Jeffrey (Jeff) H. Ruzal and Raymond T. Mak, Members of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, were quoted in SHRM, in “EPLI Often Excludes Wage and Hour Claims,” by Allen Smith.
Following is an excerpt:
Historically, employment practices liability insurance (EPLI) hasn't covered Fair Labor Standards Act (FLSA) and similar state law claims, so employers shouldn't mistakenly assume they'll be reimbursed by EPLI for their wage and hour claims. Nonetheless, employers may be able to recoup their attorney fees and defense costs, even for wage and hour claims, and perhaps more, depending on the terms of their EPLI policies.
"Often, insured businesses mistakenly believe that they are covered for all workplace litigation, regardless of the underlying claim," said Jeff Ruzal, an attorney with Epstein Becker Green in New York City. "This is often the case with wage and hour claims, which are typically not covered by insurance, unless businesses purchase a specific rider that covers such claims. Even in such cases, coverage is often limited to defense fees and costs but not judgments or settlements."
History of EPLI …
Defense-only coverage is still subject to the exhaustion of the policy deductible, said Raymond Mak, an attorney with Epstein Becker Green in New York City. …
Selection of Counsel …
Otherwise, insurance companies may require the use of their own law firms, even though to the employers, the attorneys are strangers, Ruzal noted.