Top ten mistakes employers make

Classifying all workers as exempt, whether they are or not

Although classifying all workers as exempt and paying them a salary would be easier for both the employer and (arguably) the employee, legally it’s not a good idea and can get companies involved in hefty lawsuits. Read more about avoiding exempt/non-exempt wage and hour law issues here.

Letting workers take lunch whenever they want

Allowing employees to take the required 30 minute unpaid lunch break whenever they want can also put your company in danger of a lawsuit. Employees are required to take a 30-minute unpaid meal period if he/she works more than five hours.

The break must be taken no later the end of the employee’s fifth hour of work. If the employee does not take the meal break within this period, the employer must pay the worker one additional hour of wages.

Make everyone an “independent contractor” because having employees is too much trouble

Just because you want the worker to be one, or because the worker prefers independent contractor status does not make it so. Ultimately, 46% of Independent Contractors reviewed by the IRS are determined to be misclassified and one in three companies fail a worker classification audit. For more information on independent contractor misclassification, read 1099s and Independent Contractors: What You Need To Know.

Not providing training about harassment and discrimination to managers and supervisors

By law, employers with 50 or more employees must have their supervisors complete two hours of training about sexual harassment. The training must also be conducted every two years.

Let workers decide their own schedule without supervision

Employees cannot decide which days and how many hours a day they prefer to work. Most employees are restricted by law as to how many hours they can work per day without having to be paid overtime.

Terminating workers who take leave of absences

Workers have protection under law for reasons such as workers’ comp, disability, pregnancy, medical, military, jury duty, etc. There are laws that provide protection against retribution for workers taking leave.

Not giving workers their final checks if they fail to return company property

Not meeting final paycheck deadlines can be costly. If a worker is either terminated or quits more than 72 hours in advance, the worker’s final check has to be ready on their last day.

Provide loans to workers and deduct the money from their paycheck each pay period

Under California law, no other deduction other than employee benefits such as health insurance is permitted.

Use non-compete agreements to protect confidential information by preventing employees from working for the competition.

Non-compete agreements are prohibited in California with only a few exceptions. An employer cannot keep an employee from working for another company, as the company would be seen as preventing the worker from earning a living.

Implement a “use it or lose it” vacation policy and avoid paying out all that money at termination

As the employer, you may place a reasonable limit on the accrual of vacation, but you cannot take away what has already been accrued.

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