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What's the Cost of Not Accommodating Your Employees?
TL;DR This article outlines the visible and hidden costs of not accommodating your employees and why making reasonable accommodations is essential for sustaining a high-performance, engaged, and productive work environment. While not an exhaustive list of costs, the business case for scaling and improving workplace accommodations is clear.
What's the Cost of Not Accommodating Your Employees?
TL;DR This article outlines the visible and hidden costs of not accommodating your employees and why making reasonable accommodations is essential for sustaining a high-performance, engaged, and productive work environment. While not an exhaustive list of costs, the business case for scaling and improving workplace accommodations is clear.
Introduction
Failing to accommodate employees isn't just a compliance issue—it's a costly mistake that can wreak havoc on your company's bottom line. From multi-million-dollar lawsuits to a revolving door of talent, the financial and reputational risks are staggering.
In today’s fast-evolving workplace, the real question is: Can your organization afford not to accommodate? As legal battles soar and disengaged employees cost businesses billions in lost productivity, the hidden costs of non-compliance are becoming impossible to ignore.
The Cost of Non-Compliance is Risky and Massive
At a Glance
Legal Costs and Fines
According to the Department of Justice (DOJ), fines for first-time ADA violations can range from $55,000 to $75,000, with subsequent violations costing up to $150,000. More details are available on the ada.gov website.
ADA Violations: Failing to comply with the ADA can lead to legal consequences, including lawsuits filed by employees through the Equal Employment Opportunity Commission (EEOC) and other agencies. According to the EEOC, failure to accommodate is one of the most common claims filed under the ADA, resulting in significant fines, penalties, and legal fees.
In 2023, the EEOC secured a record $665 million in total compensation for victims of employment discrimination. This is a nearly 30% increase compared to 2022, reflecting growing legal risks for employers who fail to accommodate employees with disabilities. The EEOC filed 143 new employment discrimination lawsuits in 2023, a 50% increase from the previous year, with a substantial number involving systemic failures to accommodate employees.
Disability Discrimination Lawsuits Are Rising
Companies of all sizes are facing lawsuits, and no industry or organization is immune. Here’s a sample of a few EEOC lawsuit settlements from recent years (with many more out there):
Walmart (2021, 2024) — In 2021, Walmart faced a $125 million jury verdict for disability discrimination. The EEOC alleged that Walmart wrongfully terminated a long-term employee with Down syndrome, violating the ADA by failing to provide reasonable accommodations to adjust her work schedule. Additionally, in 2024, Walmart agreed to pay $100,000 to settle another disability discrimination case after firing a cashier with epilepsy. The EEOC claimed Walmart violated the ADA by failing to provide necessary accommodations to manage her condition at work.
Wells Fargo (2024) — Wells Fargo faced a $22.1 million judgment in a disability discrimination lawsuit. The case involved a former Wells Fargo Securities supervisor, Christopher Billesdon, who was laid off after requesting a reasonable accommodation to work from home due to his disability. The jury found that Wells Fargo violated the Americans with Disabilities Act (ADA) by failing to provide reasonable accommodations, which led to this significant award.
ABC Pest Control, Inc. (2024) – This small pest control company in Florida settled a case for $47,480 for pregnancy discrimination under the Pregnant Workers Fairness Act (PWFA). The company allegedly fired a pregnant employee after she requested accommodations to attend medical appointments.
FedEx (2023) — FedEx settled a $3.3 million disability discrimination lawsuit for failing to provide reasonable accommodations to deaf and hard-of-hearing package handlers. The EEOC claimed that FedEx Ground Package System, Inc. violated the Americans with Disabilities Act by not providing accommodations, including necessary American Sign Language (ASL) interpreters.
Walgreens (2023) — Walgreens agreed to pay $180,000 to settle a disability discrimination case where the company terminated an employee with diabetes after denying her request for a reasonable accommodation.
Navitas Systems (2023) — This mid-sized company paid nearly $100,000 to settle a disability discrimination lawsuit. The company was sued for maintaining a policy requiring employees to be “100% healed” before returning to work after a medical leave, violating the ADA.
For more EEOC cases, head to the EEOC newsroom (an average of 1 new EEOC lawsuit related to disability discrimination per day).
Are Traditional Methods for Managing Accommodations Working?
The short answer is no. Even companies using traditional methods and vendors for accommodations management are being sued. The reality is that many legacy solutions and processes can no longer meet the demands of the dynamic environment, especially given the increased volume and complexity of requests. Here are a few reasons why the complexity of requests is and will become more troublesome for HR teams:
Mental health at work is skyrocketing (it’s even this year’s Mental Health Week’s theme, “My Mental Health at Work.”): 1 in 3 full-time employees say their mental health has declined because of work in the past year (source).
Industry-specific regulation increasing: EEOC Identifies Practices to Retain Persons with Disabilities at Federal Agencies | U.S. Equal Employment Opportunity Commission (source).
