HR Management & Compliance

Are You Ripe for a Wage/Hour Lawsuit?

One of the key areas of concern for employers in the wage/hour arena is the misclassification of employees, says Marc Jacuzzi, Esq. of Simpson, Garrity, Innes and Jacuzzi, PC, in South San Francisco.


When an employee performs both exempt and nonexempt work, employers often assume that because the exempt work (such as management and supervision) is the “real job,” the employee is exempt. This is a mistake—under California law, if the employee is spending more than half of his or her time performing nonexempt duties, the person must be considered nonexempt.


First Steps


As a first step towards protecting yourself, Jacuzzi recommends reviewing job descriptions to make sure they are “for real.” If they say one thing but the employee actually does another, you will start off in the wrong place if challenged in an audit or lawsuit.

Check out ERI’s wage/hour HR Management & Compliance Report, exclusively for California employers, and find out how to avoid getting burned in a complicated—and costly—wage/hour suit. Read more.

When beginning this kind of review, don’t announce that you are doing it “for classification purposes.” That could stir up trouble you don’t need. Instead, look at jobs on a case-by-case basis, starting with those where you know employees do a combination of exempt and nonexempt duties, such as the Starbucks “working managers.” Just say you are reviewing job descriptions as part of the normal HR process. Talk to managers, but again, don’t make a point of saying that it is being done for wage-and-hour purposes. Just say that it is being done for compensation purposes.


Start out by looking at areas where you think you may have exposure, maybe in cases where you have had layoffs and managers and supervisors are filling in to keep up with production demands. If you see that you’ve got problems, proceed with care. Jacuzzi points out that it is easy to blunder into a situation where you “create” the problem by uncovering it.


Your Career


A decision about whether to proceed with any kind of investigation should be made by management. The liabilities can be very large because they can go back for years and potentially cover many employees. On the one hand, you don’t want your organization to be blindsided when a complaint is made or an audit begun. On the other, you don’t want everyone pointing their fingers at you if an investigation that you initiated leads to liability that might have been avoided with proper planning.


Our advice is this: Review a sample of job descriptions. See if you think you have a problem. If you fear that you do, consult with counsel before proceeding. If you hide your head in the sand, you could create exposure for your organization. If you get out too far in front too fast, you could end up holding the bag when everyone else runs for cover.


Your Best Defense


Of course, in cases like this, your best defense is a strong offense—in this case, our report, How To Comply with California Wage & Hour Law.


This information-packed 155-page guide, written by an experienced California employment lawyer, features in-depth coverage of all the topics you need to know about in an easy-read, quick-reference style:


  • The California Labor Code vs. the federal Fair Labor Standards Act (FLSA)
  • Who the California wage/hour laws apply to
  • The Wage Orders that cover your organization
  • Hours of work—including travel time, make-up time, meal and rest periods, and the definition of “hours worked”
  • The rules for hourly, salary, and piece-rate pay
  • Bonuses, profit-sharing plans, and tips
  • Overtime and double-time wages
  • Alternative workweeks
  • Tools and equipment, uniforms, and work-related expenses and losses
  • Paid time off—vacation, PTO, holidays, and sick leave
  • Unpaid time off
  • When and how employees must be paid
  • Payment of final wages upon termination
  • Deductions from pay
  • Recordkeeping requirements
  • Pay-related discrimination 
  • And much more!

Order your copy now and try it out risk-free for 30 days. If you’re dissatisfied in any way, just return it within 30 days for a full refund.


Don’t become the next statistic—get your copy of How To Comply with California Wage & Hour Law today.

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