Workplace sexual harassment is a legal, cultural and leadership issue, and one that every employer, regardless of size, must take seriously.
For SMEs, this can feel like a difficult topic to approach. Smaller teams often rely on close working relationships, informal communication and trust. But that informality can sometimes make it harder for people to raise concerns, challenge inappropriate behaviour or know where to turn if something happens.
The law is clear: employers must take proactive steps to prevent sexual harassment at work. Since 26 October 2024, all employers have had a legal duty to take reasonable steps to prevent sexual harassment of workers, including harassment by third parties such as clients, customers, contractors or suppliers.
This means businesses cannot simply wait until a complaint is made. Prevention must be part of how you manage your workplace.
What counts as sexual harassment?
Sexual harassment is unwanted conduct of a sexual nature that violates someone’s dignity, or creates an intimidating, hostile, degrading, humiliating or offensive environment.
It can include obvious behaviour, such as inappropriate touching or sexual comments. But it can also include unwanted jokes, suggestive messages, sexualised “banter”, staring, sharing explicit content, or repeated comments about someone’s appearance.
The key point is this: it does not have to be intended to offend to be unlawful. The impact on the person experiencing it matters.
For SMEs, this is important because inappropriate behaviour is sometimes dismissed as “just a joke” or “how they are”.
That mindset creates risk. More importantly, it creates an unsafe culture.
The employer’s legal duty
The Worker Protection (Amendment of Equality Act 2010) Act 2023 introduced a preventative duty on employers. This means employers must take action in advance to reduce the risk of sexual harassment happening in the first place.
The Equality and Human Rights Commission can take enforcement action where an employer fails to take reasonable steps, even if no specific incident has occurred. If an employee brings a successful tribunal claim, compensation may also be increased where the employer has failed to comply with the preventative duty.
For SMEs, the phrase “reasonable steps” is important. What is reasonable will depend on your business size, resources, working environment and risk profile.
A small office-based business will not necessarily need the same measures as a large hospitality employer with late-night shifts and regular customer interaction. But every employer needs to do something.
What’s changing in October 2026?
The current legal duty, introduced on 26 October 2024, requires employers to take reasonable steps to prevent sexual harassment at work. However, this duty is expected to strengthen from October 2026, when employers will be required to take all reasonable steps to prevent sexual harassment.
The word ALL is what is key here.
It raises the standard expected of employers. In practical terms, it means SMEs will need to show that they have taken a thorough, proactive and documented approach to prevention. It will no longer be enough to simply have a policy sitting in a handbook.
Employers will need to demonstrate that they have assessed risks, trained staff, communicated expectations, provided reporting routes and reviewed whether their preventative measures are actually working.
October 2026 is also expected to introduce stronger rules around third-party harassment. This means employers may be liable where an employee is harassed by someone outside the business, such as a customer, client, contractor, supplier or service user, if the employer has failed to take all reasonable steps to prevent it.
This protection is expected to apply to harassment linked to protected characteristics more broadly, not just sexual harassment.
For SMEs, this is especially important. Many small businesses have employees working directly with clients, customers, visitors, contractors or members of the public. Under the strengthened rules, employers will need to think beyond internal staff behaviour and consider the wider environments their employees work in.
That could mean reviewing how customer-facing staff are protected, making it clear to clients and service users that harassment will not be tolerated, training managers to intervene appropriately, and ensuring employees know how to report concerns involving third parties.
The key message is simple: by October 2026, employers will need to move from a basic compliance approach to a much more active prevention model. The businesses best prepared will be those that can clearly evidence what they have done, why they have done it, and how they continue to review risk.
For SMEs, the practical steps to start now include reviewing your harassment policy, carrying out a workplace risk assessment, updating manager training, checking your reporting routes, and looking carefully at any roles where staff may be exposed to inappropriate behaviour from customers, clients or contractors.
This isn’t about creating unnecessary bureaucracy. It’s about showing that your business has taken the issue seriously, acted proportionately, and put meaningful protections in place before something goes wrong.
Why prevention matters for SMEs
Sexual harassment has a serious impact on people and businesses. It can damage confidence, wellbeing, performance and trust. It can lead to absence, resignations, grievances, tribunal claims and reputational harm.
In a small business, those effects are magnified. One unresolved issue can affect the whole team. People may feel forced to “pick sides”, morale can drop quickly, and trust in leadership can be damaged.
Preventing harassment is about making sure everyone understands the standards of behaviour expected, and that people feel safe, respected and listened to.
Start with a clear policy
Every SME should have a clear anti-harassment and bullying policy. This policy should explain what sexual harassment is, make clear that it will not be tolerated, and outline how concerns can be raised.
