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What is Employment Practices Liability?

By Marlene Garcia
Updated May 17, 2024
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Employment practices liability exists when an employer fails to protect certain classes of employees in the workplace from discrimination set forth in U.S. federal law. These laws prohibit sexual harassment, age discrimination, and discrimination based on race, sex, religion, and sexual orientation. Employment practices liability also applies to wages, wrongful termination, hiring practices, and breach of contract. Illegal employment practices liability extends to public and private organizations with four or more employees. Federal laws also forbid retaliation against workers who file employment practice claims.

The Equal Employment Opportunity Commission investigates claims of discrimination in the workplace. Employees or prospective employees cannot be treated differently because of the color their skin, their sex or sexual preferences, religion, or disability. For example, an employment practices liability might arise if an employer discriminates against a pregnant woman through demotion or lay-off. These protected classes of people cannot be denied benefits or leave, paid less than others, or refused employment. Accommodations for disabilities are also required to avoid employment practices liability.

The U.S. Fair Labor Standards Act defines laws that pertain to wages and overtime pay for hourly workers. A private, federal, state, or local government employer can avoid employment practices liability by paying at least minimum wage and by paying one and a half the regular pay rate for more than 40 hours a week. The law also protects children by restricting the number of hours they may work and guarding them from hazardous jobs.

Men and woman are entitled to family and medical leave under another federal law. They must be given 12 weeks unpaid leave per year to care for a newborn or child they adopt or take into foster care. The U.S. Family and Medical Leave Act also guarantees time off to care for a child, parent, or spouse with a serious illness.

If an employer violates the Uniform Services Employment and Re-employment Act of 1994, he or she might face employment practices liability. The law guarantees that a member of the armed forces retains his or her job after serving in the military. It also prohibits discrimination because of current service, past service, or the possibility he or she will be called to serve in the future.

There are exceptions to the law under certain circumstances. An employer does not face liability if a disability poses a risk to the employee or others. Employment can also be denied if an applicant has a criminal conviction that makes him or her unsuitable in certain positions. Age discrimination is permitted in dangerous occupations, such as jobs in law enforcement and firefighting.

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