Topics: EPLI Coverage
Sue first; ask questions later. That’s the mindset of many employees in today’s workforce.
Fueled by many factors, employee lawsuits can be devastating. Beyond damaging your business’s reputation, an employment claim can lead to lower morale, diminished productivity and lost trust.
Speaking of lost, the cost of defending an employment-related claim can skyrocket as high as $300,000, and the timeline for resolving that claim can be as long as 24 months, according to Advisen. That’s a lot of lost time and revenue.
Over the past 20 years, Employment Practices Liability Insurance, or EPLI, has become a coverage staple for thousands of U.S. businesses large and small. As EPLI has become more popular, five trends have emerged.
Invasion of Employee Privacy
Whether it’s done from a computer or through the lens of a security camera, many employees are monitored at work. While employers have rights in the workplace, so do their employees. Legal experts predict that privacy will soon replace wrongful termination as the biggest hot-button issue in the workplace, according to a recent article in the Insurance Journal.
According to industry experts, these are the most common situations that spawn workplace privacy lawsuits:
While perusing a candidate’s LinkedIn page isn’t illegal, demanding access to a person’s social media accounts is.
When it comes to monitoring your employees’ social media use during the workday, discretion is key. For tips on how to create a policy that is intended to work for everyone, check out this post from the Small Business Administration.
Illegal Background Checks
The federal Fair Credit Reporting Act (FCRA) sets national standards for employment screening. Two common tools employers use to screen candidates are credit reports and criminal background reports. However, a candidate must provide written consent before an employer can request these documents. Businesses that attempt to secure this information without a candidate’s consent are inviting a potentially damaging lawsuit, according to the Equal Employment Opportunity Commission (EEOC).
According to the Insurance Journal, the Pregnancy Discrimination Act requires employers to allow pregnant employees to work at their jobs as long as they can perform their duties. Additionally, an employer cannot hold pregnancy against a candidate who’s applying for an available position.
GINA, the Genetic Information Nondiscrimination Act, prohibits employers from using genetic information as a factor in employment-related decisions. What’s more, under GINA, employers cannot request family medical history or any other kind of genetic information from job applicants, according to a recent article in the Insurance Journal.
Employee or intern? It’s a question the U.S. Department of Labor can help you answer. Interns, unlike employees on a payroll, are not subject to the Fair Labor Standards Act. To protect themselves, businesses should know what defines an internship. For the six key criteria, visit the Department of Labor’s Test for Unpaid Interns.
With employment laws continuing to evolve, staying in compliance can be quite a challenge. Fortunately, the EEOC launched a Small Business Resource Center to help. The site contains FAQs, tips, fact sheets and videos, along with free outreach programs, to assist businesses with staying on top of nondiscriminatory laws.
If you think EPLI isn’t worth the investment, you’re putting your small business at risk for big trouble. Employment-related claims, from discrimination to retaliation, can be extremely costly:
For more information on these statistics, see the Resources section at the end of this article. To learn more about EPLI and its benefits, read our blog post “Building a Case for EPLI Coverage.”
Small businesses aren’t immune from potentially big lawsuits. AmTrust works with small businesses to help mitigate those risks.
Statistically, it’s three times more likely to happen than a fire. But like a devastating blaze, it could destroy your business. It’s an employee lawsuit. If you own a small business, the risk of being sued by an employee is very real. According to the U.S. Equal Employment Opportunity Commission (EEOC), employees of businesses big and small filed over 90,000 employment-related claims in 2016 alone. In this article, we’ll take a look at five industries that are ideally suited for Employment Practices Liability Insurance or EPLI.