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Latest study reveals states with highest employment lawsuits

It doesn't matter whether it's a small, start-up company with three employees or a large conglomerate like Wal-Mart-businesses of all sizes continuously face labor lawsuits.

According to recent data, businesses in some states seem to face a higher risk of being sued by a current or former employee. In some areas the risk was as high as 60 percent.

So what's the risk for business operating in the state of Georgia?

The survey

Hiscox, a well-known insurance carrier, released the information after gathering information from employment charge activities from the Equal Employment Opportunity Commission, or EEOC, and similar entities on state levels. Employers with at least 10 employees made up the bulk of the study.

The results revealed that businesses operating in New Mexico, Washington, D.C., Nevada, Alabama and California had the highest risk of an employment lawsuit,

Compared to the national average of roughly 11 percent, the data showed that New Mexico businesses, for instance, had a whopping 66 percent chance.

So what are the reasons behind such higher probabilities?

Why the higher probability?

One spokesperson from Hiscox points to state law as a possible culprit. Each state has different labor laws and, depending on the law, can impact businesses differently.

Companies operating in riskier areas typically have state regulations that bestow greater protections for employees or greater obligations and risks for employers than federal law provides.

Is Georgia at risk?

The state of Georgia, fortunately, was not among the list of high-risks states. However, that doesn't mean Georgia is free from labor lawsuits and stringent employment regulations.

Along with Mississippi, Georgia state law, for instance, mandates that employers use a federal e-verity system as a way to keep tabs on employee legally allowed to work in the country.

The study does reveal some good news. Overall, the national average for employment lawsuits is down from last year. The Hiscox 2014 study shows that businesses had a 12.5 percent risk of facing an employment lawsuit.

For more information about business litigation or specific employment law regulations that pertain to a specific entity, click here.

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