The Need for Audits of Employment-Related Policies and Procedures

Staying up-to-date on the ever-changing laws facing employers in the state of California is an ongoing challenge. Even the most experienced human resources and legal experts in the field face daily challenges keeping abreast of new and amended laws and, in turn, interpreting those laws. The best advice for employers to ensure that they are in compliance with the law is, with the assistance of experts in the field, to establish, maintain and update employment-related policies and procedures on an ongoing basis. Conducting an annual audit of your company's policies is a good way to help ensure that your policies are up to date. This advice applies to all companies no matter their size.

A sampling of some of the rules and regulations that often catch employers off-guard is provided below.

Meal and Rest Periods:

All employers are required to provide non-exempt employees with 30-minute uninterrupted meal periods for every five hours worked. The penalty for failing to provide a meal period is the payment of one hour of that employee's regular rate of pay. The exceptions to this rule are few and difficult to apply, and as a general rule it is safe to assume that you are covered by these laws.

Those exceptions are limited to the following:

No meal period is required if an employee works five hours or less in any one day. And, generally no meal period is required if an employee works less then six hours in any one day so long as that employee agrees to waive the meal period in writing. Under very limited circumstances an employer may engage in an “on-duty” arrangement with the employee under which the employer and the employee agree, in writing, that taking a meal period is impracticable. Any such agreement is revocable by the employee. This exemption is seldom allowed as the analysis is applied strictly against the employer. Examples where such an agreement has been enforced include a single employee operating a coffee kiosk or a single employee operating a gas station.

Similarly, all employers of non-exempt employees who work more then 3-½ hours in any day must provide those employees with a 10-minute rest period (i.e. a “break”) for every 4 hours worked. The penalty for failing to provide the required rest period is, like the meal period requirements, one hour of the employee's regular rate of pay.

Please note that employers bear the burden of keeping adequate time records for their employees. In order to avoid potential liability for meal and rest period penalties, employers are strongly advised to require their employees to (1) clock in and clock out for lunch, or alternatively, write down each meal period taken for every day worked; and (2) write down each rest period taken (since this is paid time for which clocking-out would not be appropriate).

Overtime:

As with meal and rest period requirements, employers of non-exempt employees, with very limited exceptions, must comply with overtime laws, which require time-and-a-half pay to an employee for all hours worked greater than eight hours in any one day or forty hours in one week. Further, all hours worked greater then twelve in any one day must be paid at double the employee's regular rate of pay.

Many employers are under the mistaken impression that simply paying an employee a salary negates the need for overtime payment. This is wrong. The key element in determining overtime pay is whether or not the employee is considered exempt or non-exempt. The method of payment is not controlling.

The topic of properly classifying employees as exempt or non-exempt is too detailed to discuss in this overview. In short, however, the test depends partly on a minimum level of compensation that must be paid to an employee and partly on an analysis of that employee's day-to-day job duties. Depending on the percentage of those job duties that may be classified as “exempt”, overtime pay may be avoided. Employers are strongly advised to assess each of their employee's day-to-day job duties to ensure that no employees are misclassified. Scherer Smith & Kenny LLP specializes in assisting employees with job duty audits and overtime assessments.

Workplace Harassment/Discrimination/Retaliation Policies:

The topic of harassment, discrimination, and retaliation in the workplace is a complicated area of the law replete with pitfalls for employers. While a full discussion of this topic is better left to a separate article, a critical recommendation we make to employers is to institute a zero tolerance policy against harassment, discrimination, and retaliation in the workplace. Recent amendments to California's Fair Employment and Housing Act mandate that employers with more than 50 employees (including independent contractors and temporary workers) located anywhere in the United States must comply with a very detailed list of workplace harassment/discrimination/retaliation training requirements. However, to be safe, we recommend that all employers provide thorough training to all employees.

Another recent amendment to state law mandates that employers institute sexual harassment policies which expressly state that employees are to be protected from discrimination and harassment from non employees (such as independent contractors, vendors, suppliers, and the like).

The importance of having comprehensive and updated policies and procedures relating to workplace harassment, discrimination, and retaliation is critical. Employers are strongly advised to consult with legal counsel for purposes of establishing and maintaining adequate anti-discrimination/harassment/retaliation policies.

Scherer, Smith & Kenny LLP's Employment-Related Services

The variety and wide reaching-scope of employment-related policies and procedures mandated by state and federal law necessitate that employers establish and maintain a comprehensive booklet of policies and procedures which must be provided and explained to employees. Scherer Smith & Kenny LLP's practice includes creating employment handbooks and providing employers with periodic updates on policies to be included in those handbooks. Our firm will also conduct or assist employers in conducting (1) audits of employers' policies and procedures to ensure accuracy and compliance with current laws; and (2) seminars and workshops to train employees about their rights and obligations under the law.

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