You may be violating an employment law just by trying to be nice to your employees, says a new report.
The California Chamber of Commerce has produced a white paper cataloging the top 10 mistakes most likely to get a company sued. While a few of the laws cited apply specifically to California, some of them are federal and may apply in your state.
The report observes: "Employers may unintentionally violate employment laws simply by trying to provide some flexibility for an employee, save money for the company or just be nice."
Here are the top 10 mistakes:
1. Classifying all employees as exempt, whether they are or not
It may be easier to pay someone a salary rather than figure out overtime, meal breaks, rest breaks and the like. The time (and money) you save on bookkeeping is a false economy, however, since you could pay big time in penalties or a lawsuit. (See the report for more specifics.)
2. Letting employees work through lunch so they can take off early
A non-exempt employee is required to be given a 30-minute meal break, plus a 10-minute break for every four hours worked. If you deny one or the other, you owe the person an extra hour's wages; if you deny both in the same day, you owe an additional two hours. The wages must be paid during the pay period in which it's missed. The employee cannot waive his or her right to the breaks.
3. Making everyone an "independent contractor" because having employees is too much trouble
The report notes that contractors are happy until one of the following comes up: workers' compensation, unemployment insurance, state disability insurance or paid family leave benefits. Avoid these legal spiderwebs by determining who is and who isn't a contractor.
4. Not providing training about harassment and discrimination to managers and supervisors
Don't assume your employees won't need the information. Avoid lawsuits by providing the basic sexual harassment training required by law.
5. Letting employees decide which, and how many, hours they want to work each day
Most employees are restricted by law regarding the number of hours they can work without needing to be paid overtime. If you are allowing longer workdays for four-day workweeks, there are rules that need to be followed. Check with your state laws for specifics.
6. Terminating any employee who takes a leave of absence
From the report: "Employees have legal protection when they are away from work for various reasons, including workers' compensation, disability, pregnancy, family and medical leave, military leave, jury duty and many more."
7. Withholding an employee's final check if they fail to return company property
You may think you can withhold money while you wait for an employee to return a computer or a cellphone, but think again. Some states have laws that require you hand over the check the minute the words "you're fired" come out of your mouth. And if an employee quits and gives more than 72 hours notice, the check must be ready on his or her last day. The penalties start accruing from the moment the check is late-one day of wages for every calendar day of delay.
8. Providing loans to employees and deducting the money from their paycheck each pay period
This seems perfectly fine, doesn't it? Except most state labor codes permit only paycheck deductions authorized by law and those authorized by the employee for health insurance or other benefits. No other deductions are permitted. If you're making a loan, you should have the employee sign a promissory note and a lawyer review it.
9. Using noncompete agreements to protect confidential information
Many employers force employees to sign these agreements to protect business secrets, customer lists, and pricing information and to prevent employees from working for the competition. Essentially, you can't force your employee to stay with you, nor can you prevent him or her from making a living.
10. Implementing a "use it or lose it" vacation policy and avoid paying out all the money at termination
Accrued vacation is a form of wages and cannot be denied. You can stop an employee from accruing vacation beyond a "reasonable" amount, but you cannot take away what he or she has already earned. What is considered a "reasonable" cap? Generally 1.5 to two times the annual accrual, says the report.
Have you suffered any consequences from doing any of these things?
--
Courtney Rubin is a business writer and contributing editor to Inc. magazine.
Related Stories
| Feb 11, 2011
BIM-enabled Texas church complex can broadcast services in high-def
After two years of design and construction, members of the Gateway Church in Southland, Texas, were able to attend services in their new 4,000-seat facility in late 2010. Located on a 180-acre site, the 205,000-sf complex has six auditoriums, including a massive 200,000-sf Worship Center, complete with catwalks, top-end audio and video system, and high-definition broadcast capabilities. BIM played a significant role in the building’s design and construction. Balfour Beatty Construction and Beck Architecture formed the nucleus of the Building Team.
| Feb 11, 2011
Kentucky’s first green adaptive reuse project earns Platinum
(FER) studio, Inglewood, Calif., converted a 115-year-old former dry goods store in Louisville, Ky., into a 10,175-sf mixed-use commercial building earned LEED Platinum and holds the distinction of being the state’s first adaptive reuse project to earn any LEED rating. The facility, located in the East Market District, houses a gallery, event space, offices, conference space, and a restaurant. Sustainable elements that helped the building reach its top LEED rating include xeriscaping, a green roof, rainwater collection and reuse, 12 geothermal wells, 81 solar panels, a 1,100-gallon ice storage system (off-grid energy efficiency is 68%) and the reuse and recycling of construction materials. Local firm Peters Construction served as GC.
| Feb 11, 2011
Former Richardson Romanesque hotel now houses books, not beds
The Piqua (Ohio) Public Library was once a late 19th-century hotel that sat vacant and deteriorating for years before a $12.3 million adaptive reuse project revitalized the 1891 building. The design team of PSA-Dewberry, MKC Associates, and historic preservation specialist Jeff Wray Associates collaborated on the restoration of the 80,000-sf Richardson Romanesque building, once known as the Fort Piqua Hotel. The team restored a mezzanine above the lobby and repaired historic windows, skylight, massive fireplace, and other historic details. The basement, with its low ceiling and stacked stone walls, was turned into a castle-like children’s center. The Piqua Historical Museum is also located within the building.
