As a business owner, you have been resilient during this pandemic, adapting and responding to keep everyone safe and maintain revenue.  Most business decisions were executed at rapid speeds with the little information that was available at the time.  Some of the original uncertainty and questions have now been answered, but many remain to be seen.  One area of concern is the legal risks associated with employment decisions – past and those yet to be made as the workforce returns - that may give rise to suits filed by employees against employers.    Following is a brief look at the areas where COVID-19 can increase your business’s exposure to these claims.  It is important to understand that a standard general liability policy will not respond to defend your business or pay judgments awarded for these types of claims. Employment Practices Liability is the coverage needed for these situations.

Wage and Hour Claims Remote work initiated by the ‘Stay at Home Orders’ was new for the majority of businesses. Businesses did not have prepared remote policies and procedures, leaving many areas unaddressed - including expectations surrounding meal and rest breaks and defining acceptable work hours. This increases the risk of wage and hour claims, including overtime pay. Businesses may have changed job responsibilities, positions and salaries for some employees without taking into consideration the need for change in exempt vs non-exempt classification. Also, company reimbursement policies for the use of personal equipment often was not addressed.

FMLA and FFCRA Violations  The 'Families First Coronavirus Response Act' allows employees to take paid leave for several COVID-19 related reasons. If an employee is denied the ability to do so or retaliated against for using, they can bring suit just as they can for violations under FMLA. Layoffs, Furloughs, Terminations  For many businesses, ‘Stay at Home Orders’ resulted in temporary layoffs and downsizing, which may become permanent for some.  How employers determined which employees to retain and terminate could be scrutinized, leading to allegations of discrimination.

Discrimination  COVID-19 has caused a significant increase in stress and anxiety, leading to more requests by employees for employer accommodations, such as additional time off, reduced hours, or a change to their work environment. Denying reasonable requests can lead to claims under ADA and state anti-discrimination laws.

Employee Medical Privacy How a business handles a notification that an employee tested positive for COVID-19, who that information is shared with, and if there is unauthorized access to this private information could lead to a privacy claim. As well, failure to retain the medical information separate from the employee's personnel file which is required by the ADA.

Retaliation - Whistleblower and NLRA Employees are protected by OSHA from retaliation when they raise complaints or concerns about workplace safety. Massachusetts has an additional law that further protects health care workers who speak out with this concern. The 'National Labor Relations Act' provides workers with the right to address work-related issues collectively. This includes talking bout work conditions, requesting health and safety precautions as well as refusal to work in unsafe conditions. Treating an employee negatively or firing him/her for participating can result in a claim.

WARN Act For employers with 100 or more full-time employees, this 'Workers Adjustment and Retraining Notification Act' require that they must provide at least 60 days' notice before laying off at least 50% of the workforce during a 30 day period. Due to the rapidly evolving situation, many employers may not have adhered to this requirement.

Employee Health and Safety As businesses urgently responded to the situation without the ability for standard checks and balances, it is expected that claims will be filed alleging safety violations or failing to take sufficient measures to reduce COVID-19 exposures.

Transfer Your Risk - Employment Practice Liability Insurance (EPLI) Workplace cultures, the state of the economy, and changes in employment law have all led to increases in employment-related claims over the years. COVID-19 compounds the risk.  Businesses face the potential of an allegation or suit. Whether legitimate or not, you must respond and defend your business. Employment Practices Liability Insurance (EPLI) can help reduce the financial burden by protecting your business from employment-related claims brought against your company, its managers, and its directors and officers. The average cost of defending an EPLI claim is estimated at $125,000 plus time, damage to reputation, and merely the anxiety surrounding the claim. EPLI covers such things as age and gender discrimination; sexual harassment; wrongful discipline and termination; negligent decisions involving hiring, promotion, and compensation; breach of an employment contract; emotional distress; mental anguish; invasion of privacy; libel; slander; etc.   An additional benefit of this coverage is that carriers provide loss prevention consultant services, toll-free hotlines, and prevention manuals, which are valuable risk-mitigating resources.

Reducing Your Risk As with all business risk, you have four key ways to approach it - Avoid, Reduce, Transfer, and Accept. The mere fact that you are in business with employees eliminates your ability to avoid it. The EPLI provides you a means to transfer some of it to an insurance carrier, and you can opt to accept/ retain the associated risk implications. The key one, though, is reducing your risk. Read more to learn what you can do to mitigate your risk of employment-related lawsuits.

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