Other unfunded post-employment liabilities, which include retiree healthcare costs, account for $5.7 billion of the city's outstanding debts.
The risk may be voluntarily assumed, as in insurance contracts, or may be imposed by law, as in the case of employers' liability for wrongs committed by employees in the course of their employment.
Increasingly, appearance-based discrimination claims are triggering a barrage of employment lawsuits and putting Title VII of the Civil Rights Act of 1964 to the test for determining levels of employer liability.
While social insurance is preferred to the employer liability approach by social security experts because it can give better protection, employer liability is still widely used in developing countries not only for employment injury but also for sickness and maternity benefits and employer severance payments.
More than 100 insurance firms in America now offer "employment practices liability insurance" (EPLI), which covers employers' legal costs, damages and settlements in lawsuits for discrimination and harassment.Perhaps the most potent influence on the growth of litigation in America has been its workers' lack of job security.
Having employment practices liability insurance that covered his legal expenses strengthened his resolve.
Some companies mitigate this with generous severance packages, ironclad employment-at-will provisions and employment practices liability insurance.
When it was introduced a decade ago, employment practices liability insurance seemed like the perfect response to changes in federal law that increased the risks for employers.
"We are not making money on this coverage line and have not been for some time," said Michael J. Maloney, an executive with Chubb, one of the largest providers of what is called employment practices liability insurance, which covers bias, harassment and similar claims brought by employees.
In a letter to Fairbrother one payroll company wrote: "We can save you money – 20% of your labour costs – by reclassifying PAYE staff, paying them through CIS [a construction industry tax scheme for self-employed people]." It continued: "Last year this saved our clients over £25m in Employers NIC [national insurance contributions], placing tax and employment law liabilities with us".
