WORKPLACE LAW -
Workplace Resolutions
Question:
As a business owner, I am wondering if there are employment practices I should review at the beginning of the year. Could you let me know if there is anything you recommend?
Answer:
It’s always a good idea to take stock at the beginning of a new year, and to make sure that your workplace practices are in compliance with the law. While there is no “New Year’s checklist” per se for employers, the following are some suggestions of things that you may want to review and evaluate.
Resolution Number One—Evaluate your employee classifications.
Employees in California are either exempt from the provisions of the California Wage Orders, or they are non-exempt and therefore subject to the Wage Orders’ provisions, which include rules regarding the payment of wages and overtime, and the provision of meal and rest periods. While exempt employees are typically paid on a salary basis and non-exempt employees are generally paid an hourly wage, this is not the determining factor with regard to whether an employee is exempt or non-exempt. Similarly, simply referring to an employee as a “manager” or “supervisor” does not necessarily mean that he/she is truly exempt. Under both federal and state law, individuals who work in executive, administrative, or professional positions may be exempt from most wage and hour regulations. To fall within the executive, administrative, or professional exemptions, an employee must perform certain defined duties, must customarily and regularly exercise discretion and independent judgment in performing those duties, and his/her monthly salary must meet a set minimum. Additionally, in California, employees who perform work in several listed professions, and whose annual salary meets a set minimum, fall within the professional exemption.
It is important that employers periodically review their employees’ classifications in order to ensure that their employees are all properly designated as either exempt or non-exempt employees. By improperly classifying an employee as exempt, an employer can inadvertently deny that employee rights to which he/she is entitled under the Wage Orders. This can lead to significant liability for unpaid overtime and missed meal and rest periods, which can carry a hefty financial penalty for the employer. In order to assess whether your employees are properly classified, you can refer to the California Department of Industrial Relations’ website (http://www.dir.ca.gov/), which contains a description of each exempt category, as well as a list of the criteria that must be satisfied in order to classify someone as being exempt.
Resolution Number Two—Review your timekeeping practices.
Any business with employees who are subject to the provisions of the California Wage Orders (non-exempt employees) should periodically review its timekeeping policy to ensure that employees are properly tracking all time worked. The Wage Orders require employers to keep accurate records of the actual hours worked by their non-exempt employees. Employers should therefore have a written timekeeping policy in place requiring their non-exempt employees to accurately record their hours worked. Employers should also require employees to document when they take their legally required meal periods, and to confirm in writing that they were provided a rest period for every four hours worked. Your timekeeping policy should require employees to sign off on their time sheet or time card, thereby acknowledging in writing that they took all their required meal and rest periods during that pay period.
If you already have a timekeeping policy, you should review your employees’ time records to make sure they are accurate and include all work time and overtime. Payroll records should be checked to make sure overtime is being paid accurately. Under California law, non-exempt employees generally must be paid overtime if they work more than eight hours in a day or more than forty hours in a week. If you do not already have a timekeeping policy in place, now may be the time to prepare and implement one.
Resolution Number Three—Audit your employees’ wages.
The Equal Pay Act (part of the Fair Labor Standards Act) prohibits wage discrimination by employers based on sex. Employers are therefore prohibited from paying one employee lower wages than another employee of the opposite sex for equal work in jobs that require equal skill, effort and responsibility, and which are performed under similar working conditions unless certain specific exceptions apply. It is therefore a good idea to periodically review the wages paid to your employees, along with their job descriptions and their actual job duties, in order to ensure that your employees are being fairly compensated and that no one group is being underpaid for their work.
Next week we will discuss some additional workplace resolutions to consider.
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