Can Employers Avoid EPL Wage and Hour Disputes?

Posted on: April 2, 2015 by Renato Cachina

Are your clients aware that recent amendments made to the Fair Labor Standards Act (FLSA) have made it easier than ever for employees to file wage and hour lawsuits against their employers? According to a report published by Monitor Liability Managers, most wage and hour cases tend to be settled quickly, and employers typically lose if the case goes to trial. In addition to paying damages to the employee, the employer is often required in these cases to pay the employee’s attorney fees plus their own defense costs. These fees run into the tens of thousands of dollars.

Can these cases be avoided? The short answer is no; employers should always make sure they are financially protected with the appropriate Employment Practices Liability (EPL) insurance policy. There are, however, steps your clients can take to potentially reduce their risks. For example, one of the things your clients can do is check with their state labor laws and determine if their employees are entitled to overtime pay; if so they must be paid accordingly. Other risk reducing steps include:

Keeping Accurate Payroll and Time Worked Records

Not only should employers have documentation on what hour and day that work begins and end, including total hours worked, it could be beneficial to require that even salaried employees clock in and out for their workday.

Creating and Enforcing Strict “Off the Clock” Policies

FLSA lawsuits, according to some American employers, typically include complaints that employees worked through lunch breaks, came in early, or stayed late, without receiving compensation. While this may have been voluntary on their part, without an actually off the clock policy, they could certainly argue that they were expected to work overtime.

Allow Paid Breaks

Under the FLSA, any break/rest period under less than 20 minutes are considered to be “hours worked” and thus are compensable. Meal period of less than 30 minutes fall under the same rules.

At ELM PL, we understand the Employment Practices risks that your clients face, which is why we stress how important it is that not only they stay updated on changes, but also have appropriate insurance coverage. Please contact us today at (888) 330-0696 to learn more about our various products and services.


Posted in: blog employment practices liability