One of the two types of wage and hour claims made by employees against their
employers.
Pay practices claims involve "all other" types of claims that do not
fall within the category of "misclassification claims." The most
common types of pay practices claims include (but are not limited to)
miscalculating the amount of wages owed to an employee; requiring employees to
work "off the clock" and not paying them for such work; not paying
workers for their time spent in "donning" and "doffing"
specialized equipment required for their work; not allowing employees to take
rest or meal breaks; and not paying workers on a timely basis.
(The other type of wage and hour claim is known as a "misclassification
claim" in which an employer misclassifies and thus fails to pay overtime
wages to an employee.) Insurers universally exclude indemnity coverage for both
types of wage and hour claims (i.e., misclassification and pay practices) under
employment practices liability insurance (EPLI) policies. However, a handful of
insurers offers coverage for the costs of defending such claims, albeit subject
to sublimits, typically $100,000 or $250,000.