be held liable for the actions of your employees, third party vendors or even your customers – by association. You could also be the subject of a discrimination suit if someone you interview but fail to hire feels that he or she was treated unfairly.

Put the necessary security blanket in place

EPL insurance can protect any business against claims made by potential hires, employees currently on your payroll and even previously-terminated employees. With EPLI coverage, your company is protected against claims including:

  • Wrongful termination
  • Employment-related emotional distress and invasion of privacy
  • Defamation
  • Retaliatory/constructive discharge
  • Sexual harassment and discrimination
  • Workplace torts such as slander

EPLI coverage generally provides recipients with the cost to defend against the EPL charges plus any damages you are ordered to pay.

Heightened exposure calls for heightened response

As employers face a growing number of serious employment practices liability exposures in their daily interactions with employees, companies are learning the hard way just how complex the employee-employer relationship has become.

Speak to your insurance broker to learn more about how the proper training protocols and insurance coverage can provide much-needed protection and peace of mind for your company in light of the workplace laws.


1. The Guardian. https://www.theguardian.com/…

Robert Fiorito
Robert Fiorito serves as Vice President with HUB International Northeast, a leading global insurance brokerage, where he specializes in providing insurance services to the restaurant industry. As a 25-year veteran and former restaurateur himself, Bob has worked with a wide array of restaurant and food service businesses, ranging from fast-food chains to upscale, “white tablecloth" dining establishments. Robert can be reached at 212-338-2324 or by email at robert.fiorito@hubinternational.com. For more information on HUB, please visit www.hubinternational.com.