How likely are you to be involved in an employment law claim?

Employment lawsuits are filed for myriad reasons, but some companies are more likely to be the subject of one than others.

According to a recent study by specialty insurance provider Hiscox, where you live in the country - and the size of the business you work for - could influence the chances that you will be involved in an employment-related lawsuit. The study reveals that five areas of the country (surprisingly, neither New York nor New Jersey is among them), including New Mexico, D.C., Nevada, Alabama and California, have statistically higher rates of employment-based civil actions than others. In those areas, businesses with at least 10 employees are much more likely to be sued by a current or former employee than similarly situated companies in other parts of the country.

What's behind the discrepancy?

Part of the discrepancy - and the reason why employment lawsuits are more likely in some areas of the country than others - lies in state-level employment laws themselves. California, for example, has some of the most liberal, employee-friendly employment laws in the country. It is much "easier" for employers in those states to violate one or more labor laws, possibly leading to more lawsuits. California's laws are much stricter in many ways than federal laws, which could leave employers with even the best of intentions simply missing the mark.

This is not to say that workers and companies in New York and New Jersey don't find themselves at odds over employment-related issues. There are thousands of complaints and lawsuits filed each year, involving issues as varied as overtime pay, discrimination, harassment, wrongful termination, retaliation and workplace injury.

The cost of employment-related claims

In addition to providing more information about the probable locale for employment-related suits, the Hiscox study gave detailed information about the true scope and cost of employment claims. For example, did you know one out of every five small-to-medium businesses (those with fewer than 500 employees) will face a labor-related lawsuit? Or, that the average cost to defend such a suit - including attorney fees, court costs and settlement - will be about $125,000?

In addition, for cases that proceed to trial and are adjudicated by a judge, the average judgment is approximately $200,000; when juries are involved, judgments are usually much higher, with the median verdict being around $500,000.

High stakes on both sides

Whether you are an employer or an employee, clearly, there are high stakes involved in any employment-related claim. For businesses, there is much to be said about preventing these claims before problems arise. Assuring compliance with all applicable state and federal laws pertaining to labor issues, particularly those dealing with overtime, proper classification of workers (chiefly exempt versus non-exempt and employees versus independent contractors) will help stave off problems.

If you find yourself in the situation where, as an employee, you need to make a claim in order to stop discriminatory, illegal or harassing behavior in the workplace or, as an employer, you find yourself on the wrong side of an employee's allegations, you need seasoned legal help. To learn more about your legal rights and options, speak with the experienced employment law attorneys at the Westchester, New York or Mahwah, New Jersey, offices of Mitchell Pollack and Associated, PLLC.