I will preface this by saying that I am not a Human Resources professional nor an attorney. Don’t take this as the end all/ be all when it comes to your employee relations. Although I am not and attorney or certified HR professional, I do help businesses with their risk management and insurance needs and Employment Practices Liability Insurance is one of those areas. Here in Southern California, Employment Practices Liability insurance claims happen a LOT more than general liability, professional liability (E&O) or any other areas of liability for that matter. I don’t have the statistical data, but working day-in and day-out with clients, I do see Employment Practices Liability claims a whole hell of a lot more than most other lines of insurance. And remember, Employment Practices Liability claims are NOT covered by a General Liability insurance policy or Workers’ Compensation.
With that being said, here are 10 EEOC (Equal Employment Opportunity Commission) Tips for Small Businesses taken directly from the EEOC. The Equal Employment Opportunity Commission is an independent federal agency created by Congress in 1964 to eradicate discrimination in employment. The Commission enforces various statutes that prohibit employment discrimination on the basis of race, color, sex, national origin, religion, retaliation, age, and disability or protected veteran status.
The EEOC has the authority to investigate charges of discrimination filed against employers who have a statutory minimum number of employees. HR can help avoid costly penalties by following the tips published by the EEOC.
- Look at the facts, not the faces. Race, color, religion, sex (including pregnancy, sexual orientation or gender identity), national origin, disability, age (40 or older) or genetic information (including family medical history) should not be a factor when you hire, fire, promote, pay, train, discipline or make other work-related decisions.
- Provide reasonable accommodations to applicants or employees who need them for medical or religious reasons, if required by law*.
- Develop a strong anti-discrimination policy before discrimination becomes a problem.
- Ensure that employees understand their rights and responsibilities at work.
- Be alert to potential harassment or discrimination. Stop, address and prevent harassment and discrimination.
- Ensure that employees are not punished for reporting discrimination, participating in a discrimination investigation or lawsuit, or opposing discrimination.
- Post an EEO poster at your business.
- Keep employment records as required by law.
- File an EEO-1 Report if you have 100 or more employees. Some federal contractors with at least 50 employees must also file this report.
- Contact the EEOC to request assistance, information or training.
* Federal, state and local laws may prohibit additional types of discrimination and/or require you to provide reasonable accommodations for other reasons. Federal, state and local government websites may have additional information about these laws.
Retaliation charges increased by nearly 5% in 2015 and continue to be the leading concern raised by workers across the country. Disability charges increased by 6% from last year and are the third largest category of charges filed.
The U.S. Equal Employment Opportunity Commission (EEOC) released breakdowns of the 89,385 charges of workplace discrimination that the agency received in fiscal year 2015.
EEOC said it resolved 92,641 charges in fiscal year 2015, and secured more than $525 million for victims of discrimination in private sector and state and local government workplaces through voluntary resolutions and litigation.
The year-end data shows that retaliation again was the most frequently filed charge of discrimination, with 39,757 charges, making up 45 percent of all private sector charges filed with EEOC. The fiscal year ran from Oct. 1, 2014, to Sept. 30, 2015. The agency is currently seeking public input on its proposed update of enforcement guidance addressing retaliation and related issues as part of its commitment to inform the public about the EEOC’s interpretation of the law and promote voluntary compliance.
Top 10 Charges
The charge numbers show the following breakdowns by bases alleged:
- Retaliation: 39,757 (44.5% of all charges filed)
- Race: 31,027 (34.7%)
- Disability: 26,968 (30.2%)
- Sex: 26,396 (29.5%)
- Age: 20,144 (22.5%)
- National Origin: 9,438 (10.6%)
- Religion: 3,502 (3.9%)
- Color: 2,833 (3.2%)
- Equal Pay Act: 973 (1.1%)
- Genetic Information Non-Discrimination Act: 257 (0.3%)
The percentages add up to more than 100 because some charges allege multiple bases.
Charges raising harassment allegations made up nearly 28,000 charges, or 31%. Employees claimed harassment in charges based on race, age, disability, religion, national origin and sex, including sexual orientation and gender identity.
