As we approach the close of 2015, employers should take the time to review their employment law policies and practices. I’m often asked where should the process start? Here are five areas employers can focus on to start the audit process:
1. Employee handbooks
Employers need to ensure their policies are up to date, and a few areas that saw updates that may need attention in regards to employee handbooks are the revisions to California’s paid sick leave, the enforceability of arbitration agreements that contain class action waivers, and equal pay protections.
Employers should review new laws taking effect in 2016 to ensure compliance.
2. Ensure compliance with minimum wage increases
California minimum wage increases to $10 per hour effective January 1, 2016.
Employers need to remember that the state minimum wage also sets the salary basis for exempt employees, and therefore the minimum salary that must be paid to exempt employees will also be increasing.
3. Wage and hour issues
There are so many wage and hour areas that employers need to ensure compliance with, but here are few to help start the audit process:
- Timing of wages, and that employees are paid all final wages on time.
- Review to make sure that the company is paying for training time when required.
- Ensure that all independent contractors are classified properly.
4. Meal and rest breaks
Even though it is widely known by employers of their obligations to provide meal and rest breaks, there is still substantial litigation over this issue. Therefore, employers should continually review their meal and rest break policies and practices to ensure compliance with the law. To start, here is a link to a previous article about five things California employers should not forget about meal and rest breaks.
5. Correct information is listed on employee pay stubs and new requirements for piece-rate employees
Employers should ensure their pay stubs provided to employees comply with the requirements of Labor Code section 226. The DLSE provides a sample of what information a compliant pay stub should list for an hourly employee, but don’t forget about the requirement to report an employee’s accrued paid sick leave.
Employers should especially conduct this review if they paid employees on a piece-rate basis. A new law, AB 1513, adds various Labor Code sections and places new requirements on employers who pay on piece-rate basis. The law now mandates that employers pay piece-rate employees separately for the following activities:
- Rest breaks
- Recovery periods (for employees who work outside)
- Non-productive time (defined by the law)
The law requires employers to calculate the regular rate of pay for each workweek, and then pay the piece-rate employees the higher of this regular rate of pay or the applicable minimum wage for rest break time. The law also requires employers to pay piece-rate employees for “nonproductive time” which is defined as “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.” The nonproductive time is required to be paid at a rate no less than the applicable minimum wage rate. Employers paying employees on a piece rate basis should review the new obligations with an employment law attorney to ensure compliance.