Federal employment and workplace standards generally have been a predictable and, of course, required compliance benchmark for multifamily housing property managers. While state variations have always existed, the states largely have nodded to federal standards.
Not anymore. New state-level sexual harassment laws that exceed federal requirements are hitting all employers, but especially multifamily housing, where they intersect with an already dense regulatory thicket around fair housing, for instance. The cycle of updating compliance training is getting faster, and the variability between states is getting more complicated and convoluted. These changes are driving a re-examination of how compliance training is done in the industry.
The two variables to watch in 2020 are:
1. Lowering the bar for what constitutes employer liability
2. The requirement of more training for more categories of employees
Together, they represent corresponding burdens in terms of staying on top of new and increased liability, and in terms of providing more or the right training.
Large multi-state property management companies may have the infrastructure to adjust, but smaller and mid-sized property management businesses may feel especially squeezed depending on what states they operate in.
New York, Connecticut, and Illinois
Let’s look at three states. With a new law in New York, harassment does not need to meet a severity standard to be actionable, and employers may be liable for harassment even if an employee did not follow the employer’s complaint procedure. Non-employees will be protected not only from sexual harassment, but all forms of discrimination. The law requires courts to award reasonable attorney’s fees in all employment discrimination claims to any prevailing party.
Judges are instructed to read the New York law as aggressively as they see fit, regardless of federal civil rights law and regardless of any interpretation of similar language used in federal civil rights law. Exceptions and exemptions from state law are “to be construed narrowly in order to maximize deterrence of discriminatory conduct.”
At the same time, new provisions went into effect last October in Connecticut. Now virtually all Connecticut employers must provide two hours of sexual harassment training to all employees, and supervisors also must receive training.
In Illinois, all employers must provide sexual harassment training to all employees each year. As in New York, the new law protects not just employees but also independent contractors from harassment and discrimination.
In each case, these states are stepping beyond federal law, both in terms of consequences for companies and in new ways to become liable when bad things happen under a property manager’s watch.
Ongoing and rapid updates to state laws like this mean training requirements and content can become out of date fast. As these laws converge on multifamily housing, employees and supervisors need to take into account other key requirements, including fair housing regulations at both the state and federal level, and tenant rights at the local level in particular.
Every multifamily housing property management team believes they have their own particular bowl of spaghetti when it comes to the training they need to do and how they untangle their existing system to put in place something simpler. Each has properties in different states and different communities, which can offer varying challenges and recruiting ecosystems.
Research by Grace Hill has found training employees on federal fair housing laws at least once a year was still the primary compliance goal for training program administrators in recent years. And fair housing laws are still the most important compliance issues property managers face. But even in 2017 and 2018, sexual harassment was increasing in importance for property managers surveyed. In addition, mid-sized companies spent the most on compliance violations, which could indicate problems with having properties across multiple jurisdictions, but less infrastructure to keep up with different compliance burdens.
The best way to cut compliance costs is through frequent training that is kept current with changes in the law. But staying on top of training can become its own unmanageable full-time job. Property managers are likely to respond to rapid changes like those in New York, Connecticut, and Illinois by adopting the software-based approach taking hold in nearly every other aspect of property management.
The Software Approach
Property tech companies have been stepping into the administrative jobs property management companies have needed to scale and make more efficient. Learning management systems (LMSs) likely will be called upon to address accelerating compliance costs, as well.
Bolstering this, in recent years, the No. 1 reported training goal for multifamily housing executives dealing with compliance was an easy, streamlined, and quickly implemented training program. This goal has surpassed the stated goal of giving employees the skills to thrive and promoting a training culture. It suggests companies now are feeling more pressure to get employees onboarded and engaged as quickly as possible as the law changes around them.
Property management needs to move past a “check-the-box” annual approach with the same old content—the laws, the onsite landscape, and the societal changes mean we need a compliance training program that changes at faster intervals and can quickly adapt, whether it be to emotional support animals, medical marijuana, or new harassment laws.
Most compliance programs can be pushed along and updated occasionally to account for a changing world, until the changes come too fast and are fragmented. We may have arrived at that point.
Dru Armstrong is CEO of talent performance company Grace Hill, a leading e-learning and compliance platform for property management in the U.S. Previous to this she was co-founder and CEO of consumer technology company Lily Pod, which followed her experience with venture capital and private equity firm The Gores Group and with The Boston Consulting Group. She earned an MBA and law degree at The University of Chicago, culinary arts and management diplomas from the Institute of Culinary Education, and a Bachelor’s in economics from Columbia University.