In California, businesses face the potential risk of class action employment lawsuits, often centered around wage and hour disputes. Ensuring compliance with state labor laws can help your company avoid costly legal battles.
Proper classification of workers
It’s essential to correctly classify employees and independent contractors according to California’s Assembly Bill 5 (AB 5). Misclassification can lead to wage claims, including unpaid overtime and benefits. Review each worker’s role and duties regularly to ensure they align with their classification.
Adherence to meal and rest period laws
California has specific regulations regarding meal and rest breaks for employees, including:
- Meal breaks: If you work more than five hours, you must take a 30-minute unpaid meal break. You can waive this break by mutual agreement if your shift is six hours or less. After ten hours, you need a second 30-minute meal break, which you can waive if your shift is 12 hours or less and you took the first break.
- Rest breaks: You must take a 10-minute paid rest break for every four hours worked. No rest break is required for shifts under three and a half hours.
Ensure that your business provides the mandated breaks, and document any deviations due to legitimate business needs.
Paying proper wages
In California, the minimum wage varies based on employer size: $16 per hour for employers with 26 or more employees and $15 per hour for employers with 25 or fewer employees.
Overtime pay must be at least 1.5 times the regular rate for hours worked over eight in a day or 40 in a week, and double time for hours over 12 in a day or over eight on the seventh consecutive day. Regularly audit your payroll processes to ensure compliance with these regulations.
Staying ahead of potential issues
Proactively addressing wage and hour issues helps your business remain compliant and reduces the risk of class action lawsuits. Taking these steps not only safeguards your business but also fosters a fair and compliant work environment for your employees.