Common Employment Practices Liability Myths

    Posted on: August 25, 2015 by Signature Insurance Group

    When it comes to a disgruntled former employee or applicant, business owners must understand the liability risks they face. The financial toll that can take place if your company is not covered with Employment Practice Liability Insurance (EPLI) can be devastating. Along with making sure that you have the best Southern California EPLI available, you should be aware of some of the most common myths about employment practices.

    MYTH 1: Salary Employees Are Exempt

    While ‘salary’ is a form of exemption, there are many other requirements that truly make an employee ‘exempt’. They may not be able to file overtime grievances, but that doesn’t mean that they aren’t entitled to interest, penalties and more. Assuming someone is exempt due to a salary status could be a costly mistake.

    MYTH 2: Working From Home After Hours Doesn’t Require Pay

    Non-salary employees must be paid for every hour that they work. This means that if an employee is at home after hours answering emails or making calls for the company, they are entitled to compensation.

    MYTH 3: “1099” is Okay for Short Term Employees.

    1099 is an IRS form that is used to document money paid to independent contractors. An employee is an employee whether they work for you for a week or a year and they require payment via payroll and a W-2 form. Misclassification can lead to back taxes and other fees.

    MYTH 4: My Company is Small and My Employees are Like Family.

    Even if your employees are actually family members, when times are tough and stress is high, a lawsuit could still occur. Small businesses with close-knit staff are just as vulnerable to employment claims as a large corporation. The only difference is that a small company usually doesn’t have the resources to rebound after a large settlement like a corporation does.

    The fact is that no matter how large or small your company is there are risks when it comes to employment practices. To ensure you and your company are safe from any allegations against your company it is always a wise choice to make sure you have a good EPLI plan is place.

    At Signature Insurance Group, we understand the importance of making sure you and your business are protected. Call us today to find out how we can help you find piece of mind with the correct EPLI policy. 855.972.9437


    Posted in: Business Insurance Employment Practices