Eight Common Mistakes Employers Make

California employers are subject to countless federal, state and local laws, imposing various requirements, including wage and hour and anti-discrimination laws. Unfortunately, many employers – particularly small businesses – are unaware of their obligations and violate various worker protection laws, often resulting in expensive lawsuits, civil settlements and penalties. Here are some common, costly mistakes employers make:

Misclassifying Non-Exempt Workers as Exempt
Generally, all workers are entitled to overtime pay. However, some employees – typically executive, managerial or professional employees – are “exempt” from overtime and receive a flat salary, regardless of the number of hours the employee works. However, the exemption only applies in certain narrow situations defined by law, and many employers improperly classify workers as “exempt” when they are legally entitled to overtime wages and meal and rest break requirements.

Misclassifying Employees as Independent Contractors
Determining whether a worker is an employee or independent contractor depends on a number of factors, and the law in this area is still evolving with the recent California Supreme Court decision in Dynamex v. Superior Court, and California’s new AB5 legislation. All workers in California are presumed to be employees, and there are only limited circumstances under which a worker (particularly if the worker will be doing the type of work that is part of the employer’s normal business) can be treated as an independent contractor. Because of the complexity surrounding the classification of independent contractors, and the enormous potential liability for employers for misclassifying workers, it is imperative to speak with legal counsel before treating a worker as an independent contractor.

Failing to Train Supervisors Regarding Employment and Labor Laws
Employment laws prohibit employers from taking action against an employee for certain reasons, including discrimination on the basis of a protected characteristic such as race, religion, gender, sexual orientation, national origin, pregnancy, etc. Employees are also protected from retaliation for complaints of discrimination or illegal activity. It is vital to train supervisors to manage their employees in accordance with all applicable laws.

Failing to Use an Employee Handbook
An employee handbook informs employees about the employer’s values and policies and facilitates compliance with employment and labor laws. A proper employee handbook can be an essential shield for an employer to raise when defending wage and hour claims or discrimination claims.

Failing to Properly Document Employee Job Performance
Proper documentation clearly establishes the employer’s expectations and where the employee failed to reach them. Written job descriptions and employee evaluations serve as training tools, performance measures and critical evidence in the event you have to terminate an employee.

Failing to Accommodate Disabled Workers
The law not only prohibits employers from discriminating against those with disabilities, it also imposes a duty on employers to engage in an “interactive process” with employees who may have a disability and to “reasonably accommodate” disabled employees so they can perform the essential functions of their job. Accommodations may include assistive devices, a modified work schedule or a restructuring of job duties.

Failing to Comply with Wage Payment and Notification Requirements
California requires employers to pay their employees in a certain manner and provide written notice of pay periods and amounts. There are no less than ten itemized requirements that must appear on all employee pay stubs. Failure to comply can subject the employer to penalties and a civil lawsuit, and every pay period in which a violation of these requirements exists can trigger a separate penalty. 

If you have questions about your compliance in regards to any of the foregoing employment laws, please do not hesitate to contact an employment attorney at Schneiders & Associates, L.L.P. for advice and legal guidance.