Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.
There are 20 factors used by the IRS to determine whether you have enough control over a worker
to be an employer. Though these rules are intended only as a guide — the IRS says the importance of each
factor depends on the individual circumstances — they should be helpful in determining whether you wield
enough control to show an employer-employee relationship. If you answer “Yes” to all of the first four
questions, you’re probably dealing with an independent contractor; “Yes” to any of questions 5 through 20
means your worker is probably an employee.

The U.S. Supreme court upheld Obama’s Affordable Health Care Act (more commonly known as Obamacare) on June 28, 2012 in a 5-4 decision. Many businesspeople hoped the Supreme Court would strike down Obamacare, turning it from an urgent problem into a nonissue. That hope is now gone.

If you are a small business owner with more than 50 employees and you haven’t decided what you are going to do about Obamacare, now is the time to fi gure out your strategy.

What Obama Care Means Today

Some aspects of Obamacare are good. Nobody likes it when insurance companies refuse to insure someone because of a preexisting condition or put lifetime policy caps in place. Getting a checkup without a copay, and being able to cover a child up to the age of 26, are also benefi ts. These aspects of the law are unlikely to go away.

In addition, the new laws force insurance companies to be more transparent than has been required previously: they have to explain why premiums are going up, and they can be barred from participating in the state exchanges if states find that they are raising premiums arbitrarily. Additionally, insurance companies can’t have too high an overhead. If they spend less than 80 percent of the premiums on actually providing medical care, they will now have to refund that money.

At the same time, some states are cooperating and some states are exploring perceived wiggle room to see just where they can get away with business as usual. It’s anyone’s guess what the final law is going to look like.

The big problem is the cost. You already know that U.S. healthcare is expensive. The motivation behind healthcare reform is the promise of lower premiums down the road as the U.S. healthcare system becomes more efficient. Unfortunately, we are a long way from that point.

• Many experts are worried that short-term costs will increase and that those costs will be passed on to consumers who can ill afford them

• The Congressional Budget Offi ce estimates that government spending on health care will increase from the current rate, which is 17 percent of the gross domestic product, up to 25 percent in 2037.

• State Medicaid costs are going to increase. States will be required to cover everyone who makes up to 133 percent of the federal poverty level. That means millions of working families are going to be eligible, not just those who are officially defined as poor. Although federal funding will pay for this expansion until 2017, states will have to start taking over after that point. States will also have to pay more for doctors and more for medical facilities because they will have to deal with many more patients than before.

• By 2014, states will have to set up Small Business Health Options Programs, or exchanges, where small businesses can create purchasing pools. A larger pool of people, obviously, has an advantage over a smaller group when it comes to buying insurance. The size of the businesses that can join will vary from state to state. A small business is definitely not more than 100 employees, but states can also limit the pool size to companies that have no more than 50 employees through the end of 2016. If a company outgrows the size limits, it will be grandfathered in. The advantage of bargaining for insurance as part of a larger pool should cause premiums to decrease.

• Taxes are going to go up for those who are wealthy. In January 2013, there will be a Medicare surcharge of 0.9 percent for individuals who earn more than $200,000 per year; for families, the magic number is $250,000. There is also a 3.8 percent tax, aimed at wealthy citizens, that will tax “unearned income.”

Getting good professional advice – in the form of an insurance agent – is key when it comes to deciding how to navigate the changes to come. The best strategy for you is going to depend, to some extent, on whether you already offer insurance to your employees. Below, some important points to consider and discuss.

The Tax Credit

If you have a small enough business, Obamacare still might not affect you negatively. For example, very small businesses won’t be penalized if they don’t provide insurance, and the federal government has been offering a tax credit to the very smallest businesses. As you would expect, smaller businesses are eligible for bigger tax credits.

Many companies that qualify for this tax credit benefi t have not taken advantage of it, even though it has been available since 2010. They say the benefi t isn’t big enough What ObamaCare for the amount of work required to get it. Some 170,300 companies received the tax credit in 2010, although somewhere between 1.4 million and 4 million companies were actually eligible. It will be interesting to see whether interest from companies increases over time, or if the federal government will sweeten the deal to increase participation.

