Upcoming deadlines for employers to comply with new workplace sexual harassment training rules are spurring increased focus on prevention training, which can help reduce a company’s exposure to these types of claims, experts say.
But in addition to making training a priority, it’s important that businesses establish a strong corporate culture to prevent sexual harassment in the workplace, they say.
Wednesday is the deadline for New York state employers to have interactive annual harassment prevention training in place for all employees, and New York City issued training rules April 1 that mandate annual training and require employers to train all their employees by Dec. 31, observers say.
The new requirements at New York state and city levels are part of an “echo effect” across the nation that began in October 2017 in the wake of allegations of sexual abuse and harassment against movie mogul Harvey Weinstein and other equal opportunity offenders like Matt Lauer and Bill O’Reilly, said Andrew Rawson, chief learning officer at Traliant LLC, a compliance training provider in Los Angeles.
“While almost every state has their own discrimination and harassment laws that echo federal ones, it was never mandated by law to train anywhere but California and Connecticut until about a year ago,” Mr. Rawson said.
In addition to New York, a growing number of states, including California, Connecticut, Delaware, Illinois and Maine, have passed legislation that mandates or expands on requirements that sexual harassment prevention training is provided to employees, he said.
“It went from a best practice nice to have, to a need to have, to a substantial chunk of the working population (must have),” he said.
Patrick Sterling, a board director for the Risk & Insurance Management Society Inc. and senior director, legendary people and risk management at Texas Roadhouse Inc. based in Louisville, Kentucky, said the company, which has 20 locations and 2,000 employees in New York, expects to have all its staff trained by the deadline.
“We’ve built a training program in-house that we’ve rolled out to employees, and we’re in compliance in New York and ready for any other states,” Mr. Sterling said.
The program was developed in partnership with the legal department to make sure it complied with the law and was effective, he said.
“As part of our enterprise risk management program, we have active cross-functional committees that focus on key risks. One would be employment practices. You always want to be in front of these risks, making sure you’re doing the right things,” Mr. Sterling said.
From the risk management perspective, training is a positive, he said. “Anytime you can increase the conversation, it’s a good thing. Training helps prevent things from happening.”
Employment practices liability insurers, too, view the new state rules mandating sexual harassment prevention training as a positive. Demand for prevention training in general is on the increase, they say.
“We’re definitely seeing increased demand from employers for sexual harassment prevention training, but it’s unclear whether it’s due to the fact of these upcoming deadlines or whether there’s an overall increase in sex harassment claims,” said Atlanta-based Moire Moron, assistant vice president, claims practice lead for employment practices liability at QBE North America, a unit of Sydney-based QBE Insurance Group Ltd.
The insurer recently started offering the services of a complementary employment practices consulting firm to policyholders of its employment practices liability coverage, QBE Business Resource Edge, Ms. Moron said.
“As employers are facing more complex issues, we found it necessary to offer a more robust offering to insureds,” she said. Services include an EPL hotline, as well as on-demand sexual harassment prevention training and state-specific regulatory updates and an employee handbook builder, Ms. Moron said.
“Our trainings are able to assist the insured, either by eliminating some of their risks or reducing some of their risks and exposures,” she said, adding that while policyholders don’t get a more beneficial rate, they “do get the benefit of these resources for free.”
The mandated sexual harassment training being implemented by several states is unlikely to have a significant impact on how underwriters look at an employment practices liability risk, said New York-based Katie Fioretti, regional head of commercial management liability, North America, at Allianz Global Corporate & Specialty SE in written comments.
“Although a positive result given the increased scrutiny surrounding employment liability exposure, most insurers already factor this type of harassment training into our underwriting process and would expect such procedures already in place,” Ms. Fioretti wrote in an email.
It’s possible that the government mandate will “increase the frequency of employment practices matters as employees are more aware of their rights, forums for complaints and the federal and state remedies available,” she wrote.
As yet there are no penalties for New York employers that fail to comply with the training mandates, but indications are that companies recognize that implementing training is an important step, not just legally but as a way to reduce their exposures and strengthen their workplace cultures, experts say.
While training is not a shield against lawsuits, having it can help reduce a company’s exposure because it takes away a weapon from opposing counsel, said Los Angeles-based Corbin Ebert, president at Inverness Insurance Services.
“If there was a lawsuit, you can be certain that if training wasn’t done, the opposing counsel would strike that discord, and that could lead to exacerbated penalties for the company,” Mr. Ebert said.
For Texas Roadhouse, the training is part of ensuring that “we’re driving a great culture,” said Mr. Sterling. “You don’t do these things to lower your insurance costs, you do it for the right reasons,” he said.
“It’s more important that we have a great workplace where employees want to work and stay and are treated well — anything we can do to enforce that is a good thing,” Mr. Sterling said.