Business Protection Bulletin

Most employers are aware of the employee protections found in Title VII of the Civil Rights Act of 1964. Employers may not discriminate against employees on the basis of race, color, religion, sex, or national origin. Also, they may not retaliate against employees who have protested against an illegal employment practice or who participated in an investigation or other activities against the employer for an illegal practice.

Further, recent court decisions have applied Title VII’s protections to an employee’s association with another person whose characteristics fall under those protections. The U.S. Supreme Court held in 2006 that employers cannot discriminate against someone closely related to or associated with a person who is exercising protections under Title VII. Two federal courts earlier this year ruled that employers violated the law by discriminating based on association. One allegedly fired a white basketball coach because his wife was African-American; the other allegedly fired an employee whose coworker’s fiancé filed a complaint with the Equal Employment Opportunity Commission.

All employers are vulnerable to these types of accusations, even those who strive to obey the law. Employment Practices Liability insurance (EPLI) policies cover many types of losses resulting from employee claims. How will they respond to association discrimination claims?

EPLI policies vary somewhat from one insurance company to another, but most provide coverage for acts such as discrimination, wrongful termination, harassment, retaliation, and inappropriate employment conduct. A typical policy covers discrimination against an employee for termination of the employment relationship, demotion, failure to promote, denial of an employment benefit, or other adverse action based on a number of characteristics such as color, race, sex, ethnicity, age, and religion. It also covers retaliation claims if the employee engaged in a protected activity, the employee suffered an adverse action, and the protected activity caused the adverse action. Because they apply specifically to employees who have these characteristics or who perform protected activities, these policy provisions do not appear to cover actions against employees because of their association with others.

However, the policies usually also cover “inappropriate employment conduct.” Among the acts that might fall within this category are coercion, wrongful demotion, wrongful discipline, retaliatory treatment, and others. The definition of “inappropriate employment conduct” will be different from one policy to another. One insurance company might cover association discrimination while another might not. As such, employers should discuss specific terms of coverage with one of our insurance agents.

The policies might cover the employer, but not the employee alleged to have committed the act, if a court determines the employee deliberately acted illegally or with intent to harm the other employee. For example, if a court ruled that a supervisor was acting maliciously when he fired an employee for marrying someone of a different race, the insurance might pay for the employer’s defense and liability but not for that of the supervisor.

In this era where job cuts and lawsuits are common, employers face a real exposure to actions against them for the decisions they make. Lawsuits can be costly even if they are groundless; the costs of defending them can mount rapidly. EPLI provided by a financially solid company is an important part of every employer’s risk management program. EPLI, coupled with a well-executed loss prevention program, will help any employer survive employee accusations.

Insurance companies, agents, and buyers tend to focus on the major coverages within the Commercial General Liability policy: Liability for injuries caused by a business’s premises, operations, products, or finished projects, and liability for property damage. However, for businesses that do not own the buildings in which they operate, there’s an often-overlooked coverage that could be very important. The policy declarations refer to it as “Damage to Premises Rented to You,” although it has traditionally been known as Fire Damage Legal Liability Coverage. It provides limited coverage for tenants who cause fire damage to rented premises.

Fire Damage Legal Liability is a “give-back” coverage. Coverage A – Bodily Injury and Property Damage Liability contains 14 exclusions — clauses that describe types of losses to which the coverage does not apply. The final paragraph states that the last 12 exclusions do not apply to fire damage to premises while rented to or temporarily occupied by the insured with permission of the owner, so it gives the coverage back from the exclusions. This means that, if the insured is legally liable for fire damage to premises rented or temporarily occupied, the policy will provide coverage for fire damage to premises in the insured’s care, custody or control, and fire damage resulting from release of pollutants, among others. This coverage has several limitations:

• It usually has a limit of only $50,000 or $100,000.
• It applies only to the premises, not to contents, such as furniture or wall coverings.
• It covers fire damage only, not water damage or other types of losses.
• It provides coverage only if the insured is legally liable for the damage. It does not cover liability the insured assumed under a contract.

These limitations can leave a business at least partially unprotected in a variety of situations. Some examples:

• The business’s liability for damage to a rented space is $200,000.
• The business is an auto body shop. While a car is being spray painted, a spark ignites the fumes and causes an explosion.
• The business rents meeting space in a hotel. A projector overheats, starting a fire that damages tables, chairs, easels, and a cart holding refreshments.
• The business’s lease makes it responsible for damage to the premises, regardless of cause. A nearsighted driver crashes his car into the display window.