Skipping Insurance

McKinsey & Co. estimated in June 2011 that 30 percent of employers are going to get rid of their employee health plans after 2014. In addition, the survey found that some 85 percent of employees would prefer to keep the job and lose the insurance than switch jobs in order to get insurance.

You have to admit, choosing not to provide insurance is both bold and simple: All you have to do is pay the penalty. If you can afford it and your employees are unlikely to go elsewhere, then the bottom-line truth — at least in terms of plain dollars — may be that paying fines might be cheaper than paying for insurance. If you couple that approach by paying your employees the money that was previously going for insurance, they’ll see a wage increase, too. Isn’t that a win-win for everyone?

Not completely. Employees still have to get insurance. If they don’t, they face a fine, too, and it will get bigger as time goes by: in 2014, it is a modest $95 or 1 percent of their income. In 2015, it is $325 or 2 percent of their income. And there’s a big difference between what pre-tax and post-tax dollars can buy. When you buy insurance on a company level, being able to use pre-tax dollars effectively creates a nice discount for your employees.

What happens if employees, faced with reality instead of an abstract decision, decide they really are better off changing jobs? You can’t control what other companies are going to do, but if you don’t offer insurance, and your employees can get it somewhere else, are you really sure they won’t take the opportunity?

Not buying insurance for your employees is like playing chicken. It may be a gutsy approach, but being gutsy is not the same thing as being wise. You don’t know what is going to happen in the future, but deliberately offering a deal that is second-best means you may well lose your best employees to better opportunities.

Going Out of Business

Another alternative is to let the business go. If you don’t have a small business, no one can force you to buy insurance for your employees. However, this is a short-term and short-sighted decision. Owning your own business has always been one of the best ways to build wealth. Unless you want to retire anyway, a better alternative would be to fi gure out how to stay in business and take care of your employees at the same time.

How Insurance Companies Are Responding

According to a Bloomberg Government Analysis, insurance companies have been keeping a close eye on all these changes, and it shows in their business strategy. Since Obamacare was passed into law, private insurance companies have become increasingly involved in public health insurance programs. This is despite Republican predictions from Rick Santorum and Michele Bachman that government would take over the insurance industry. The truth is that the insurance industry is still thriving. Coverage is stable, there hasn’t been any substantial acceleration with respect to cost growth, and profi ts are stable.

Increasingly, insurance companies are putting their money into managed-care programs for Medicare and Medicaid, with revenue from these programs accounting for more than 40 percent of what they make. At the same time, commercial business revenue is now less than half. The Bloomberg analysis was based on the financial filings for the five largest publicly traded companies and one nonprofi t: Aetna, Blue Cross-Blue Shield (the nonprofi t), Cigna, Humana, UnitedHealth Group, and WellPoint. These six insurance companies cover one out of every three people who have insurance.

Clearly, these companies expect Obamacare to be fully implemented, and they are preparing their business plans accordingly. They were not waiting for the Supreme Court to vote; they’ve been busy for years with new plans.

Insurance companies cater to their customers just like any other business. Since Obamacare will require that you look for insurance solutions, insurance companies will be eager to provide them.

Change is unsettling. However, the moreknowledge that you are able to acquire, the better your decisions will be.

It used to be that most people died soon after retirement at 65. Those days are gone, and they aren’t likely to come back anytime soon. As a responsible business owner, it’s important to understand the benefits and risks behind hiring someone older.

You already know the risks. In September 2006, the Society for Human Resource Management (SHRM) released the results from an email survey about hiring older workers that was sent to HR professionals.

Some HR professionals did report disadvantages:
• Older employees might bet set in their ways and sometimes are not as adept at new technology as their younger counterparts. They may need additional training, and they may lack flexibility.
• They might be old enough to have one or more chronic diseases, which makes them more expensive when it comes to medical care and insurance.
• They prefer flexible hours, but not all businesses can give them this benefit.

