Getting people to return to the office, or work at all, has become a major headache for U.S. businesses. Strategies like offering remote work, hiring less qualified workers, and keeping older workers on staff carry liability risks you must consider.
Remote work
About 38% of employers required workers to come into the office full time in 2023, according to Scoop Technologies’ “Q4 2023 Flex Report.” About 7% had fully remote workforces, and the rest had hybrid models. The new trend of allowing work away from your premises presents serious insurance issues.
For example:
Workers’ compensation: You must contend with ergonomic problems due to ill-conceived workspaces, and home hazards that could become workplace hazards. Because of these risks, workers’ compensation insurance and risk management are essential.
Cybersecurity: Home-based and remote internet connections and hardware are often less secure than in- office setups, thereby increasing your cyber risks. You must establish, implement, and enforce tight protocols over system access and device management. You should also secure cybersecurity insurance that reflects the increased risk of breaches.
Employment practices: Having remote workers exposes you to employment practices lawsuits.
- When you permit staff to work remotely, management can have a harder time monitoring when they are performing work. Additionally, if your workers are called or emailed after hours, this can create unpaid work time.
- Remote employees may be disadvantaged when it comes to promotions. A recent report by LinkedIn cited a study that found remote workers received 31% fewer promotions in 2023 than full- time in-office and hybrid employees.
- A recent Gallup survey revealed that 80% of hybrid employees are not trained on best practices for hybrid work. The survey also found that 73% of hybrid managers and senior leaders are not trained to handle hybrid teams.
Property damage: Keeping track of inventory and establishing what contents and structures are and are not insured is a challenge. Under normal business property policies, building contents have a set coverage amount, and movable property is covered under an inland marine addendum (or endorsement). If you have property permanently housed elsewhere, inform your insurance professional to make sure it is covered.
General liability: Commercial general liability insurance is a foundational coverage. It has traditionally been written to cover visitor injuries on business premises, but now you must consider injuries and damage your customers or visitors cause to your remote employees’ work sites.
Labor shortages
The U.S. Chamber of Commerce reported in January 2024 that the U.S. labor participation rate remains below average, at 62.5%. That’s down from 67.2% in 2001. Qualified labor is especially hard to find. Almost every industry sector is experiencing shortfalls, according to 2023 statistics from the St. Louis Federal Reserve.
This might mean hiring first-time employees and less-qualified employees, which can lead to higher rates of injury and error. Notably, Travelers’ “2023 Injury Impact Report” indicated that 34% of workplace injuries happened in the first year of employment. This suggests a focus on safety at work is crucial, as is quality workers’ compensation insurance to get injured employees back to work quickly. Make sure your onboarding includes training on safety, workplace practices and cybersecurity.
Establishing a solid workplace culture is also important. About 45% of companies offer etiquette classes to new hires or all employees, and 18% will implement such training in 2024, according to a July 2023 Resume Builder survey. These classes teach proper dress, interpersonal communications, and business etiquette, such as appropriate office conversation, offering and accepting constructive correction, and taking breaks. These lessons could avert hostile workplace allegations and customer complaints.
Other trends
Though most of the COVID-19 disruptions are behind us, it is important to remember that the workforce has changed in terms of expectations and makeup. Employees are more willing to complain to authorities. In fact, the Equal Employment Opportunity Commission filed 50% more employment discrimination lawsuits in fiscal year 2023 than in FY 2022 and doubled the number of “systemic” filings alleging patterns of violations, not just a single incident.
During an economic downturn, it might be necessary to reduce your head count. If you must lay off workers, consult an experienced employment law attorney first. Wrongful termination lawsuits can run into the millions of dollars.
Lastly, a difficult economy has forced many older Americans to stay in the workforce. Almost 20% of Americans 65 and older were still employed in 2023, according to Pew Research Center. That’s up from 2% in 1987. If you employ older workers, keep safety, Medicare and other critical issues top of mind. Discuss employee benefits liability coverage with your insurance professional.
By Applied Systems, Inc.