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  • March 28, 2021

Employment Practices & Liability Trends for 2021

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Employment Practices & Liability Trends for 2021

Employment Practices & Liability Trends for 2021 1024 538 Dominion Risk

As an employer, you care about protecting your employees, your business and your stakeholders. A good corporate culture where employees feel appreciated, valued, and safe is critical to meet those goals. If your employees feel differently, then you are at risk for employment-related disputes. The exposure to misunderstandings in the workplace has never been greater and it is changing rapidly. Employers need effective employment practice controls.

COVID-19 Pandemic

The pandemic has forced many organizations to make serious workplace changes—such as having employees work remotely, adjusting office setups or conducting significant staff layoffs or furloughs. Naturally, EPL claims followed. Some of the most common, pandemic-related EPL claims include:

  • Allegations that the employer allowed unsafe work conditions (e.g., poor sanitation practices, a lack of social distancing protocols or inadequate personal protective equipment) contributed to employees getting sick or dying from COVID-19
  • Allegations of retaliation after an objection to unsafe working conditions
  • Allegations of failing to accommodate remote staff or denying employees the option to work remotely
  • Allegations related to employee leave concerns
  • Allegations of furloughs or lay-offs without proper notice and of discrimination from employees who felt that the furlough or lay-off targeted a protected class of employees

Review any organizational changes you have or will take in response to the pandemic. Document that your actions were legal, fair, and reasonable based on the situation. Consult your employment counsel.

Wage, Leave and Salary Regulation

There have been a number of changes over the last six years to wage and hour laws.  States are addressing potential issues through “wage theft” legislation. These changes put new pressures on businesses to ensure that you are complying with federal and state wage and hour laws. You should review state-specific and federal laws related to minimum wage, exempt vs. non-exempt, payments by the task or the piece, overtime pay, sick and paid leave with your attorney and your industry lobbyists and associations. In states, like Virginia, the laws have changed drastically in the last two years.  

Age Discrimination

According to the U.S. Bureau of Labor Statistics, the share of employees over the age of 55 in the labor force should rise to nearly 25% by 2024 (up from 13% in 2001). This demographic shift underscores that employers should plan for and mitigate the potential for age discrimination in the workplace. The Age Discrimination in Employment Act (ADEA) forbids age discrimination against employees and job applicants aged 40 and over.

A recent Hiscox study found that 21% of U.S. employees have reported age-related, workplace discrimination. This poses real risk to morale, reputation and the business and is an invitation for an EPL claim. You should review your situation and manage exposures to allegations of age discrimination.  

Marijuana Legalization

As of November, 2020, medical marijuana has been approved in 36 states. In the 2021, General Assembly, Virginia became the 16th state to approve recreational marijuana (effective in 2024). As legalization becomes more commonplace, your organization may need to adapt. At this point, all of the questions have not been answered.  

As of now, employers in most states can still drug-test employees and have a drug-free workplace policy. In fact, in many states, you still earn a credit on your workers’ compensation premium for having a drug-testing policy.  However, some states have enacted legislation restricting an employers’ ability to conduct drug tests for marijuana. Further, several state court cases have ruled in favor employees in marijuana usage law suits, particularly for medical usage of marijuana. 

You should keep this on your agenda of items to monitor. At some point, employers may need to adapt their drug policies and procedures to comply with this changing environment.

Social Movements

There is no denying that the last few years have brought dynamic social movements including the #MeToo movement and Black Lives Matter. Their direct impact on employment relations is critical for your business to address.

The #MeToo movement is an anti-sexual harassment campaign that started in 2006 and has gained significant social media attention since 2017. Consequently, there has been a 50% rise in sexual harassment lawsuits against employers over the past few years according to the EEOC. Employers must have a zero-tolerance policy for sexual harassment with effective training, monitoring and enforcement. Dominion Risk Advisors has effective tools for policies, procedures and training.

The Black Lives Matter movement is a racial justice campaign started in 2013. Based on a number of race-related issues, including George Floyd’s death in the summer of 2020, the BLM movement resurged in 2020. In the workplace, it is important that your employees are trained on empathy and acceptance. The organization should have a well-developed policy against harassment or discrimination. You must train employees on effective, thoughtful communication and the importance of respecting everyone. In response to this movement, thoughtful employers promote diversity, acceptance and inclusion in the workplace and take any accusations or reports of racism with critical seriousness.

Again, we recommend that you contact your employment counsel to discuss your best strategy.

LGBTQ+ Protections

The EEOC released guidance stating that workplace discrimination and harassment based on sexual orientation, gender identity and gender expression violated Title VII of the Civil Rights Act of 1964. In 2020, the U.S. Supreme confirmed that Title VII protects gay and transgender employees from such treatment. This decision highlights the need for your organization to ensure all LGBTQ+ employees feel properly supported in the workplace.

We’re Here to Help

You don’t have to respond to this changing risk landscape alone. Carrying EPL coverage is an effective tool to finance potential employment claims, such as discrimination, harassment and wrongful termination.

We’re here to help you navigate the Employment Practices insurance market. We have resources through our Zywave platform that is updated regularly by their safety and HR professionals. We are eager to work with you and your legal representatives to ensure that you are taking the right steps to avoid EPL claims. 

Just like insurance on your property, the first goal is to avoid the loss. If you do have one, we want to make sure that you are covered and have the right representation and defense. Please call your DRA representative for help on EPL matters.

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