Under the Americans with Disabilities Act (ADA) of 1990, employers are prohibited from discriminating against qualified individuals with disabilities. This prohibition is included in acts of hiring, promoting, training, assigning jobs, firing, and various other employment practices. However, in recent times disability discrimination losses are increasing in severity.
Advisen data shows the cost of ADA losses is on the rise. The following article provides more information on who is protected under the ADA, examines the median cost of ADA losses and discusses ways to reduce ADA-related liability at your organization.
According to the Equal Employment Opportunity Commission, legal protection under the ADA extends to the following people:
- Individuals with physical or mental impairments that substantially limit major life activity
- Individuals with a record of a substantially limiting impairment (e.g., an employee who is in remission from cancer)
- Individuals who are subject to adverse employment actions and are believed to have a physical or mental impairment that is not permanent and minor (even if the subject does not have such an impairment)
Failing to meet ADA requirements is unlawful and can result in costly losses.
According to Advisen data, the median cost of an ADA loss increased over 200% from 2000 to 2021. From 2000 to 2010, the median cost of an ADA loss remained relatively consistent from $40,000 to $80,000. However, in recent years, the median loss cost has risen over $100,000 with a spike to $175,000 in 2020.
Median Severity of ADA Losses
ADA losses are present in most major industries, Advisen data shows. Public administration accounts for the greatest frequency of these losses at 16%, followed closely by health care, manufacturing and retail trade.
ADA Losses by Industry
Education had the highest median loss cost of all industries at $110,000. Arts, entertainment and recreation, finance and insurance and public administration also had high median loss costs, ranging from $98,000 to $92,000.
Median Cost of ADA Losses
Reducing the Risk of ADA Claims
As the data shows, ADA claims can be costly. Consider the following:
- Train employees. Educate employees on forms of discrimination and its adverse effects. Training also provides an opportunity for employers to explain inappropriate behavior and warn employees about resulting disciplinary action.
- Create a policy for submitting complaints. Employees should be taught how to submit a complaint without fearing adverse consequences. The process should be clearly documented.
- Communicate with employees. Consistently speak to your employees about their job experiences. This will help create an environment where employees feel more comfortable speaking up about experiencing or witnessing discrimination.
- Enforce a zero-tolerance policy. Create and enforce a zero-tolerance policy for workplace discrimination and harassment. Disciplinary action should be consistent for all employees.
- Purchase insurance. Employment practices liability insurance can protect businesses by providing coverage for employers against allegations of workplace discrimination.
Proactively developing and enforcing workplace anti-discrimination policies may help prevent disability discrimination lawsuits in the future.
Disability discrimination is detrimental to employees and businesses alike and can result in costly losses. For more information on how to avoid employment-related liability, contact us via the form below. And be sure to follow us on LinkedIn and like us on Facebook for more industry news and tips.