The agency filed 142 merits lawsuits last year, up from 133 the previous year. The majority of the lawsuits filed alleged violations of Title VII of the Civil Rights Act of 1964, followed by suits under the Americans with Disabilities Act (ADA). This included 100 individual lawsuits and 42 lawsuits involving multiple victims of discriminatory policies. EEOC lawyers resolved 155 lawsuits alleging discrimination.
Once way to help deal with Employment Practices claims is to purchase Employment Practices Liability (EPL) Insurance. EPL Covers wrongful acts arising from the employment process. The most frequent types of claims covered under EPL insurance include wrongful termination, discrimination, sexual harassment and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) defamation, invasion of privacy, failure to promote, deprivation of a career opportunity and negligent evaluation. The policy covers directors and officers, management personnel and employees. These types of claims are not covered under a general liability or workers’ compensation insurance policy.
Sources: EEOC; Insurance Journal
A former employee of a Safeway store in Oregon has filed a lawsuit against the grocery store chain saying she was forced to quit because a customer repeatedly stared at her breasts and made vulgar comments.
The Oregonian reported that 44-year-old Daphne Lannan says in a lawsuit filed last week in Multnomah County Circuit Court that she asked managers at the Lebanon Safeway to stop the customer but they did not.
According to the lawsuit, Lannan says a male customer began to comment about the size of her breasts, saying he wanted to touch them. Lannan’s attorney says the law allows employees to sue their employers for sexual harassment by non-employees.
The Takeaway: As an employer, you would need to have an Employment Practices Liability (EPL) Insurance policy to defend a claim of this sort. This isn’t covered by a workers’ compensation insurance policy or general liability policy. EPL provides protection for an employer against claims made by employees, former employees, or potential employees. It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations.
Additional Tip: To avoid gaps in coverage, make sure Third-Party coverage is offered and included by the carrier on your policy. This covers you if a customer or a third-party sues you for discrimination, etc., not just employees. For more information visit: Third-Party Employment Practices Liability Insurance or contact me with questions.
For more on the story: OregonLive.com
Being an entrepreneur makes you the boss, but along with getting to choose your own hours, location, and business plan, it also means that you’re responsible for a lot of other things like commercial/business insurance. There’s a lot more to business insurance than getting the lowest business insurance quotes. It means understanding your business’s unique needs and the potential hazards that can threaten its success.
This brief video from the Insurance Information Institute touches on the ins and outs of small business insurance, including coverage for:
- Property loss
- Business disruption
- General liability (including product liability)
- Professional liability (also known as “Errors & omissions,” or “E&O”)
- Employment Practices Liability
- Workers’ Compensation
Credit: Insurance Information Institute
A new study by Hiscox revealed that, on average, a United States-based business with at least 10 employees has a 12.5% chance of having an employment liability charge filed against them. However, California has the most frequent incidences of Employment Practices Liability charges in the country and businesses in the state have a 42% higher chance of being sued by an employee than the national average! Not surprising!
Behind California, #2 is Illinois, #3 – Alabama, #4 – Arizona & Mississippi. and #5 is Georgia.
The Hiscox survey reveals that lower-risk states for Employment Practices Liability charges include Massachusetts, Michigan, Kentucky, Washington and West Virginia.
One way to help mitigate loss from an employee, potential employee, or former employee suing your business for an employment related claim is to purchase an Employment Practices Liability Insurance policy. Workers Compensation Insurance does NOT cover Employment Practices Liability related claims!
Source – PropertyCasualty360
I’ve touched on Employment Practices Liability Insurance in the past here.
In a nutshell, Employment Practice Liability Insurance provides protection for employers against claims made by employees, former employees, or potential employees for discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations.
Some Employment Practices Liability Insurance (EPLI) policies have “third-party” coverage included. “Third-party” coverage refers to claims made by non-employees, usually customers, who allege that an employee engaged in wrongful conduct such as sexual harassment or discrimination. Without a specific policy endorsement for third-party claims, EPLI policy forms do not cover this exposure. Without third-party coverage, a gap in coverage results because EPLI policies are written to cover employment related claims by employees or applicants against their respective employers.
