In order to explain the law and answer questions employers have about implementing policies to comply with the requirement that all employers provide up to three paid sick leave days starting July 1, 2015, the Department of Industrial Relations is hosting a free webinar. It is taking place on April 8, 2015, from noon to 1 p.m.

Employers also have the opportunity to submit questions prior to the webinar to: AB1522@dir.ca.gov. I’ve embedded the DIR announcement below, or click here for additional information about how to attend.

AB1522 Webinar Announcement

In addition, the DIR has published a Facts and Resources slide deck about the new law:

Paid Sick Leave Facts and Resources

These are good resources for employers to review to help understand some of the compliance issues that need to be addressed prior to July 1. It is already mid-March, and I recommend that all employers start addressing this issue now in order to be compliant by July 1. As I’ve written about before, there are many elements California employers need to address that take some time to implement, and before you know it July 1 will be here.

I just discovered How to Start a Startup, which is a series of videos published by Stanford University on YouTube with some outstanding speakers. The problem is that the class videos are so great, I have a hard time turning them off. Case in point, this week I watched Ben Horowitz’ lecture: How to Manage.  Ben is a rap enthusiast, and venture capitalist in Silicon Valley.  He offers excellent points and perfect examples about how managers have to analyze difficult requests from employees from many different perspectives. Definitely worth devoting the 50 minutes of your time to watch (embedded below). It is by far the best presentation on management I have ever listened to, and I’ve had my share of management classes (by the way, Ben’s book, The Hard Thing About Hard Things is a great read also).

In the lecture, Ben discusses the very difficult situation of addressing an employee’s request for a raise. Ben’s point is that the easy way out of the difficult managerial decision is to simply agree to the raise. This is the easy way out, everyone in the room is happy, the manager is liked by the employee, and the employee is obviously happy.

However, as Ben mentions, this can create other issues across the organization:

However, you knew there was going to be a however, you have to think about it from the point of view of the employee who did not ask for a raise. They may be doing a better job than the employee who did ask for the raise and in their mind they are going, “Ok, so I didn’t ask for a raise and I didn’t get a raise. They asked for a raise and they got a raise. What does that mean?" One, you’re not really evaluating people’s performance. You’re just going, whoever asks, gets. That means I either need to be the guy who asked for the raise, though that’s not how I feel. I do my work and I don’t necessarily want to ask for a raise. Or I just need to quit and go to a company that actually evaluates performance. You can really make the person who doesn’t get the raise feel pretty pissed about it. Don’t think that when someone is walking through your company doing the "Shmoney Dance," that other people aren’t going to notice.

Not familiar with the Shmoney Dance? Click here.

In addition to Ben’s point that CEOs or supervisors responsible to determining pay rates need to have and follow a formal review process for determining raises, it is important to note it would be bad management to ask an employee to keep their pay details confidential because doing so runs afoul of California law.

This leads me to point out five areas of employee compensation or off-work conduct that cannot be regulated by an employer under California law:

  1. Employers cannot prohibit employees from discussing or disclosing their wages, or for refusing to agree not to disclose their wages. Labor Code Sections 232(a) and (b).
  2. Employers cannot require that an employee refrain from disclosing information about the employer’s working conditions, or require an employee to sign an agreement that restricts the employee from discussing their working conditions. Labor Code Section 232.5.
  3. Employers may not refuse to hire, or demote, suspend, or discharge and employee for engaging in lawful conduct occurring during nonworking hours away from the employer’s premises. Labor Code Section 96(k).
  4. Employers cannot adopt any rule preventing an employee from engaging in political activity of the employee’s choice. Labor Code Sections 1101 and 1102.
  5. Employers cannot prevent employees from disclosing information to a government or law enforcement agency when the employee believes the information involves a violation of a state or federal statute or regulation, which would include laws enacted for the protection of corporate shareholders, investors, employees, and the general public. Labor Code Section 1102.5.

Colin Cochran brought a putative class action against his employers, Schwan’s Home Service, on behalf of 1,500 customer service managers who were not reimbursed for expenses pertaining to the work-related use of their personal cell phones. He alleged causes of action for violation of Labor Code section 2802; unfair business practices under Business and Professions Code section 17200 et seq.; declaratory relief; and statutory penalties under Labor Code section 2699, the Private Attorneys General Act of 2004.

