Minnesota's new wage-theft law, the legalization of medical marijuana and the #MeToo movement are among a host of workplace issues that can quickly render a company's policies and culture out of date — or worse, illegal. It's Sharon Scharf's job to keep clients current about emerging risks. She is a risk-management specialist at Cobb, Strecker, Dunphy & Zimmermann, or CSDZ, who works with firms to identify risks to the business, as well as its owners and executives. for not complying with rapidly changing employment laws and cultural shifts. The Minneapolis-based agency works with real estate developers, architects and engineers, building contractors and more. Scharf has broad knowledge of workplace laws and regulations across many states and industries.

Q: How does a company decide when it can mitigate risk — presumably through training and policies — and when it should buy insurance?

A: It depends on the client, where they are doing business and the kind of business they are doing. My job is to inform and educate. Buying liability insurance is an elective decision, unlike workers' compensation, which you need to have in order to do business in this state. You have a decision to either retain the risk or transfer it — but you can't ignore it. If you're a business and you don't feel you have exposure from the #MeToo movement, you may not buy insurance. But you might say: I'll do some training of employees and supervisors, and I'll make sure my handbook is up to date. You would retain the risk and try to mitigate it. The other is transferring risk by buying insurance.

Q: Are businesses feeling they need more insurance protection in the wake of #MeToo?

A: Not only because of #MetToo. Minnesota used to be a state recognized for its employee focus. It has shifted more to a business focus, other than wage theft. I think that's why Minneapolis, St. Paul and Duluth have passed their own laws on minimum-wage and sick-leave policies. When I talk with a client who doesn't believe they will be sued, I'll say: You're in business. You can be sued for a reason or no reason at all. Regardless, you have to defend yourself. At a minimum, you will need to investigate the allegations and work to get the claim dismissed. It's more than just the dollars. It's also the energy and time of your managers being taken away from running your business. That's the other part of the cost that's hard to measure. Although an insurance policy won't pay for your managers' time, a key component in these policies is defense coverage. You may have the penalty or the settlement, but you also have defense costs.

Q: Minnesota passed a "wage theft" law in July making it a crime to hold back workers' wages. What are Minnesota business leaders saying about it?

A: Some people think the impact is mostly on minimum wage and tipped employees. It's much broader. If you have commissioned salespeople, you now have to pay commissions earned every three months. There also are new requirements for record-keeping and the potential for civil enforcement penalties. If you intentionally and knowingly don't comply with the regulations, you could go to jail. Unlike other employment exposure, there isn't an insurance solution. If I choose not to pay you, the insurance company isn't going to pay the wages, but some policies may provide defense cost coverage.

Q: How has the patchwork of marijuana laws affected companies? In Minnesota, medical marijuana is legal. In other states, recreational marijuana is legal. But the federal government deems it illegal for recreational use.

A: It gets complicated. In Minnesota, if an employer has a drug-free policy and an employee tests positive but states they are using it for a medical purpose, the employer should talk with the employee to determine if they need an accommodation based on the Americans with Disabilities Act — before taking adverse action. But let's say they operate heavy equipment. You do not have to accommodate them because potentially they could harm someone else if the drug affects them. In states where recreational use is legal, you have to make sure your policies don't mandate no drug use ever. You can say, for example, no drug use on our premises or while conducting business. That's legitimate. But you can't say they can't use the substance on a Saturday afternoon while they are not working.

Q: What's the key takeaway for businesses?

A: It's important for companies to understand they need to have a process in place and to routinely assess their business practices to stay up to date on changing laws and the regulatory environment. An attorney, accountant or HR person on staff can be great resources. Businesses need to pull out their handbook or employment application to ensure they are in compliance. For example, does their application ask about criminal history? If so, they need to update it. My philosophy and CSDZ's philosophy is that you don't start with buying insurance. That's the end solution. We begin by understanding your business, your history, goals and risk exposures. Then we work to create business risk solutions. Although we have been talking about business exposures, it can also be personal exposure. It's your reputation. You can never defend yourself when you're in headlines or on the front page. By that time, it's way too late.