Laws governing how employers establish wages and hours in California are set by various agencies at the state and federal levels. Labor laws that direct wage and hour rules include the Fair Labor Standards Act (FLSA), Department of Industrial Relations (DIR) and Industrial Welfare Commission (IWC) wage orders.
The FSLA sets minimum wage, overtime rates, record keeping for wages and hours and standards for child labor. The California DIR sets working condition requirements and manages CA Labor Law, Cal/OSHA and Worker’s Compensation. The IWC issues industry and occupational wage orders to regulate wages and hours for non-exempt employees and related areas such as reporting time paid, record retention and rest periods.
Issues complicating wage and hour law compliance include alternative work weeks, meal and rest breaks, interns and work-related technology such as mobile devices for remote work.
Why is Compliance Important?
Accurate wage and hour reporting is important not only to prove employees have been fairly compensated for actual hours worked to build and sustain business, but is also essential in avoiding wage and hour litigation. According to Federal Judicial Center, 7,764 wage and hour lawsuits were filed at the Federal level between April 1, 2012 to March 31, 2013, compared to 7,064 filed at the Federal level during the previous reporting year.
Jay Rivera, writing for Legal Match, reminds readers that the Fair Labor Standards Act is over 70 years old and has not kept up with the modern workforce. He says the FLSA needs information-age changes and that until they are made, employers need to protect themselves against wage and hours claims that can lead to major losses.
According to the Wall Street Journal, wage-and-hour claims are where all the “low hanging fruit” exists for plaintiffs’ lawyers, particularly in worker-friendly states such as California, Florida, Massachusetts, New Jersey, New York and Pennsylvania. There are many businesses that have difficulty complying, or choose not to for various reasons, and they become an easy target for a lawsuit that can bring big dollars to the plaintiff and their attorney.
California’s Wage and Hour Laws
Labor law and the Industrial Welfare Commission wage orders in California are enforced by the Division of Labor Standards Enforcement (DLSE). The wage and hour laws in California for recording time, paying overtime and employee rest periods and meal breaks are strict and are not always easy to understand. Complicated issues such as legal requirements for handling time cards and recording time can be administered accurately and with compliance with a time labor management system that takes any guesswork out of the process.
Several areas of wage and hour reporting are tricky for California employers, including meal break record keeping, overtime calculations and unfair time rounding practices. Other complicated areas include automatically deducting for meal periods, proper and accurate accounting for remote work and off-the-clock work. These issues have been behind class action lawsuits as recently as 2013 as discussed in the California Labor & Employment Law Blog.
Implementation and enforcement of a clearly written time and attendance policy avoids significant liability for employers. Employer timekeeping and reporting practices must be based on a solid understanding of current state and federal labor law to stay in compliance and avoid litigation. In addition, all records must be retained and provided to officials upon request.
Employers can minimize risks associated with wage and hour non-compliance with payroll best practices that include automated time labor management and payroll software. Automating these processes helps employers comply with varied and complicated labor regulations and union rules and agreements. For information on the products and services PAYDAY offers to help you comply, contact us today.