An older employee may have very real physical limitations that require accommodation. If the employee is on Medicare, there are earning limitations. You can also be sure that older employees are probably not going to stay with your business for thirty years, although they may well stay for ten or twenty. Older employees do value relationships more; there are benefits to this, but it is also true that relationships can affect efficiency and productivity. An although younger employees may not have the perspective yet to appreciate what older employees offer, that’s a disadvantage for the younger employee, not the older one.

Interestingly enough, though, HR managers were positive about hiring older people. Some 71 percent of those surveyed thought older workers had invaluable career experience, but only 49 percent thought older workers didn’t adequately keep up with technology, and only 36 percent thought health-care costs were an issue. These are not overwhelming statistics. The remaining percentages citing disadvantages were even lower; in fact, 24 percent said they didn’t see any disadvantages at all to hiring older workers.

The top reasons for hiring older employees were as follows:
• Older employees have invaluable work experience, including diverse thoughts and approaches.
• They are usually able (and willing) to mentor younger, less-experienced employees.
• They can take on part-time or seasonal work. In fact, they often prefer it.
• They are reliable and have a strong work ethic.
• Older employees have a serious commitment to work, and they are loyal.
• Many times, they already have established, long-term networks of clients and contacts

Of those surveyed in 2006, 100 percent thought hiring older people had advantages. Although these HR professionals were careful to note that it is wrong to stereotype any employee by age, they also said that older employees can make excellent team players and are often more patient than younger employees.

In fact, it is possible that some of the negative responses had more to do with bias than with reality. An article that appeared on Entrepreneur.com about hiring older employees echoed the results of the SHRM survey. It listed some reasons why it might be smart to hire older employees:

• Young employees can be careless. Older workers, who are dedicated to doing the best possible job, are often the ones who find and correct mistakes. That kind of person can potentially save your business a great deal of money along the way. For example, a 75-year-old clerical worker noticed that a mailing effort worth more than $50,000 had a one-digit mistake in the zip codes. The mailing house and the marketing manager both missed this error; the 75-year-old did not. How many mistakes of that magnitude can your company afford to eat?

• Punctuality, honesty, and an insistence on doing things right even if it means staying late are old-fashioned virtues … and older employees often have them
in full measure. They take pride in what they do, and they can be extremely hard working.

• Training has as much to do with a willingness to listen and change direction as it does with having good hearing. Someone who is older may actually be easier to train than someone who is younger, because older employees are less likely to need repeated reminders. Once they’ve got something, they don’t usually just ignore it. Younger employees — impatient, ambitious, and not really team players yet — may do just that. Youth does not mean compliance. Sometimes
it means rebellion.

• Older employees are often have strong organizational skills. This is significant, because businesses lose about a million hours of work each year because of disorganization within the workplace.

• Most older people have developed communication skills and tact. They aren’t seeing workplace politics for the first time, and they often know exactly how to deal with it.

• They aren’t shy about sharing what they know, they tend to know a great deal, and they have the maturity to put it all into perspective. Sometimes younger employees are intimidated by the mere fact of being within an organization. Every company needs people who will speak up when it counts, but sometimes that’s easier to do for older employees than it is for younger ones. It’s like a 50-year-old taking a class from a 30-year-old professor. The dynamic is totally different than it would be for someone who is 18 years old and on campus for the first time. The older student will still be respectful, but will also have the confidence that comes from life experience.

• Their salary and benefits may be less expensive than those for someone who is younger. If they own their own home and have insurance from some other source, or even a pension from another company,they can focus more on what they want to do and less on just covering their living costs. Older employees may not be there for the money as much as they are for the satisfaction and involvement of still being productive and valued. If they have debts, they are very motivated to make sure they take home that all-important paycheck.

• It sets a good example. Employees are smart enough to know when a company respects all its employees, regardless of age, and older employees are often excellent models who are more than happy to mentor and train. And it is just smart business to teach the lesson that your business values diversity, including the diversity that comes from age. At some point, most employees will get older themselves. It’s good for them to know they work for a company that values them regardless of age.

Perhaps the most compelling reason to hire older workers is this one. You need them. The truth is, there are more jobs than there are people to fill them.

