Nationwide, according to a new study, American businesses face an average 10.5 percent chance of being sued by an employee for discrimination, or for retaliation for reporting discrimination. The District of Columbia leads all U.S. locations at a whopping 81 percent, but some states also present great odds, led by Nevada and Delaware at 55 percent.
The other states with higher-than-average odds are New Mexico (50 percent), California (46 percent), Mississippi (43 percent), Alabama (39 percent), Illinois (35 percent), and Georgia and Connecticut (19 percent).
The study, conducted by global insurer Hiscox, notes:
State laws on discrimination vary and many of the higher-risk states have laws that are more stringent than federal statutes, creating additional obligations and risks for employers. It’s critical for companies, especially those with operations in multiple states, to stay current on employment law and the related exposures. Some states (AK, DC, KY, LA, MI, MN, NE, NJ, NY, OH, OK, OR, VT and WA) allow employees to go to court without filing a federal or state charge.
And how about the cost of these lawsuits? Hiscox reports:
A representative study of 1,214 closed claims reported by small to medium-sized enterprises (SMEs) with fewer than 500 employees showed that 24% of employment charges resulted in defense and settlement costs averaging a total of $160,000. On average, those matters took 318 days to resolve.
The report was compiled using the latest data on employment charge activity from the Equal Employment Opportunity Commission (EEOC) and its state counterparts across the US.
About the EEOC and Discrimination Laws
The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information. It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
Most employers with at least 15 employees are covered by EEOC laws (20 employees in age discrimination cases). Most labor unions and employment agencies are also covered.
The laws apply to all types of work situations, including hiring, firing, promotions, harassment, training, wages, and benefits.