The trial court denied class certification on the grounds that there would be too many individualized questions about each employee’s cell phone expenses incurred for work purpose. In Cochran v. Schwan’s Home Service, the appellate court reversed trial court’s denial of class certification. Below are five lessons employers should learn from this ruling.

1. Employers have an obligation to reimburse business expenses incurred by employees.

Labor Code section 2802, subdivision (a) requires: “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer….” This Labor Code section requires employers to reimburse employees for all out-of-pocket expenses the employee incurs (and not just cell phone usage) during the performance of their job.

2. Expenses must be necessary in order to require employer reimbursement.

“In calculating the reimbursement amount due under section 2802, the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was `necessary,’ which in turn depends on the reasonableness of the employee’s choices. [Citation.]”

Cochran at 1144.  What is necessary or not could vary from case to case. Apparently, in this case, the employer had a clear policy requiring the service representatives to use their personal cell phones, so there was no need for the court to conduct any analysis about whether the putative class members’ use of their personal cell phones was a necessary expense.

3. Employers must always reimburse employee for expense of cell phone use even though the employee did not pay additional cell phone fees for using their cell phone for work purposes.

This is the essential holding of the Cochran case. The court explains:

The threshold question in this case is this: Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? The answer is that reimbursement is always required.

Cochran at 1144.  The employer argued that the case could not be certified as a class action because there are too many individualized questions surrounding each employee’s cell phone plan, and if the employee actually incurred any more expenses as a result of using their cell phone for work. Many people now have unlimited data plans, and if so, the employee would not incurred any additional expenses when using the phone for work.

The court explained that any time a cell phone is required for work, the employer must reimburse the employee. The court stated that to hold otherwise would provide a “windfall” to the employer.

4. The court held that the details about each employee’s cell phone plan do not determine liability.

Not only does our interpretation prevent employers from passing on operating expenses, it also prevents them from digging into the private lives of their employees to unearth how they handle their finances vis-a-vis family, friends and creditors. To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed.

Cochran at 1145.

5. The court did not explain how to calculate a reasonable reimbursement for employee’s cell phone use when the employee has an unlimited data plan.

The court passed in explaining how an employer and employee would go about figuring out the amount of reimbursement for personal cell phone use given the different data plans available for cell phones. The court stated that section 2802 requires that the employer should pay some “reasonable percentage” of the employees’ cell phone plans when the cell phone is required for work. Cochran at 1144.

This ambiguity is a blessing and a curse for employers. It is a blessing in that it leaves many options available to employers and employees to structure a reasonable reimbursement plan, but it is a curse because the ambiguity could still lead to future challenges to the agreed upon reimbursement plan. 

The Ninth Circuit Court of Appeals has asked the California Supreme Court to clarify three questions pertaining to California’s little known, and very rarely litigated, laws regarding a day of rest every seven days. The case is Mendoza v. Nordstrom. The California Supreme Court’s clarification could result in a new-found focus on these laws, and it is worth it for California employers to follow the issues raised in this case. Below are five issues employers ought to pay attention to:

1. Is the requirement to provide one day of rest every seven days based on a rolling seven days or on the workweek?
The first issue the Appellate Court seeks clarification on is California Labor Code section 551. This section states that “[e]very person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” Section 552 further states that “[n]o employer of labor shall cause his employees to work more than six days in seven.” The issue is whether these Labor Code sections apply to seven consecutive days on a rolling basis or only apply to each workweek. The difference in how the days are counted can have a significant impact. The court provides the following example to illustrate its point:

 

 

Sun.

Mon.

Tues.

Wed.

Thurs.

Fri.

Sat.

Week 1

Off

Work

Work

Work

Work

Work

Work

Week 2

Work

Work

Work

Work

Work

Work

Off

If the workweek begins each Sunday, if the statute is read to apply to consecutive seven days, then the employer in this example has violated sections 551 and 552. Alternatively, if the statute applies to each workweek, then the employer has not violated these provisions. The appellate court could not find any support to both plausible interpretations of these Labor Code sections, and therefore is asking the California Supreme Court to clarify.

2. When is an employer exempt from the seven day rule?
The second issue the Appellate Court seeks clarification on pertains to California Labor Code section 556. The section exempts employers from the day-of-rest requirement “when the total hours [worked by an employee] do not exceed 30 hours in any week or six hours in any one day thereof.” The court provides the following example of hours worked each day: 8-9-5-8-8-8-9. Would this work schedule exempt the employer from providing a day of rest on the seventh day? The court explained that the interpretation of the word “any” in section 556 could easily mean one (as in “Pick any card from the deck.”) or it could mean all (as in “Any child knows the answer to that simple question.”).

