Don’t be too surprised if you see a “wage and hour” exclusion in your employment practices liability insurance policy, especially if you have employees in California. While these exclusions purport to bar coverage for claims brought under laws that govern “wage and hour” practices, lawsuits involving “wage and hour” violations often include alleged violations of other labor-related statutes. This was the scenario presented recently in Hanover Ins. Co. v. Poway Academy of Hair Design, Inc. in which a federal court was asked to decide whether a “wage and hour” exclusion applied to a claim that the insured had failed to reimburse reasonable business expenses in violation of California Labor Code section 2802. Continue Reading Claim for Failure to Reimburse Reasonable Business Expenses Not Barred by EPL Policy’s Wage and Hour Exclusion
Employers continue to face a wave of lawsuits alleging violations of various “wage and hour” statutes (overtime pay, meal and rest breaks, etc.). Employment liability insurers have uniformly denied coverage for these claims and have tightened applicable exclusions. Some insurers now offer wage and hour coverage, but these policies and endorsements usually provide only very restricted defense cost coverage. A new source of coverage now exists, courtesy not of insurers but of revisions to the California Labor Code.
New Labor Code §558.1, effective January 1, 2016, appears to create individual liability for violation of California’s wage and hour statutes. Continue Reading New Law May Create Coverage for Wage and Hour Claims