Are You Vulnerable to Wage and Hour Lawsuits?
Labor Violations are one of the easiest ways a business owner can lose money, and litigations are on the rise. A California security company, ABM Security Services, was ordered to pay out $90 million to employees after they were found to be violating labor laws by not providing sufficient breaks for their workers. After multiple appeals, the case made it’s way up to Supreme Court, where federal judges recently ruled to uphold the penalties. Since 2000, the incidence of wage and hour federal court filings has skyrocketed by more than 450%. As increased efforts have been placed on protecting workers, employees are becoming more aware of their rights in the workplace and more willing to take action against employers who have violated labor laws. In federal court, employers are more likely to face wage and hour claims than any other form of employment litigation. California’s Wage and Hour Laws are more stringent than their federal counterparts, so being proactive is key. Are you staying up-to-date with the latest updates and changes to federal and California wage and hour laws? Are you regularly reviewing HR policies to ensure you're not making any mistakes that could result in penalties or litigations? Below are four more tips to help you avoid labor law violations and employee lawsuits. Classify employees and contractors correctly. Knowing the difference between your employees and contractors can mean the difference between compliance and penalties. Consider these factors when deciding how to classify a new-hire, or when reviewing current employee classifications:
- Does your company control or have the right to control what the worker does and how the worker does his or her job?
- Are there employee-type benefits available for the worker such as a pension plan, insurance, vacation pay, etc.?
- Are all of the business aspects of the worker’s job controlled by the company? Facets such as how and when the worker is paid, expense reimbursement, and supplies provided?
- Is the work performed a key aspect of the business, and will the relationship continue past a designated amount of time or projects?