Pregnancy-related workplace accommodations are gaining momentum: The EEOC's Final Rule on the Pregnant Workers Fairness Act (PWFA) (source).
And many more developments, making it increasingly more challenging to keep up with an ever-changing workforce and legal landscape.
The Widespread Impacts of Non-Compliance to Organizations
Low Employee Morale
In a McKinsey study, 41% of employees reported feeling undervalued or unsupported, with many considering leaving their jobs as a result. Feeling supported, acknowledged, and a sense of belonging is crucial in the workplace — and accommodations play a key role in fostering that environment. Whether someone has a visible or invisible disability, life circumstances can change, making support more critical than ever.
Decreased Productivity
Employees who do not receive necessary accommodations are 5x more likely to report significant drops in productivity compared to those who do get the support they need. Gallup found that disengaged employees are 18% less productive than their engaged counterparts, leading to missed deadlines and lower-quality work. Additionally, disengaged employees take 37% more sick days, further disrupting workflow and increasing business costs. Small investments in accommodations can yield substantial returns by boosting employee efficiency and overall team output (source).
Employee Turnover
SHRM estimates that entirely replacing an employee, including all backfills and hidden costs, can be as high as three times the employee’s annual salary. Failing to accommodate employees can be costly, leading to high turnover and an expensive replacement process. Providing the right accommodations helps retain valuable employees, foster loyalty, and save your company from the expensive costs of backfilling roles and the burden it places on teams and customers.
*Studies by the American Psychological Association (APA) indicate that employees who feel supported by accommodations are 1.7 times more likely to stay with their current employer. The APA frequently publishes on the benefits of workplace support and accommodations.
Absenteeism
According to the CDC, U.S. employers lose about $1,685 per employee each year due to absenteeism. Unnecessary absences disrupt workflows, especially in collaborative environments and customer-facing employees, negatively affecting productivity, team dynamics, and revenue-generating relationships.
Damage to Employer Brand
Reputation Impact: A CareerArc study found that 86% of employees would not apply to or continue working at a company with a poor reputation for supporting employees with disabilities.
Talent Attraction: Research from Deloitte shows that companies with strong inclusion programs are 57% more likely to improve their ability to attract diverse talent. This information is discussed in their Global Human Capital Trends report.
By focusing on compliance and supporting employees through accommodations, organizations can protect their reputation, retain valuable talent, and boost productivity while avoiding high turnover and absenteeism costs.
Need help with Workplace Accommodations?
Disclo's platform ensures workplace accommodations processes are compliant and streamlined. The specialized platform simplifies the complexities of accommodations, focusing on automation and efficiency. By using Disclo, employers can confidently manage accommodation requests, ensuring both compliance and a smooth process for employees.
Learn more details and explore Disclo's offerings here.
Failing to accommodate employees isn't just a compliance issue—it's a costly mistake that can wreak havoc on your company's bottom line. From multi-million-dollar lawsuits to a revolving door of talent, the financial and reputational risks are staggering.
In today’s fast-evolving workplace, the real question is: Can your organization afford not to accommodate? As legal battles soar and disengaged employees cost businesses billions in lost productivity, the hidden costs of non-compliance are becoming impossible to ignore.
The Cost of Non-Compliance is Risky and Massive
At a Glance
Legal Costs and Fines
According to the Department of Justice (DOJ), fines for first-time ADA violations can range from $55,000 to $75,000, with subsequent violations costing up to $150,000. More details are available on the ada.gov website.
ADA Violations: Failing to comply with the ADA can lead to legal consequences, including lawsuits filed by employees through the Equal Employment Opportunity Commission (EEOC) and other agencies. According to the EEOC, failure to accommodate is one of the most common claims filed under the ADA, resulting in significant fines, penalties, and legal fees.
In 2023, the EEOC secured a record $665 million in total compensation for victims of employment discrimination. This is a nearly 30% increase compared to 2022, reflecting growing legal risks for employers who fail to accommodate employees with disabilities. The EEOC filed 143 new employment discrimination lawsuits in 2023, a 50% increase from the previous year, with a substantial number involving systemic failures to accommodate employees.
Disability Discrimination Lawsuits Are Rising
Companies of all sizes are facing lawsuits, and no industry or organization is immune. Here’s a sample of a few EEOC lawsuit settlements from recent years (with many more out there):
Walmart (2021, 2024) — In 2021, Walmart faced a $125 million jury verdict for disability discrimination. The EEOC alleged that Walmart wrongfully terminated a long-term employee with Down syndrome, violating the ADA by failing to provide reasonable accommodations to adjust her work schedule. Additionally, in 2024, Walmart agreed to pay $100,000 to settle another disability discrimination case after firing a cashier with epilepsy. The EEOC claimed Walmart violated the ADA by failing to provide necessary accommodations to manage her condition at work.
