An overview of employment practices, why they’re important + best practices for community-focused organizations to consider.
No matter what industry you’re in—and whether your organization has paid employees, volunteers or both—your employment practices could put your organization at risk for a financially-devasting lawsuit, negative public image and even put your team in harms-way. That’s why it’s crucial to understand the fundamentals of employment practices, why they’re important and ways you use them to help protect your organization and your most important asset, your people.
What does the term “employment practices” mean?
Sometimes referred to as human resources (HR) policies, employment practices are the actions, processes and procedures related to your people and working conditions, including those within applying, hiring, promoting, firing, discipline, benefits, accommodations, training, conduct and more.
Why are employment practices important?
These types of practices can help foster a fair and productive work environment and provide guidance and protections for both employees and organization.
For example, let’s say that your organization promotes Jane to be your new mid-level manager. However, John is upset because he believes that he is more qualified for the position and that Jane was promoted solely due to unfair favoritism and discrimination.
Your employment practices could help ensure that your organization has policies and documentation in place to help justify Jane’s promotion or, just as importantly, they could support John’s concerns and help point-out potential bias or discrimination.
Who is in charge of employment practices?
Employment practices are often created and managed through an in-house HR person or department or contracted-out to a third-party HR professional or agency. However, many smaller businesses and volunteer-based organizations don’t have the resources to have a dedicated HR professional—leaving those responsibilities to fall on leadership.
In fact, one survey indicated that 81% of small business owners handle HR on their own. However, 30% of them reported that they aren’t sure they’re doing it correctly. And that’s a problem.
Why are employment practices a potential risk?
Most organizations are responsible for upholding employment and worker-related federal laws and guidance (like those set forth by the EEOC), as well as any state and local regulations that apply to their operations.
Not complying with any of these laws or regulations means that an employee, member or volunteer of your organization could claim that their legal rights have been violated by your organization and file a lawsuit against you. And, according to the Insurance Information Institute, the number of lawsuits filed by employees against their employers have been on the rise.
Employment practices lawsuits typically involve instances related to discrimination, sexual harassment, wrongful termination or discipline, failure to employ or promote, breaches of contract, wrongful infliction of emotional distress and similar issues.
Who is the EEOC?
If your organization has at least 15 employees—or you’re a part of a labor union or employment agency—it’s likely that you’re responsible for following the laws and guidance set forth by the U.S. Equal Employment Opportunity Commission (EEOC).
The EEOC is responsible for coordinating, enforcing and overseeing all federal equal employment opportunity regulations, practices and policies that make it illegal to discriminate against a job applicant or employee because of their race, color, sex/gender, religion, national origin, age, disability or retaliation.
While the policies that the EEOC oversees are among some of the most common involved in employment practices lawsuits, there are other worker-related laws to consider as well. You can learn more about laws that are investigated and enforced by the EEOC here + other federal employment-related laws that are overseen by other departments here.
8 Quick tips to help protect your organization against employment practices risks:
- Institute fair, consistent, inclusive and equally-enforced workplace policies—and have them documented in a handbook or playbook. These should apply to paid employees, volunteers and other people associated with your organization, like your board members. You can find templates online to help get you started with your handbook, but always tailor them to your unique needs and have them reviewed by your legal counsel.
- Communicate and coach your team on your expectations, including your policies and procedures, and have all related information (like your employee handbook) easily accessible everyone.
- Foster a workplace culture of doing the right thing, practicing shared values and prioritizing safety. This can start during the hiring process by having a detailed job description and asking the right questions during interviews to help ensure each person is the right fit for the organization and role.
- Maintain detailed documentation of each employee, including hiring contracts, disciplinary records (separated by technical and behavioral situations), compensation history, grievances and investigations. This should also include the roles and responsibilities of each person, like who is responsible for your employment-related practices.
- Stay up-to-date on the latest local, state and federal worker-related laws and recommendations and consult with your legal counsel on those regulations.
- Regularly discuss all of your employment practices with your legal counsel—and especially seek assistance during difficult situations like terminations, complaints, allegations of wrongdoing and investigations.
- Ask your independent insurance agent about possible protections, like Employment Practices Liability Insurance (EPLI) which helps to provide financial protections should your organization be sued over an employment-related practice.
- Look for volunteers with human resources backgrounds that may be able to help you through these processes.
Industry-specific resource libraries to help you get started.
We have industry-specific resource libraries to help community-focused organizations manage personnel, evaluate employment practices and implement best practices, including resources for emergency service organizations, healthcare and caregiving facilities, houses of worship, municipalities, public entities, schools, school bus contractors and water and wastewater companies.
People in industries like these often have the best intentions—however, even the best of organizations filled with the most-selfless people could find themselves in a bad situation. We hope that these tips can help you assess your risks and keep your organization safe while you fulfill your important roles—and we thank you for all that you do.
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