Employment Practices Liability Insurance and Gay Marriage

On a Friday in late June, the Supreme Court, ruled in a 5 to 4 decision, same sex couples may now be legally married in all 50 states. Many people rejoiced while many people thought America was going to hell in a hand basket. Regardless of where you stand on the issue, the impact of this decision has huge ramifications for small and medium sized businesses specifically in the area of employment practices liability insurance or EPLI.

The legalization of gay marriage initiated a tsunami of calls by business owners to their attorneys. The question of how the Court’s decision impacts business owners of small and medium sized businesses unfolded immediately. There are two broad areas businesses need to address and those are benefits and discrimination.

Benefits: Many local companies operating in Texas have declined to offer partner benefits such as health insurance, family or medical leave, and retirement benefits to gay couples. If this was the case in your company, those benefits must now be offered to everyone, gay or straight, regardless if any employee has communicated their sexual orientation. There is no way around this as the Supreme Court decision supersedes all prior state law. Failure to extend equal benefits runs the risk of incurring legal action from an employee.

Offering the same benefits to everyone requires several changes from employers. Tax reporting systems need to be updated as do health insurance enrollment forms. Policies addressing family medical leave, retirement and life insurance beneficiary information also need to be updated. In short, any discretionary employee benefit must accommodate the new definition of spouse.

Discrimination: The Equal Employment Opportunity Commission, or EEOC, has ruled any discrimination in the workplace on the basis of sexual orientation is illegal according to Federal Law. The recent ruling by the EEOC broadened the definition of sex discrimination to include sexual orientation.

Employees are protected from discrimination in hiring, firing, and promotion decisions, as well as work conditions such as harassment. While 22 states had already banned such discrimination prior to the EEOC’s ruling, workers in all 50 states are now protected, and may take any discrimination complaint to their local EEOC office and be heard.

Many Texas based small and medium businesses were not, and may still not be, prepared for the impact these two rulings have on them. Too many small businesses haven’t seen the need for employment practices liability insurance, or ELPI coverage. Either they think they are too small for it, or somehow think no employee will ever sue them. Unfortunately, this may not be the case, and finding out after you’ve been served, is too late.

Employment practices liability insurance may or may not be included in your company’s general liability insurance. In many cases, ELPI is an option; if it’s not listed, then it’s not included or covered. ELPI provides coverage for wrongful termination, sexual harassment, discrimination, breach of employment contract, negligent evaluation, failure to employ or promote, wrongful discipline, deprivation of career opportunity, wrongful infliction of emotional distress, and mismanagement of employee benefit plans.

Any small or medium business with two or more employees should have ELPI coverage. Adding it to your current coverage won’t cost much either. Providing a safe workplace free from discrimination of any kind with equal benefits for all is not only required by the law, it’s also good business! Share your comments, questions, or experiences with me on our Google +, Facebook, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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