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Claims stemming from employment practices are one of the biggest liabilities faced by business owners today. The Equal Employment Opportunity Commission (EEOC) receives upwards of 200,000 claims per year and collects hundreds of dollars in settlements and penalties for claimants. Employee lawsuits can be extremely devastating to an employer. In 2017, the average total cost of claims that resulted in a defense and settlement payment was $160,000 and the timeline for resolving a claim can be as long as two years.
Employment Practices Liability Insurance (EPLI) has become a coverage necessity for employers of all sizes. Insurance agents can help protect their clients by partnering with a reputable EPLI provider like Mavon Insurance that is experienced and knowledgeable in this area. Below are some of the biggest trends in EPLI claims that your business clients are facing today.
1. Sexual Harassment
Sexual harassment is no more prevalent than before, but high-profile cases and the MeToo movement have brought more awareness to the matter and thus claims have increased. Workplace sexual harassment can be either verbal or physical, or both, and can include anything from jokes, innuendos or name-calling to touching, groping or other unwanted physical contact. The harasser doesn’t necessarily have to be the employer for an employment claim to be filed. Any manager, supervisor or other employee in the workplace can create a harassment liability, as EEOC standards of liability state that:
- an employer is responsible for the acts of its supervisors, and
- employers should be encouraged to prevent harassment and employees should be encouraged to avoid or limit the harm from harassment.
2. Employment Discrimination
Discrimination encompasses a variety of different reasons for which employees can be held back, not hired or otherwise unfavorably treated in the workplace. When an employee or job applicant feels they have been treated a certain way due to their race, skin color, nationality, sex, disability, religion or age, it falls under employment discrimination. Examples of employment discrimination include:
- job listings that suggest preferences about candidates outside of professional attributes;
- pay disparities among equally-qualified employees of different classes in the same position or;
- denying a certain group of employees the use of company facilities while others are free to use them.
Another top trend in EPLI involves misclassification of employees. The Fair Labor Standards Act (FLSA) protects salaried and non-salaried employees, but it does not apply to other classifications such as independent contractors or unpaid interns. However, these two types of workers often find themselves doing similar work to regular employees without that same protection. Employers have different reasons for classifying their workers as contractors or interns, but if they are asking those workers to perform the duties of an employee, they should be compensated as such. Employee misclassification has become a very common type of employment lawsuit and can result in large penalties and fines, back pay and taxes, and in some cases even jail time.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect, and gratitude to help our clients succeed and place business in specialized markets. For more information about our products or to become an agent, please contact us today at (855) 248-1480.