In all of these situations, the insured will either have no coverage or insufficient coverage. If these limitations could cause a problem, the business might want to consider some options. It could look at buying a property Legal Liability Coverage Form. This policy covers the insured’s legal liability for damage to property described in the policy and in the insured’s care, custody, or control. An advantage of this is that it provides coverage for a variety of perils, not just fire. However, it does not cover liability assumed under a contract, so it still would not cover damage caused by the nearsighted driver. A regular Property insurance policy will provide broader coverage, but it probably duplicates the landlord’s coverage and is more expensive than other options. The tenant might want to ask the landlord to remove assumed liability from the lease.

To determine which coverage options are best for a particular situation, work with one of our experienced insurance agents. We can explain alternatives, give an idea as to their costs, and provide information about various insurance companies’ claim handling practices. Get the facts early — the time to find out about your coverage is before a loss occurs.

As the manager of a business, you want to focus on those things that drive success: Productivity, innovation, performance, and strategy. As you work to grow the business, you probably do not want to deal with more mundane office matters. Sometimes, however, these issues can have a major impact on employee morale, and they must be handled well. One such issue is the employee dress code. It would be nice if all employees used common sense every day and wore tasteful, professional clothing. Taste and professionalism, however, can be in the eye of the beholder. It is likely that your organization needs some kind of guidance on appropriate dress.

If the organization has an employee handbook, it probably has a section on acceptable dress for the workplace. Is the policy too vague to be useful or overly specific? Does it comply with legal requirements? Does it require dress that is more formal than necessary given the amount of customer contact employees have? Does it allow clothing that is too informal for regular customer contact? If the answer to any of these questions is yes, consider updating it. If not, make sure that you are enforcing it. Also, it might be wise to remind employees of the dress code policy periodically. This will inform new employees and reinforce the policy with veterans.

The organization should enforce the dress code without partiality. Individuals and groups of employees should be treated equally. Federal employment laws and regulations permit employers to set employee dress codes and to treat men and women differently within social norms. For example, it’s acceptable to require men to cut their hair while not making the same demand of women. On the other hand, it might not be acceptable to require women to wear skirts or men to wear uniforms while not making equivalent demands of the other sex.

Be aware that federal and state laws protect employees from discrimination on the basis of religion. Employers must make reasonable accommodations to employees who want to dress a certain way for reasons of religious observance. Some men might cover their heads or wear beards for this reason; women might wear clothing that almost completely covers them up; employees of both sexes might wear certain pieces of jewelry. Unless complying with these requests would pose an undue hardship for the organization, the employees’ wishes must be honored. Employers may refuse such requests if the clothing or style creates a safety hazard; in most other cases, they must make the accommodation.

On the other hand, the law does not require employers to allow workers to display tattoos and body piercing. Rather, employers are free to make business decisions about the display of these styles. Some employers might permit it for employees who seldom or never interact with customers. Others might permit it for everyone, especially if their customers frequently have tattoos or piercings. Still others might decide that it’s inappropriate for their businesses in all cases. The decision is entirely the employer’s, based on the balance between business needs and the need to attract and retain good employees.

This is really what dress codes are all about. Every business projects an image, and how its employees dress affects that image. Managers naturally want to put their best foot forward with customers. At the same time, a good workforce is not easy to build and retain. A too-strict dress code will repel good job candidates and could cause valuable employees to consider leaving. Inflexibility might violate anti-discrimination laws and inspire workers to file lawsuits. It is in an employer’s best interest to develop a dress code that reflects well on the business and keeps employees happy.

Occasional severe injuries are an unfortunate part of the construction business. When they happen, a contractor may be looking at a very large lawsuit and will seek coverage under its Liability insurance policy. Undesirable side effects of Liability insurance claims include disputes between the contractor and the insurance company. Bad feelings can begin with the claim notice from the contractor, build with a letter from the claim adjuster listing every policy condition that might mean no coverage for the claim, exacerbate when the adjuster balks at the defense attorney’s bills, and erupt during negotiations over a settlement.

A contractor cannot control a claim adjuster’s actions, but there are things that can be done to influence the adjuster’s behavior for the better, minimize areas of disagreement, and make the whole process a little smoother. Claim adjusters find it frustrating when they receive initial claim notices that provide limited information. When giving the initial notice of a liability claim to its insurance company, the contractor should provide at minimum the following information:

• Basic information, such as the date and location of the loss, names of injured persons, nature of injuries, and so on.
• If the contractor has already hired defense attorneys, an explanation of its reasons for selecting that firm. For example, a particular firm might have significant experience defending contractors of the same type; the notice to the insurance company should state that.
• A statement of what the contractor expects from the company during the claim process. This should present several questions for the company to answer, such as whether the attorneys will act as the conduit for information between the contractor and the company, whether the company will hold an early meeting with the contractor to discuss the case, and the confidentiality of certain communications.