3. What does it mean to cause employees to work seven days?
The next question the Appellate Court proposed to the California Supreme Court is for clarification of Labor Code section 552. This section provides that employers may not “cause” its employees to work more than six days in seven. The court asks the Supreme Court to clarify the term “cause.” The court states:
To “cause” can mean to “induce,” so is it enough for an employer to encourage or reward an employee who agrees to work additional consecutive days? In another context, causation is defined in terms of the “natural and probable consequence” of one’s action. Is it enough for an employer to permit employees to trade shifts voluntarily, when a natural and probable consequence may be that an employee works more than the day-of-rest statutes allow?

4. Definition of workday.
While this case did not address the issue of overtime, it is a good reminder to review the definition of workday and workweek under California law.
The DLSE defines workday as:

A workday is a consecutive 24-hour period beginning at the same time each calendar day, but it may begin at any time of day. The beginning of an employee’s workday need not coincide with the beginning of that employee’s shift, and an employer may establish different workdays for different shifts. However, once a workday is established it may be changed only if the change is intended to be permanent and the change is not designed to evade overtime obligations.

5. Definition of workweek.
The DLSE defines the workweek as:

Any seven consecutive days, starting with the same calendar day each week beginning at any hour on any day, so long as it is fixed and regularly occurring. "Workweek" is a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods. An employer may establish different workweeks for different employees, but once an employee’s workweek is established, it remains fixed regardless of his or her working schedule. An employee’s workweek may be changed only if the change is intended to be permanent and is not designed to evade the employer’s overtime obligation.

If an employer does not set a designated workweek, the DLSE will presume the employer uses the calendar week, from 12:01 a.m. Sunday to midnight Saturday, with each workday ending at midnight.

There is always a lot of attention paid to what notices and forms should be given to new-hires. However, today’s Friday’s Five post I want to focus on the documents that should accompany an employee’s separation from employment:

1. Paycheck for all hours worked until separation including all accrued but unused vacation time.
Generally, the paycheck must be provided at the time of termination or within 72 hours if employee quits without providing 72 hours’ notice. Here is a more detailed article I wrote on the topic previously.

2. Notice to Employee as to Change in Relationship
California Unemployment Insurance Code 1089 requires that employers provided separated employees with written notice of the employee’s change in relationship with the employer.

3. “For Your Benefit, California’s Program for the Unemployed” pamphlet published by the EDD (Form 2320)
This form published by the EDD is required to be provided to any employee who is being laid off, terminated, or placed on a leave of absence on the last day of employment.

4. COBRA and Cal-COBRA Notices.
Employers should obtain these forms through your health insurance provider.

5. Health Insurance Premium (HIPP) Notice (DHCS 9061)
For employers with 20 or more employees, the Department of Health Care Services requires that employers provide terminated employees with the Health Insurance Premium Payment (HIPP) notice.

This Friday’s Five is a bit early this week, but I have to post today as my blog is going through some upgrades and I will not be able to post this tomorrow (Friday). I’ve previously written about what Labor Commissioner hearings are (also known as Berman Hearings here in California) and the various steps during a claim.  This post is more generally about the strategy during Labor Commissioner hearings, and items to remember while completing the process.

1. Be courteous to everyone during the process.
Be nice to the clerk checking people in at the Labor Commissioner’s office. Be nice to the Deputy Labor Commissioner hearing the claim. And yes, be nice to the claimant. You can be nice while still aggressively defending your position, just don’t be a jerk about it. I can hear other lawyers criticizing this advice already with the idea that you do not want to make the process pleasant for the other side in order to deter this type of behavior. I disagree with this approach. First, once the claim is resolved, it is generally binding on the parties, so by making the process unpleasant on the claimant, it will not be deterring any other actions. Second, the hearing officers are human beings, if they get the sense that you (or your opponent) are the unreasonable party creating the conflict, they are probably going to find against you.

