In a rare act of comity between the legislative and executive
branches of government, in September 2004 Governor Arnold
Schwarzenegger signed into law Assembly Bill 1825. The law which
became effective on January 1, 2005 (Government Code section
12950.1; full text available at www.leginfo.ca.gov) requires
employers with 50 or more employees to provide two hours of
training and education by January 1, 2006 to all supervisory
employees employed as of July 1, 2005. Supervisory employees are
already defined in Government Code section 12926(r0 as persons
with the authority to ?hire, transfer, suspend, lay off, recall,
promote, discharge, assign, reward, or discipline other
employees.? In the ten year period from 1994 to 2004, the Equal
Employment Opportunities Commission has resolved 164,449 cases
and collected from employers and distributed to employees
victimized by sexual harassment monetary benefits totaling more
than $ 453.7 million and the EEOC hastens to point out these
sums do ?not include monetary benefits obtained through
litigation.? According to published reports the EEOC has handled
more than 25,000 sexual discrimination charges each and every
year since 2000. Suits by disgruntled employees are commonplace.
Among the recent wave of workplace issues suits for sexual
harassment claims have moved to the forefront not only because
of their sheer numbers but also because of their large economic
impact. Even if the firm is protected by employment practices
liability insurance, sexual harassment claims still cost a
company a lot of money due to loss of productivity, departure of
valued workers, and finding, hiring and training replacement
employees and the self-insured retention (deductible) paid to
insurance carriers. However, these are not the only expenses
burdening companies. There are other costs that have to be
accounted for. These include the monetary value of
administrative and executive time consumed to deal with
investigators, lawyers and insurance adjusters. There is loss of
business opportunity, damage to reputation, bad press reviews,
tarnishing of image in the marketplace, increased cost of
recruiting future employees, and escalation in premiums and
deductibles on future insurance policies. Eventually, there may
be more intense regulatory scrutiny by federal governmental
agencies such as the Equal Employment Opportunities Commission
(EEOC) or comparable state agencies such as California?s Fair
Employment and Housing Commission (DFEH). Yet another expense is
the damage done to employee relations in the company. Our
knowledge-based economy is heavily dependent on teamwork,
collaboration, and continuous learning. Accordingly, employees
and their relationship with the company in today?s economy are
perhaps an organization?s most important assets. Sexual
harassment always creates conflict, loss of productivity, damage
to morale, and disruption of the collaborative spirit among the
staff. By the time litigation ensues, the offended employee has
usually left the company and is working somewhere else having
taken away the intangible asset of his or her familiarity with
customers, suppliers, industry trends, perhaps even some
proprietary information or trade secrets. These losses may not
be readily quantifiable but they are real. Therefore the
employer has significant incentives to stop such disruption and
prevent harm to the morale of the entire workforce occasioned by
the departure, quite apart from settlement costs or payment of
compensatory or punitive damage assessments. Thus, sexual
harassment prevention training for supervisors is part of an
overall sound business strategy for any company that wants to
maintain and enhance its competitive advantage in the
marketplace vis-a-vis its rivals. The December 31, 2005 deadline
for compliance with AB 1825 is rapidly approaching. Prudent
managers of companies will not leave this task to the last
minute.
About the author:
Opus Group LLC
target="_blank">Sexual Harassment Prevention - AB 1825
compliance - Training - California
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