Wells Fargo (2024) — Wells Fargo faced a $22.1 million judgment in a disability discrimination lawsuit. The case involved a former Wells Fargo Securities supervisor, Christopher Billesdon, who was laid off after requesting a reasonable accommodation to work from home due to his disability. The jury found that Wells Fargo violated the Americans with Disabilities Act (ADA) by failing to provide reasonable accommodations, which led to this significant award.
ABC Pest Control, Inc. (2024) – This small pest control company in Florida settled a case for $47,480 for pregnancy discrimination under the Pregnant Workers Fairness Act (PWFA). The company allegedly fired a pregnant employee after she requested accommodations to attend medical appointments.
FedEx (2023) — FedEx settled a $3.3 million disability discrimination lawsuit for failing to provide reasonable accommodations to deaf and hard-of-hearing package handlers. The EEOC claimed that FedEx Ground Package System, Inc. violated the Americans with Disabilities Act by not providing accommodations, including necessary American Sign Language (ASL) interpreters.
Walgreens (2023) — Walgreens agreed to pay $180,000 to settle a disability discrimination case where the company terminated an employee with diabetes after denying her request for a reasonable accommodation.
Navitas Systems (2023) — This mid-sized company paid nearly $100,000 to settle a disability discrimination lawsuit. The company was sued for maintaining a policy requiring employees to be “100% healed” before returning to work after a medical leave, violating the ADA.
For more EEOC cases, head to the EEOC newsroom (an average of 1 new EEOC lawsuit related to disability discrimination per day).
Are Traditional Methods for Managing Accommodations Working?
The short answer is no. Even companies using traditional methods and vendors for accommodations management are being sued. The reality is that many legacy solutions and processes can no longer meet the demands of the dynamic environment, especially given the increased volume and complexity of requests. Here are a few reasons why the complexity of requests is and will become more troublesome for HR teams:
Mental health at work is skyrocketing (it’s even this year’s Mental Health Week’s theme, “My Mental Health at Work.”): 1 in 3 full-time employees say their mental health has declined because of work in the past year (source).
Industry-specific regulation increasing: EEOC Identifies Practices to Retain Persons with Disabilities at Federal Agencies | U.S. Equal Employment Opportunity Commission (source).
Pregnancy-related workplace accommodations are gaining momentum: The EEOC's Final Rule on the Pregnant Workers Fairness Act (PWFA) (source).
And many more developments, making it increasingly more challenging to keep up with an ever-changing workforce and legal landscape.
Curious to see how accommodations can support your employees?
Schedule a free demo today.
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The Widespread Impacts of Non-Compliance to Organizations
Low Employee Morale
In a McKinsey study, 41% of employees reported feeling undervalued or unsupported, with many considering leaving their jobs as a result. Feeling supported, acknowledged, and a sense of belonging is crucial in the workplace — and accommodations play a key role in fostering that environment. Whether someone has a visible or invisible disability, life circumstances can change, making support more critical than ever.
Decreased Productivity
Employees who do not receive necessary accommodations are 5x more likely to report significant drops in productivity compared to those who do get the support they need. Gallup found that disengaged employees are 18% less productive than their engaged counterparts, leading to missed deadlines and lower-quality work. Additionally, disengaged employees take 37% more sick days, further disrupting workflow and increasing business costs. Small investments in accommodations can yield substantial returns by boosting employee efficiency and overall team output (source).
Employee Turnover
SHRM estimates that entirely replacing an employee, including all backfills and hidden costs, can be as high as three times the employee’s annual salary. Failing to accommodate employees can be costly, leading to high turnover and an expensive replacement process. Providing the right accommodations helps retain valuable employees, foster loyalty, and save your company from the expensive costs of backfilling roles and the burden it places on teams and customers.
*Studies by the American Psychological Association (APA) indicate that employees who feel supported by accommodations are 1.7 times more likely to stay with their current employer. The APA frequently publishes on the benefits of workplace support and accommodations.
Absenteeism
According to the CDC, U.S. employers lose about $1,685 per employee each year due to absenteeism. Unnecessary absences disrupt workflows, especially in collaborative environments and customer-facing employees, negatively affecting productivity, team dynamics, and revenue-generating relationships.
Damage to Employer Brand
Reputation Impact: A CareerArc study found that 86% of employees would not apply to or continue working at a company with a poor reputation for supporting employees with disabilities.
Talent Attraction: Research from Deloitte shows that companies with strong inclusion programs are 57% more likely to improve their ability to attract diverse talent. This information is discussed in their Global Human Capital Trends report.
By focusing on compliance and supporting employees through accommodations, organizations can protect their reputation, retain valuable talent, and boost productivity while avoiding high turnover and absenteeism costs.
Need help with Workplace Accommodations?
Disclo's platform ensures workplace accommodations processes are compliant and streamlined. The specialized platform simplifies the complexities of accommodations, focusing on automation and efficiency. By using Disclo, employers can confidently manage accommodation requests, ensuring both compliance and a smooth process for employees.
Learn more details and explore Disclo's offerings here.
