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:

5
violations a week at $10.00 = $50 per week

            times 50 weeks -$2500

            times 4 years = $10,000

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

PLUS
attorney’s fees

PLUS
incorrect pay stub penalties

“And
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.

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Here are
the particular problems Hoffman sees over and over:

• The
  herding cats problem. Many
  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
  overtime.

Wage
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.

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