The answer to this question is “Absolutely!” A marked increase in the number of claims arising from the employment process has become evident in recent years. Because of heightened awareness concerning workplace injustices existing and past employees are more likely than ever to take legal action against their employers for actual or implied discriminatory practices. Even if the employer is found not liable, defense costs for these types of claims can be very expensive. And, if the employer is found liable the settlements figures can be staggering.
Increasing obligations and liabilities imposed on employers by employment discrimination legislation has escalated employer’s liability to enormous proportions. Practices and procedures previously considered to be in compliance with Federal and State law may be in violation of a job application or employees rights. Employer’s can even be held accountable for actions of managers operating without the consent or knowledge of the employer. These are just a few legislative acts that can leave an employer at odds with employees, current and past, and job applicants:
Civil Rights Act
Equal Pay Act
Family and Medical Leave Act (FMLA)
American’s with Disabilities Act (ADA)
Management of people is a complicated and demanding task, creating many opportunities for mistakes and misunderstandings. Sound risk management principles dictate a need to exercise loss prevention activities to their fullest extent. Preventing claims from arising out of employment practices requires the adoption and documentation of formal programs relating to hiring practices, ongoing conditions of employment, and termination of employment procedures. When establishing these programs it is advisable to consult with an experienced HR consulting firm, they can help you write a comprehensive employee handbook as well as consult with you on HR matters before they become a claim.
Beyond establishing these policies and procedures, loss prevention requires thorough training of all personnel from the supervisory level up, as well as non-supervisory employees who implement employment procedures. It also requires dissemination of information so that all employees are aware of company policies relating to employment practices, and fair and consistent enforcement of the policies is adopted. In other words, sound management programs will not only serve to provide a strong defense when suit is brought against an employer, but will often deter such actions in the first place.
Your General Liability and Workers’ Compensation policies exclude coverage for your legal liability arising from employment practices. With premiums starting as low as $1,000 Employment Practices Liability (EPLI) coverage is very affordable, even for the smallest of employers.
Policies can provide a variety of coverages including:
Sexual harassment
Discrimination on basis of age, color, race, disability, religion or sex.
Wrongful termination
Prior acts or prior knowledge of an occurrence
Independent contractors
Third Party
Pay on behalf of wording
Breach of employment contract
Employment related misrepresentation
Wrongful deprivation of a career opportunity
Failure to grant tenure
Negligent evaluation
Invasion of privacy
Wrongful infliction of emotional distress
Contact The Hartwell Corporation today for more information regarding pricing and coverages available for your firm.
Traci McClure | SPHR, AINS
Vice President of Operations, Corporate H.R. Director & Quality Coordinator
