As a business owner the responsibility of providing a safe, positive, and comfortable work environment falls on your shoulders. The unfortunate reality is that these responsibilities are not always upheld or maintained. To help protect businesses from harmful claims that may arise from a multitude of situations, the Employment Practices Liability Insurance (“EPLI”) policy would come into play. The EPLI policy provides coverage for wrongful acts during the
employment process, with the common claims being wrongful termination, discrimination, sexual harassment, and retaliation.
As part of this policy an insured business has the option to enhance coverage via the (unappreciated and undervalued) Wage and Hour Endorsement. This endorsement provides the named insured coverage for the cost of defending claims alleging failure to pay overtime to a nonexempt employee, with settlements of said claims generally excluded.
Why discuss this coverage now? In recent days President Obama has set his sights on raising the overtime pay threshold for wage and hour employees working 40+ hours per week, with plans for the change to take effect in 2016. Under the Fair Labor Standards Act employers are required to provide overtime pay to employees who work 40+ hours a week, with executives and managers being exempt from the requirement (these individuals are generally earning higher salaries). The target is to raise the threshold for the first time since 1975 from $23,660 to $50,440, more than doubling it.
With the increase in threshold we can expect to see an increase in wage and hour claims as many employers may not be immediately aware of their obligation. In an effort to better protect the company which you have worked so hard in growing, it may be worth:
- Familiarizing yourself with the coverage
- Discussing coverage options with an insurance professional
- Exploring the market for coverage options and pricing
No business owner wants to enter a legal battle, but if required, wouldn’t you sleep better knowing that coverage is in place to help protect your investment?
