The many new laws being passed by congress and state legislatures represent a significant challenge for Human Resource professionals.  These increased risks are magnified by other events occurring simultaneously with the enactment of new employment laws.  First, the willingness of workers to file claims against their employers has dramatically increased in the past year.  The EEOC reports an average 15 percent increase in claims last year, led by a 29% increase in age claims and 23% increase in disability claims.  Second, President Obama has promised a significant increase in funding for enforcement agencies (such as the EEOC, DOL, OFCCP, NLRB, OSHA and others) and has appointed many pro-employee leaders as the new heads of those agencies.  Third, court decisions and some of the new laws have significantly eased the burdens of proof for employees to establish discrimination.  Finally, the recession has led to multitudes of terminations - which are the most risky personnel decision and the most likely to lead to a claim.  This combination of legislative, legal and economic factors is creating a "perfect storm" of unprecedented legal risk to employers.
 
Many employers may look to add or increase Employment Practices Liability Insurance (EPLI) coverage to respond to this elevated risk.  If so, this is a decision that HR professionals need to be integrally involved in.  There are a wide variety of EPLI coverage terms and the use of EPLI can have a significant, and possibly unexpected or unwelcome, impact on the functioning of an organization's Human Resource department.

 

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