| Feb 11, 2011
Justice center on Fall River harbor serves up daylight, sustainable elements, including eucalyptus millwork
Located on historic South Main Street in Fall River, Mass., the Fall River Justice Center opened last fall to serve as the city’s Superior and District Courts building. The $85 million facility was designed by Boston-based Finegold Alexander + Associates Inc., with Dimeo Construction as CM and Arup as MEP. The 154,000-sf courthouse contains nine courtrooms, a law library, and a detention area. Most of the floors have the same ceiling height, which will makes them easier to reconfigure in the future as space needs change. Designed to achieve LEED Silver, the facility’s elliptical design offers abundant natural daylight and views of the harbor. Renewable eucalyptus millwork is one of the sustainable features.
| Feb 11, 2011
Research facility separates but also connects lab spaces
California State University, Northridge, consolidated its graduate and undergraduate biology and mathematics programs into one 90,000-sf research facility. Architect of record Cannon Design worked on the new Chaparral Hall, creating a four-story facility with two distinct spaces that separate research and teaching areas; these are linked by faculty offices to create collaborative spaces. The building houses wet research, teaching, and computational research labs, a 5,000-sf vivarium, classrooms, and administrative offices. A four-story outdoor lobby and plaza and an outdoor staircase provide orientation. A covered walkway links the new facility with the existing science complex. Saiful/Bouquet served as structural engineer, Bard, Rao + Athanas Consulting Engineers served as MEP, and Research Facilities Design was laboratory consultant.
| Feb 11, 2011
A feast of dining options at University of Colorado community center, but hold the buffalo stew
The University of Colorado, Boulder, cooked up something different with its new $84.4 million Center for Community building, whose 900-seat foodservice area consists of 12 micro-restaurants, each with its own food options and décor. Centerbrook Architects of Connecticut collaborated with Denver’s Davis Partnership Architects and foodservice designer Baker Group of Grand Rapids, Mich., on the 323,000-sf facility, which also includes space for a career center, international education, and counseling and psychological services. Exterior walls of rough-hewn, variegated sandstone and a terra cotta roof help the new facility blend with existing campus buildings. Target: LEED Gold.
| Feb 11, 2011
Chicago high-rise mixes condos with classrooms for Art Institute students
The Legacy at Millennium Park is a 72-story, mixed-use complex that rises high above Chicago’s Michigan Avenue. The glass tower, designed by Solomon Cordwell Buenz, is mostly residential, but also includes 41,000 sf of classroom space for the School of the Art Institute of Chicago and another 7,400 sf of retail space. The building’s 355 one-, two-, three-, and four-bedroom condominiums range from 875 sf to 9,300 sf, and there are seven levels of parking. Sky patios on the 15th, 42nd, and 60th floors give owners outdoor access and views of Lake Michigan.
| Feb 11, 2011
Iowa surgery center addresses both inpatient and outpatient care
The 12,000-person community of Carroll, Iowa, has a new $28 million surgery center to provide both inpatient and outpatient care. Minneapolis-based healthcare design firm Horty Elving headed up the four-story, 120,000-sf project for St. Anthony’s Regional Hospital. The center’s layout is based on a circular process flow, and includes four 800-sf operating rooms with poured rubber floors to reduce leg fatigue for surgeons and support staff, two substerile rooms between each pair of operating rooms, and two endoscopy rooms adjacent to the outpatient prep and recovery rooms. Recovery rooms are clustered in groups of four. The large family lounge (left) has expansive windows with views of the countryside, and television monitors that display coded information on patient status so loved ones can follow a patient’s progress.
| Feb 11, 2011
Grocery store anchors shopping center in Miami arts/entertainment district
18Biscayne is a 57,200-sf urban retail center being developed in downtown Miami by commercial real estate firm Stiles. Construction on the three-story center is being fast-tracked for completion in early 2012. The project is anchored by a 49,200-sf Publix market with bakery, pharmacy, and café with outdoor seating. An additional 8,000 sf of retail space will front Biscayne Boulevard. The complex is in close proximity to the Adrienne Arsht Center for the Performing Arts, the downtown Miami entertainment district, and the Omni neighborhood, one of the city’s fast-growing residential areas.
| Feb 11, 2011
Chicago architecture firm planning one of China’s tallest towers
Chicago-based Goettsch Partners was commissioned by developer Guangzhou R&F Properties Co. Ltd. to design a new 294,570-sm mixed-use tower in Tianjin, China. The Tianjin R&F Guangdong Tower will be located within the city’s newly planned business district, and at 439 meters it will be one of China’s tallest buildings. The massive complex will feature 134,900 sm of Class A office space, a 400-key, five-star hotel, 55 condominiums, and 8,550 sm of retail space. The architects are designing the tower with multi-story atriums and a high-performance curtain wall to bring daylight deep into the building, thereby creating deeper lease spans. The project is currently finishing design.