It is a good idea for the contractor to seek an in-person meeting with the claim adjuster within the first few months after making the initial notice. This meeting will separate the contractor’s claim from the dozens of other cases on the adjuster’s desk. It will facilitate an exchange of information, introduce the adjuster to the attorneys, educate the adjuster about the case, and allow both sides to discuss their expectations for the claim process, such as frequency of updates and the payment schedule for the attorneys.

Even with a detailed initial notice and an early meeting, disputes between the contractor and the company can still arise. If the two parties can define the issues specifically, they can limit the disagreements and focus on producing a successful claim resolution. Even if they disagree on whether the policy will cover the claim, a specific description of each side’s concerns can help narrow the areas of disagreement and reduce uncertainty. Therefore, it is in the contractor’s interest to be specific about its questions and concerns in all communications with the company. This should give the company an incentive to be clear about why it might not cover the claim. Armed with this information, the contractor can decide more easily how to proceed next — whether that will be to mediation, appeals to the company’s management, litigation, or other alternatives.

During this process, the contractor should not overlook his insurance agent as a resource and advocate. Agents deal with claim situations on a daily basis and can provide valuable information on what to expect and ways to make the process easier. Workplace injuries are upsetting and disruptive; ensuing lawsuits are stressful and take a contractor away from his real business. Following these steps can reduce the amount of stress and help bring the claim to a conclusion with which all parties can live.

In the modern workplace, men and women work together for eight or ten hours a day; sometimes even longer. When people spend that much time together, it’s not surprising that occasional romances will bloom. Many people have met their spouses at work. Unfortunately, workplace romances don’t always have happy endings. When a couple in an office breaks up, the atmosphere can become, at best, uncomfortable and, at worst, hostile. Productivity can suffer as the ex-partners feud with each other. More serious, in some cases the firm might have a significant financial exposure when love goes wrong.

Relationships between two people of equal position in the company might not be cause for concern, but romances involving supervisors and their subordinates can expose the company to legal liability. Workers outside the relationship might detect favoritism toward the subordinate when he or she receives pay raises, promotions, or other desired rewards. Conversely, if the couple breaks up, the subordinate might be sensitive to any actions that smack of retaliation. In the worst cases, the subordinate could decide he or she is a victim of sexual harassment and take legal action against the company. The federal Equal Employment Opportunity Commission received almost 14,000 complaints of sexual harassment in 2008. Almost 30% of these settled in the injured employee’s favor, costing the employers $47 million, not including damage awards won through litigation.

Employers who wish to avoid close relationships with government investigators should consider several options, including:

• Not having an office romance policy. Firms who choose this option might emphasize anti-harassment and anti-discrimination policies instead.
• At the other extreme, some companies have outright bans on employee romances. Although this might have some appeal, it can be difficult to implement because the forbidden behavior could be hard to define. Also, courts might not uphold such a ban.
• Some companies require employees who date each other to notify a company representative, such as the human resources manager, when the relationship begins and if it ends. This might protect the company from ensuing sexual harassment claims.
• Many companies have policies against spouses working for the same company or against employees supervising significant others, spouses, or other relatives. This can make it less likely that other employees will perceive favoritism, but the company must apply the policy equal to members of both sexes to avoid discrimination claims.
• Some companies actually require employees in a relationship to sign contracts. These agreements state that the employees have entered into a voluntary relationship, affirm that they understand the company harassment policy, describe how to report complaints, and describe acceptable and unacceptable behaviors.

In addition to adopting one of these options, employers can take some steps to reduce their chances of having to fend off sexual harassment claims. First, they should communicate to supervisors that relationships with subordinates should be avoided. They should create an environment where supervisors and other employees feel safe to report improper behavior. They should have policies against harassment and implement procedures for making complaints. They should take steps to end direct reporting relationships between romantic partners by transferring one of them, if possible.

Human nature being what it is, there will probably always be workplace romances. Thoughtful consideration and implementation of policy alternatives will help protect a company from potential resulting lawsuits. However, all the best precautions might still fail to prevent litigation, so all employers should carry Employment Practices Liability insurance. One of our experienced insurance agents can provide advice on the available coverage options and companies. With preventive measures in place and risk financing in the form of a good insurance policy, employers can focus on their top priorities: Growing their businesses.

