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
Industry Research | Mar 2, 2023
Watch: Findings from Gensler's latest workplace survey of 2,000 office workers
Gensler's Janet Pogue McLaurin discusses the findings in the firm's 2022 Workplace Survey, based on responses from more than 2,000 workers in 10 industry sectors.Â
AEC Innovators | Mar 2, 2023
Turner Construction extends its ESG commitment to thwarting forced labor in its supply chain
Turner Construction joins a growing AEC industry movement, inspired by the Design for Freedom initiative, to eliminate forced labor and child labor from the production and distribution of building products.Â
Multifamily Housing | Mar 1, 2023
Multifamily construction startup Cassette takes a different approach to modular building
Prefabricated modular design and construction have made notable inroads into such sectors as industrial, residential, hospitality and, more recently, office and healthcare. But Dafna Kaplan thinks that what’s held back the modular building industry from even greater market penetration has been suppliers’ insistence that they do everything: design, manufacture, logistics, land prep, assembly, even onsite construction. Kaplan is CEO and Founder of Cassette, a Los Angeles-based modular building startup.
Airports | Feb 28, 2023
Data visualization: $1 billion earmarked for 2023 airport construction projects
Ninety-nine airports across 47 states and two territories are set to share nearly $1 billion in funding in 2023 from the Federal Aviation Administration. The funding is aimed at help airports of all sizes meet growing air travel demand, with upgrades like larger security checkpoints and more reliable and faster baggage systems.
Seismic Design | Feb 27, 2023
Turkey earthquakes provide lessons for California
Two recent deadly earthquakes in Turkey and Syria offer lessons regarding construction practices and codes for California. Lax building standards were blamed for much of the devastation, including well over 35,000 dead and countless building collapses.
Sports and Recreational Facilities | Feb 27, 2023
New 20,000-seat soccer stadium will anchor neighborhood development in Indianapolis
A new 20,000-seat soccer stadium for United Soccer League’s Indy Eleven will be the centerpiece of a major neighborhood development in Indianapolis. The development will transform the southwest quadrant of downtown Indianapolis by adding more than 600 apartments, 205,000 sf of office space, 197,000 sf for retail space and restaurants, parking garages, a hotel, and public plazas with green space.
Architects | Feb 27, 2023
Hord Coplan Macht announces retirement of Founder/CEO Lee Coplan, FAIA, and names successor
Hord Coplan Macht, an award-winning integrated architecture, interior design, landscape architecture, and planning firm, announces the retirement of Founder and Chief Executive Officer Lee Coplan, FAIA. Lee leaves behind a long and celebrated career leading the practice over the last four decades while bringing innovative design strategies and leadership to the architecture and design community.
Libraries | Feb 26, 2023
A $17 million public library in California replaces one that was damaged in a 2010 earthquake
California’s El Centro community, about two hours east of San Diego, recently opened a new $17 million public library. With design by Ferguson Pape Baldwin Architects and engineering services by Latitude 33 Planning & Engineering, the 19,811-sf building replaces the previous library, which was built in the early 1900s, damaged by a 7.2 earthquake that struck Baja California in 2010, and demolished in 2016.
Architects | Feb 24, 2023
7 takeaways from HKS’s yearlong study on brain health in the workplace
Managing distractions, avoiding multitasking, and cognitive training are key to staff wellbeing and productivity, according to a yearlong study of HKS employees in partnership with the University of Texas at Dallas’ Center for BrainHealth.
University Buildings | Feb 23, 2023
Johns Hopkins shares design for new medical campus building named in honor of Henrietta Lacks
In November, Johns Hopkins University and Johns Hopkins Medicine shared the initial design plans for a campus building project named in honor of Henrietta Lacks, the Baltimore County woman whose cells have advanced medicine around the world. Diagnosed with cervical cancer, Lacks, an African-American mother of five, sought treatment at the Johns Hopkins Hospital in the early 1950s. Named HeLa cells, the cell line that began with Lacks has contributed to numerous medical breakthroughs.