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Employers Need To Be Diligent In Light Of Employee Lawsuits

Posted by Leslie Ruhland on Jan 26, 2018 12:24:53 PM
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The recent atmosphere of reporting of alleged harassment has led to a number of high-profile cases and employee lawsuits. Employers would do well to take note.


A recent study of employment practices litigation by Hiscox, a global specialist insurer, found that companies based in the U.S. had almost a 12 percent chance of an employment charge being filed against them.

That number may be increasing.

With the current climate of sexual harassment claims, allegations and revelations, there is a heightened awareness of the problem and, some believe, a growing trend towards making claims.

A recent article in USA Today noted

Fewer than half of employees are confident that their workplace can handle problems that arise on the job, and a small number who've specifically witnessed harassment were too fearful of retaliation to speak up about it, according to a new survey.

Only 27% of those who've had a workplace issue have taken their concerns to management, and 12% who witnessed harassment feared they would be penalized if they challenged it, according to the poll conducted for legal solutions provider, LegalZoom.  

This is another reason why employer compliance with California labor laws is an increasingly critical issue.

The Cost of Employee Litigation

According to the Hiscox study, businesses with at least 10 employees have a 12.5 percent chance, on average, of having an employment liability charge filed against them. But in some states, including California, businesses face a much higher level of possible litigation.

The study also noted that 20 percent of smaller to mid-sized businesses with under 500 employees will face employment charges with an average cost to defend of $125,000. These costs include attorney's fees and settlement costs. For those business with the proper insurance coverage, their average deductible cost was only $35,000, while their insurance companies paid out the $90,000 balance.

The median judgment for cases that go to trial is approximately $200,000 for employment lawsuits adjudicated by the courts, while one-in-four cases resulted in a judgment of $500,000 or more.

The Need for Comprehensive Policies

In the LegalZoom poll reported on by USA Today, the lack of clear policies or reporting structures was noted as part of the larger problem in the workplace,

Part of the issue is that many employees don't know where to turn if there is a problem. Fewer than half of those surveyed said their workplace had a human resources department. Only 52% said they had an employee handbook, and just 46% of them said their handbook is up to date and inclusive of all guidelines.

Laura Goldberg, LegalZoom's CMO, suggests some enhancements for the typical handbook, or policy manual,

"Think about making a handbook that’s more visual. Think about making one that's interactive, that sets a different tone in the workplace as opposed to a handbook that with its tone says 'this is a legal document.' ''

Download our employee handbook guide to make sure your organization's manual is on the right track.

In addition to discrimination complaints and claims of sexual harassment California employers and managers can inadvertantly open the door to potential lawsuits in a number of other areas. This graphic from CalChamber illustrates the most common issues.




[Infographic courtesy of CalChamber]

Stay Informed, Stay Compliant, Stay Safe

Maintaining an updated and streamlined compliance strategy will help your organization meet its obligations, while providing accuracy and timeliness. Ensuring that your staff has access to an up-to-date and comprehensive employee handbook can provide guidance and legal protections, as well.

So take time to understand the laws and prioritize employee and manager training, and maintain accurate record keeping. In this way, you will make compliance a sure thing.

Another key step in maintaining HR compliance and increasing your company's cost-effectiveness is to consider outsourcing. A professional agency such a Accuchex can provide much-needed help with Human Resources needs and questions. Accuchex is a full spectrum Payroll Management Services provider offering expertise in Time Management, Insurance and Retirement issues, as well.

If you are looking for reliable resource for your HR issues, we can help. And you can get your free 2018 California Labor Law Guide to help you make an informed decision, or call Accuchex Payroll Management Services at 877-422-2824.

free 2018 california labor law guide  

Topics: employee lawsuits, discrimination, policy manuals, handbook, sexual harassment

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