Error Omissions
Error Omissions
Submit your information below so we can contact you with a FREE quote
[All fields are required.]
Actual Annual Revenue:
Verify:
=
I have read and agreed to theTerms & Conditions
Error Omissions
Error Omissions

Employment Practices Liability: Wage and Hour Suits Spike


Employment Practices Liability: Wage & Hour Suits SpikeIn 2011, according to data from Seyfarth Shaw, a defense law firm out of Chicago, wage and hour complaints filed in the U.S. federal courts spiked from 6,081 in 2010 to 7,006 in 2011. Workers are suing their employers at record numbers for allegedly not paying proper wages.

Basically, employees who believe they were not paid wages owed to them can file a civil lawsuit in federal court, or they can file a complaint with the U.S. Department of Labor or the state, depending on the nature of the allegations. Most wage and hour complaints are over unpaid overtime and misclassification of workers as independent contractors instead of employees, which means employers do not have to pay unemployment insurance, payroll taxes, or workers compensation, according to experts. And, according to defense attorneys, many of these wage and hour violations are unintentional.

What’s more, Richard Alfred, chair of Seyfarth Shaw’s National Wage & Hour Litigation Practice Group, said wage and hour lawsuits have increased dramatically since the economic downturn, partly because plaintiffs have received huge settlements from companies “caught in the cross-hairs.” “These massive lawsuits create enormous risks for virtually all employers in the country as they struggle to apply the antiquated federal Fair Labor Standards Act (enacted in 1938) and similar state laws,” Alfred said.

Furthermore, if a court rules in the plaintiff’s favor, it usually doubles the amount of employees’ unpaid minimum wages and unpaid overtime at time and a half, said John Stephen, an attorney with Porter Wright law firm in Dayton. “Even an innocent or inadvertent mistake by an employer can result in a very expensive lawsuit due to the doubling of damages and having to pay the other side’s attorneys’ fees,” Stephen said.

Employment Practices Liability Insurance (EPLI) is available to businesses to protect them in the event of suits involving allegations of wrongful termination, breach of contract, disciplinary issues, sexual harassment, failure to promote, and more. However, a typical EPLI policy contains exclusions for wage and hour cases. Yet, increasingly an EPLI may include an extension for some defense cost protection for these kinds of claims, often on a sub-limited basis. This is very important because defense costs can add up quickly. Additionally, with some EPLI policies that do not contain this coverage extension, you can request it be included.

At Axis Insurance Services, we can review the specifics of Employment Practices insurance, what is included, and how coverage can be enhanced. Please call us at (877) 787-5258.

 

Comments

comments

Blogged on: May 15, 2012 by Mike Smith
Error Omissions
Error Omissions
Submit your information below so we can contact you with a FREE quote
[All fields are required.]
Actual Annual Revenue:
Verify:
=
I have read and agreed to theTerms & Conditions
Error Omissions
Error Omissions