2. Do not take it personally.
Because Labor Commissioner claims can be relatively small, and parties do not need to be represented by a lawyer, many parties represent themselves during the process. However, just like negotiating someone’s salary, employers need to view the process as a business transaction, not a personal attack. If it is too hard to separate the personal issues from the process, it is best to hire a lawyer to help make the arguments for the company and to help take the personal aspect of the process out of the equation.

3. Read the DLSE’s website for the Labor Commissioner’s view of the law.
The DLSE has a great website setting out its position on some aspects of California labor law. While the DLSE’s view expressed on its website is not necessarily binding on the parties, it is a good starting point regarding what issues the company will likely be challenged on during the proceeding.

4. Make the record.
The actual Labor Commissioner hearing is tape recorded, and the parties and any potential witnesses give testimony under oath during the proceeding. Therefore, because there is a record of testimony provided under oath, if the case is appealed to superior court by either party after the hearing, this testimony will be very important in subsequent proceedings.

5. Don’t make the wrong record.
This goes back to being prepared. All parties have to be truthful as they are sworn in, but be careful in your testimony. Think through all of the facts before the hearing. If you wrongly recall facts or begin to guess at answers during the Labor Commissioner hearing, and then try to correct those facts at a subsequent proceeding, it will adversely affect your credibility. Think through your testimony before the hearing in order to be as accurate as possible.

One policy that I find is usually not given the attention it deserves when drafting employee handbooks is the policy for vacation time. There are numerous rules about how employees earn vacation, and it is often tricky to draft a proper policy without someone experienced in this area. Many out-of-state employers assume that their policy complies with California law when setting up operations, but California is unlike most other states when it comes to vacation time. Here are some of the more problematic areas I see arise (for more detailed overview it is worth reading the DLSE’s website explaining the nuances here):

1. No use-it-or-lose-it policies permitted.
Under California law, vacation is treated the same as earned wages and vest as the employee performs work. Because vacation is earned proportionally as the employee works, any type of policy requiring employees to lose vacation that has already been earned is illegal under California law.

2. Reasonable caps are allowed.
While employers cannot implement “use-it-or-lose-it” policies, they can place a reasonable cap, or ceiling, on vacation accrual. The DLSE explains:
Unlike "use it or lose it" policies, a vacation policy that places a "cap" or "ceiling" on vacation pay accruals is permissible. Whereas a "use it or lose it" policy results in a forfeiture of accrued vacation pay, a "cap" simply places a limit on the amount of vacation that can accrue; that is, once a certain level or amount of accrued vacation is earned but not taken, no further vacation or vacation pay accrues until the balance falls below the cap. The time periods involved for taking vacation must, of course, be reasonable. If implementation of a "cap" is a subterfuge to deny employees vacation or vacation benefits, the policy will not be recognized by the Labor Commissioner.

3. Vacation is a formed of earn wages that must be paid out on the employee’s last day of work.
An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination. Labor Code Sections 201 and 227.3

4. No deductions permitted from employee’s final wages for use of vacation that was not accrued.
Vacation is treated as a form of wages under California law, and by permitting an employee to take vacation time before it is earned, is effectively a loan provided to the employee. It is well established under California law that employers may not utilize self-help remedies to recover debts from the employee’s final pay check.

5. “Cliff vesting” policies are problematic.
While employers may set probationary periods or waiting periods during which employees do not accrued vacation time. However, the DLSE maintains that employers may not have a policy that grants employees lump sums of vacation upon reaching certain dates. The DLSE’s view on this type of “cliff vesting” is that the employer is really attempting to provide for accrued vacation, but at the same time is impermissibly attempting to limit its liability of having to pay out a pro rata share of the accrued vacation if the employee does not work until the date in which the vacation is granted to the employee. It is safer for employers to avoid these lump sum grants of vacation, and simply set a time period (i.e., the employee’s first six months of employment) that the employee does not accrue vacation.

As you can probably tell by now, California law is vastly different than Federal law and other states. It is a trap for employers, but with some understanding of the obligations created under the law it can easily be managed.

I apologize for the long post in advance, but I’ve been receiving many questions about exempt vs. non-exempt classification of employees lately. This article is the first in a series of articles to help employers tread through this technical area, hopefully in a manner that makes it at least somewhat easier for employers to understand.

