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  • Writer's pictureDavid Manes

Employer Liability: Where and When Employers Are Liable for Employees or Non-Employees

Employer Liability: Where and When Employers Are Liable for Employees or Non-Employees

Employer Liability: Where and When Employers Are Liable for Employees or Non-Employees

When an employee causes harm during work hours, an employer also has the weight of responsibility, or liability, for the action. Although the employer may not have had any active role in the problem, the employer may still be liable. This may seem unfair, but employers become liable for two reasons.

Two Rules that Guide Employer Liability

Since employers guide the workload of employees and benefit from their work, employers are responsible for the actions of employees. Employers are legally entitled to the profits of an employee’s work. However, this means that employers are also liable for bad employee behavior.

Moreover, the legal system champions the cause of the victim in a situation where injury or harm occurs. Since an employee is unlikely to have the resources to pay damages, the legal system assigns liability to the employer. This is one of the many reasons why it’s important for businesses to hire capable and dependent employees.

Employer Liability for Sexual Harassment

In situations involving sexual harassment, an employer’s liability depends on the job position of the alleged harasser and the type of sexual harassment. Of course, employers are still responsible for handling the situation and holding the alleged harasser accountable. Ignoring sexual harassment is illegal, and employees often sue for sexual harassment charges.

Is There A Harassment Law?

The employer is liable for sexual harassment when company officials, such as the president, head partner, or immediate supervisors, commit sexual harassment. Since these individual are generally the employer, they hold authority over employees and are liable for sexual harassment.

Proof of the following terms in a sexual harassment case could signal liability for the employer.

Quid pro quo harassment – when a supervisor leverages his or her authority to demand sexual favors from an employee.

Hostile work environment – when continued harassment, whether physical or emotional, creates a work environment that feels unsafe to an employee.

Employer Not Liable for Sexual Harassment

The employer is not liable when co-workers, other supervisors, or customers harass an employee sexually. Since none of these individuals exercise direct authority over the victim, the employer will not be considered liable. However, if the employer failed to stop known sexual harassment, the employee can claim hostile work environment and the employer may be liable.

Employer Liability for Negligent Hiring

The employer is liable for negligent hiring when the employer hires a job applicant and ignores the applicant’s lack of qualifications or criminal record. When an employer knows about a potential employee’s criminal record and hires that individual, the employer is liable for any subsequent problems caused by that employee.  Another example, if an employee lied in the job application and interview, and the employer failed to perform a background check, the law holds the employer responsible.

How to Sue Your Employer for Not Paying

Examples of Employer Liability

A food delivery service promises delivery within 20 minutes or “your next order is on us.” Trying to stay within the 20 minutes, a delivery driver hits a woman who is crossing the street. The food delivery service is liable.

A technology support team, which travels to customers to help with installments and software problems, gives every team member a smart phone to conduct business on the go. While receiving the next assignment, a team member hits a pedestrian. The technology support team is liable for the pedestrian’s injuries.

When a Non-Employee Causes a Liability Problem

In some situations, a customer or third party worker harasses an employee of a company. Harassment can be physical, sexual, or emotional. When the employee complains to the employer, it is the responsibility of the employer to solve the problem or make a change that protects the employee from the harassment. If the company fails to take these measures, the employer may be liable for the non-employee’s actions.

Examples of Non-Employee Liability Problems

What Are My Employee Rights?

Delilah works the counter at a coffee shop, and a customer comes in routinely to order a coffee while making comments about her body. She complains to her manager who ignores the problem. Delilah continues to interact with the customer but becomes terrified of physical harm so she reports the problem to the human resources department. The HR department fails to do anything. When the customer comes around the counter and gropes her breast, Delilah quits her job and sues her employer.

Oliver, a flight attendant, welcomed passengers onto a flight. One man ogled him and made an inappropriate comment about Oliver’s sexuality. Later, that same man slapped Oliver’s butt as he walked through the aisles, closing overhead bins. Oliver complained hostile environment to his employer.

A Few Possible Employer Liable Situations

  1. Data breaches

  2. Social media libel

  3. Wage and hours claims

  4. FMLA violations

  5. Alternative work arrangements (FLSA violations)

Protect Your Business from Liability

The Department of Labor

In Pennsylvania, the law holds employers accountable for negligent hiring and obligates employers to keep workplaces from being termed a hostile work environment. When either situation occurs, the employer is liable. Therefore, a couple of details could help protect you from complaints and subsequent lawsuits.

1. Run background checks.

Validate any information a job applicant offers on the resume and create a policy that requires a background check on every employee. Moreover, search for any criminal past and check driving records.

Special Care to Hiring Public Workers

When hiring an employee to interact with the public, pay special attention and take more care. Employees who visit the customer’s home, work with vulnerable people, or carry weapons require more care during the hiring process.

2. Remove problematic employees

When an employee threatens other workers or customers, the employer is responsible for appropriately managing the situation. The addition of accumulated violations should prompt immediate action from the employer.

3. Respond to complaints of harassment

The law obligates employers to respond to harassment complaints, or else face a possible lawsuit. During investigation of the complaint, the employer may need to implement some type of interim remedial action. In extreme cases, the non-employee may need to be banned from the company premises.

4. Review and Follow your Harassment Policy

A company’s harassment policy should prohibit third party and non-employee harassment. Also, the policy ought to outline the process for reporting cases of harassment.

5. Educate and train supervisors 


The employer should invest in education and training on the subject of non-employee harassment. Supervisors need to know how to spot and respond to harassment from third parties.

6. Incorporate and insure your business

Although incorporation often includes more taxes and legal regulation, it protects the personal assets of the business owner from the business during a lawsuit. Many companies choose to buy insurance in preparation for possible legal action. Also, insert further protections in contracts.

7. Hire an Attorney 

An employer should hire a lawyer when faced with a complaint of third party harassment. Once a complaint is made, gather all relevant information and share it with your attorney. Harassment complaint require a timely response.

If you are at risk for possible third party harassment or a third party accident resulting in a liability issue, contact a KM&A employment attorney.

Don’t hesitate. Call an employment attorney at 412-626-5626 or email us at

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