5 Tips to Avoid Wage & Hour Liability in California
By: Jade McKenzie
Wage and hour litigation is an area of law that is incredibly nuanced, but incredibly important. Every California employer is faced with the daunting task of avoiding liability for wage and hour law violations. Fortunately, employers can greatly reduce the risk of exposure by following these five simple tips:
1. Avoid Rounding Policies
A rounding policy is one where an employee’s start and stop time is recorded to the nearest segment of time (5, 10, or 15 minutes, for example), rather than recording every minute of time worked. This practice creates the risk of failing to fully compensate an employee for time actually worked. The only way to truly eliminate this risk is to avoid rounding policies altogether.
2. Train Employees on Meal- and Rest-Break Compliance
California law imposes strict requirements for providing meal- and rest- breaks to non-exempt employees. For each violation, the employer must pay a premium, and these premiums can quickly add up. The best way to limit the number of missed meal or rest breaks is to regularly train employees and supervisors on the relevant policies, and carefully document any missed breaks.
3. Do Not Encourage Off-the-Clock Work
Employees must be paid for all hours worked, as opposed to all hours simply recorded. While most employers do not permit off-the-clock work, it is easy to inadvertently encourage this behavior. For example, understaffing or strictly prohibiting employees from working overtime may result in off-the-clock work. To reduce liability, these practices should be avoided. Read more in our posts “Collect Call-In?” and “Bring-Your-Own-Device Policies: What Employers Need to Know.”
4. Ensure Accuracy of Paystubs
California Labor Code Section 226(a) identifies nine categories of information that must be included on every paystub. If this information is properly included, the employer is likely to have complied with this code provision. This is an area of law where liability can easily be avoided.
5. Confirm Employees are Properly Classified
When classifying an employee as exempt or non-exempt, there are several factors that must be considered. As a general rule, an employee should not be classified strictly based on job description or salary. Misclassification claims are becoming increasingly common, and often result in class action lawsuits. To reduce the risk of liability, employers are strongly encouraged to consult with an attorney to ensure their employees are properly classified. Read more in our legal alert “The Wait Is Finally Over – DOL’s New Proposed Overtime Rule Sets Federal Minimum Salary Level Threshold at $679/Week ($35,308/year).”