Employment Agency Liability: Can Staffing EPLI Claims be Prevented?

Employment Agency Liability Can Staffing EPLI Claims be Prevented

Employment Agency Liability: Can Staffing EPLI Claims be Prevented?

Employment Practices Liability Insurance, or EPLI coverage, is a type of Professional Liability Insurance and Employment Agency Liability policy that protects your company in the event that an employee or the U.S. Equal Employment Opportunity Commission (EEOC) claims that it has violated an employee’s civil rights. Although the candidates recruited by staffing agencies are employed by the agency’s clients, the agency may still be held liable for Staffing EPLI Claims. Potential violations include but are not limited to situations (intentional or not) involving:

  • Wrongful Termination
  • Discrimination
  • Sexual Harassment
  • Slander and Libel
  • Privacy Invasion
  • Emotional and Mental Distress

The advantage of having EPLI coverage is that it will reduce your employment agency liability, and protect your company from the high costs of sensitive, discrimination based lawsuits. It’s important to remember though, that EPLI insurance cannot prevent these claims from happening all together. Unfortunately, many incidents that lead to EPLI cases are unintentional on the part of the employment agency involved, but they can still be held liable regardless. Here are some tips to share with employment agency staff and managers avoid the kind of mistakes and accidents that can trigger an EPL Lawsuit.

Implement regular diversity training for your employees. Training sessions should focus on preventing acts that the EEOC is watching fore, including discriminatory hiring and referral practices.

Reevaluate your agency’s policies and practices. An agency should never be using policies that guide certain candidates into specific positions based on their status in a protected group.

Reexamine screening tools and restrictive application processes. Background checks and pre-employment tests should be in line with EEOC standards.

Avoid tricky client requests. Sometimes a client might ask an agency for an unlawful request- do not comply! The employment agency could be found at fault.

Adjust your focus. Since the EEOC’s goal is to eliminate barriers for groups that have historically had a difficult time finding employment based on their gender, age, race, religion, disability, and ethnicity, pay specific attention to these groups.

It’s important that those who own and operate employment agencies to be aware of their employment agency liability risks, and understand what they can do to reduce the risk of an Employment Practices Liability lawsuit. World Wide Specialty Programs has always had a singular purpose- to design, develop and provide staffing insurance programs for the staffing industry. Working with over 2,000 insurance brokers nationwide, we know the staffing industry better than anyone, and can provide great options for your staffing industry insurance needs. Contact us today for more information at (877) 256-0468. 

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