DOL rule set to broaden liability for employers

March 1, 2024
Business Insurance

Types : In the News

A U.S. Department of Labor rule that takes effect this month may result in more contract workers being classified as employees, potentially requiring employers to provide benefits and insurance coverage such as workers compensation and possibly exposing them to employment-related lawsuits.

The Employee or Independent Contractor Classification Under the Fair Labor Standards Act rule, which was finalized Jan. 10 and rescinds a Trump administration rule, covers employment classification under the FLSA, but employers worry it might have broader influence.

Some experts said the DOL rule will have employers rethinking insurance coverage.

“There may be more confusion about whether certain claims are covered by a policy that the employer has or whether employers would consider getting additional coverage,” said Bill Kennedy, a partner with Philadelphia-based Montgomery McCracken Walker & Rhoads LLP.

Experts say companies may consider adding employment practices liability insurance or directors and officers liability insurance.


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