Small Business and Sexual Harassment Claims

In wake of the #MeToo movement, awareness of sexual harassment has increased, but not necessarily at small businesses. Unlike their larger counterparts, small business and sexual harassment claims have increased because they’re less likely to have formal workplace policies in place.

According to the CNBC/SurveyMonkey Small Business Survey of more than 2,000 small business owners, only half of businesses with 5-49 employees had formal sexual harassment policies in place. That number decreased to 39 percent at businesses with less than five employees. That’s a stark contrast to businesses with 50 or more employees, as 85 percent said they had formal sexual harassment policies in place.

Eleven percent of the businesses surveyed said they issued company wide reminders of their sexual harassment policies and reporting procedures as a result of the #MeToo movement and other high-profile sexual harassment accusations. Nine percent said they’ve reviewed policies regarding diversity and gender equality. Seven percent have required new or additional training, and 4 percent have issued new reporting procedures. However, 61 percent of all businesses surveyed did not take any of the above precautions.

Role of HR in Small Business and Sexual Harassment Claims

Complicating matters for small businesses is that two-thirds of those surveyed lacked an official human resources professional, meaning that the business owner was responsible for handling any harassment claims. Only 3 percent said it was the job of human resources personnel to handle harassment issues and 10 percent said they had no specified way to handle harassment at all. Without a designated, unbiased person to speak to about harassment, employees may be afraid to report it for fear of retaliation.

Harassment can take many shapes. Understanding the different situations that qualify as harassment and explicitly spelling them out in your HR policies can help your employees feel safer since they’ll have a clear way to report things.

Small Business Sexual Harassment

What You Should Look For That Could Indicate Sexual Harassment

There are a few signs that your small business should look for that could indicate sexual harassment:

An employee touches another employee: An employee, especially a person in a management position, touches and massages another employee’s arms and shoulders. Without having a sexual harassment policy in place, this business could be liable for sexual harassment

Women quit more frequently than men: This could indicate that there is a culture of fear. If you lose women employees as they move up the ranks, you may want to investigate. Track turnover patterns and see if you notice any trends.

Fire a pregnant employee: Pregnancy can become a mark of discrimination for women. The best solution is not to put your small business in a situation where an illness or pregnancy could wreck short term issues on the business side. Outsourcing maybe be needed or additional staff to help cover your business. Make sure you plan ahead to protect your small business.

small business sexual harassment

Protect Your Small Business From Sexual Harassment Claims

A lack of a formal employee handbook with policies and procedures for handling sexual harassment in the workplace doesn’t mean that a business owner is exempt from liability. Although federal law exempts small businesses with less than 15 employees from the requirement to have a sexual harassment policy, it’s in their best interest to establish one.

Other than the fact that state laws may have smaller thresholds for requiring a formal policy, the financial and reputational costs are too high to risk running a business without one.

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