Sexual harassment in the workplace

A part of owning and running a business is keeping up with statutory and regulatory requirements. Regulatory red tape is consistently one of the biggest issues with which businesses struggle to keep up. However, there are instances when compliance with legal requirements makes good business sense. A perfect example of this is the growing trend of states requiring employers to provide sexual harassment prevention training to employees.

The financial cost of the failure to address sexual harassment in the workplace can be high. The Equal Employment Opportunity Commission—the federal agency that administers and enforces civil rights laws against workplace discrimination—reported that, in 2018, they recovered $56.6 million in benefits related to sexual harassment charges. This number represents only a percentage of the overall legal costs of sexual harassment, since many sexual harassment cases are resolved prior to EEOC involvement. This also does not account for costs to businesses such as employee turnover, lower productivity, lower motivation and commitment, and team disruption, which often go hand-in-hand with sexual harassment claims.

In response to the recent wave of sexual harassment accusations, many states—including New York—are requiring businesses to be more proactive in preventing workplace sexual harassment. In 2018, New York passed a law requiring all New York employers to adopt a sexual harassment prevention policy and to provide training to their employees on an annual basis. Additionally, all new employees must be trained within 30 days of hire and reporting procedures must be put in place.

Unfortunately, while awareness and training are important to reduce workplace sexual harassment, it does not guarantee that it won’t happen. Businesses must make sure to protect themselves in the event of a workplace discrimination claim by purchasing an Employment Practices Liability insurance policy.

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