Wage and hour disputes are one of the most common types of employment law disputes. These are when an employee has a complaint regarding:
- Wage rates and number of hours
- Back pay or retro pay
- Overtime hours and rates
- Other related salary issues
Wage and hour insurance can often protect an employer in instances involving wage and hour lawsuits. Wage/hour insurance is often covered as a part of commercial general liability (CGL) insurance. Under this type of insurance, the insurer provides the employer with some financial backing in the event of a lawsuit or legal claim. CGL is sometimes called “Employment Practices Liability Insurance," or EPL.
Most employment practices liability insurance policies cover issues and losses “resulting from” employment-related claims. In a wage and hour lawsuit, the policy may address:
- Damages issued to plaintiffs
- Judgments, injunctions, and other court orders
- Settlements or payments related to mediation
- Interest on payments
- Defense costs
Coverage may depend on each individual policy and the terms that were negotiated between the insurer and the employer. Terms and expenses that are not covered by the policy will not be covered by the insurer, and must be shouldered by the employer.
Disputes between the insurer and employer may include:
- The amount of damages and costs that are covered, as insurers will usually only cover up to a specified amount of money
- Expiration dates of policies
- Breaches of insurance contract terms
- Insurance fraud violations
- Various state and federal exclusions, such as those related to the Fair Labor Standards Act or FLSA
Disputes may actually require separate legal proceedings to handle the conflict between the insurer and the employer. This may be an additional lawsuit besides the original wage/hour lawsuit.
Employment liability insurance can often involve complex matters. For instance, wage and hour lawsuits may require a special term or provision in the insurance contract. If you need help negotiating or reviewing an insurance policy, you may wish to hire a business lawyer for assistance. Your attorney can provide you with guidance on legal matters, and can also represent you if you need to appear in court for an employment law dispute.