Employment Practices Liability Definition

The "Legal-Ease" Glossary
Employment Practices Liability

This refers to an employer's responsibility to treat employees fairly and not discriminate against them or violate their civil rights, as interpreted and enforced by the Equal Employment Opportunity Commission (EEOC).

Currently, the EEOC makes it illegal to base employment decisions based on a person’s…

  • Age (40 and older).
  • Disability.
  • Genetic information.
  • Veteran status.
  • National origin.
  • Pregnancy.
  • Race or skin color.
  • Religion.
  • Sex.

It’s also illegal to sexually harass employees or retaliate against employees who report workplace discrimination or illegal harassment.

Each of these groups is called a “protected class.” Almost every US citizen belongs to some sort of protected class. The laws are designed to level the playing field so that employees are hired, compensated, promoted, or fired based on their merits – not their other attributes that have no bearing on their ability to do the job.

Employees who belong to a protected class and feel they are being discriminated have the legal right to file a claim against their employers. Employment Practices Liability Insurance (EPLI) can pay for those lawsuits. This type of insurance can cover…

It’s an important policy for a small-business owner to have, especially if they have 15 or more employees. That’s when the federal EEO laws apply to a business. However, each state has its own EEO laws, and they may take effect when you have only a couple employees. Even if government agencies don’t intervene, your employees can always sue your business on their own.

To learn more about workplace discrimination and EEO laws, check out our EPLI blog series.


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