HR Management & Compliance

Fines for Non-Compliance Add Up Fast in California

Penalties for noncompliance with California wage and hour
laws can add up surprisingly fast, says attorney Christopher C. Hoffman. And
it’s surprisingly easy to run afoul of California‘s
many tricky requirements. (See yesterday’s CED to read Hoffman’s tips on rest periods
and meal breaks in California.)


Hoffman is
the regional managing partner of Fisher & Phillips, LLP in La Jolla. His remarks came at the Society for Human
Resource Management (SHRM) Annual Conference and Exhibition, held recently in San Diego.


A Typical Example of Minor
Infractions Meaning Major Fines


Take this
example, says Hoffman: A manager deducts 60 minutes a day for a meal period,
but the employee only takes 20 minutes. If that happens for 4 years, with a
penalty of 1 hour of pay per violation and a pay rate of $10 per hour:


violations a week at $10.00 = $50 per week

            times 50 weeks -$2500

            times 4 years = $10,000


there’s 40 minutes of off the clock work each day at the overtime rate is
another $10,000 over 4 years

attorney’s fees

incorrect pay stub penalties


that’s just for one employee,” Hoffman says.


Accurate Time Records Are Critical


If you
have no records, Hoffman says, you’re at the employee’s mercy. Courts may well
believe whatever the employee tells them. You are responsible for the accuracy
of the records.




Independent contractor or employee? Guessing wrong could
cost you big. Don’t take a chance – be sure with our brand-new Special Report
specifically for California
employers, Independent Contractors:
Avoiding Costly Lawsuits Through Proper Classification
. The Report is yours
free with a no-risk 7-day trial to CEA Online. Download your copy now »



Here are
the particular problems Hoffman sees over and over:


  • The
    herding cats problem.
    employees just don’t like to keep time records.
  • The
    exact same time every day problem.
    An employee who is in at exactly 8, out at 12, in at 1, out at
    5 every day of the year is suspicious).
  • The
    automated system problem.

    Automated systems have blind spots, Hoffman says. “Eliminate all
    artificial restrictions.  Deal with
    early punch-ins with discipline,” he says.
  • The
    bad incentives problem.

    This happens, Hoffman says, when for example, supervisors are judged
    solely by department efficiency. That’s a powerful incentive to hide


and hour seems like it should be easy, but it never is. Hours worked, rest
breaks, exemptions, independent contractors, the list goes on and on. There
are, however, good resources to help you out.

One excellent
one our editors recommend is our brand-new Special Report, Independent Contractors:
Avoiding Costly Lawsuits Through Proper Classification

The Report
leads you step-by-step through the process of evaluating whether a worker
should be classified as an employee or an independent contractor.


It examines
various tests for determining a worker’s status and presents 12 steps you can
take to minimize the risk of misclassifying a worker. It also provides
information about how to deal with the consequences of misclassification, as
well as a sample, customizable legal agreement that you can use with your
independent contractors.


Claim your
copy now