Often one of the first line items to be cut from HR budgets is training, which can be perceived by high-level executives as “a good thing to do” but nonessential to their organizations in these challenging financial times. In reality, workforce training has never been more important, and it provides a stronger-than-ever return on investment.
The recession has put employers under attack by employees government enforcement agencies. Consider the following facts:
• From 2007 to the end of 2008, employment claims filed with the Equal Employment Opportunity Commission increased by 14.5 percent, from 83,000 to 95,000.
• In 2008, retaliation claims filed with the EEOC jumped 22 percent, from 27,000 to 33,000 claims.
• The EEOC just hired 170 new investigators for intake and investigation purposes.
• Corporate counsel reported significant rises in employment disputes in the past year, with discrimination suits rising by 11 percent.
• The Department of Labor recently added of 250 new wage-and-hour field investigators—a staff increase of more than a third—along with additional new staff in the department’s Office of the Solicitor.
• In December 2008, Wal-Mart agreed to pay as much as $640 million to resolve 63 class-action lawsuits involving wage-and-hour violations across the nation.
In light of such statistics, there are four types of training that should never be cut. These programs—essential for most workforces— are training in the prevention of unlawful harassment and discrimination, prevention of workplace violence, prevention of wage-and-hour law violations and adherence to the organization’s code of conduct. There are sound return-on-investment arguments for each one.
1. Training to prevent discrimination and harassment
The EEOC charge numbers cited above represent only the tip of the iceberg. They do not include harassment and discrimination charges filed with state enforcement agencies, in state courts or those related to conflicts that settle before the charges are formally filed.
In the event of a layoff, employees who are terminated might perceive that they were targeted for belonging to one of the legally protected categories, such as age, race, gender or national origin. Employees who haven’t been laid off might view filing a harassment or discrimination claim as “job security,” falsely believing that such a claim makes it impossible for an employer to terminate their employment.
The return on investment
Many courts have held that regular—generally, that means annual—harassment prevention training allows an employer to establish an affirmative defense to avoid liability in cases where the allegedly aggrieved employee has not suffered any tangible job detriment, such as a demotion or termination. (If there is a tangible employment action, such as a termination, this affirmative defense is not available.)
Additionally, numerous courts have held that employers that do not train in harassment prevention, or do so only sporadically, can be subject to punitive damages for negligence. Conversely, if an employer can demonstrate it made good-faith efforts to comply with harassment and discrimination laws by training employees, punitive damages can more likely be avoided.
2. Workplace violence prevention training
Incidents of workplace violence are in the news nearly every day. Homicide is the second-leading cause of fatal occupational injury in the U.S., according the Bureau of Labor Statistics’ most recently revised report, which covers 2008. And while workplace homicides fell by 18 percent in 2008, workplace suicides rose from 196 cases in 2007 to 251 cases in 2008, an increase of 28 percent and the highest number ever reported by the fatality census, according to the BLS.
Many employees and former employees are feeling desperate—over layoffs, terminations, foreclosure on their homes, their plummeting (or nonexistent) retirement accounts. In nearly every case of extreme workplace violence, there were many early warning signs that were ignored because employees and supervisors were not trained in recognizing them and taking appropriate action.
The return on investment
Not only can proper training of employees and supervisors prevent an incident of horrible tragedy from occurring, but it also can be used as a legal defense should an incident occur. Employers that show they have acted prudently to protect their employees by conducting training will likely avoid multimillion-dollar jury awards finding that the employer was negligent or assessments of punitive damages.
3. Training to prevent wage-and-hour violations
Current economic conditions have resulted in drastic cost cutting and the slashing of work hours and overtime, which can lead to unwitting violations of wage-and-hour laws. Wage-and-hour violations most frequently occur simply because employees do not have accurate information on how to properly record hours or supervisors lack training in wage payment practices.
The return on investment
As with other types of training, programs for employees and supervisors in this area can help not only to prevent violations, but also to establish a legal defense—in this case, by demonstrating good-faith compliance with the Fair Labor Standards Act.
Employers that have instituted a wage-and-hour training program and have instructed employees and supervisors in proper wage-and-hour record keeping and payment practices can avoid the liquidated damages that can arise from a willful violation of the law. Employee class-action wage-and-hour lawsuits are a substantial threat to U.S. employers, and wage-and-hour training for employees and supervisors can minimize the risk of such suits, potentially saving an employer millions of dollars in violations and liquidated damages.
4. Ethics and code-of-conduct training
Employers are being scrutinized for ethical violations like never before. The Sarbanes-Oxley Act of 2002 strongly encourages training on an organization’s code of conduct and requires education about systems available to employees to report ethical violations. Additionally, federal sentencing guidelines mandate training on ethics and legal compliance for all organizations as one of the two ways in which an organization’s sentence for criminal misconduct might be mitigated.
The federal sentencing guidelines clearly state that employers can be held liable for their employees’ illegal conduct. Employers can substantially mitigate potential fines and punishment for criminal violations if they take proactive steps to prevent unethical and illegal conduct through an effective ethics and compliance program, including training. Conversely, the lack of an effective ethics and compliance program can be used by a fact finder to increase fines and liability.
The return on investment
Ethics training can prove an essential defense should an ethics lapse occur, demonstrating to an enforcement agency that your organization took ethics seriously enough to train your entire workforce. Such good-faith efforts can make regulators less likely to assess fines or penalties and can lessen public relations damage to the organization.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.