• Even when the economy is bad, 20 to 30 million jobs still have to be filled. But you don’t see many large families anymore in the U.S. Those who do have large families are often from other countries and may not have the same strength when it comes to education as those who are older.

• Most companies haven’t thought far enough into the future. They have been so busy cutting costs and exporting jobs offshore in order to stay in business that they’ve neglected training new talent. As Colin Powell observed in his book It Worked for Me, the military pays a great deal of attention to mentoring future leaders because they don’t hire from outside. Yes, the U.S. is very large, and outsourcing work has been a popular strategy for many companies … but far too often, the profits erode and the work comes back home again. That places business owners in the same situation as the military: you need to mentor, too.

An older employee is someone who has verifiable history. That’s a tremendous advantage, but they are also often more motivated than their younger counterparts. One expert said their motivation score is higher (at 78.4 percent) than the 71.2 percent for someone between the ages of 18 and 29.

Research has shown that, far from being a burden, older employees actually miss fewer days than younger ones. According to SHRM, their turnover rate is less than the one for younger ones, too. That matters, considering that turnover costs are about a third of an employee’s annual salary. And many of them are healthier than the last generation. Many older employees are obviously still healthy and vital.

It’s important to hire the right person for the job, but the right person might well be someone older. If that’s the case for your own business, then you should give older potential employees serious consideration. It’ll keep you on the right side of the law — always a good idea — and if you select the right people, they will make your company stronger and better.

And isn’t that the thing that really counts?

BULLYING AFFECTS YOUR BOTTOM LINE

Most people who are targeted by bullies try to deal with the problem for almost two years before leaving the job. According to Harrison Psychological Associates, the cost to employers of that two-year period adds up to $180 million, in part because bullying makes productivity go down. Bullying is also a huge time waster. It’s hard to work if someone is actively and continually attacking you, after all, and it’s also hard to do what you’re supposed to if much of your time is spent tormenting someone else.

WHO’S THE BULLY?

Most bullies are poor managers who think that the best way to manage is through intimidation and fear. According to one recent study, those managers who were surveyed thought that the following factors played a contributing role to bullying at work:

• Lack of managerial skill (66%)

• Personality (57%) • Authoritarian management style (56%)

• Inaction when bullying occurs (37%)

• Too much work, work that the employee is not qualified to do, and unrealistic standards or deadlines (27%)

An insecure manager without adequate training who thinks being a good boss means being arbitrary, demanding, and unpleasant is a prime candidate for becoming the local bully and making life miserable throughout your office.

WHO’S THE TARGET?

When you’re younger, those who are perceived as different or weak are targets for bullies. Adult bullies in the workplace, however, have a different agenda: they still target perceived threats, but it’s the threat of excellence instead of the threat of diversity.

Someone who is productive, intelligent, honest, capable, and well-liked can make a bully look bad by comparison. This is especially true if the bully is a manager, and the target is someone who brings real ability to the company. As a result, the bully wants to control or get rid of the target instead of doing some constructive mentoring instead. Which employee do you want to keep and reward? The bright, personable, productive target, or the intimidating manager who thinks bullying is either a good way to manage or an effective self-preservation technique?

WHAT INACTION GETS YOU

Bullying is not just a schoolyard problem. This is a big enough issue that it presents a key problem for your company to solve. Yes, you can neglect it; that’s what many companies do. They don’t interfere, or sometimes they even criticize the bully’s target for not being more productive or for not doing a better job of handling the bully’s attacks.

Unfortunately, however, bullying is usually not something that can be stopped effectively by the target; an employee does not have the necessary clout, especially if the bully is at a higher organizational level. The Workplace Bullying & Trauma Institute says the percentage of those who will choose to solve the problem by leaving the company is at 70%.

Leaving an abusive job might be a great solution for your employee, but guess who’s on the losing side of the deal? You are. Not only have you lost a valuable person, you’ve also got all the costs of finding someone new and training that person to fill the hole. Worse, you haven’t solved the problem that caused the bully’s target to leave, so you may see the whole cycle start over again. And then there are the legal risks. Bullying represents a rich field of opportunity for lawyers.

