Commercial
Employment Practices Liability Insurance
Employment-related claims are on the rise, make sure you are covered.
Commercial
What is EPLI?
Employment practices liability insurance (EPLI) covers employers’ defense costs and losses from employment-related claims.
These claims can include wage and hour disputes, allegations of discrimination, harassment, retaliation, and unlawful termination. With emerging EPL trends including social media, medical marijuana, pregnancy accommodations, religious accommodations, and mobile electronic devices, business are at risk now more than ever.
Do I need EPLI?
Do you have employees? If so, the answer is yes. When you have employees, you have employment practices exposure. According to the EEOC, an average EPLI claim costs businesses between $22,400 and $40,000 in damages. More than 40% of EPLI-related lawsuits are filed against private companies with fewer than 100 employees.
What Does EPLI Cover?
Employment practices liability insurance provides protection against several kinds of employee lawsuits, including:
- Sexual harassment
- Discrimination
- Wrongful termination
- Breach of employment contract
- Negligent evaluation
- Failure to employ or promote
- Wrongful discipline
- Deprivation of career opportunities
- Wrongful infliction of emotional distress
The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements.
Fair Pay
Be proactive and self-audit to be sure you avoid liability related to the Fair Pay Act:
- Does your organization have updated job descriptions that include criteria for skills, education, seniority, and responsibility?
- Does your organization assign consistent compensation to similar jobs performed by individuals with similar skills, education, seniority, and responsibility?
- Are employees assigned projects and clients with associated commissions on a consistent basis?
Wage Theft
Wage denial or employee benefits that are rightfully owed to employees can cost US workers as much as $50 billion annually. Wage theft can include forcing employees to work “off the books,” not providing consistent meal and rest breaks and failure to pay overtime and earned tips. Clear, consistent policies and proper manager training can help you avoid wage theft.
Worker Classification
Avoid EPLI claims resulting from the misclassification of contract workers by better defining their independent contractor status.
- Review federal economic reality and state labor tests, as well as IRS guidelines for classifying workers.
- Determine if you are classifying “contractors” and employees performing similar tasks consistently.
- Perform misclassification audits on a monthly or quarterly basis.
Gender Identity and Restroom Access
Avoid restricting employees from the use of restrooms based on their gender identity. Occupational Safety and Health Administration (OSHA) suggests the following:
- Permit employees to use the restroom associated with their gender identity.
- Don’t ask employees to provide medical or legal documentation of gender identity to access appropriate restrooms.
- Provide additional single and multi-occupancy, gender-neutral restrooms with lockable stalls.
Effective Compensation
Millennials currently make up 50% of the US workforce. As that number continues to rise – it will reach 75% by 2025 – this segment is driving a dynamic shift in pay practices from a merit-driven system to a value-based approach.
Employers who create a performance management program built on a results-driven culture that integrates compensation, rewards and performance will be well-positioned to avoid potential EPLI claims.
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