While ensuring that everyone is paid properly is one of the most basic parts of the employment relationship, for California employers, it can be a challenge to navigate the state’s unique wage and hour laws.
That’s why California wage and hour training is an important step in grounding managers in the basics and keeping them up to date on employment laws and requirements so they can prevent costly violations. In 2019 alone, three separate settlements of California wage and hour class actions topped $100 million dollars. Dozens of others were in the millions.
Complicating matters further, wage and hour violations in California are calculated on a per paycheck, per pay period basis. For example, assume a 50-person employer makes a small wage and hour mistake that causes employees to be shorted on their paychecks. That’s not a single violation. That’s 50 violations – and it will be another 50 violations if the problem isn’t caught and corrected before the next pay period.
Given all this, it’s not surprising that employers often make significant investments in payroll and finance systems. However, regardless of the automated systems in place, managers are the people who experience the impact of wage and hour mistakes on operations, which can undermine a positive, productive work environment and lead to legal action.
5 things California frontline managers should know
All managers in California should have a basic understanding of the state’s wage and hour laws. This includes knowing how to handle a variety of questions and situations, and when to reach out to HR for assistance.
- What does it mean to be exempt or non-exempt employees?
Determining whether an employee is exempt or non-exempt is a critical part of getting them paid properly — and it’s not as easy as it sounds. While generally speaking, exempt employees are salaried, and non-exempt employees are paid on an hourly basis, managers need to look at what the employee does and what they earnUnder California law, exempt employees must make at least twice the state minimum wage and spend at least 50% of their time doing work that requires them to exercise independent judgment and discretion.
- What can and cannot be deducted from employees’ paychecks?
California law generally limits the things that an employer can deduct from an employee’s check. Employers can legally make deductions that are required under state or federal law, authorized in writing for things like insurance or medical dues or required by collective bargaining or wage agreements. Among the things that an employer cannot deduct are gratuities or tips left for the employee, cost for required photographs or uniform expenses, and business expenses required for employees to do their jobs.
- What factors determine overtime?
Overtime pay is premium pay that must be paid to non-exempt employees who work over a minimum set by law. In California, a workweek is any period of 7 consecutive workdays, beginning on the same calendar day in each week. So a workweek might run from Monday to Sunday or Thursday to Wednesday.California workers are entitled to time and a half for all hours worked in excess of 8 hours – up to and including 12 hours – on any workday; all hours worked in excess of 40 hours in a workweek; and the first 8 hours worked on the 7th day of consecutive work.
- What are the rules around pay days, overtime pay and final paychecks?
In California, wages must be paid at least twice during each calendar month on days designated as pay days. Overtime wages must be paid no later than the next regular payroll period after the overtime is worked.
There are also strict rules governing when employees receive their final paychecks. If employees are fired or give at least 72 hours’ notice, they must receive their final paycheck, including accrued vacation time, when their employment ends. If employees quit but do not give 72 hours’ notice, they must receive their final paycheck within 72 hours after they leave their position.
- When do mandatory rest and meal breaks apply?
California law requires that employers provide non-exempt employees with a 10-minute paid rest break for every 4 hours worked. An exception is made when an employee works less than 3.5 hours. To whatever degree is possible, the rest break should be in the middle of the work period and is paid as regular time. Employers must also provide non-exempt employees with 30-minute meal breaks that are unpaid. The number of meal breaks depends on the hours worked. For example, employees who work between 5-6 hours are entitled to 1 meal break before the start of the 6th hour. Those working more than 10 hours get 2 meal breaks.
Even well-intentioned employers can occasionally make mistakes when it comes to paying workers accurately and on time. For California employers, it can be especially challenging to comply with the state’s wage and hour laws. Any serious risk management strategy should include regularly training managers on the basics of California’s wage and hour laws and how to effectively address issues before they multiply and become serious problems.
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