Protect your Business Against Wage and Hour Lawsuits

An increasing category of employment lawsuits against employers now involves wage and hour lawsuits that violate both federal as well as state law. Sometimes, these lawsuits evolve into class-action lawsuits involving hundreds or even thousands of workers. The risk to your business is immense, and many employers are quite clueless about how to protect themselves against such claims.

Broadly, such wage and hour law lawsuits are filed when employees believe that they are not being paid for work that they perform off –the- clock, or when they’re not being paid for work that they perform during their lunch hours or rest breaks. Other popular causes of wage and hour lawsuits may be the improper classification of employees as independent contractors. Employers are also facing an increasing number of lawsuits alleging that they retaliated against employees who claimed unpaid wages. Most of these lawsuits have to do the payment of minimum wage as well as overtime compensation.

As an employer, you must be clearly aware of federal law as well as California law for wages and overtime. Work that is performed outside normal work hours must be compensated. For instance, if the work is performed at the beginning of the shift or toward the end of the shift, the worker is eligible for compensation. Many employers make the mistake of taking the benefits of work that is performed outside work hours, without compensating for it. Such behavior simply creates ideal conditions for a lawsuit against your company.

Another grey area for employers is how to respond when they receive a complaint that they have improperly compensated an employee. Some employers simply panic, and take action that could later be construed as wrongful retaliation. In fact, wrongful retaliation claims are becoming some of the more common wage and hour lawsuits that are filed against employers. If an employee complains that he or she was not compensated properly, then you cannot take any negative action against him/her.

To protect yourself, have clear and established policies about off- the- clock- work hours. Make employees record all the hours that they have worked. All supervisors and managers must be trained about wage and hour issues, so that mistakes do not occur.

If an employee is not classified as a full-time employee on payroll, make sure that the classification is correct. Periodically review policies and procedures to make sure that there are no unfair deductions from compensation, and discipline supervisors or managers violate policies.

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