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Business Insurance Protects From Overtime Claims


H.R. 5159, also known as the Schedules that Work Act, ensures that workers can have flexible work schedules. This has, however, led to employees rendering a lot of overtime.

The hospitality and retail industries are among those most impacted by H.R. 5159, especially hotels, 24-hour shops, and food joints. Confusion regarding the coverage of related laws such as the Fair Labor Standards Act (FLSA) has caught many businesses off-guard. This resulted in a rise in wage and hour claims, namely in 2010 to 2011 where filed lawsuits went up by 15 percent.

Overtime pay as defined by the FLSA must be 1.5 times the regular hourly wage in excess of 40 hours a week, but it’s not that simple. Occupations that make commissions (real estate agents, for instance) have higher overtime pay, resulting in conflicting wage and hour claims. Businesses thus need to find ways to protect themselves from costly litigation.

Fortunately, wage and hour practices fall under the realm of employment practices liability (EPL). Businesses can get EPL small business insurance to cover the costs of settling wage and hour claims. It’s imperative for EPL insurance carriers to report these claims to the EEOC prior to filing insurance claims.

Business owners are encouraged to inquire about and purchase EPL insurance from a reputable small business insurance agency. After all, it pays to be protected from the financial repercussions of the law.


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