Reducing Risk Exposure to Employment Practices Liability Suits

Employers can invest in employment practices liability insurance (EPLI) to ensure they have adequate coverage in the event of a claim relating to discrimination, wrongful termination, failure to promote, harassment, and more. Most large businesses have adequate EPLI coverage, but small businesses and startups may be vulnerable to discrimination claims. Thankfully, there are several ways businesses can reduce their employment practices liability risk.

Top 5 Tips to Address Employment Practices Liability Risk

  1. When posting job opportunities, include clear descriptions defining duties and expectations. Be sure applications do not include any potential discrimination triggers such as asking what year the applicant graduated from college. This can result in age-related discrimination lawsuits.
  2. Conduct background checks and screen applicants to weed out unsuitable candidates before interviewing them in person. EPLI risk starts from the moment an employer interviews a job candidate. If a business opts not to hire someone they interviewed, that individual can claim discrimination.
  3. Write an employee handbook providing clear policies and procedures for attendance, discipline, and termination. The handbook should also include an equal employment opportunity statement.
  4. Perform in depth performance evaluations for all employees and keep detailed records of the results. This can provide protection if an employee alleges wrongful termination.
  5. Discuss your risk and EPLI coverage needs with an insurance agent.

A number of factors affect how much EPLI coverage a business needs: how many individuals the business employs, any previous discrimination lawsuits, employee turnover rates, and more. The Reilly Company can help your business determine your risk level and how much EPLI coverage you need. To learn more, contact us today.

Hiring Law & Ethics and Employment Practices Liability

Finding and hiring talented employees is a difficult enough task by itself. Reviewing resumes, interviewing candidates, and determining which individual is the best fit takes time, and time equals money. However, recruiters and employers also need to consider the legal aspects of hiring if they want to avoid a discrimination lawsuit. Employers need to take pains during every step of the hiring process to ensure they are beyond reproach. For example, a poorly worded job posting or interview question can open a company up to a discrimination claim.

Interview Process

The interview process is rife with discrimination traps. While an interviewer needs to determine the best candidate for the job, the way they ask questions can come across as discriminatory. For example, say a job position requires the candidate to be available at all hours of the day. Assuming a working parent cannot meet this obligation is discriminatory. Asking questions such as, “Do you drive your child to and from school?” opens the door to a lawsuit. Instead, employers should make job listings clear and state in no uncertain terms what the work hours and expectations are.

Reference Checks

Calling job references can create discrimination headaches as well. A simple rule of thumb is this: if an employer cannot ask the question during an interview, they cannot ask it of a reference either. For example, if an interviewer noticed an applicant had a physical disability, they cannot ask previous employers about it. Instead, employers can ask about the applicant’s job performance, attendance, etc. These are legal and legitimate questions to help determine which candidate is the most qualified for the position.

Any individuals involved in the hiring process needs to be aware of all potential discrimination concerns. Employers who face discrimination lawsuits not only lose time and money spent on defense, their reputation suffers as well. To learn more about hiring best practices, contact The Reilly Company. We can help you avoid legal snares and reduce the risk of discrimination litigation.