Safeguarding Your Business Against Wage and Hour Claims

If you’re an employer, it’s vital to be aware of the wide range of wage and hour claims you could potentially face. Not only can these types of employment disputes cause interruption to your business operations, but they can also impact your bottom line. From allegations involving unpaid overtime to failure to provide meal breaks and minimum wage violations, it’s essential for you to take the necessary steps to protect your business interests. Significantly, there are several measures you can take to defend your business against wage and hour claims – and avoid running afoul of the law.

Ensure Your Employees are Classified Correctly

One of the biggest reasons wage and hour claims arise in the workplace is due to employee misclassification. Importantly, California law follows the “ABC test” to determine whether a worker is an employee or independent contractor. Under this test, a worker is considered an employee, and not an independent contractor, if they meet the following three criteria:

• The worker is free from the direction and control of the employer in the performance of their work
• The worker performs work that is outside the usual course of the employer’s business
• The worker is customarily engaged in an independently established trade or business of the same nature as that involved in the work performed

Incorrectly classifying an employee as an independent contractor can come with serious consequences, including substantial monetary fines and potential litigation.

Keep Accurate Timekeeping Records

One of your legal obligations as an employer is to ensure your employees are paid for all hours worked — including the time each employee is “suffered or permitted” to work. By law, workers who put in more than eight hours a day, or 40 hours a week, are required to be paid overtime. For each additional hour worked over this threshold, an employee must be paid an overtime rate of time and a half their regular rate of pay. An employee is entitled to double their hourly wage for all time worked over 12 hours in a day, or if they worked more than eight hours on the seventh consecutive workday in a workweek.

It’s crucial to keep accurate timekeeping records to ensure employees are compensated appropriately for the time they worked. You might consider implementing automated time-tracking, biometric time clocks, or other time keeping software to help improve accuracy. Additionally, managers should be adequately trained in the company’s timekeeping policies and fully understand how to address any potential issues promptly.

Conduct Regular Wage and Hour Audits

When it comes to safeguarding your business against wage and hour claims, one of the most important things you can do is conduct regular audits. With wage and hour audits, you can identify and correct any potential issues before they escalate into a lawsuit. An audit can reveal inaccurate timekeeping, discrepancies in pay, and employee misclassification. Audits can also help ensure compliance with the latest legislation and allow you to take swift remedial action to minimize risk, if necessary.

Have Clear Workplace Policies in Place

Implementing clear workplace policies is an effective way to reduce the potential for misunderstandings — and help protect your company from wage and hour claims. They can also demonstrate a commitment to compliance with the law. An employee handbook should be drafted and distributed to all employees and management that communicates the following:

• Regular employee work hours
• Pay frequency
• How requests for schedule changes will be handled
• How hours will be tracked
• Who is responsible for approving time off
• Which breaks are paid versus unpaid
• How employees should record break time
• How overtime is earned

Critically, a well-drafted employee handbook should address compliance with the state and federal wage and hour laws. It should also provide employees with a clear process for reporting any complaints or concerns about violations.

Ensure Compliance with the Wage and Hour Laws

It’s imperative for business owners to have an understanding of the state and federal wage and hour laws to ensure compliance. Notably, these laws are frequently updated — and it’s important to stay informed about any changes. By taking a proactive approach and working closely with an experienced employment law attorney, you can be in the best possible position to safeguard your business against potential wage and hour claims. A skillful attorney can help you understand your responsibilities under the law, assess any areas of risk, and develop a comprehensive strategy to mitigate those risks.

Contact an Experienced California Employment Law Attorney

Navigating the wage and hour laws can be complex — an experienced employment law attorney can guide you and help you avoid any pitfalls. At White & Bright, LLP, we provide dedicated counsel to employers regarding compliance with the state and federal wage and hour laws, and defend them in the courtroom if litigation should arise. We welcome you to contact or call us at (760) 747-3200 to learn more about our legal services.