Employment Practice Liability Basics

Employment Practice Liability

As businesses grow and take on more employees, their risk exposure to employment practice liability claims increases. Even businesses that continually exercise their best efforts to fully comply with all state and federal employment law may find themselves to be the subject of a liability claim based on illegal employment practices. Regardless of a business’ size, it must take reasonable steps to protect itself against employment practices liability with a customized insurance policy.

EPLI Claim Examples

An employee can sue its employer for any number of reasons related to a violation of legal obligations in the employer-employee relationship. For example, federal and state law prohibits employers from discriminating against employees for reasons such as race, sex, sexual orientation, age, or religion. Also, employers must provide a working environment that is not hostile and does not tolerate any form of harassment. Furthermore, employers cannot take retaliatory disciplinary action against employees such as firing a whistleblower for exposing a prohibited business or employment practice.

Wage and Hour Law Compliance Coverage

The law pertaining to how employees categorize positions as exempt or non-exempt and how they calculate hours worked is subject to strict federal regulation. It may be advisable for businesses to have an EPLI insurance policy that can address expenses related to Wage and Hour violations.