Of course, the main reason people let bullies get away with bad behavior is not because they like or approve of the behavior. It is difficult and unpleasant at the best of times to tell people they need to change. In How to Deal with Workplace Bullies Bullying and the Risk of Legal Action the case of talking to a known bully, you already know the bully can be awful to deal with; the entire conversation could blow up in your face. It’s no wonder, then, that so many companies avoid a blowup by never even starting the conversation.

EFFECTIVE MEASURES

The single most important thing you can do as the owner of a company is to make sure you do something to solve the problem instead of pretending it doesn’t exist. You have to hold bullies accountable for their conduct. Ignoring bullying behavior, or even rewarding it, sends a chilling and repressive message throughout your company’s culture. It also increases your liability from a legal point of view. When it comes to bullying , courts expect you to have both a policy against it and a clear path for resolving problems.

Get your managers some good training . They need to have a healthy model for managing employees that doesn’t involve bullying. They also need to be able to evaluate the social environment at work so they can specifically challenge negative and harmful behaviors such as bullying. In particular, they need to understand the situation well enough so that they don’t inadvertently give the target a poor performance review. After all, the problem behind inadequate productivity is not the person being bullied, it’s the person who created an impossible work environment.

Educate employees about bullying so it’s clear what is, and is not, acceptable behavior at your company. Write an anti-harassment policy, and make sure that someone who is being attacked can go as high within the company as necessary in order to solve the problem. If an employee’s manager is the source of the problem, you can’t reasonably expect that the same manager is going to be willing to fix things for that employee. Encourage people to talk to management when bullying occurs, and be willing to let the person who has been targeted transfer into another area of the company if that would effectively solve the situation. It’s better to have an employee change jobs than leave the company completely.

Sometimes businesses hire people whose performance doesn’t live up to the initial expectations. Sometimes the problem isn’t so much about performance as it is behavior. Either way, you already know you can hurt your business if you hire the wrong employee, but you will hurt it even more if you don’t put a comprehensive, consistent procedure in place to use when employees present problems. You might even be able to redirect problem employees so they can be assets instead of liabilities.

One of the best procedures is something called progressive discipline. It starts with training. You can only expect employees to live up to your expectations when you have given them a clear understanding of what you require of them as employees. The usual way to do this is through job descriptions and employee handbooks.

Once employees understand your expectations, the progressive discipline generally consists of the following steps:

• An oral warning: The oral warning is more complicated than it might seem. For example, a manager can only reasonably give an employee an oral warning after the employee has been trained and then counseled about the specific problem. If you haven’t trained the employee adequately, you don’t have grounds for complaining about noncompliance. The first goal is to find out whether an employee understands what you want to see in terms of behavior and performance. If the first conversation is not enough to correct the problem, though, then the supervisor needs to have a second conversation. Document any conversations you have about the problem in one memo or more, and place the documentation in the employee’s file.

• The written warning: If the problem still exists after the oral warning, then it is time for a written warning. A written warning consists of two parts: a written discussion about why the employee’s behavior or performance is a problem, and a list of one or more potential consequences if the problem is not corrected within a certain amount of time. Depending on how valuable the employee is, a manager might choose to provide multiple written warnings. For example, perhaps it has been a while since the last warning, you think you were not clear enough, or you are pretty certain the employee misunderstood you.

• Suspension or demotion: Sometimes you don’t have to apply the worst possible penalty that is available to you. Perhaps suspending an employee temporarily, or moving the employee into a lower-level job, would be enough. If you do decide to suspend someone, it’s a good idea to have a standard way of proceeding with that as well. For example, you might want to start with a one-day suspension and work up to a five-day suspension, if necessary, over time.

• Termination of employment: If the time specified in the written warning has gone by and the employee’s behavior or performance are still a problem, or the employee just refuses to cooperate, then the best solution might be letting the employee go.

The key to being effective about progressive discipline is documentation. You need to keep detailed documents so it is clear that you have followed your own procedures and given the employee every chance to correct performance and behavior. Also, you should keep an eye on the amount of time that passes. Maybe someone has earned the right to move backward in the process as well as forward. On the other hand, you don’t want problem behavior to continue indefinitely. Letting a problem drag on too long makes you look ineffective — not the message you want to send your employees.

