September 2006 Newsletter
The Top 10 Things Employers Do to Get Sued
1. Pay All Employees a Salary. Timecards Are Such a Hassle, and Payroll Is So Much Easier When You Don’t Have to Calculate Overtime. They Are My Employees, So I Can Decide How to Pay Them… Right?
Wrong. Most employers don’t want to deal with timecards and calculating overtime pay. And many feel… If my employee agrees to work for a straight salary, regardless of the hours they may work, what is wrong with that?
Many of the biggest multimillion-dollar awards of back pay and unpaid wages by the courts have been due to an employers' misclassification of non-exempt employees as though they were exempt from overtime.
Under both federal and state law, there are certain employees that are exempt from overtime requirements and they can be paid a straight salary regardless of how many hours a week they work. All employees who do not qualify for an exemption are entitled to overtime pay, and they cannot agree to forego overtime pay in exchange for receiving a salary.
An exempt employee will normally be a high-level executive, professional, or administrative employee. Other types of exempt employees could be certain artists, outside salespeople, and some computer professionals. All others generally are non-exempt.
An employee’s job title is irrelevant to the determination of whether the employee is exempt or non-exempt. An employee with a distinguished job title may not qualify as an exempt employee if the employee’s actual duties do not qualify for an exemption. The job title will not make that employee exempt unless the employee meets all the exemption tests.
All exempt employees must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment. Currently, the minimum in California is $2,340 a month.
However, simply placing your employee on salary does not exempt that employee from wage and hour laws. Even though a non-exempt employee can legally be paid in the form of a “salary,” that employee earns overtime the same as hourly wage earners. For example, a non-exempt employee paid a salary of $500 a week must be paid overtime based on $12.50 per hour ($500 divided by 40 hours), which equals $18.75 per hour for time-and-one-half, and $25 an hour for double-time.
Remember, the law requires that all California employers must keep accurate records of employees' work hours and compensation. Employers must keep records of their employee's: Full name, home address, occupation, Social Security number, and date of birth (if under 18). Time-keeping records must show when the employee begins and ends each work period. This includes time records for meal breaks that show when the break started and ended. The employee's total daily hours worked must be recorded. Total wages and other compensation paid each payroll period. Total hours worked in the payroll period and applicable rates of pay. This information must be made readily available to the employee upon reasonable request.
Please contact the ProSERVICE Human Resources Department if you would like assistance in determining the exempt, or non-exempt, status of your employees.
2. For a Boost in Productivity, Let Your Employees Work through Their Lunch Breaks on Your Busiest Days and Let Them Make Up the Missed Time Off on Your Slower Days.
In general, non-exempt employees are entitled to a half-hour meal break for every work day of more than five hours. For each workday an employer doesn’t give an employee a required meal break, the employer owes the employee one additional hour of pay.
In California, the state Labor Commissioner has made the determination, to avoid this penalty the employer has an “affirmative obligation to ensure that workers are actually relieved of all duty, not performing any work, and free to leave the worksite.”
On-duty meal periods, where employees are paid for their normal meal period and allowed to eat on the job, generally are permitted only in extremely limited situations where the nature of the work truly prevents an employee from leaving and from being relieved of all duty. Additionally, they must be agreed to in writing by the employee and employer, must be paid, and often may be revoked at any time in writing by the employee. For example, the attendant at a small animal hospital may be the only employee on the premises at 3 a.m. when he would normally take a meal break, and so may be given an on-duty meal period.
Again, the law requires that all California employers must keep accurate records of employees' work hours and compensation. Remember that employers must keep track of the in and out period for meal breaks.
The law does not require that employers keep a record of rest breaks. Nonetheless, the best practice is for employers to keep track of all rest breaks. This will avoid claims from employees that their employer did not allow them to take rest breaks (10 minutes for every four hours of work or major portion thereof). This also will allow the employer to keep track of any abuses of the provided rest breaks.
Exempt employees are not subject to the meal break requirements and may work any number of hours without a meal break.
