Glossary
Wage and hour claims, defined
Disputes over how workers are paid: unpaid overtime, missed meal or rest breaks, misclassifying employees as exempt or as independent contractors, off-the-clock work, and errors in final paychecks.
In practice
They are brought under federal and state pay statutes, often as a class or collective action, and the amounts at stake are mostly back pay, penalties and the plaintiffs' attorney fees rather than damages for harm. Standard EPLI policies exclude them, or offer a defense-only sublimit that pays the lawyers but not the back wages, because carriers regard unpaid wages as a debt the employer owed anyway. Restaurants, construction, home care and any business with hourly staff, tips or contractors are the usual targets. The best transfer available is usually that defense sublimit; the rest is managed through correct classification, accurate time records and an audit by employment counsel.
A worked example
Suppose a restaurant group is sued by former servers alleging they were made to clock out before side work. Defense costs $60,000 and the settlement for back pay and penalties is $150,000. The EPLI policy's $100,000 defense-only sublimit covers the lawyers; the owners pay the settlement. Hypothetical.
Applies to: Restaurant InsuranceWorkers' Compensation Insurance