As an employer, you take on a unique level of risk. With federal and state employment laws and other employee protections, business owners need employment practices liability insurance to protect against potential claims. Part of managing these policies and preserving your coverage is creating adequate documentation of your employment practices. Understanding the documentation needed and why it matters can help protect your business.
Why Documentation Matters for Employment Practices Liability
The first step for business owners to protect their EPLI coverage is understanding why documentation is essential. Establishing procedures that address the necessary paperwork helps businesses to identify performance issues, reward successes, and enforce employment-based policies.
Documentation provides the necessary tools for consistency and professionalism in the workplace, which reflects well with employees and clients. Not only that, but comprehensive documentation also protects businesses in the face of accusations of impropriety. Your company’s employment records can help you fight discrimination claims with evidence of compliance.
What Documentation You Need for Employment Practices Liability
Once you understand the importance of documentation, consider what types of records your business needs to keep. When you file a claim against your EPLI policy, you need documentation to prove that your business was not negligent in the situation.
Your employee files should clearly illustrate each individual’s experience with the company from start to finish.
Recruitment
Employee records should include applications, resumes, interview notes, and any non-disclosure or employment contracts. You should also include the offer letter, the employee’s provided personal information, and verifications from the hiring process. It shows due diligence and equitable treatment in hiring.
Performance
Employee records of performance reviews, salary adjustments, bonuses, and awards are essential in your EPLI documentation. These records show trends in the employee’s attendance, behavior, and overall job performance if you need to support a termination or promotion decision.
Accommodations
Employment practices liability also addresses discrimination claims. Any medical accommodations, leave requests, or doctor’s notes should stay on file within each employee’s records. It provides clear evidence of each individual’s accommodations and other medical history.
Termination
Terminated employees may claim wrongful termination, so your business needs comprehensive records to support each decision. Keep all termination files, including any resignation letters, termination notices, exit interview information, and signed separation contracts.
How Procedures Help With Documentation for Employment Practices Liability
Establish clear procedures for your business to ensure adequate documentation for your employment decisions. When your business has defined procedures, it sets expectations for your employees, provides clear and detailed guidelines for your hiring managers, and allows for feedback and employee involvement. Remember that procedures should evolve as the employment climate changes, so consider changing needs as you assess your documentation policies.
If you’re questioning the value of documentation in EPLI matters, consider the risks of facing a liability claim without the evidence to support your company’s decisions. The proper documentation can distinguish between costly employment practices and liability settlements and protect your company’s reputation as a responsible and reasonable employer.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
