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:

           

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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cost you big. Don’t take a chance – be sure with our brand-new Special Report
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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.

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
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