The recession that started in December 2007 has had a major impact on the construction industry. The demand for new homes has collapsed together with the general housing market. Owners of commercial projects have put them on hold, either due to lack of financing, cash flow problems, or lack of demand for the space. Although surviving might seem like the top priority for contractors, a period of economic slowdown might be the perfect time to take steps that will plant the seeds for long-term profitability.

One step with an immediate payoff is using equipment more efficiently. Are employees making unnecessary trips up and down ladders to retrieve tools and materials? Consider using scaffolding or scissor lifts, which will allow the worker to bring all necessary materials in one trip while also keeping him safer than a ladder would.

Now might be an excellent time to review contracts with an eye toward inserting clauses to improve worksite safety. For example, you might want to require tools with safety enhancements, specific fall protection measures on scaffolding, footwear that meets a specific protection standard, or eye protection. Improved safety practices will reduce liability insurance claims and make the business more attractive to insurance companies, resulting in lower rates.

During a slow economy, you probably have downtime between projects. Use this time to think about how to improve safety on the next job. Meet with the general contractor to discuss ways to prevent accidents. Meet with the subcontractors who will bid on the work. Ask them about how they will prevent accidents from happening. Take their answers into consideration when you evaluate their bids.

Don’t forget training. A downturn affords you time you didn’t have before to train employees on safety, different types of projects (such as environmentally sensitive jobs), and more efficient work processes. When the recovery comes, you will be in a position to bid on more and different jobs and your safety practices will make you attractive to general contractors.

Together with training, consider replacing outside safety consultants with your own jobsite superintendents. Give the supers the training they need to manage worksite safety effectively. This will give you stronger supers, allow for immediate safety improvements on the job, and save money that would have been spent on consultant fees and higher insurance premiums.

Arrange meetings with the loss control professionals at your insurance company. Ask them to evaluate your worksites, provide training materials, or even to come in and discuss loss prevention with your workers.

If your safety record is already solid, talk to one of our insurance agents about changing to a loss-sensitive insurance rating plan. These plans, which normally apply to Workers Compensation insurance but can also apply to other coverages, adjust your premium based on your loss experience during the policy term. Very large contractors might want to consider a retrospective rating plan, which bases the final audit premium almost entirely on the contractor’s loss experience during the term. Contractors with sound safety practices stand to benefit enormously from this type of approach.

The economy will eventually rebound. When it does, the companies that were proactive during the slowdown will reap handsome rewards in the form of more contracts, higher revenue and greater profits. By investing in efficiency, safety and training, contractors will be poised for future growth. The economy is at a standstill; your business shouldn’t be.

The American workforce is growing older and the economy is struggling. These two factors indicate that, as companies lay off workers to cope with a slow economy, older workers who lose their jobs might increasingly take their former employers to court for alleged age discrimination. However, a recent decision of the U.S. Supreme Court could make it harder for workers to win those lawsuits.

Jack Gross, a 54-year-old claims administration director for a financial services firm, was reassigned in 2003 to the position of claims project coordinator; some of his duties were transferred to a person in her forties whom he formerly supervised. Because he lost some of his duties, he considered the move a demotion and sued his employer a year later, claiming a violation of the Age Discrimination in Employment Act of 1967. At trial, the judge instructed the jury that it must find in Gross’s favor if he proved that he had been demoted and that age played a part in the employer’s decision. The jury did return a verdict in his favor and awarded him lost wages. An appeals court reversed the ruling, saying that the judge’s instructions were incorrect, and Gross appealed to the U.S. Supreme Court.

On June 18, 2009, a divided court ruled against Gross. Writing for the majority, Justice Clarence Thomas said that a person suing for a violation of the ADEA must prove that the employer would not have taken the action if not for the person’s advanced age. The employer does not have the burden of proving that it would have taken the action regardless of the employee’s age, even when the employee has evidence that age was one factor in the decision. He also wrote that the ADEA requires the employee to show that age was the primary reason for a demotion, not just one of multiple reasons. He noted that Congress had the opportunity to prohibit considering age among other factors and neglected to do so.

