With work-from-home (WFH) options rapidly becoming the norm in the wake of the COVID-19 pandemic, many employers are retooling to meet new expectations by either continuing to be fully remote or allowing a hybrid model. Businesses should invest in updating and implementing policies and procedures covering flexible work environments and schedules. This is essential to avoid potential litigation stemming from allegations of unfair work practices, discrimination, or unlawful termination.
Changing Expectations
The transition to WFH reflects a major change in the workforce. In 2019, less than 6% of Americans worked from home. That number quickly increased to 35% by May of 2020. The broader implementation of technology already available for many white-collar workers, like robust Wi-Fi connections, computers, and smartphones, made the transition relatively easy one.
Employees have seen the benefit of WFH and now expect employers to offer remote work opportunities. This demand has shown no signs of slowing down, with 90% of surveyed employees reporting being as productive, if not more, working remotely than in person, and 84% stating that working from home would benefit their happiness.
Organizations are having to adapt quickly as the Great Resignation further affects the employment pool. To attract and retain talent, companies are prioritizing WFH-hybrid models, expanded benefits, and wellness programs. However, the transition to WFH, while popular with workers, has generated new and evolving risks.
Emerging Litigation Hardening the Market
Offering WFH and other flexible options may open the door to new risks, while transforming existing ones. Litigation stemming from the trend has appeared in several areas:
- Uneven Return-to-Work Policies: Employers face discrimination claims for a range of factors regarding how WFH guidelines are implemented, such as meeting the needs of employee rights to reasonable accommodations, unlawful termination, or unfair work practices.
- Virtual Inappropriate Behavior: Harassment can be claimed based on employee behaviors while using virtual working channels such as ZOOM or Microsoft Teams.
- Unequal Pay: Parallel to WFH-related challenges, a call for transparency revealing gender-based pay gaps opened the door to discrimination claims.
An increase in claims over the last two years is the main contributor to the hardening of the EPLI (employment practices liability insurance) marketplace. This causes higher rates and stricter underwriting in the space. The number of lawsuits and size of settlements are higher due to increasing costs in defense, often relating to social inflation.
Updating Policies and Procedures
Employers need to update policies and procedures and set up new management strategies to reduce the risks of remote and hybrid environments.
It is important to work with an experienced broker to understand what coverage the organization needs. Consultative services include, but are not limited to, an overview of employment laws, sample employment policies and procedures, and online training. Having an EPLI policy to protect against lawsuits related to employment-affiliated matters is essential. Most policies include a loss prevention service at no additional charge.
With the structure of the modern workplace rapidly changing, organizations must respond strategically to protect themselves against management liability claims.
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