California law presumes that all employees are non-exempt employees, meaning that they are not exempt from the Labor Code requirements, such as overtime pay, meal and rest breaks, and minimum wage. Exempt employees are designated as such because they are “exempt” from certain wage and hour requirements due to their duties and pay. However, the employer bears the burden when classifying an employee as exempt, and simply providing a title to an employee does not make them exempt. The employee must meet very specific requirements for each applicable exemption, and if the requirements are not met the employer must comply with all wage and hour requirements – such as overtime pay, etc…. It is also important to note that some exemptions only exempt the employee from specific Labor Code provisions (for example, the inside sales exemption only exempts the employee from overtime pay requirements, but the employer is still required to provide meal and rest breaks).

There are many exemptions, and many nuances to each exemption, so employers should perform this analysis very carefully and receive advice from an experienced attorney or HR professional when classifying employees as exempt.

In my experience, here are the most common exemptions that arise in a workplace under California law and the requirements to meet each one:

1. Executive/managerial exemption
In order to meet the executive (managerial) exemption, the employee must meet all of the following requirements:

  1. Employee’s duties and responsibilities involve the management of the enterprise in which he or she is employed or of a customarily recognized department or subdivision of the enterprise;
  2. Employee customarily and regularly directs the work of two or more other employees;
  3. Employee has the authority to hire or fire other employees, or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status or other employees is given particular weight;
  4. Employee customarily and regularly exercises discretion and independent judgment in performing his or her duties;
  5. Is “primarily engaged” in duties that meet the test of the exemption;
  6. Earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.

The term “primarily engaged in” means that more than one-half of the employee’s work time must be spent engaged in exempt work and differs substantially from the federal test which simply requires that the “primary duty” of the employee falls within the exempt duties. Therefore, to qualify for this exemption, the employee must spend more than 50% of their work time on exempt duties.

2. Administrative exemption
To meet the administrative exemption, an employee must meet all of the following requirements:

  1. Employee spends more than one-half of their work time performing office or non-manual work directly related to management policies or general business operations for the employer or the employer’s customers;
  2. Employee “customarily and regularly” exercises discretion and independent judgment in carrying out job duties as to matters significant to the employer’s business;
  3. Performs his or her job only under general supervision and works along specialized or technical lines requiring special training, experience, or knowledge; and
  4. Is paid a salary equivalent to no less than two times the state minimum wage.

3. Computer professional exemption
To be an exempt computer professional, the employee must meet the following requirements:

1. The employee is primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment.

“Primarily” is defined as requiring more than 50% of the employee’s work time be spent on these types of duties.

2. The employee is primarily engaged in duties that consist of one or more of the following:

  • The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
  • The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to, user or system design specifications.
  • The documentation, testing, creation, or modification of computer programs is related to the design of software or hardware for computer operating systems.

3. The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.

4. The employee’s hourly rate of pay, or annual salary if paid on salaried basis, meets a minimum threshold amount set by California’s Division of Labor Statistics and Research (DLSR). For 2015, the DLSR set the amounts at $41.27 per hour or annual salary of not less than $85,981.40 for full time employment, and paid not less than $7,165.12 per month.

4. Commissioned inside sales exemption
To qualify as an exempt commissioned inside sales employee, an employee must meet the following requirements:

  1. Employee’s earnings must exceed one and one-half times the California minimum wage; and
  2. More than half of the employee’s compensation must be commissions.

Employers must note that this exemption is only for the overtime requirement, and other wage and hour requirements such as minimum wage, meal and rest breaks, time recording requirements still must be met.

5. Outside salesperson exemption
To qualify as an exempt outside salesperson the employee must:

  1. Be at least 18 years old;
  2. Must customarily and regularly work more than 50% their work time away from the employer’s place of business; and
  3. Must be engaged in selling tangible items or obtaining orders or contracts for products, services, or use of facilities.

The Wage Theft Protection act of 2011 added Labor Code section 2810.5 requiring all private California employers to provide a written notice containing specific information to non-exempt employees upon hire. Below are five indispensable items employers should understand about the Notice to Employee (“Notice”) required under the law.

1. All private employers, regardless of size, must provide the Notice to employee with some limited exceptions.
The DLSE explains that the Notice is not required for employees “directly employed by the state or any political subdivision, including any city, county, city and county, or special district; an employee who is exempt from the payment of overtime wages by statute or the wage orders of the Industrial Welfare Commission; or for an employee who is covered by a valid collective bargaining agreement if it meets specified conditions.” So for private employers, no matter how small, must provide the Notice to an employee unless the employee is an exempt employee.

