What is the employer duty to indemnify an employee in California?
As per California law, the employer becomes responsible for the compensation of staff for all the losses and damages sustained in course of the work. However, given the fact that the employer must cover all the expenses for lawsuits and damages which fall into the scope of the employee's work, the aim of the company risk management is to ensure that they are at the lowest level possible.
That is the reason the employer`s obligation on this is based on the understanding that the most part of the employee`s job on spot do fall under the control and management of the employer. Therefore if the employer is responsible for the situation, he/she is also responsible for the consequences.
There are several key things to know about employer’s duty in California to indemnify employees in lawsuits:
- The fidelity is extended no matter the parameter of the lawsuit, whether it is under state or federal law. Suits are not limited to discrimination and harassment cases. Also, some common lawsuits include wage hour violations, customer or vendor’s breach of contract, and other employment-related claims.
- Indemnification will cover all the legal defense cost including the one that arises as a result of the claim which has been made against the employee.
- The employee must only carry out acts, either consistently or occasionally for the employer's benefit within the limits set on her employment. For this particular reason, the defendant could still get indemnity even if he committed unauthorized wrongful acts, if they happened while he was on job.
- The exception is when the employer won’t owe the employee indemnity as is the case where the act is an intentional or criminal misconduct, or the employee acted in bad faith.
- Employees do not have their indemnification rights waived or signed away by employers as a condition of their employment. If such act was done, it will go against the general public policy protections by the State of California.
The knowledge of employer indemnification requirements will enhance the understanding of the proper protections enacted either by the companies or the employees. It is an enticing financial tool for staff to go about their duties at work. One of the ways this technological development reduces price volatility is allocating the risk in the right way between businesses and their workers.
