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

EPLI: Worker Wage & Hour Lawsuits Continue to Set Records


EPLI Worker Wage & Hour Lawsuits Continue to Set RecordsWorkers filed a record number of wage and hour lawsuits during the federal fiscal year 2015 that ended September 30, according to Seyfarth Shaw, a law firm that analyzes data from the Federal Judicial Center. There were 8,781 cases filed in fiscal 2015, which reflects an 8% increase over last year.

“New federal labor regulations, the fight for a minimum wage hikes and an intense focus on independent contractor classification and joint employer status create a perfect storm for new lawsuits,” Richard Alfred, chair of Seyfarth’s wage and hour litigation practice, said in a written statement.

In fact, the issue of joint employer status is receiving a great deal of scrutiny in the wake of a ruling by the National Labor Relations Board (NLRB) in a case in September. Many feel the ruling could potentially exacerbate an already complicated issue for employers and result in more employee-related lawsuits including those involving wage and hour disputes. The NLRB in September issued a new test that makes it far more likely that even if a company does not directly employ an individual, it could be liable for employment torts and other encumbrances. The case involved Browning-Ferris Industries of California, Inc., which uses the services of numerous employees through an outside staffing firm. A company using such services was only considered a joint-employer if it had “direct control” over working conditions. Under the NLRB ruling in the Browning-Ferris case, a company is a joint employer if it exercises “indirect control over working conditions or if it reserves the authority to do so.”

As a result of the federal agency’s ruling, companies have become hypersensitive on the way they classify their workers as federal regulators are re-examining the rules on independent contractors and on joint-employer relationships, especially in the franchise and hospitality fields. Indeed some companies are facing lawsuits challenging their business models that rely on armies of independent contractors, according to Seyfarth Shaw.

What’s more, last summer, the Department of Labor’s proposal to revise the rules on white-collar exceptions to wage and hour laws caused employees and their lawyers to pay more attention to companies’ compliance with the laws. The new regulations are expected to dramatically boost the number of workers who will be covered by hourly wage laws.

It’s imperative that employers review their job descriptions and classifications, employee handbooks, harassment training for all employees, including outsourced workers, and have an understanding that outsourced workers, who often come and go quickly, most likely will have to be treated as in-house employees to ensure compliance with regulations.

Also, imperative is a review of the company’s Employment Practices Liability Insurance (EPLI), which is designed to respond in the event of a workplace-related claims such as allegations of discrimination, sexual harassment, wrongful termination, etc. Some policies also provide defense coverage for wage and hour disputes while others may include a sub-limit for this exposure. Having a professional insurance advisor that specializes in EPLI coverage can help you determine the scope and extent of your program.

Axis Insurance Services specializes in Employment Practices Liability coverage and we’re happy to review your insurance plan to determine how well structured it is to address your firm’s specific risk profile. Give us a call at (877) 787-5258.

 

Comments

comments

Blogged on: December 11, 2015 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