5 Quick Tips For Assessing Your Employment Risk
Posted September 2, 2015

Employers often find it daunting to keep up with the myriad of employment laws and sometimes don’t know where to begin in assessing risk. Here are five quick tips:

  1. Review your paystubs. Labor Code section 226(a) lists nine items you must have on your paystub, along with the sick time accrual under California rules that kicked in July 1. A missing start of the pay period or address of the employer on the paystub (not just on the check), can result in thousands of dollars of penalties per employee. Compare your on-line pay stub to your hard copy stub; they may be different. And if you’re using a payroll service, temp agency or employee leasing organization (professional employer organizations or PEOs), don’t rely on them completely. Check their work. They may not have a million of dollars to pay the claim and you, as a potential joint employer, may well be on the hook. New legislation is being proposed to give employers one free pass for some violations, but that law isn’t signed yet and won’t cover all violations.
  2. Review the status of your lower-level salaried employees. Exempt and non-exempt employee categories are difficult to decipher and often seem confusing based on the employee’s job description. Simplify the task by setting aside all high-level salaried people and all hourly people. Focus on that narrow band of salaried exempt employees who may appear not to qualify for the exemption. Make sure they spend more than 50% of their time doing higher level tasks. Have them agree to their job description in writing with the qualifying percentages spent on higher level work responsibilities. This will insulate you later if they claim they were actually non-exempt and entitled to lots of overtime and missed break penalties.
  3. Review meal break rules. This topic continues to bite even sophisticated employers who think they’ve got this one dialed in. Do your lower level supervisors or leadpersons, who are often the weak link, know the rules and are stick to them? Are employees starting (but not completing) meal breaks by the end of the 5th hour of work; e.g., work starts at 7 a.m., are they eating by noon? Check time sheets to see if they are recorded at the proper times. Are employees working more than 10 hours in a day offered a second meal? Almost none will ever take one, but you need to show evidence in your handbook and in your actual practice that they know about the option. If you’re running multiple shifts, is the night shift taking their meals on the same type of schedule as the day shift? I’ve seen companies get into trouble because the graveyard crew was taking its meal breaks differently than what was prescribed by company rules.
  4. Check your “leave of absence” protocols. Do your HR people really know how to handle leaves of absence? Do they know when the Family and Medical Leave Act (FMLA) overlaps with workers comp? Or how to mesh the alphabet soup that is FMLA, CFRA, SDI, PDL, and PFL when they have a pregnant employee? Do they know what to do when the 12 weeks of FMLA runs out and the employee still wants time off? Or how to handle an interactive dialogue and reasonable accommodation? Even seasoned HR professionals and consultants can be stymied. Most critically, documentation is often lacking, resulting in a minimal or non-existent paper trail of what you discussed with the employee and what action was either considered or taken. Paper is your friend in these circumstances.
  5. Review your termination process. Most critically, is there documentation of the termination reasons? Even new employees need to have documentation as to why they are being let go. At-will is not fail safe. Even for new employees, at-will is not a defense to claims of discrimination, harassment and retaliation; and just about every claim has one or more of those elements. You need to provide legitimate business reasons to the employee and in your file before the termination. I still hear employers say that their last lawyer told them not to say much and not to put anything on paper. This is incorrect advice.

These are just a few ways employers can stay ahead of the multiple traps that await them when a disgruntled ex-employee seeks legal advice for perceived wrongs. A little preventative action can go a long way to thwart costly lawsuits and, even worse, devastating class actions.

Jonathan Fraser Light is with LightGabler, which specializes in representing employers in all aspects of employment consulting and employment litigation.