Like many California business owners, one of your most challenging tasks is keeping costs low to maximize your profits. This includes the high cost of labor. In fact, employee wages and benefits might be among the biggest items on your list of operating expenses.
Paying your workers a fair wage is critical to avoiding legal issues, but it is not always clear which of your employees’ hours you are required to compensate. Knowing the answer to this question allows you to more accurately calculate overtime rates for your employees and remain in compliance with state and federal labor laws.
What does the law consider ‘work time’?
Obviously, the hours your employees are clocked in and on duty are hours for which you must pay. However, you know that this is not always clear cut. For example, what if an employee offers to work during her unpaid lunch hour? What about meetings and training seminars? Should you compensate workers for travel time? Many of the questions you have about commensurable hours may involve unique circumstances, but in general, federal law and/or California laws impose the following restrictions:
- You must pay employees who travel between work sites but not for travel time to and from work.
- You may not require your workers to stay off the clock for prep work, clean up or correcting mistakes.
- If you require your employees to remain on site while on call or waiting for assignments, you must pay them for that time.
- Employees whom you assign to answer the phone, reply to emails or deal with customers while on their meal break must be paid.
- Mandatory business events, such as meetings or training, that occur during normal work hours are commensurable.
- In California, there is no rounding of time. You must pay for all reported time the employee works down to the minute. In this respect, California law is more stringent than federal law.
Occasionally, an employee may volunteer to work off the clock to complete a project or help other workers finish their jobs. You cannot permit this. You must also pay an employee who works from home while sick. Knowingly allowing an employee to work off the clock, even voluntarily, can result in serious legal trouble for you.
Because these are only a sampling of situations that can cause confusion, it is always a good idea to seek reliable advice for any labor issue of which you are uncertain.