With the number of wage and hour claims against employers on the rise, Marsh has launched a new insurance product that reimburses companies for defense costs, settlements, and judgments for actual or alleged violations of the Fair Labor Standards Act (FLSA) or similar state and local laws.
The Marsh Wage and Hour Preferred Solution is offered exclusively through Marsh and its international specialty placement broker Bowring Marsh. The policy provides up to $100 million of insurance coverage for wage and hour claims, which generally are excluded under traditional employment practices liability insurance policies. Examples of such claims include allegations that an employer failed to pay employees for overtime hours worked, failed to provide or pay for meal breaks and rest periods, or misclassified employees as exempt rather than non-exempt from legal overtime provisions.
The number of these claims filed in federal court under the FLSA — the federal statute that governs payment of wages and prescribes minimum wages to workers — has risen dramatically over the last several years. In 2011, wage and hour claims accounted for 84% of all employment class-action lawsuits, more than tripling the combined total of employment discrimination claims and Employee Retirement Income Security Act (ERISA) claims, according to law firm Seyfarth Shaw LLP. And NERA Economic Consulting reports that between 2007 and 2011 companies on average paid $8.5 million to settle wage and hour lawsuits.
The Marsh Wage and Hour Preferred Solution is tailored for companies with more than 4,000 employees and includes a wage and hour risk management toolkit — provided by Mercer — to assist companies in identifying and addressing potential areas of exposure under the FLSA.
“Wage and hour exposure remains the single largest employment practices–related exposure for US employers, but employers have historically had limited protection from the often staggering costs of wage and hour claims,” said Adeola Adele, Marsh’s employment practices liability insurance product leader. “The Marsh Wage and Hour Preferred Solution addresses this exposure through a risk transfer product, and, at the same time, provides companies with an assessment toolkit to assist in proactively managing their exposure.”
Was this article valuable?
Here are more articles you may enjoy.