How to Institute a Sexual Harassment Policy for Your Small Business

An effective anti-harassment policy does more than protect your employee’s civil rights — it also minimizes legal risks for your company.
business man harassing colleague
Regardless of whether it is required by law in your area or not, all businesses should have an anti-harassment policy in place to protect their employees. (Photo: Tom Wang/Shutterstock)

Yesterday, Time magazine named “The Silence Breakers” as its 2017 Person of the Year, recognizing the women (and men) who helped spark a national conversation around the prevalence of sexual harassment by sharing their stories.


Time magazine named “The Silence Breakers” who launched a national conversation on sexual harassment as its 2017 Person of the Year. (Photo: TIME)

With more accounts of sexual misconduct being brought to light daily, now is a great time for small businesses to revisit their own policies designed to protect employees.

“If you are employed by a small business, it’s that small business that’s responsible for ensuring that you are not sexually harassed,” explained Susan Strauss, harassment and bullying consultant.

But are small businesses even required to have a harassment policy on the books? According to Betsy Bulat Turner, employment lawyer and partner at Martenson, Hasbrouck & Simon LLP, it depends on where your business is located.

Title VII, the federal law protecting employees against harassment on the basis of sex and other protected characteristics, typically applies to business with 15 or more employees, she explained, but many state and local laws apply to even smaller businesses and do require such policies.

Related: 6 Legal Mistakes Small Business Owners Make (and How to Avoid Them)

But regardless of whether it is required by law in your area or not, all businesses should have an anti-harassment policy in place. Not having one can put your business at risk. Whether you’re reviewing your business’ current policy or creating a new one, here’s a shortlist of what you’ll need to include.

Start with a strong policy statement

First, you’ll want to craft a statement making it clear that unlawful harassment is not tolerable at your small business.

“You’d want to have a strong policy statement explaining that the organization wants to create a fair, respectful, harassment-free environment — that you want the work environment to be healthy and safe for all your employees,” Strauss said.

Your anti-harassment policy should be broader than just sexual harassment and cover misconduct toward all protected classes, “such as sex, race, color, national original, religion, disability status, medical leave status, or any other characteristic protected by applicable law,” said Turner.

Related: 7 Tips for Developing an Effective Employee Handbook

Define ‘harassment’ and provide examples

uncomfortable muslim woman

Sexual harassment is unwelcome and inappropriate workplace behavior that is severe and/or pervasive enough to interfere with an employee’s ability to do their job or create a hostile work environment. (Photo: YAKOBCHUK VIACHESLAV/Shutterstock)

Next, include the legal definition of the term “harassment” and how it differs from appropriate workplace behavior and provide examples to make sure your expectations are clear. Remember, your definition should not just center on sexual harassment, but harassment of any sort.

“It has to be unwelcome. It has to be severe and/or pervasive enough that it interferes with an individual’s ability to do their job, and creates a hostile work environment,” said Strauss.

Strauss said to also remember that harassment is more than just an internal issue. Customer-facing employees, such as cashiers or waitstaff, can also experience inappropriate behavior from guests, so make sure your policy reflects that situation.

“It needs to be in the policy so employees know that just because they’re dealing with a customer, it doesn’t mean they give up their rights,” she said. “And that if they are, that the waitstaff has permission to tell the customer to knock it off.” If the unwelcome behavior continues, it’s the owner or manager’s job to step in and protect his or her employee.

Create an avenue for reporting an incident

In the event of a harassment incident, it’s critical that employees know how to go about reporting the event to a manager and feel confident their complaints will be taken seriously, said Turner.

Related: How to Have a Difficult Conversation with an Employee

Employees need “assurance that complaints will be addressed confidentially, timely, and impartially, and that the investigation will be documented with appropriate remedial actions taken,” she said. Also include “a statement that the company will not retaliate against employees for reporting potential violations of the anti-harassment policy in good faith.”

“You must have a procedure in place for reporting,” echoed Strauss. “Tell your employees who they should report the misconduct to and what will happen once they do the reporting.”

Outline investigation procedures and consequences for misconduct

Once someone comes forward with a complaint, any and all allegations should be looked into.

“The investigation should be confidential (on a need-to-know basis), thorough and prompt, and remedial actions should be taken immediately if the investigation substantiates the misconduct,” said Turner.

investigation file

If an employee comes forward with a complaint, gather any sort of evidence you can and thoroughly document your investigation. (Photo: ESB Professional/Shutterstock)

Interview the accuser privately, then talk to the alleged perpetrator to find out his or her side of the story. You may also need to talk to witnesses or look for evidence, such as text messages, emails or an incriminating note on a cocktail napkin, said Strauss.

“Gather any sort of evidence to support the complaint, and then form your conclusions — documenting everything,” said Strauss.

Related: The Records You’ll Need if You Ever Get Sued

If at the end of the investigation, you deem the offender “guilty,” there must be consequences for their actions.

“Maybe that’s a teachable moment; maybe it’s a verbal reprimand; maybe it’s suspension without pay; maybe they’re terminated; maybe you send them to harassment training — it could be any number of things. But there must be consequences,” said Strauss.

Particularly egregious type of harassment, such as sexual assault, would require you to report the event to the police.

Do what you can to make it right

While you can never erase what happened to a victim of sexual harassment, you should do whatever is in your power to make the victim whole, Strauss continued. Some examples could be back pay for absences related to the incident, a couple of extra days off or a visit to a counselor on the business’ dime.

“You’ve got to think about it from a holistic sense, not just for the company but for the target and the harasser as well.” she said.

Have an attorney review your policy

Once your draft policy is written out, be sure to run it by your small business attorney, advised Turner.

“Given the different federal, state and local anti-discrimination and anti-harassment laws that could apply to your business, consulting with an attorney to prepare an effective anti-harassment policy is essential,” she said. “Consulting with a lawyer who specializes in employment will ensure legal compliance and also that your particular business needs are addressed.”

Finally, remember that your anti-harassment policy is only effective if it is actually implemented and enforced, said Strauss. “Otherwise it’s just words on a piece of paper.”

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