pay practices claims

Pay practices claims are one of the two types of wage and hour claims made by employees against their employers.

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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 offer coverage for the costs of defending such claims, albeit subject to sublimits, typically $100,000 or $250,000.