The Human Resource: Why EPLI is not enough

Do you know anyone who ever complained about their employer? Sounds like a stupid question because complaining to friends and family about your job is a very common event throughout most of our lives.

Did you know that a significant number of individuals do a great deal more than just complain about how they are being treated at work, or situations at work that are unacceptable or make them uncomfortable and unhappy? To evidence this point, the United States Equal Employment Opportunity Commission reported that 91,503 charges of workplace discrimination were filed during the 2016 fiscal year. Believe it or not, this number of initial filings is an increase from the prior fiscal year.

More staggering statistics reflected the handling by the EEOC of more than 585,000 inbound calls to their free compliance hotline and 160,000 plus visits to enforcement agency field offices.

Over the past 20 years as a human resource leader and practitioner, I have been exposed to a wide range of organizations with leaders and managers at all levels who had very little comprehension or understanding of the way an employee can sue their employer. So often I was told, “the employee can’t afford to sue us” or “we are too small, it will never happen to us.”

From time to time after providing guidance and strategic recommendations on enhancing their human resource infrastructure, policies, and procedures, I have been told not to worry so much because the company has employment practices liability insurance, or EPLI. Generally, that was the moment I was forced to remind the business leader that insurance is used “after” an event, and was a reactive tool versus an intentional and proactive strategic approach to risk management of their employment practices.

Consider these facts. It does not cost an individual any money to contact and file a charge with the EEOC, or even the Office of Federal Contract Compliance Program for that matter. There is also no cost to file a charge with the Department of Labor. Why? Because the charges is a report of alleged violations of laws and regulations that the EEOC, OFCCP and the DOL may enforceable.

Therefore, the individual is simply initiating a process for the government enforcement agency to begin exploring and investigating if any wrong-doing took place.

Why then, am I claiming EPLI is not enough? Simply, insurance is protection for when an event has already happened and is triggered long after steps should have been taken to mitigate the risks and protect the business through proactive and strategic development, implementation, and management of effective human resource management practices.

The insurance policy does not educate, train, guide, or advise the business on how to manage the workforce and the employees and managers involved in various personnel and employment situations before the problem happens, while the problem is happening, or after the problem happened. In other words, it is simply insurance and not a replacement for effective and compliant policies, procedures, and practices for your workforce.

But wait, there is even a greater risk you may not be aware of or understand. Examining the breakdown of charges filed in fiscal year 2016, number two were allegations based on race at 35.3 percent. Coming in at a close number three were charges based on disability at 30.7 percent, number four were charges based on sex at 29.4 percent, and the list goes on. Do you have any idea what type of charge is filed more than any other type of charge year after year? At 45.9 percent retaliation charges topped the list once again.

Retaliation, the action and behaviors of employers against employees who executed their rights to file a complaint against their employer based on their belief that the employer has violated a law or regulation. Retaliation is illegal – even if the initial claim is found to have no merit or is unsubstantiated, taking negative action against the employee for filing the claim violates the law and the rights of the individual.

Unless you are looking to exhaust your EPLI coverage and dig into your pocketbook to pay the fines and damages when you lose your case, you should be thinking about how to establish appropriate risk management practices in the form of compliance and effective human resource management policies, processes, and procedures.

What you want to do is perform a compliance audit of your employment practices, identify the gaps, develop a comprehensive corrective action preventive action plan, implement it, and then perform periodic reviews for adherence to established policies, processes, and procedures. It is highly recommended that you utilize a third party to perform the audit for an objective analysis and to leverage subject matter expertise that may not already exist in your company. Regardless of performing the audit with internal or external resources, failure to get a handle on your employment practices and ignorance of problems that exist will not be an acceptable excuse if sued.

Source data: https://www.eeoc.gov/eeoc/statistics/enforcement/all.cfm

About Warren Cook

Warren is the President and co-founder of SymbianceHR and provides strategic oversight for service delivery, business operations, and technical guidance on consulting engagements. He is a human resources subject matter expert with over 25 years of experience as a strategic human resources business partner, project manager, and people leader across private and public sectors organizations. Warren is responsible for the strategic planning of all client consulting engagements from initial needs assessment and compliance review through delivery of customized strategic solutions that meet the client’s business goals. He has a proven track record of providing executive coaching and guidance to business leaders and human resource professionals at all levels including the C-Suite of Fortune 100 companies. Warren is also the Chief Talent Officer and cofounder of SymbianceHiRe, a Symbiance company dedicated to providing direct placement talent acquisition services and temporary and contract staffing solutions to the business community. Warren holds a B.S. in Human Resource Management, an MBA in Project Management, and a M.S. in Industrial and Organizational Psychology. Warren is the author of “Applicant Interview Preparation – Practical Coaching for Today.”

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