Human Resources or Risks? Managing Employment Practices
Nonprofit staff members bring the missions of their organizations to life each day. The mistreatment of staff is not only unethical, but it sets an organization up for failure by exploiting its greatest asset, often resulting in expensive, enduring, and emotionally draining insurance claims and lawsuits. Explore these five common challenges of effective and ethical employment practices, and vow to respect your staff while upholding your nonprofit’s reputation as an honorable employer.
The Equal Employment Opportunity Commission sets forth various prohibited employment policies and practices that prevent employers from discriminating and retaliating against their employees. Employers must fully understand their ethics and compliance obligations especially in regards to staff screening and selection. Even inadvertent errors or inconsistencies in screening and hiring practices could result in illegal discrimination, potentially exposing an organization to litigation and reputational damage.
Another point in the employee life cycle when discrimination lawsuits might arise is at the individual’s departure from the organization. Wrongful termination claims are relatively common and costly, and bring an organization’s ethics into question.
Confusion about the classification of employee, independent contractor, or volunteer roles—as well as exempt versus non-exempt employee roles—can endanger your organization. Misclassifying an individual’s role in the wrong type or exemption class could result in your organization violating the Department of Labor wage-and-hour regulations. Organizations found violating these rules could be responsible for rectifying their wrongs, owing any applicable overtime, tax withholdings, employer contributions, and tax penalties.
Illegal Harassment is a form of discrimination that violates federal and state laws and results in harm to individual employees, corporate culture, staff morale, and an organization’s reputation. Sexual harassment also constitutes illegal harassment at the federal level and in certain states.
Invasion of Privacy
According to the American Civil Liberties Union (ACLU), electronic surveillance in private sector workplaces is largely unregulated. In many circumstances, employers can legally monitor their employees without employees’ knowledge or permission—whether by reading emails sent through the organization’s servers, recording and listening to calls made on employer-owned devices, or filming in workplace facilities with hidden cameras.
Some exceptions protect employee privacy, for example, the Electronics Communications Privacy Act (ECPA) prohibits employers from accessing employees’ private emails or from intercepting or monitoring telephone calls. Still, according to the Electronic Privacy Information Center, “if consent is given in the form of an employment contract that explicitly authorizes the employer to access e-mails, it may be lawful under ECPA…”
Employers who wish to track and monitor their employees—perhaps to ensure productivity, prevent theft, or for other legitimate business reasons—should minimize their own liability while also striving to prevent the exploitation of staff. Start by disclosing your surveillance activities to staff, which will reduce their expectations of privacy while fortifying your defense against invasion-of-privacy lawsuits.
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If you have a policy with Great American Executive Liability Division, see policyholder resources: