How Employers Can Prevent Wage and Hour Lawsuits

A wage and hour lawsuit is a legal claim filed in court by an employee alleging that their employer violated their wage and hour rights. Examples of violations that could result in a wage and hour lawsuit include not paying an employee the required minimum wage and failing to pay an employee overtime at the required rate.

Employers of all sizes can face wage and hour lawsuits, and usually, when an employee files a wage and hour lawsuit against an employer, the law tends to favor the employee strongly. If an employee files a wage and hour lawsuit against you, the verdict and settlement can be costly for you.

As an employer, it is crucial that you understand how you can prevent wage and hour lawsuits. You need to understand how you can avoid the added costs of penalties and back wages. Below, we share some tips you can follow to help prevent wage and hour law violations and, thus, wage and hour lawsuits;

Tip #1: Classify Workers Correctly

If you wrongly classify a worker as exempt, meaning they are not entitled to minimum wage and overtime pay, you will wrongfully deny them minimum wage and overtime pay. Misclassifying workers can be a costly mistake. It is crucial that you understand what your workers do every day so you can be able to correctly classify them as exempt or non-exempt.

In California, most employees are considered non-exempt, thus eligible for minimum wage and overtime pay. Some workers exempt from the minimum wage law in California include outside salespersons and those people who are the spouse, child, or parent of the employer. And some workers who are exempt from overtime pay include executive, administrative, and professional employees, outside salespersons, and employees who’ve entered a collective bargaining agreement under the Railway Labor Act.

Tip #2: Avoid Using Comp Time in Lieu of Overtime Pay

Sometimes, employees request time off instead of pay when they work overtime. You may be tempted to quickly accept such a request in an effort to be responsive to your employee’s desires. If an employee requests time off instead of pay after working overtime, do not be quick to accept the request, as such a system that trades time for wages essentially goes against federal law in the private sector.

Tip #3: Make Payments When They are Due

For example, do not hold back on paying overtime to “make it up” on the next payment. You might forget. Also, do not pay $600 when you owe $1,200 or average employee hours over weeks. Every workweek is taken as a standard, and the law does not allow the averaging of hours over two or more weeks. For instance, if an employee works 30 hours the first work week and 50 hours the next, they must receive overtime pay for the extra hours worked in the second week, although the average number of weeks worked in the two workweeks is 40.

Contact Us for Legal Help

Need help preventing wage and hour lawsuits? Look no further than the experienced employment attorneys in San Francisco at SAC Attorney LLP. Contact us today at (408) 436-0789 or by filling out our online contact form.