Beware that coverage for third-party employment practices liability claims is excluded under commercial general liability (CGL) policies.
Companies that are heavily customer oriented, such as retail stores, restaurants, or auto dealerships, are most exposed to third-party liability claims. On the other hand, companies not involved much in customer interaction such as manufacturers are not nearly as exposed to these kinds of claims.
Third-party liability coverage is generally available by endorsement for additional premium and should be seriously considered by firms which face these exposures.
Our economy is in such a state where liability claims are on the rise. Many, but not all people, are out there are looking for any way they can make an extra buck during these challenging times. This rise in claims doesn’t only apply to Employment Practices Liability insurance, but general liability, workers compensation, and other forms of liability as well. Business owners beware!
Former ESPN announcer Ron Franklin, who was recently fired for allegedly making sexist comments to a sideline reporter before the Chick Fil-A Bowl, is suing ESPN for wrongful termination.
He confirmed the lawsuit on Wednesday but did not comment on the details of the lawsuit.
Franklin allegedly said to the sideline reporter, “Listen to me sweet baby, let me tell you something.” After the reporter told him not to talk to her like that, Franklin responded, “OK, then listen to me a-hole.”
Franklin later apologized in a statement. The longtime college football and basketball announcer worked for ESPN for 25 years.
What’s the moral of the story?
Employment Practices Liability claims such as this are not limited to major corporations such as ESPN. In today’s litigious climate, employers of all sizes are vulnerable. According to U.S. Equal Employment Opportunity Commission (EEOC) data, 41% of all EPL claims are brought against small employers with 15 to 100 employees. This is why any business with employees, or those which begin to hire employees must consider Employment Practices Liability Insurance (EPLI).
Employment Practices Liability insurance insures against claims of wrongful termination, failure to hire, failure to promote, various types of discrimination, as well as sexual harassment.
These insurance policies will reimburse your company against the costs of defending a lawsuit in court. They will also compensate for judgments and settlements. It doesn’t matter whether your company wins or loses the suit. Policies typically do not pay for punitive damages or civil or criminal fines, however.
One more benefit of these policies is that most include risk management services. Employment Practices Liability Insurance policies will typically offer an unlimited phone hotline service, online training, and state and federal compliance assistance from licensed attorneys.
If you are a business owner and are interested in more information on Employment Practices Liability Insurance, you can reach us here and we’ll be sure to follow-up with you:
The U.S. Equal Employment Opportunity Commission (EEOC) recently reported that for fiscal year 2010, it received nearly 100,000 new private sector charges of employment discrimination. This is the most ever in the agency’s 45-year history and a 7.2% increase over the number of charges filed in 2009*. For more information, click here.
What does it mean for employers?
Most experts agree that in a down economy, the opportunities for Employment Practices Liability insurance claims increase – employers are more likely to have to make difficult employment termination decisions, and with fewer alternatives available to them, employees are more likely to pursue legal remedies.
Employers facing difficult budget decisions may be tempted to reduce or eliminate their Employment Practices Liability insurance coverage. However, as the surge in EEOC claim filings shows, the risk to employers may now be greater than ever.
How much does an Employment Practices Liability insurance Policy Cost?
The cost of coverage depends on your type of business, the number of employees you have, and various risk factors such as prior claims or loss history. You can get a quote with very minimal information, often right on the spot. You would be surprised on how minimal the cost is in comparison to the coverage provided.
*Courtesy of Swett & Crawford Professional Services Group
If you’re a small business owner, chances are you don’t have the luxury of your own Human Resources department to oversee employment law compliance or employee relations and communication. You probably have your hands tied in many other areas just trying to make it through each day. To make your job more difficult, state and federal bureaucracies throw lists of employment statutes at you that you must comply with or run the risk of getting sued. Among the long list, the following statutes are some of the more noteworthy ones, but certainly not the only to be concerned about:
- Title VII of Civil Rights Act of 1964 (Title VII): This statute is a common source of employment litigation. This Federal statute makes it unlawful for an employer to refuse to hire or terminate any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment because of race, color, religion, sex, including sexual harassment, national origin, and pregnancy, childbirth, or related medical conditions.