Justice John Paul Stevens denounced the majority’s interpretation of the ADEA as “an unabashed display of judicial lawmaking.” Noting that the court had interpreted other anti-discrimination laws to prohibit discriminatory actions based partly on a protected characteristic, he said it was inconsistent and arbitrary for the court to apply a different standard to ADEA violations. He pointed to a previous decision where the court held that an action was illegal if discrimination against a protected characteristic was “a motivating factor” in the decision. Justice Stephen Breyer added that to apply the majority’s standard “is to engage in a hypothetical inquiry about what would have happened if the employer’s thoughts and other circumstances had been different.” The answer, he wrote, will often be far from obvious.

This decision should be good news for employers and their insurance companies. Employment Practices Liability insurance policies normally cover employment terminations, demotions, decisions not to hire or promote, and denials of employment benefits based on factors such as age, sex, race, religion, sexual orientation, and others. This decision should result in fewer successful lawsuits against employers for alleged age discrimination, with a corresponding drop in payments under EPLI policies for these actions. Although insurance companies will still incur the cost of legal defense, they are less likely to pay for judgments against employers.

Because the court based its reasoning on Congress’s failure to clearly prohibit actions based even in part on age, members of Congress may seek to change the law. Employers should continue to avoid any actions that older workers could perceive as unfairly discriminatory. If that proves to be unworkable, they should work with their attorneys, and our insurance agents, to ensure that their practices are legal and their insurance coverages adequate.

The underlying intent of insurance is to cover larger or significant losses, not minor ones. By sharing risk with the insurer via a deductible, the expensive costs of adjudicating minor losses are avoided, which translates into premium savings. Of course, your deductible also reduces the amount paid by an insurer for the claims you do file, which provides another basis for an insurer to lower your premium.

Most business people understand that a higher deductible results in a lower insurance premium. However, there are several vital points to consider before opting for a higher deductible:

How much risk are you willing to bear?

Not every business owner has the same tolerance toward risk. Risk acceptability should be premised on the general practice of others in your industry and your business’ current and projected cash flow predictions.
Insurance coverage with a higher premium / low deductible might appear to be more expensive and less tempting in the short-term. However, the psychological impact of a significant loss while possessing coverage with a lower premium / high deductible could have serious consequences to your bottom line when you actually suffer a significant loss.

You have to weigh carefully the pros and cons of what you can pay in premiums versus how much deductible you’ll have to absorb in the event of a significant loss.

Not all deductibles are equal.

Savings on premiums are not necessarily proportionate to higher deductibles. Although a $1,000 deductible might save you $200 in monthly premiums and a $2,000 deductible saves you $400 in premiums, a $3,000 deductible might only result in a $450 premium saving which is a smaller ratio in terms of costs versus benefits. The ratio of premium savings relative to higher deductibles will vary among insurance carriers. Consult with our insurance brokers to secure coverage which not only offers the best insurance benefits to cost ratio, but which is practical to the financial realities of your business.

Also, deductibles can be applied differently for different types of policies. The most common deductible types are:

• Aggregate Deductible – the most common type of deductible you will find on a Commercial policy. This refers to a single deductible which applies for all losses during the policy period. If you have $18,000 in total claims and an aggregate deductible in the amount of $7,500, then you would receive $10,500 from your insurance carrier.
  Straight Deductible – the deductible you will pay for each and every claim you make during the policy period. Were you to have a straight deductible for your fleet and you incur three collision claims, then the ascribed deductible would be applied separately to each of the three claims.

Before considering a deductible change, be sure to consult with one of our insurance brokers to fully understand your options.

One of the most significant federal laws of the last 20 years is the Americans with Disabilities Act of 1990. This law’s purpose is to provide full economic opportunity to disabled individuals without discrimination. It forbids employers from discriminating against them on the basis of their disabilities. The law has had a major impact on employers’ practices in job application procedures, hiring, job placement, compensation, promotions, terminations, and other areas. It has also been the source of much litigation against employers. The Equal Employment Opportunity Commission reported that it received nearly 140,000 ADA-related complaints in one seven-year period.

Some employers have worried about the ADA’s apparent effects on hiring and placement of workers. The law appeared to prohibit them from evaluating workers’ physical limitations when deciding their fitness for jobs. Some employers interpreted it to mean that they had to change a particular job to fit a disabled applicant. However, the law exempts an employer from having to do this if placing the person in the position would pose a “direct threat” to himself or other workers. A direct threat is “a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” Because of this provision, employers have not had to make unreasonable job modifications for disabled workers.

