Five signs your startup could be falling short of employment laws

Startups pride themselves on moving fast, and it’s certainly true that in  these types of workplace environments, processes can often be light, hierarchies flat and communication informal. A founder might well find themselves sitting next to an intern rather than in a shiny big office, while decisions are made on Slack and the team WhatsApp is a veritable hive of ideas.

This kind of informality can be one of the things that makes a startup a great place to work and is why more employees are rejecting the established, big-name companies in favour of something that feels truly exciting and innovative. Yet, it can also create legal risk when the culture of the workplace grows faster than the processes designed to protect the people within it.

This issue is now particularly pressing. Since October 2024, employers have had a proactive duty to take reasonable steps to prevent sexual harassment at work; however, from 30 October 2026, that obligation will be strengthened, requiring employers to take “all reasonable steps”. The October 2026 legislative changes will also bring the significance of harassment involving third parties to the fore – an important consideration for businesses whose employees regularly deal with clients, customers and/or suppliers.

For founders, waiting until somebody makes a complaint is an untenable position. Employers have to put preventive measures in place before something goes wrong, so that the burden to take action doesn’t fall on the shoulders of the person facing harassment.

The tricky thing is that the Government isn’t likely to provide specific guidance on what amounts to “all reasonable steps”, leaving employers in something of a limbo state. Ultimately, what is expected will depend on the organisation, its workforce and the risks it’s people face.

That being said, there are five key areas that startups should be looking at now to prepare

1. Your culture has grown, but your policies haven’t

Lots of startups begin with a handful of people who know each other well. Nobody feels the need for lengthy policies because problems can simply be talked through with your friends or family. The trouble comes when a team of, say, ten employees becomes 30 and there are new managers, remote workers, contractors, and perhaps teams in different locations to consider. That initial, informal understanding of “how we behave here” becomes much harder to rely on as a governing principle.

This is why employers should have in place clear policies covering anti-bullying, harassment, and sexual harassment, including what behaviour is unacceptable, how concerns can be reported, who they should be reported to and what happens next. Employees also need to be given the reassurance that they can raise a concern without this having negative repercussions for them. Our survey results have previously shown that fear of negative repercussions is the biggest deterrent for reporting (alongside lack of clarity on the process to follow and their complaint not being taken seriously).

But simply uploading a policy to an HR portal isn’t enough. The research we conducted at Weightmans found that although 71% of workers say their employer has a bullying policy, one in 10 would not know what to do if they experienced bullying. The words exist, but they’re filed away somewhere and not everyone knows how to apply the rules. That is a fairly fundamental problem, as a policy that few people understand or know how to use offers only limited protection in practice.

Another issue is that policies also need to reflect how people actually work. Workplace conduct does not stop when everybody leaves the office, as Christmas parties, conferences, work trips, client dinners, and other social events can all create risk, as does remote working if for example an office has not yet been sourced/expanded to accommodate a growing workforce.

For startups, the question should therefore be whether the policies written when the company employed six people still make sense when it has grown and now employs ten times that number.

2. “That’s just our culture” has become an excuse

Every business develops its own language and sense of humour; in close-knit teams, teasing, and jokes can become part of everyday working life – until they cross a line. This is when “banter” serves as an extremely convenient label for people to use after their words have made somebody else uncomfortable. In truth, it’s really just an excuse for bad behaviour, harsh words, and potentially discriminatory conduct. Our research found that 45% of workers say discriminatory banter exists in their workplace – and, sadly, it is too often simply brushed off.

Startups have an opportunity here, because their workplace culture is still being formed. Giving their entire workforce proper training from the outset about bullying, harassment, and sexual harassment helps establish what the expectations are before questionable behaviour becomes normalised and accepted as “part of the job”.

That training needs to go beyond an annual presentation people click through while answering emails. Staff should understand what constitutes inappropriate behaviour, including what amounts to bullying, harassment and sexual harassment, how to respond when they witness it or are on the receiving end of it, and where and how to report it. They also need to clearly understand the startups zero-tolerance approach to such conduct.

Managers and anyone responsible for handling complaints also need additional training. When somebody raises a concern, the first response they receive can determine whether they trust the organisation to deal with it properly, and it is much easier to establish those expectations while a company is still in its infancy than to try to dismantle a problematic culture once it has become embedded.

