Do You Know the Top 5 EPLI Best Practices?
Age discrimination settlements can cost your company millions. Watch to learn the top five employment liability best practices to follow in order to reduce the likelihood of age discrimination lawsuits occurring.
EPLI claims are on the rise
Did You Know?
Companies large and small share the burden equally. As many as 41% of EPLI-related lawsuits are brought against private companies with less than 100 employees. Your business is three times more likely to be sued as the result of an EPLI claim than it is to experience a fire.
Employment Practices Liability Insurance FAQ's
Employment Practices Liability (EPL) insurance, also known as EPLI, covers employee claims made alleging their legal rights have been violated by the company, or a fellow employee or employees.
EPLI covers both the organization and its insured persons including officers, directors, employees and independent contractors for legal defense costs, settlements and judgements that arise from claims of:
- discrimination (e.g., age, sex, race), sexual harassment, hostile work environment, or bullying
- wrongful termination or wrongful discipline
- breach of employment contract, deprivation of a career opportunity, or failure to employ or promote
- mismanagement of employee benefits
- defamation or privacy violations, and
- violations of common employment laws.
Written demands, Equal Employment Opportunity Commission (EEOC) charges, or lawsuits may trigger coverage.
EPL insurance policies typically exclude wage and hour claims, as well as coverage for violations of Worker’s Compensation laws; the Fair Labor Standards Act (FLSA); National Labor Relations Act (NLRA); the Worker Adjustment and Retraining Notification Act; Occupational Safety and Health Administration (OSHA); and the Employee Retirement Income Security Act (ERISA). EPLI does not cover punitive damages or claims resulting from criminal acts.
All employers are subject to demands by prospective, current and former employees for actions alleged to be discriminatory, retaliatory or hostile. More recently, the #MeToo movement has focused board member attention on employment practices and insurance coverage for the company and its director and officers.
EPL coverage will vary depending on the number of employees, coverage limits and the breadth and depth of a business’ anti-discrimination policies, as well as the number and severity of past discrimination claims and EEOC complaints or lawsuits.
Enforcement of the Fair Labor Standards Act (FLSA) and similar state laws have resulted in huge damages from employee misclassification issues, such as classification of an employee as full time versus part time, independent contractor versus employee, or salaried versus exempt.
There are a few employment laws that are important to understand:
- Fair Labor Standards Act (FLSA), which limits the number of hours in an employee work week, including overtime and minimum wage. FLSA prohibits wage disparity based on sex, entitling men and women to equal pay.
- Family and Medical Leave Act (FMLA), which entitles employees to 12 weeks of unpaid leave with job protection and healthcare coverage. This does not cover all employees, making it important to know the exceptions to FMLA.
- Age Discrimination in Employment Act (ADEA), which prohibits age discrimination in hiring, firing and promoting.