2. DLSE publishes a template Notice to Employee, but it is not required.
It is recommended that employers use the DLSE’s template to avoid any potential challenges. If the template is not used, the employer is still required to provide all of the information required by the law on one form to the employee. It is not compliant to provide the information piecemeal to the employee on various forms. As explained in number 4 below, the DLSE’s webpage regarding the Wage Theft Protection Act has not been updated to reflect the new template published by the DLSE to address the new paid sick leave requirement in 2015. The current Notices can be found on the DLSE’s website at its Publications webpage. Hopefully the DLSE will update its website to avoid any potential employer confusion in this regard.

3. Electronic delivery is acceptable under certain conditions.
Electronic delivery of the Notice is fine as long as there is a process for the employee to acknowledge receipt of the Notice and print a copy of the Notice.

4. Notices must be in the language usually used to communicate employment policies with the employee.
The DLSE has published previous templates in various languages, such as Chinese, Spanish and Korean on its Wage Theft Protection Act page. However, the DLSE has not updated many of these translations since it has published the new Notice to Employee effective January 1, 2015 to address California’s paid sick leave requirement. In fact, the DLSE’s own page on the Wage Theft Protection Act still contains the old Notice to Employee. The current templates for 2015 are only found on the DLSE’s Publications page which contains the updated 2015 Notice in English, Spanish and Vietnamese.

5. If any information listed on the Notice changes, the notice does not have to be reissued as long as the information is listed on the employee’s next pay stub.
Employers must notify the employee in writing of any changes to the information set forth in the Notice within seven calendar days after the time of the changes, unless one of the following applies:

  1. All changes are reflected on a timely wage statement furnished in accordance with Labor Code section 226, or
  2. Notice of all changes is provided in another writing require by law within seven days of the changes.

In litigation, the following five issues make defending an employment lawsuit much more difficult.

1. No documentation.
No matter what type of employment litigation is at issue – wage and hour claims, leave issues, or harassment claims – the amount of documentation an employer has dramatically increases the odds of prevailing in litigation. I would even go as far as to say there is a relationship in place here (similar to Moore’s law in the computing industry) that the likelihood of avoiding a devastating judgment is proportionate to the amount of documentation the employer has regarding the particular employee or group of employees involved in the litigation.

What should employers document? Conversations with employees, reviews, days absent and the reason for the absence, performance issues (both good and bad – see below), etc…. With email and the ability to scan documents or take pictures of documents on a phone, there is almost no excuse not to have everything documented. The only issue preventing employers from documenting issues is not stressing the need to do document, and the press of business.

2. Inadequate time records.
Employers have the burden to record and maintain accurate time records under California law. If the employer knows employees are not properly recording their time, the employer needs to enforce a policy to have employees accurately record their time, even if it requires disciplinary action. Also, how can time records be “inadequate”?

  • The records that do not record the employee’s actual time working. For example, the employee records their start and stop time and the same time every day even though the employer knows it changes.
  • Not keeping time records long enough. The statute of limitations can reach back four year in wage and hour class actions, and these records will be the primary issues in most cases.
  • Not recording all required information. For example, employers are required to record employee’s meal periods under the IWC Wage Orders (see section 7 – Records).
  • Not keeping the time records in a manner that is usable. Maintaining records in a form that makes reviewing the records almost impossible is almost equivalent to not maintaining them in the first place. Some thought should be put into how an employer is keeping old time record information and how that data could efficiently be reviewed in the future if needed.

3. No institutional knowledge of policies and changes to policies.
Is there one person with full knowledge of the employment policies implemented by the company? Institutional knowledge about the various policies put into place by the company, when they were implemented and why they were implemented is critical knowledge. Also, this information should not reside with just one person in case that person leaves the company.

4. Not communicating goals and performance expectations to employees routinely.
This is pretty basic, but it helps to be reminded about conducting employee reviews routinely and accurately. The reviews will likely be the primary focus in a wrongful termination, discrimination or relation claim, and therefore the reviews should be accurate. It is hard to counsel employees on performance issues, but it is critical that these issues are addressed with employees in writing.

5. No written policies.
Sometimes employers operate with unwritten policies. It is important to have the policies clearly spelled out in an employee handbook or in some other manner. It is critical to have the policies in writing to prevent an employee from claiming that he or she is being arbitrarily singled out for discipline.