These Are the Risks Every Employer Faces
Over 160,000 civil lawsuits are filed in California in every year. In 2009 alone, the State of California conducted 9,034 employment practices inspections, resulting in 4,367 citations costing business owners over $10 million. Last year, nearly 100,000 employees filed Equal Employment Opportunity Commission complaints. This number has remained above 79,000 since 1997.
It frequently costs an employer over $150,000 to defend itself against one employment practices claim. Adding to those costs, many California labor laws award attorney’s fees to the employee’s attorney at the end of a case even if the wage award is small. Often, the employee’s attorney’s fees are many times higher than the employee’s actual award.
Typical Wage and Hour Violations
Misclassifying a person as an independent contractor when in fact he or she is an employee.
Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee. (Labor Code § 3357)
Failing to pay an employee minimum wage for all time worked.
An employer can be ordered to pay 2 times the value of the minimum wages that were unpaid.
Misclassifying a person as exempt from overtime pay when in fact they are entitled to it.
Under California law, the employer is required to prove that the employee is not entitled to overtime, not vis-a-versa.
Failing to maintain appropriate timekeeping records for hourly, non-exempt employees, including meal periods taken and missed.
Penalties for record keeping violations can add up to $4,000 per employee.
Failing to provide non-exempt employees appropriately timed rest and meal periods.
The California Supreme Court recently set out new guidelines governing employee meal and rest breaks. (Labor Code § 226.7)
Maintaining a tip pooling policy in a restaurant that violates Labor Code § 351.
The Employment Policies and Practices Audit
A Cost/Benefit Approach to Claims Prevention and Management
Let us help you lower your risk profile and avoid costly employee lawsuits. We will evaluate all major aspects of your company’s employment policies and practices to ensure the company is in compliance with California and federal labor laws.
- Hiring practices
- Employment handbooks and codes of conduct
- Classifying independent contractors and employees
- Compliance with applicable California Wage Orders
- Exempt versus non-exempt from overtime compensation
- Overtime pay policy and practices
- Recordkeeping practices
- Meal break policy and practices
- Rest period policy and practices
- Uniform and tool policies and practices
- Expense reimbursement policy and practices
- On-call wages
- Prevailing wages
- Piecework wages
- Commission wages
- Tips and tip-pooling
- Discrimination, harassment and retaliation investigations
- Termination practices and the effective use of severance agreements