How to Minimize Individual Liability for Employment-Related Claims

July 12, 2021Articles
Bank Director

Dinsmore partner James Reid was recently published in Bank Director with his article "How to Minimize Individual Liability for Employment-Related Claims," an excerpt of which is below.

Although banks are always allowed to be included in employment-related claims as employers, there is an increasing tactic to include C-suite individuals to create pressure for a quick settlement. Employers can take some preventive measures to minimize the potential liabilities or distractions that can accompany being a named party in a lawsuit.

C-suite individuals may be liable in their individual capacity instead of solely the employer, depending on the claims being brought, and can be found personally liable for actions outside the scope of employment.

Fair Labor Standards Act
Corporate officers and supervisors may be personally liable for violations under the FLSA if they exercise day-to-day control of operations and are involved in the supervision and payment of employees.

Tips to Minimize Risks:

  • Use a committee to make payment decisions.
  • Have multiple avenues to allow employees to report concerns.
  • Make sure non-discretionary bonuses are included in overtime for non-exempt employees.
  • Retain outside counsel to update job descriptions/policies and verify employees are properly classified as exempt or non-exempt.

Read the full article here.