By Casey Myers

Employment practices liability insurance (EPLI) covers claims for sexual harassment, discrimination, wrongful termination and more. The average cost of employment-related claims is rising, along with the length of time it takes to resolve them. In 2020, retaliation and sexual harassment claims, gig worker classification, the gender pay gap and medical marijuana usage were among the top trending employment practices litigation cases.

Here are some of the latest EPLI claims trends and steps your organization can take to reduce them.

Retaliation Claims are Increasing

More than half of the U.S. Equal Opportunity Commission EEOC claims filed in 2021 involved retaliation. The Department of Labor (DOL) defines it as occurring when an employer (through a manager, supervisor, administrator or directly) fires an employee or takes any other type of adverse action against an employee for engaging in protected activity.

An adverse action is an action which would dissuade a reasonable employee from raising a concern about a possible violation or engaging in other related protected activity. Retaliation can have a negative impact on overall employee morale.

Action plan for employers:

• Establish a policy against retaliation and educate teams.
• Implement a confidential process for managing complaints and communicating the anti-retaliation policy to complaining employees.
• Document everything.

Utilize OSHA’s Recommended Practices for Anti-Retaliation Programs for more guidance.

The #MeToo Movement Resulted in a Spike of Sexual Harassment Claims

Sexual harassment claims represented roughly one-third (31.7%) of all EEOC claims filed. This includes LGBT-based sexual harassment charges, which have risen steadily for the past five years.

Action plan for employers:

• Be clear that sexual harassment prevention is a company priority.
• Keep sexual harassment prevention training positive.
• Take swift and decisive action as issues arise.

The Gig Economy Increased Wage and Hour Litigation Threats

In the last 10 years, Fair Labor Standards Act (FLSA) lawsuits have increased. Many of them involve worker classification disputes.

Action plan for employers:

• Ensure that your workers are correctly classified and maintain appropriate records.
• Understand state-specific rulings like AB5 in California.
• Utilize the  FSLA Handy Reference Guide and other Department of Labor (DOL) resources.

The Gender Pay Gap Remains

In the first quarter of 2023, full-time salaried women made 84% of men’s earnings, according to the U.S. Bureau of Labor Statistics.

Action plan for employers:

• Establish and enforce clear and objective policies around pay structure and how raises and promotions are earned.
• Disclose salary ranges in job postings.
• Train interviewers not to ask about pay history.
• Ensure women have equal opportunities for training and advancement.

 Marijuana Legalization will Continue to Impact the Workplace

According to the National Conference of State Legislatures, as of Apr. 24, 38 states, three territories and the District of Columbia allow the medical use of cannabis products. In addition, 22 states, two territories and the District of Columbia have enacted measures to regulate cannabis for adult non-medical use.

Action plan for employers:

• Keep up with new legislation on marijuana usage in your state.
• Review relevant laws before firing or not hiring workers over marijuana usage.
• Create drug policies that focus on maintaining a safe workplace.

Adopt a Policy of Prevention

The best way to keep EPLI costs low for your business is to take a proactive approach to your policies and procedures. It may also help avoid costly litigation. Please seek legal advice when considering company policy changes.

1. Review potential loss exposures with your insurance broker. Purchase and/or review your EPLI policy to ensure you’re adequately covered.
2. Avoid discriminatory practices by creating and implementing effective screening and hiring programs.
3. Develop an employee handbook. For your protection, ensure it includes an employment-at-will and an equal employment opportunity statement.
4. Create a detailed job description for each role. It should clearly define the required skills and performance expectations.
5. Institute a zero-tolerance policy regarding substance abuse, harassment and any form of discrimination. Additionally, have an "open door" policy in which employees can report violators without fear of retribution.
6. Prominently post company policies that reinforce your stance on unacceptable – and illegal – workplace behavior.
7. Document all employee complaints and steps taken to resolve them.