Tips for California Employers to Avoid Costly Wage and Hour Lawsuits

 

By Toni Vranjes September 5, 2019
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LONG BEACH—California plaintiffs' attorneys continue to be drawn to wage and hour cases, due to the high likelihood that class and collective actions will be certified and result in large payouts, said William Betley, an attorney with Atkinson Andelson in Riverside.

Lawmakers in the state have passed very strict wage and hour compliance rules for employers, he said during the Professionals in Human Resources Association 2019 California HR Conference.

Wage and hour law is "scary stuff," Betley told attendees. Companies that violate wage and hour rules often attract the attention of plaintiffs' lawyers and trigger costly litigation.

An economic downturn could cause a sharp increase in litigation, he said. Workers who are laid off or terminated often become frustrated and may focus their attention on workplace grievances—which can lead to even more employment lawsuits.

The Nuances of Meal and Rest Breaks

Employers in the Golden State must pay particular attention to stringent requirements for meal and rest breaks and employee wage statements.

The California rules for meal and rest breaks are extremely detailed. In general, nonexempt workers aren't permitted to work more than five hours without an unpaid 30-minute meal break, though they can waive the break if they work no more than six hours. The employer generally must provide a second 30-minute meal break for those who work more than 10 hours in a day.

[SHRM members-only toolkit: Complying with California Wage Payment and Hours of Work Laws]

Under the 2012 Brinker Restaurant Corp. v. Superior Court ruling issued by the California Supreme Court, employers don't have to police breaks, but they must provide a "reasonable opportunity" for workers to take a 30-minute meal break.

In addition, workers are entitled to a paid rest break of at least 10 minutes for every four-hour work period or major fraction thereof.

The meal and rest breaks must be uninterrupted, and employers that violate any of the requirements could face large financial penalties.

Betley urged employers to have very specific workplace policies explaining the nuances of meal and rest break requirements. Also, employees should verify in writing that the company provided the opportunity to take the required breaks.

Wage Statement Details

California's requirements for wage statements also are very detailed. California Labor Code Section 226 specifies nine elements that must be included on pay stubs:

  • Gross wages earned.
  • The total hours worked by the employee (unless the employee is exempt from overtime).
  • The number of piece-rate units earned, if applicable.
  • All deductions made from wages.
  • Net wages earned.
  • The pay period beginning and end dates.
  • The employee's name and only the last four digits of his or her Social Security number (or an employee identification number other than a Social Security number).
  • The name and address of the legal entity that is the employer.
  • All applicable hourly rates in effect during the pay period and the corresponding number of hours the employee worked at each hourly rate.

Under the Healthy Workplace Healthy Family Act, employers must also show how many hours of paid sick leave an employee has available.

In California, wage statements must be "flawless" to avoid potential lawsuits, Betley emphasized. But there are many common mistakes that employers make.

These mistakes include failing to identify meal and rest break premium pay for missed breaks and excluding the start or end date of the pay period. The proper employer address is another common omission. Perhaps surprisingly, failing to keep a copy of the pay stub is also a frequent mistake.

Key actions that California employers should take to avoid wage-statement missteps include:

  • Conducting an annual audit of pay stubs.
  • Keeping pay stubs for at least four years.
  • Making sure that any payroll service provider is familiar with all relevant California laws.

Look for New Legislation

For all wage and hour matters, employers should be aware of the employment bills moving through the California Legislature. Betley noted that Gov. Gavin Newsom is viewed as more progressive than former Gov. Jerry Brown and that Newsom will review some of the same employment bills that Brown vetoed in the past.

Anne Clarke, HR business partner at ADP in Culver City, attended the session to stay up-to-date on the latest wage and hour developments. "I'm looking to make sure I'm aware of anything that's pending to make sure my clients are protected," Clarke told SHRM Online.

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