In addition, an employer has a variety of hiring and placement procedures available under the law. For example, the employer may still test for drug use. The ADA does not protect a worker’s use of illegal drugs, and the employer may deny or terminate employment for their use. Also, an employer is within its rights to ask about an individual’s abilities. It can require a medical examination of an individual so long as it does so for all applicants for similar jobs. If the person cannot perform the essential functions of the job, the employer does not have to hire them. The employer may also ask an applicant to perform a job demonstration. This technique provides a simulated environment where the applicant can show how they would do a job. It can be useful when applicants have obvious disabilities that appear to interfere with safe and efficient job performance.

Regardless of how an employer conducts its personnel practices, it is always vulnerable to claims of discrimination under the ADA. To protect themselves against financial loss from such claims, employers should consider purchasing Employment Practices Liability insurance (EPLI). This insurance covers an organization’s liability for “wrongful acts,” including discrimination. Most policies define discrimination as including violations of federal, state and local laws that give protected status to certain individuals. Because of these provisions, EPLI policies should cover employers for damages they must pay as the result of violations of the ADA. In addition, the policy will pay the costs of defending the organization against the claim, even if the claim is groundless.

EPLI policies cover claims made during the policy period, but only if the alleged wrongful act occurred on or after a specific date, known as the “retroactive date.” For example, a policy written for the period January 1, 2008 to January 1, 2009 and with a retroactive date of January 1, 2004 will cover a claim made on November 1, 2008 for an act that happened on July 1, 2006. It will not cover a claim made on the same date for an act that happened on July 1, 2003. There is no standard EPLI policy, so the policies will vary by company.

Modern employment laws like the ADA can easily trip up even a well-meaning employer. All organizations should consider buying an EPLI policy. Contact us with any questions about this vital coverage!

In the current weak economic environment, competition for jobs is intense. There might be dozens of candidates for each job opening, and hiring companies will have their pick. Even in times like these, however, employers must be vigilant about obeying the law when they make hiring decisions. Charges of illegal discrimination in hiring can become more likely during a tough job market. It is essential that employers follow federal and state laws that regulate what factors they may consider in the hiring process. Those who focus on the wrong things could find themselves the targets of government inquiries.

Several federal laws address discrimination in hiring:

• The Age Discrimination in Employment Act prohibits an employer from refusing to hire, firing, or otherwise discriminating against employees age 40 or older, solely on the basis of age. For example, it is illegal for an employer to offer a benefit such as vision insurance to younger workers but not to older ones.
• The Americans with Disabilities Act of 1990 forbids discrimination against disabled workers or job applicants. Under this law, an employer cannot refuse to hire a person who has difficulty walking solely on that basis; the employer must have another, legitimate reason.
• The Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, national origin, religion, sex, pregnancy, sex stereotyping, and sexual harassment of workers. Decades ago, an employer could fire a woman for becoming pregnant. The Civil Rights Act outlawed such actions.

Although these laws have been in effect for several years, some employers still try to get around them. In 2008, the federal Equal Employment Opportunity Commission leveled penalties against employers in the amount of $83 million for age discrimination; $57 million for discrimination against disabled workers; $12 million for discrimination against pregnant women; $79 million for race discrimination; $109 million for sex discrimination; and $25 million for discrimination on the basis of national origin.

What are valid considerations for an employer to use in hiring decisions? Instead of focusing on an applicant’s age, the employer should look at their track record of performance, accomplishments and continuous learning. Rather than assuming that they won’t work at a fast rate or will be slow to adopt new technology, the employer should find out through job simulations, reference checking, and testing. Instead of looking at an applicant’s disabilities (difficulty walking, for instance), the employer should look at their job skills, such as ability to calm angry customers and quickly troubleshoot problems. Rather than ask an applicant whether they’re a Christian or a Wicca or an adherent of any other religion, ask what they did to generate leads and close sales when the economy slipped into recession.

Prior to conducting interviews, employers should review with all involved personnel the legal restrictions on what they may ask or say when speaking with applicants. If necessary, training on effective and legal interviewing techniques should be given to these employees beforehand. It should be emphasized that interviewers need to focus on the tasks involved in the job and the applicant’s ability to perform them.

No matter how much preparation and training an employer does, things can still go wrong. It is important that businesses carry Employment Practices Liability insurance from a financially strong insurance company. One of our agents can obtain multiple coverage quotes, give advice on the various coverage features, and discuss the claims-handling performance of different companies.

Hiring new employees is always a difficult and uncertain proposition. Finding the right person for the job can be tricky. Complying with legal parameters can be trickier, but it is essential. By avoiding illegally discriminatory practices, employers can build a strong workforce and stay out of regulators’ crosshairs.