- Equal Pay Act: This act deals specifically with unlawful differentials in compensation based on sex. The Equal Pay Act makes it unlawful to pay employees at rates less than the rate applicable to employees of the opposite sex for equal work for jobs requiring equal skill, equal effort, equal responsibility, and where the work is performed in similar working conditions.
- Americans with Disability Act (ADA): The ADA prohibits discrimination on the basis of disability against a qualified prospective or current employee, defined as an individual with a disability who, with or without reasonable accommodations can perform his or her essential duties of the employment position for which the person desires or holds. Many states also have statutes that place additional requirements upon employers.
- Age Discrimination in Employment Act (ADEA): The ADEA applies to employees who are age 40 or over and makes it unlawful for an employer to fail or refuse to hire or terminate any employee or otherwise discriminate against any individual with respect to his or her compensation, terms, conditions, or privileges of employment because of their age. Many states apply ADEA to all ages prohibiting age discrimination of any kind.
- Fair Labor Standards Act (FLSA): The FLSA sets the minimum wage and maximum hour/overtime requirements. The Wage and Hour Division of the Department of Labor manages the administration of the FLSA.
- Family Medical Leave Act (FMLA): The FMLA offers certain employees with up to 12 weeks of unpaid, job protected leave a year, and requires health benefits to be maintained during leave as if the employee continued to work instead of taking the leave. This statute is the responsibility of the Department of Labor (DOL).
As a business owner, how do you feel when you read these? Content and compliant? Or disturbed? What if a lawsuit was brought against your business tomorrow for wrongful termination or emotional distress, among other things? You probably wouldn’t feel as bothered if you knew you had an Employment Practices Liability Insurance policy in force to protect your business.
As I’ve written on prior posts, Employment Practices Liability Insurance provides protection for an employer against claims made by employees, former employees, or potential employees. It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations. Employment Practices Liability Insurance (EPLI) is needed by any business with employees and those which begin to hire employees. EPL claims are not limited to major corporations. In today’s litigious climate, employers of all sizes are vulnerable. In fact, six out of ten employers have faced employee lawsuits within the last five years.
The cost of employment practices liability coverage depends on your type of business, the number of employees you have, and various risk factors such as prior claims or loss history. Your insurance agent can provide a quote with very minimal information, often right on the spot. If you don’t have a policy in force now, you must consider calling your insurance agent right away to discuss. This might be your best alternative to not having your own HR department or HR director.
From the Las Vegas Review-Journal:
A one-armed man who was rejected as an applicant for a taxi driving job won a $30,000 settlement from Vegas Western Cab Co., the Equal Employment Opportunity Commission said Thursday.
The EEOC said it reached a settlement with the taxi company in the lawsuit it filed on behalf of Joel Walden, a single-arm amputee.
When he applied for job as a taxi driver in 2006, Walden met all the requirements in the taxi job announcement, was experienced as a driver and had a clean driving record, the commission said. However, the taxi company refused to hire Walden because of his disability, the EEOC said.
What does this have to do with me?
Business owners, you’re not immune to these types of claims. Employment Practices Liability Insurance (EPLI) is needed by any business with employees and those which begin to hire employees. It used to be that EPL claims were limited to major corporations. This is no longer the case. In today’s litigious climate, employers of all sizes are vulnerable. According to EEOC data, 41% of all EPLI claims are brought against small employers with 15 to 100 employees.
Employment Practices Liability insurance insures against claims of wrongful termination, failure to hire, failure to promote, various types of discrimination, as well as sexual harassment.
These policies will reimburse your company against the costs of defending a lawsuit in court, even if a claim is groundless or fraudulent. They will also compensate for judgments and settlements. It doesn’t matter whether your company wins or loses the suit. Policies typically do not pay for punitive damages or civil or criminal fines, however.
The cost of coverage depends on your type of business, the number of employees you have, and various risk factors such as prior claims or loss history. Your insurance agent can provide a quote with very minimal information, often right on the spot.