4 Ways You Can Minimize Increased Employee Liability Claims by Hosting Visitors
Complaints about harassment, discrimination and retaliation have had a noticeable impact on the hospitality industry over the past few years.
The US Equal Employment Opportunity Commission (EEOC) has continued to strengthen its enforcement efforts, as 2022 marks a notable increase in employment discrimination cases. Since 2023, the EEOC has reported a significant increase in the number of discrimination charges filed, reflecting its continued commitment to addressing employment inequality.¹
Employment discrimination complaints can lead to significant charges and fines from the EEOC. In fiscal year 2022, US employers paid more than $506 million to people who sued for discrimination, which shows the financial impact of these claims.²
A history of employee complaints can also affect the cost and conditions of an organization’s employee liability insurance (EPLI). EPLI premiums are expected to continue to rise, with an estimated increase of 10% to 20% by 2024.³
The hospitality industry, characterized by high profits and difficult working conditions, is particularly vulnerable to EPLI claims. Addressing these issues has become critical to the industry’s financial stability and operational efficiency.⁴
In particular, the restaurant industry remains the sector with the highest number of complaints. “Difficult working conditions, long nights, prevalence of alcohol, high workloads, reduced culture and stressful working conditions all make hospitality more vulnerable to EPLI claims. ” said Amanda M. Fugazy, Head of the Human Resources and Employment Group and Co-Head of the Hospitality Practice Group at Ellenoff Grossman & Schole LLP. “In an industry that is already under financial pressure from smaller blade machines, and the power of price declines, using best practices to prevent EPLI and other employee liability claims using best practices of HR has become essential.”
Best practices guard against the rise of employment liability claims in the hospitality industry:
Following the best practices is the most effective defense against costly EPLI claims and potential EEOC actions and penalties. Here are four ways to block requests:
1. Open communication channels. When negotiations break down, EPLI claims tend to increase. Employees should be able to report inappropriate and discriminatory behavior and actions. When employees feel they are being heard with a quick and thoughtful response to complaints, that reduces the likelihood of filing a claim in the future.
2. Develop policies and procedures. Prohibitions against discrimination and harassment must be written and included in the employee handbook. Ideally, policies should be reviewed annually to reflect any changes in law and regulation, and should clarify employee rights and procedures. Key components of these policies include reporting protocols, which specify how employees can file a complaint, report misconduct and the procedures for doing so, as well as investigative procedures that outline who conducts the investigation. , how they are done and when they are usually completed.
3. Write everything down. Every employee complaint or request must be in writing. In the event of litigation, written policies and documentation are essential to employer protection. Keep a separate investigation file that includes all written correspondence and ensure that verbal communication is summarized in emails to the employee. All investigations must include a written decision, whether or not the allegations have merit.
4. Training is important. Employees need clear guidance on what constitutes harassment, discrimination or retaliation; managers need training on handling complaints. Many states, including NY and California, require annual training. DC requires trainers to be certified.
Work with an experienced insurance consultant to learn more about how to prevent workers’ compensation claims in the hospitality industry. Learn more at https://www.hubinternational.com/industries/hospitality-insurance/restaurant-insurance/
1. US Equal Employment Opportunity Commission. (2023). “EEOC Announces Number of Fees Moved and Total Protected Benefits for FY 2022.” Taken from the EEOC.
2. US Equal Employment Opportunity Commission. (2023). “EEOC Reports on Protected Benefits for Victims of Discrimination.” Taken from the EEOC.
3. Gallagher. (2024). “Worker’s Liability Insurance: Trends and Predictions.” Adapted from Gallagher.
4. National Food Corporation. (2024). “The Impact of EPLI and Accountability on the Hospitality Industry.” Adapted from the National Restaurant Association.
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