You might feel uncomfortable about the idea of disciplining employees, but the reality is that discipline has a vital role in the workplace:

• Everyone benefits when they know managers are going to follow a specific disciplinary procedure that is fair and is consistently applied to all employees.

• Discipline can correct performance and behavior so employees can comply with the standards and expectations you’ve set. Obviously, the best outcome is not firing someone. Doing that is expensive; it will cost you in lost productivity and higher SUTA payroll taxes. Not only that, firing someone can cause bad feeling, especially when the process is done poorly. Instead, the goal is helping all employees succeed in your specific business environment.

• Give employees a chance for self-defense. Sometimes you will find that an employee has a good case to make. You might be able to correct problems you didn’t even recognize you had.

• Discipline encourages all employees, not just the problem ones, to live up to the expectations set by the company for their behavior and ethics. Having a standard doesn’t just tell you when employee behavior is a failure; it also tells you when employee behavior is a success. Use that fact to your advantage.

• Discipline shows a good-faith effort on the part of your business to follow an impartial process when dealing with any employee problem so that if it does become necessary to terminate someone’s employment, it will be clear to everyone that the company was fair and gave the employee every chance to correct whatever problems existed.

You may be surprised to realize that your employees appreciate having a well-documented, fair process for working through employee problems in a timely way. Even though nobody wants to see another employee lose a job for what seems like arbitrary and unfair reasons, people also don’t want to see another employee getting away with obvious bad behavior. Making the effort to try and correct behavior, and firing someone only when necessary, will reassure your remaining employees that you aren’t weak or a fool. These are good points for them to understand about you.

To make your progressive discipline program succeed, you will need to do the following:

• Write a formal policy. It should be included in employee handbooks and in any documentation about how your company works that you will be giving to employees.

• Train your managers so they know how to implement the progressive discipline program.

• Spend the time and energy to make sure you document and follow up with problems. You might want to consider having someone be present as a witness or to take notes during any disciplinary procedure. Just don’t choose someone who is a peer of the employee being disciplined. You could also allow the employee to select someone to act as witness. The idea is to balance not embarrassing an employee with making sure that the process is open, fair and impartial.

• Recognize that a progressive discipline program can alter or suspend the rules of at-will employment until it becomes clear your best alternative is actually firing an employee. Being scrupulous about how you implement the plan, and demonstrating patience throughout the process, works to benefit you in the long term. That way, no one can accuse you of being arbitrary or not giving an employee enough of a chance.

The goal is to use the weakest effective action so that you don’t escalate any situation unnecessarily. That doesn’t mean going through the steps has to be rigid, though. There might be cases where it is appropriate to skip some of the steps. Suppose you find out an employee is stealing, fighting, or using or selling drugs or alcohol. In a case like that, you may have to just fire the employee immediately. However, even that can be explained ahead of time in your formal policy. People will understand. .

Sexual harassment violates Title VII, the Civil Rights Act of 1964 because it is a form of discrimination based on gender. Not only that, but each state also has its own sexual harassment laws. The actions that constitute sexual harassment are fairly broad. Making unwelcome sexual advances, requesting sexual favors, and verbal or physical behavior that is sexual are certainly a part of it. If permitting or rejecting these actions can affect whether someone is able to keep or do a job, or if the work environment could be considered intimidating, hostile, or offensive by a reasonable person, then by definition, an employee could claim sexual harassment.

The reason the government takes sexual harassment seriously is plain: you would not be allowed to run a business where it was extremely likely your employees could be hurt or killed, and this is not much different. Sexual harassment is not harmless; it hurts people, and it is bad business. You have a legal obligation to provide a workplace that is free of harassment. Failing to do so will cost you a great deal in terms of employee morale, lost productivity, and — if these are not enough of a consequence by themselves — money and time spent paying lawyers and going to court.

