The Scourge of Sex and Labor Trafficking and How Your Company Could Be Impacted by It

Human sex and labor trafficking can be difficult to detect and presents major reputational risk exposures.
By: | April 26, 2019

Sex and labor trafficking, in which vulnerable populations are exploited for profit, is a growing global scourge that carries substantial risks for companies.

That was the message delivered at a Tuesday, April 30 morning session at RIMS 2019 Annual Conference & Exhibition in Boston.

The presenters offered guidance on measuring how human trafficking could affect your business, following recent human trafficking litigation and discussing how to leverage resources for training and prevention.

The presenters dubbed the exposure the “Quiet Risk” because trafficking risk is a risk that might not be on the radar of many companies, or their risk managers.

“We as risk managers at our companies need to be on the watch and on the wall, if you will and be diligent about this risk,” said Lance Ewing, one of the session presenters, and an EVP, global risk management & client services with Cotton Holdings.

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“The silence comes from the fact that sex trafficking gets notoriety when it comes up but many times it goes on unseen,” Ewing said.

This spring, three hotels in the Philadelphia-area were sued by young women who allege they were held as virtual prisoners in hotel rooms, a situation known to the management of the hotels, and exploited for commercial sex acts.

The hospitality industry in particular is at risk from association with sex trafficking, Ewing said. But a related crime, labor trafficking, could represent reputational and other risk exposures.

Many times, immigrants or other vulnerable populations are coerced into performing labor, whether it be in construction or landscaping, for fear that family members here or abroad could be harmed if they don’t submit, Ewing said.

A typical risk scenario, in construction for example, would be if a contractor you employed in turn employed a subcontractor who is using trafficked labor. You could be held liable for the risk with no direct knowledge of the situation.

Other sectors that are at risk from labor trafficking include food processing, retail and the restaurant industry, Ewing said.

As in any risk management task, Ewing said training and awareness are key measures to take to defend against this risk.

“What companies can do is begin to partner with law enforcement and other nonprofit organizations to raise awareness,” Ewing said.

“Some of the things that we will walk through is that prevention that can be built through awareness and training,” he said.

“There was a large, global hotel company that just got done training more than 400,000 of their employees in identifying the red flags of human trafficking,” Ewing said.

Ewing’s co-presenters on Tuesday included Kim Mehlman-Orozco, a Human Trafficking Expert Witness and a co-founder of Mahn, Mehlman, and Associates, and Marisa Trasatti, a Partner with Wilson Elser Moskowitz Edelman & Decker LLP. &

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]