What’s Your Employment Practices Plan?

What's Your Employment Practices Plan?

Your employees are one of your greatest assets…they are also some of the most likely to sue you.  In a down economy, one area that has seen tremendous growth is employment practice lawsuits.  Recent studies indicate the average payout to be between $150,000 & $180,000, with the number of lawsuits also rising steadily.

So how do you protect yourself?

1.  Employee manual – One of the most important assets in an organization is a good employee manual.  While you have to abide by it as an employer, it gives you, your managers, and your employees the rules of your organization.

2.  Zero Tolerance – Communicate it and live it in your organization.  Live by the rules in your organization hold everyone in your organization to do the same.

3.  Internal Grievance Procedure – If employees know they can come to you or someone in your organization, it reduces the likelihood of them calling outside.  I would also recommend having multiple people (and at least one male and one female contact), so an employee has options on whom they can speak with.  Always make the top person in your organization accessible as well.  You NEVER know where the allegation could come from or who the other party may be.

4.  Training – Train employees and managers on two key items.  If they feel they have been discriminated against, harassed, or something is creating a hostile work environment they should know how to report it and be reassured it will be investigated and handled promptly.  The second part of training is that you are a zero tolerance organization.  Anyone who falls on the other side of this should be aware of the consequences…and as an organization you must follow through with investigations, discipline, etc.

Employment Practices Insurance – Unfortunately, even with the greatest risk management program, there’s still the potential of a lawsuit.  Having an insurance backdrop in case the worst happens is an important part of your risk management program.  With average lawsuit payouts nearing $180,000 and an increase in the frequency, for many businesses the time may be now to at least explore the insurance options to complete your risk management program.

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