You may know all of that already. You may not be aware, however, of just how broad the law is when it comes to harassment:

• Some people think that sexual harassment only occurs if a male supervisor harasses a female subordinate. But both the victim and the harasser can be of either gender, and they can also be the same gender. Generally this is interpreted to mean heterosexual harassment, such as a married man being harassed with inappropriate pictures and jokes. The U.S. Supreme Court has not addressed whether it is illegal to harass gays and lesbians, and the lower courts have handled the matter in a variety of different ways. The safe thing to assume is to consider harassment of gays and lesbians just as illegal as harassing someone who is heterosexual. This is an area of law that has not yet been worked out, which means it is also not something you want to have decided in a courtroom.

• Although the harasser might be the victim’s supervisor, it’s also possible for the harasser to be a co-worker, a supervisor from a different area, someone who doesn’t work at the company, or someone who is working on behalf of the employer. The harasser might even be a vendor or a customer.

• Anyone who is affected by offensive conduct — not just the person who is being actively harassed — can be considered a victim.

• The victim doesn’t have to suffer monetary damages or lose a job.

There is one other important requirement in order for something to be considered sexual harassment: the harassment has to be unwelcome. If an employee thinks that it might be necessary to prove the harassment is unwelcome, then the first step is making that plain. This requires action on the part of the victim. For example:

• It’s a good idea for the victim to tell the perpetrator directly that whatever is going on is unwelcome and has to stop.

• If there is some sort of process set up for complaining or resolving grievances, the victim should take advantage of that, too.

• It would be wise for the victim to document both the harassment and any efforts to stop it in a private journal. Then the victim can have a better hope of being able to prove the harassment was unwelcome, other than just claiming it later on.

The agency that investigates claims of sexual harassment is the Equal Employment Opportunity Commission (EEOC). When a claim is brought to the attention of the EEOC, the people who look into it are going to look at a company’s entire record. They will want to know what kind of sexual advances were made, and what the context was. They examine any allegations that are made on an individual basis, one case at a time.

The best thing a company can do when it comes to sexual harassment is to prevent it from happening in the first place. That starts with the following steps:

• Write a policy where it is made clear that the company does not tolerate any form of sexual harassment. A good place to put this policy would be in the employee handbook.

• Teach both employees and supervisors what the policy is, and then tell them what to do if a situation involving sexual harassment comes up. Have training sessions at least once a year. You can’t just train people once and expect it to last forever. People change jobs, and even if they’ve heard what you have to say before, it doesn’t hurt to say it again. Conduct separate sessions for managers than for employees; that way, you can focus on what is relevant to each group.

• If something does happen and someone does make a complaint, don’t ignore it. Take action as promptly as possible. There can be no exceptions; managers and supervisors have to be held to the same standards of conduct as anyone else. When you are writing your policy about sexual harassment for the employee handbook, make sure the section includes the following:

• Define what sexual harassment is.

• Make it plain that sexual harassment will not be tolerated.

• State the consequences if it does occur, such as disciplining or firing anyone who is involved.

• Clearly outline what the process is for making a complaint or resolving a grievance.

• Tell your employees that if someone does make a complaint, it will be investigated and resolved.

• Finally, tell your employees that you will not tolerate retaliation against anyone who complains.

Once you’ve trained everyone and you have a plan of action on paper for people to refer to, you are not done. You also need to be aware of what is going on in your company. Walk around. Talk to people. Pay attention, and don’t expect that everything is fine. If you see something that concerns you, talk to your supervisors about it.

Employees do tend to take their cues from management. Making it clear that sexual harassment is unacceptable, and backing it up with policy, might be enough to prevent any kind of sexual harassment from happening in the first place. But if it does happen, you and your company will be prepared, and, hopefully, you will have created an environment where people can trust that they can appeal to your company for help and that your company will put an absolute stop to the problem.

Sexual harassment is one of those things that tends to increase in severity over time. The more you ignore and tolerate it, the more likely it is to pervade the company. You don’t want that.

It is, of course, still possible that sexual harassment could take place within your company even when you put a policy in place to prevent it. But the more clearly you communicate that sexual harassment is not to be tolerated, and the more you back that policy with solid, demonstrable action, the less likely it is you will deal with a serious problem. More than that, you will also have reduced or eliminated your liability.