Given Proliferating Wage & Hour Claims, Specialized Insurance an Important Consideration for Employers

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Given a dramatic increase in both the number of wage and hour lawsuits and the average cost to employers to resolve one — $4.5 million — a little prevention could be worth at least a pound of cure in this area, Kami Quinn and Jason Rubinstein say in this BNA Insights article. They note that filings of collective wage and hour claims in federal court have more than tripled since 2000.

While the first line of defense is for businesses to review their employment practices, an employer must also consider how its current insurance portfolio would respond to such a claim and whether that likely response can be improved in a cost-effective manner, the attorneys say. The coverage provided by insurance policies for wage and hour class actions can be an extremely valuable corporate asset—even when they provide coverage only for the associated defense costs, Quinn and Rubinstein say.

Originally published in Daily Labor Report on January 28, 2014.

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