California Employment Law Tips: Prepping for a Labor Audit
by Sue M. Bendavid
When it comes to California employment law, I always tell my clients: The best employer defense is prevention.
That means that as an employer, you should be prepared for everything – including a potential visit from the U.S. Department of Labor, or the California Labor Commissioner. (Read my previous blog, California Labor Laws – Ready for a Labor Commissioner Visit? for more information regarding what usually happens when you do get such a visit.)
But if, as a California employer, you want to stay one step ahead of the Commissioner and potential employee claims, there are some things you can do to prevent penalties or litigation.
Best Employer Defense –10 Tips from a Los Angeles Employment Lawyer
Prevention begins with good employee policies. Though a wage and hour audit can cover a whole host of topics, the typical situation focuses on overtime, exempt/non-exempt, meal and rest period rules and accurate recordkeeping and documents. See if you can answer “yes” to all of these questions, to see if you will pass a wage and hour audit:
Are you paying the correct overtime premiums for hours worked by non exempt employees in excess of eight in the day, and 40 in the workweek?
2. Exempt & Non-Exempt Employees
Have you correctly characterized employees as “exempt” (not entitled to overtime pay) rather than “non-exempt” (entitled to overtime)?
3. Independent Contractors
Have you correctly identified which workers are company employees and which are independent contractors?
4. Meal Periods
Do your employees clock in and out and take a minimum of 30 minutes of duty-free meal periods after no more than five hours of work?
5. Rest Periods
Do you provide your employees with a 10 minute rest break in the middle of each four hour work period?
6. Off the Clock Work
Do you prohibit your employees from working “off the clock”?
7. Correct Wage Statements
Do you provide itemized wage statements with all required data, and do they correctly reflect pay rates and hours worked?
8. Rounding Policies
If you round off an employee’s time worked, do you comply with the law and pay the employee accurately?
9. Time Clock Corrections
When you make changes to time records, do you ask employees to verify the information is accurate and to initial the corrections?
10. Child Labor
Do you have the appropriate permits needed to employ minor workers?
If you answered “no” to any of the above California employment law questions, you should re-evaluate your company’s wage and hour policies and procedures. Correcting mistakes now will save you stress and expense in the long run. In fact, you can be held liable for violations going back for several years – it’s best to make sure you have everything in order now.
As a Los Angeles employment lawyer, I know most employers get into trouble because they simply make administrative mistakes, or don’t have good wage and hour employee policies and practices in effect. As I said, the best employer defense is not offense, but prevention.
Employment Defense Attorney Sue M. Bendavid is Chair of the California Employment Law Practice Group, who provides counsel and litigation services for business owners and supervisors throughout the state. Contact her via e-mail: firstname.lastname@example.org