3. The company WhatsApp has become a legal blind spot

Communication channels within startups can get messy surprisingly quickly, with the use of Slack for projects, Teams for meetings, WhatsApp for quick messages, emails for clients and another group chat where everybody arranges after-work drinks. Throw in remote and hybrid working, and digital communication becomes even more central to how relationships are formed.

Employers need to be clear that workplace standards do not disappear simply because somebody moves a conversation online or onto another platform. Eight in 10 of those we surveyed said aggressive voice notes or criticisms on WhatsApp count as bullying, and those eight are right. Policies should therefore also address internal messaging apps, emails and group chats, and provide guidance on which systems employees should use and what appropriate behaviour looks like. Employers should also distinguish between official company channels and social chats without assuming that anything labelled “social” sits completely outside their area of responsibility.

This is an important distinction within startups in particular, where colleagues may also be friends and the boundaries between professional and personal relationships can quickly become blurred.

A joke sent to the team WhatsApp late of an evening does not automatically become irrelevant to the employer simply because it wasn’t posted in the office during working hours. Founders need to think about where their culture actually lives, as a significant part of it increasingly exists on people’s phones.

4. You haven’t asked where harassment is most likely to happen

One of the biggest changes required by a preventative approach to workplace harassment is moving away from simply responding to individual incidents and seeing them in isolation. Employers should be taking a holistic approach and assessing where the risks lie before any complaints arise.

This will look different for every startup. Does the team attend lots of networking events where alcohol is involved? Do junior employees travel alone with clients? Are staff regularly dealing with customers or suppliers? Does remote working mean most communication happens privately online? Are there significant power imbalances between founders, managers and junior staff?

Our research found that 26% of women say they have felt pressured to laugh off inappropriate behaviour rather than challenge it. This is highly significant, as silence or lack of formal complaints cannot safely be interpreted as evidence that there is no problem.

Employers should carry out and document risk assessments, identify areas where employees could be particularly vulnerable and decide on which measures to adopt to reduce those risks. Higher-risk areas should naturally receive greater attention, but lower or medium risks should not simply be ignored.

These assessments also cannot be completed as a one-off exercise and then forgotten. A startup’s risk profile can change rapidly as it hires people, wins bigger clients, opens offices or expands internationally. The process needs to be ongoing, and grow and adapt with the company.

5. You’ve thought about employees, but forgotten everyone else

One area that employers need to pay particular attention to ahead of the changes being introduced in October 2026 is third-party harassment. In essence, this means harassment from anyone outside of the business, because employees often do not interact solely with colleagues. Depending on the business, they may also spend significant amounts of their working lives dealing with customers, clients, suppliers, patients, contractors, and other external parties.

Employers therefore need to think about how they protect staff in those relationships too. This should include reviewing commercial contracts and agreements with third parties to ensure that expected standards of behaviour are made explicit and it is clear that harassment of employees will not be tolerated. Businesses can also make sure that they have the flexibility to protect employees by suspending services or ending contracts, where appropriate.

This is particularly relevant for businesses in sectors such as retail, hospitality, healthcare, and transport, but it should be on the radar of any founder whose employees interact regularly with third parties. A lucrative customer should not get a “free pass” to behave inappropriately towards employees in a way the company would never accept from a colleague.

Build the processes before you need them

There is a temptation for growing businesses to see HR policies, risk assessments, and training as something to worry about further down the road. When there are investors to update, customers to win and people to hire, formalising workplace behaviour can slide down the list of priorities.

But culture is being established from the first hire, even if the person being hired happens to be a good friend. The practical advantage startups have is that they can build good habits before bad ones become entrenched. Businesses don’t automatically have to become bureaucratic in order to have clear policies, meaningful training, sensible rules around digital communication, regular risk assessments, and protection from third-party harassment.

All that is required is for founders to acknowledge that informal does not also mean consequence-free and take all reasonable steps to ensure the right behaviours are clearly outlined and, where those within their workforce or third parties fall short of these, that appropriate and robust action is taken. Businesses should take October’s changes as a prompt to look again at whether their current approach reflects the organisation that they have become. If policies were written several funding rounds, dozens of hires or one office-move ago, then now is the time to revisit them.

Startups are often great places to work, with cultures that can still be sociable, relaxed, and full of personality. They still, however, need everyone within them to understand where the boundaries are, and to know what happens when somebody crosses them. As a founder, you have the power to create a safe space from the start.

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