Is $7.6 million the value of sexual harassment?
Share to linkedinThe federal government currently caps sexual harassment damages at $300,000, a figure that hasn’t budged since 1991. In other words, the most a victim of sexual harassment can receive in damages if they sue their employer under Title VII is $300,000. This represents a drop in the bucket for most large organizations and certainly does not function as a deterrent.
Here’s the basic idea of her research. If your work comes with some risk of death on the job, you are typically compensated more for accepting this risk. Hersch thought that perhaps women were similarly compensated for taking on the extra risk of sexual harassment in certain industries. Her analysis found they were. In fact, she found women are paid an extra 0.18% in wages for every 1 in 100,000 increase in the likelihood of sexual harassment they take on.
Hersch first thought of the idea of applying risk analysis to sexual harassment when she learned about the severity of the repercussions of harassment. “In the United States we think of sexual harassment as a form of sex discrimination under Title VII, but in Europe it’s considered a dignity harm,” Hersch explains. “When you think of it as a dignity harm, that makes it seem more like a risk rather than just an illegal behavior.
Not surprisingly, the industries that had the highest sexual harassment rates were typically male-dominated . She ran a statistical analysis to determine if women received extra compensation when they worked in an industry with a higher incidence of sexual harassment. She controlled for everything that might be relevant to compensation including the percentage of men in the industry. That’s how she came up with the extra 0.
If the federal cap were set at $7.6 million, Hersch says this would be the amount that employers should be willing to spend to avoid one case of sexual harassment. Incenting organizations to take their sexual harassment prevention more seriously seems like an obvious first step in decreasing workplace sexual harassment. It’s time to revisit this cap.
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