Question:

            I am new on the job as a Human Resources generalist.  What do you recommend as a starting point to make sure my new company is complying with California law?

Answer:

            It is a good practice to periodically review your wage and hour policies and practices to make sure they comply with existing laws.  Below is a partial list of steps to begin a wage and hour practices audit to ensure compliance:

  • Be certain you are operating under the correct Industrial Welfare Commission Wage Order. The Wage Orders, Labor Code, and other California statutes set forth the rules employers must follow based on your business’s industry. View the Wage Orders here:  https://www.dir.ca.gov/iwc/wageorderindustries.htm
  • Check and update your workplace postings.  A new law, SB 657, taking effect January 1, 2022, allows employers to distribute some, but not all, workplace postings by mail or electronically.
  • Review the exempt and non-exempt classification of employees to make sure employees are properly classified.
  • Evaluate the status of employees and independent contractors to ensure your company’s workers are properly classified.
  • Check payroll dates and pay stubs to be sure they comply with California law.  In most industries, employees must be paid at least twice a month on regular paydays. In California, pay stubs must contain the following: gross wages earned; total hours worked (not required for salaried exempt employees); the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis; all deductions; net wages earned; the inclusive dates of the period for which the employee is paid; the name of the employee and the last four digits of the employee’s social security number or an employee identification number other than a social security number; the full and correct name and address of the legal entity that is the employer; all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee; and the number of Healthy Workplace Healthy Family Act sick leave available to the employee. A sample paystub for a nonexempt employee can be viewed here: www.dir.ca.gov/dlse/Paystub.pdf.
  • Review the process for reimbursing employees for business expenses, making sure reimbursement payments are timely and supported by appropriate documentation.
  • If you have employees who work on commission, ensure that written commission agreements are in place.
  • Review the company’s meal and rest period policies. Remind managers and supervisors of the company’s policies regarding meal and rest breaks, not working off the clock, and accurately recording all time worked on a paper or electronic timesheet.
  • Provide additional wage and hour training for managers and supervisors that set employee schedules or that work in payroll or human resources.
  • Review your timekeeping system to see that it contains an opportunity for employees to review and sign an acknowledgement stating that the time record accurately reflects all hours worked, that they had the opportunity to take all meal and rest periods in the pay period, and if they did not, that they reported the situation to their supervisor for correction.
  • Consider periodic wage and hour training to employees so they understand the importance to taking their meal and rest periods and accurately recording all time worked.

An ounce of prevention can go a long way in minimizing the risk of claims and ensuring proper payment for employees.