March 11, 2016 | Industry Insights, Insights

Employers More Likely to Have an Employment Practices Claim than a General Liability or Property Loss

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Transportation and logistic service providers are well aware of the exposures they face when it comes to general liability claims and property losses. Customers and visitors to your premises can slip and fall resulting in injuries. A fire or flood can shutter your operation temporarily, causing you to replace property or rebuild. You insure against these types of losses with General Liability and Property insurance coverages. However, are you aware that your company is more likely to be sued by an employee alleging an employment practices violation than being hit with a slip-and-fall claim or having a property loss?

Employment practices claims have been on the rise over the last several years. In fact, the Equal Employment Opportunity Commission (EEOC) released figures last month breaking down workplace discrimination claims in the private sector for 2015. Retaliation was the most frequently filed charge of discrimination, with 39,757 charges, making up 45% of all private sector charges filed with the agency. This was followed by discrimination charges based on race, disability, sex, and age, among others. In 2015 alone, the EEOC secured more than $525 million for victims of discrimination in private sector and state and local government workplaces through voluntary resolutions and litigation.

Moreover, across many industries, including in transportation and global logistics companies, wage- and-hour lawsuits have also become prevalent over the last several years, a topic we recently discussed. In fact, wage-and-hour disputes have become the most common source of substantial, employment-related liability facing employers today. The number of class and collective actions has soared due to revised laws, mounting government enforcement efforts and the increasing amount of information available to employees. Virtually all aspects of employee compensation have become the target of collective and individual actions in both state and federal courts. Ongoing changes in federal regulations and expanding state regulations add to the compliance challenges facing employers. Some of the more common areas in wage-and-hour disputes that typically spawn litigation include: minimum wage compliance, overtime compliance, spread-of-hours pay, employee misclassification issues, exempt vs. non-exempt employee status, independent contractor status, federal and state recordkeeping compliance, and improper wage deductions.

What can you do as an employer to stem the potential for a lawsuit?

It’s essential that you have a written employee handbook with strong anti-harassment and anti-discrimination policies. The handbook should also provide employees with an internal mechanism to complain about discrimination or harassment. Be sure to include an anti-retaliation provision in your handbook, particularly in light of the rise in claims of retaliation. In fact, it’s recommended that a statement be included that it’s the policy of a business not to retaliate against employees over accusations of discrimination or harassment. In addition, be sure all supervisors are trained in HR procedures and policies, including on discharge procedures for employees who are being terminated and procedures for how to handle and prevent harassment or discrimination in the workplace.

You should also have Employment Practices Liability Insurance (EPLI) as part of your risk management program to protect your business from the financial costs incurred from employment-related lawsuits filed for a range of reasons, including from wrongful termination to harassment to discrimination and so on. If you already have a policy in place, be sure to review your limits of liability, deductibles and specific coverage provisions so that your business is properly insured. If you haven’t secured an EPLI policy, be sure to do so…small and mid-sized firms are just as vulnerable to employment practices claims as large corporations.

The professionals at Roanoke Trade will be happy to review your current policy and/or present you with EPLI solutions to protect your assets in the event of litigation. Please contact us at 1-800-ROANOKE (800-762-6653).

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