Wednesday, February 04, 2009
5 New Year’s resolutions for employers
|We're one month into the new year, but you can stay on the right track for the next 11 months by resolving to avoid issues that consistently result in employment-related lawsuits:
1) Thinking that you have don’t have to pay overtime simply because an employee is “salaried.” Paying someone a salary is only one part of a several-part test to determine whether an employee is truly exempt from overtime. This is a complicated area of the law. Consult a human resources professional or attorney before classifying any employee as exempt.
2) Not paying overtime on a daily basis. California employees must be paid overtime when they work more than 40 hours in a week (the federal rule) and/or when they work more than eight hours in a day. In a workweek where an employee works only one day, and on that one day the employee works 8 and one-half hours, you must pay the employee 30 minutes of overtime.
3) Misclassifying employees as independent contractors. This issue was front-page news recently when the Orange County Register was sued for misclassifying delivery drivers. It resulted in the Register agreeing to pay a $42 million settlement. Federal and state agencies and courts use a number of different tests to determine whether a worker is an independent contractor. As with overtime exemptions, this is an area where employers should do their homework before labeling someone as an independent contractor.
4) Using an unlawful noncompete or nonsolicitation agreement. The California Supreme Court recently made it clear that noncompete agreements and even nonsolicitation agreements (i.e., an employee’s agreement not to solicit your customers for a certain time period following termination) are almost never enforceable. Attempting to enforce an unenforceable noncompete can expose an employer to punitive damages.
5) Failing to pay an employee all of his wages (including accrued vacation) upon termination. When terminating an employee, have the final check in hand to give to the employee. Do not put the check in the mail, and do not wait until the next payroll period. The employee is entitled to a penalty equal to an additional day’s pay for every day his final check is late, up to a maximum of 30 days. This penalty is obtained through the Labor Commissioner’s office.