In yesterday’s CED, we covered the first two “Worst Mistakes” your managers are making. Today, #3 on the list — plus an introduction to a webinar next week that can help you solve it.
Worst Mistake #3: Basic Wage/Hour Stumbles
Employees will tolerate a lot, but start messing with their paychecks, and there will be trouble, guaranteed. Many wage/hour problems seem relatively small, but they can be magnified dramatically as class actions.
For example, say you fail to pay 5 hours of overtime per week to an employee. Call it 250 hours in a year, with a $10 an hour premium, and it’s $2500. No big deal. Now multiply by 200 employees. Whoops, that’s half a million. Double it and add in attorney’s fees — yours and the employee’s — and you’ve got a pretty big number.
Here are the most common wage/hour failures:
Failing to Pay for All Hours Worked
One common scenario is employees who put in unpaid hours willingly (“Don’t worry, I’ll finish that up at home.”). That’s thoughtful, but it doesn’t relieve you of the obligation to pay.
The other common scenario is when people are expected to do setup before clocking in (filling cash register, setting up tables) or do cleanup after clocking out. (“Do you mind just prepping for tomorrow after you clock out?”)
Another increasingly common scenario is employees who are expected to take calls or answer email on their smartphones or home computers off hours. If it’s more than a very negligible amount of time, it probably counts as hours worked.
Next week: How to avoid costly misclassification mistakes
Making Special Arrangements
Another wage/hour problem that crops up is that managers and supervisors make special arrangements with employees. For example:
Offering comp time in private sector. There’s no such thing as comp time in the private sector. If employees work, they get paid. (Hours may be exchanged during a work week, however; a non-exempt employee can leave work early and make up the time the next day with no problem as long as both days are within the same work week.)
Lesser or no overtime rate. No matter what employees agree to, or even ask for, they must be paid time and one half their regular rate for overtime hours.
After clocking out. Before clocking in. Employees may want to “help out” and work some hours off the clock, but that is not permitted. As mentioned above, if they work, they have to be paid.
Failing to Properly Calculate the ‘Regular Rate’
The regular rate, the amount on which overtime is calculated, includes non-discretionary bonuses, shift differentials, etc. If such bonuses are awarded after the pay period closes, you have to go back and recalculate.
Exempt or Nonexempt? How To Avoid the Misclassification Mistakes You Simply Can’t Afford To Make in California
In theory, it should be simple: Nonexempt workers get overtime pay, and exempt workers don’t. But in the real world, of course, figuring out who’s who is anything but simple. And even the best-intentioned employers misclassify employees on a regular basis.
In fact, the federal Department of Labor estimates that nearly 70 percent of employers are noncompliant with the federal Fair Labor Standards Act. And it’s not taking this statistic lightly: Last year alone, it set aside $25 million for FLSA enforcement. Plus, the DLSE is aggressively pursuing noncompliant employers at the state level, too.
As if all of this wasn’t bad enough, eager plaintiffs’ attorneys are lining up in record numbers to represent employees in lucrative wage/hour class-action lawsuits — which, given the high rates of employer mistakes, has led some of these attorneys to liken these cases to “shooting fish in a barrel.”
Don’t be the next fish. Join us next Tuesday, August 2, for a can’t-miss webinar —specifically for California employers — on avoiding the most common (and costly) employee classification errors. Bring your supervisors along, too. You’ll learn:
- The specific industries and positions the plaintiffs’ bar and government agencies are honing in on
- How “white collar” exemptions in California differ from the federal rules
- •Why many seemingly exempt positions — including certain analysts, managers, specialists, and salespeople — aren’t
- Why “industry practices” don’t insulate you from liability (and some staggering recent judgments that graphically illustrate this)
- Which managers and assistant managers qualify for the executive exemption, and how to strengthen their exempt status
- Why it’s now harder than ever to successfully establish the administrative exemption
- The limited scope of the computer professional exemption at both the state and federal level, and why the classification of IT workers poses unique challenges
- Why paying employees a fixed salary is not sufficient to guarantee their exempt status — and what you need to focus on instead
- Why your “inside” salespeople aren’t exempt — and how to best structure your “outside” sales positions
- The importance of involving counsel in wage and hour audits
- Your organization’s responsibilities and options if misclassifications are discovered, including strategies for communicating with your workforce about status changes
Sign up today! Can’t make it next Tuesday? Order the CD and learn at your leisure.
Download your free copy of Training Your New Supervisors: 11 Practical Lessons today!