It should also cover harassment by third parties. This is particularly important for businesses where staff interact with customers, clients, service users, suppliers or contractors.
A policy should not be hidden away in a handbook that nobody reads. It needs to be communicated clearly and revisited regularly. Employees should know what the policy says, where to find it, and what will happen if a concern is raised.
Carry out a risk assessment
One of the most important practical steps employers can take is to assess where sexual harassment could occur in their business.
This means looking honestly at your workplace and asking where the risks might be.
Risk factors could include lone working, alcohol at work events, customer-facing roles, power imbalances, informal messaging groups, social events, travel, or environments where inappropriate “banter” has previously gone unchecked.
The EHRC guidance encourages employers to assess risk, identify action, and regularly review whether measures are working.
For SMEs, this is a valuable exercise because it makes prevention specific to your business rather than generic.
Train managers and employees
Policies only work if people understand them.
Training should help employees recognise inappropriate behaviour, understand boundaries, and know how to report concerns. For managers, training should go further. They need to know how to respond to complaints, protect confidentiality, avoid victimisation and escalate issues correctly.
This is especially important in SMEs where managers may be dealing with sensitive HR matters without formal HR training.
Good training should be practical, relevant and repeated. A one-off tick-box session is unlikely to be enough if your workplace culture does not reinforce the message.
Create safe reporting routes
Employees need to feel able to raise concerns without fear of being ignored, blamed or treated differently.
In a small business, this can be challenging because everyone knows each other. An employee may not want to report an issue to their direct manager, especially if that person is involved or close to the person complained about.
That is why it helps to offer more than one reporting route. This might include the business owner, another manager, an external HR contact or a confidential reporting process.
The important thing is that employees know they will be taken seriously.
Respond quickly and fairly
If a concern is raised, it must be handled promptly, sensitively and fairly.
The employer should listen carefully, avoid making assumptions and take steps to protect the people involved. Depending on the circumstances, this may involve an investigation, temporary adjustments, disciplinary action or external support.
Confidentiality is vital. So is avoiding retaliation or victimisation. Employees must not be treated badly because they raised a concern, supported someone else, or participated in an investigation.
A poor response can be just as damaging as the original behaviour.
Do not ignore third-party harassment
For many SMEs, the biggest risk may not come from colleagues. It may come from customers, clients, contractors or suppliers.
Employers still need to take reasonable steps to prevent sexual harassment by third parties. ACAS confirms that the preventative duty covers harassment from other people at work and third parties.
This means you should think carefully about how you protect staff in customer-facing or external environments.
For example, employees should know what to do if a customer behaves inappropriately. Managers should be prepared to step in. Contracts or client expectations may need to make clear that abusive or harassing behaviour towards staff will not be tolerated.
Protecting your people should never be sacrificed to keep a difficult client happy.
Build a culture that challenges poor behaviour early
If inappropriate comments, jokes or behaviour are ignored, they become normalised. Over time, employees may assume that speaking up is pointless or risky.
Leaders and managers set the tone. When they challenge poor behaviour early, consistently and calmly, they make it clear what is acceptable.
This means refusing to allow patterns of disrespect, sexualised comments or boundary-crossing behaviour to become part of “how things are done”.
Keep records and review regularly
Employers should keep records of the steps they have taken to prevent sexual harassment. This might include policy updates, training attendance, risk assessments, complaints, actions taken and review dates.
Good records help you demonstrate that prevention is being taken seriously. They also help you identify patterns or recurring issues.
Your approach should be reviewed regularly, especially if your business grows, takes on new managers, changes premises, introduces work events, or moves into more customer-facing activity.
Practical steps SMEs can take now
If you are unsure where to begin, start with the basics.
- Review your anti-harassment policy and make sure it reflects the preventative duty.
- Carry out a simple workplace risk assessment.
- Train your managers so they know how to respond to concerns.
- Communicate reporting routes clearly to staff.
- Review your approach to work events, client interaction and lone working.
These steps do not need to be complicated, but they do need to be intentional.
Preventing workplace sexual harassment is a proactive employer responsibility.
For SMEs, this is about building a workplace where expectations are clear, concerns are taken seriously, and people are protected from unacceptable behaviour.
The strongest businesses do not wait for something to go wrong before taking action. They create the conditions where respect, safety and accountability are built in from the start.
How Professional Pitstop can help
At Professional Pitstop, we help SMEs create safe, compliant and people-first workplaces.
We can support you with anti-harassment policies, workplace risk assessments, manager training, employee communications and practical HR support if concerns arise.
If you want confidence that your business is meeting its responsibilities, and protecting your people properly, we’re here to help.
Email: nic@professionalpitstop.com
