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Noncompliant workers are a $1.6M liability, study shows



Dive Brief:

  • The majority of business leaders and HR professionals (88%) say worker accountability would reduce business risks, according to a crosscultural U.S. and U.K. study by learning management company Cypher Learning.
  • Researchers also found that workers who fail to comply with employment law can cost businesses around $1.6 million per year.
  • Not only do workers not understand workplace policies, researchers found, but they’re also unaware of said policies; 71% of respondents said it is likely workers are breaking rules, but won’t know until something goes wrong.

Dive Insight:

A quick glance at any given U.S. Equal Employment Opportunity Commission report illustrates the correlation between failure to train employees properly on employment laws and employers doling out tens of thousands of dollars as a result. 

In recent memory, UPS paid a worker $150,000 after allegedly denying them breaks for a diabetic condition; Papa Johns paid a worker $175,000 for reportedly denying their service dog accommodation request. 

Compensation is another factor of compliance; as is anti-harassment training. Often, lawsuits arise due to violations of Title VII of the Civil Rights Act of 1964, which protects workers and potential hires from discrimination based on color, national origin, race, religion and sex. 

A molecular diagnostics company agreed in December 2022 to pay a worker $90,000 for alleged harassment on the basis of age. Later that month, a steel manufacturer also agreed to shell out $500,000 to Black and Latino workers for alleged racial harassment on the job.

Attorneys at a workplace culture and conduct practice told HR Dive beyond risk mitigation, educating workers about policy and protocol is crucial for workplace culture. Employment lawyers also told HR Dive that a peer reporting mechanism for noncompliance is important as well.

A stand-out stat from the Cypher Learning study is that a little more than half of employers continually educate their workers on policies; 65% told study authors that training is a “one-and-done information dump” during a hire’s onboarding process.

In response, researchers spoke to the importance of not just educating employees, but doing so in ways that are engaging and effective. More employers (47%) tend to use email newsletters, for example, whereas only 31% use videos and 26% use interactive games.

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