California businesses need to be cautious when considering how to cut personnel costs. Since many business costs are fixed, expenses related to human resources sometimes present a tempting area in which to find savings. However, many businesses have learned the hard way, that the legal issues which often result from cutting corners in personnel matters can be very expensive to resolve and can often lead to litigation. In California, the cost of defending an employment lawsuit could be debilitating for the small and medium-size business. In the interest of “preventative law” I thought I would share a list of ten of the most common mistakes businesses make in the area of California employment law.
#10. Poorly trained supervisors. Many employers fail to ask themselves “who are my supervisors? Who makes decisions on behalf of the employer?” Make sure the supervisors know the employer’s policies because if they make decisions on behalf of the business and they don’t know what to do the employer is held accountable. Employers need to make sure supervisors accurately conduct regular performance evaluations of employees in order to track all communication. When the day comes for a supervisor to fire an employee, there is a written track record as to why. Make sure supervisors know how to discipline employees in a consistent way to prevent unequal treatment of employees. All supervisors should also have a good understanding of employment laws. This will allow a supervisor to know when to make a decision and when to speak with human resources (“HR”). This also includes having a policy for sexual harassment prevention. If someone reports a harassment incident to a supervisor, but asks them to not say anything, the supervisor needs to know that they may have to report this to their superiors. If an organization is too small to have an HR department, hire an HR consultant to assist with these policies.
#9. Federal contractor. A federal contractor is a person or entity that contracts with the federal government to provide services, supplies, or other work. Federal contractors are subject to many special employment laws and regulations.
#8. Denial of leave of absence for legitimate legal reason. Many employers misunderstand the fact that an “at will employee” does not mean that they can be fired for any reason. Many employers fire their employees because they need to take a leave of absence either from pregnancy, the bonding period after birth, or at the time of a death in the family. There are 17 legally-protected leaves in California. If an employer is unsure which qualifies as a legitimate reason for leave of absence, they should always check with HR engage an HR consultant, or hire an attorney who is familiar with California labor laws.
#7. Failure to properly investigate employee complaints. It is imperative that employers investigate all complaints made by employees. In addition, managers can avoid liability if they promptly report to HR. Employers need to train supervisors in how to timely investigate employee complaints, and to assure all employees that a prompt investigation will occur when they make a complaint. Make it a policy. A key provision should include anti-retaliation or “whistleblower” protections.
#6 Independent contractor v. employee and the misclassification employees. All independent contractors are assumed to be employees, meaning it is the responsibility of the employer to prove that these individuals are actually independent contractors. Independent Contractor Agreements, where there is a mutual agreement of a contractor’s status a an independent contractor rather than employee does not count as a defense. For example, if an independent contractor’s sole income comes from one company, that independent contractor will most likely be classified as an employee. The State of California can inflict serious fines for this particular mistake.
#5. Disabilities. The key mistake here is a failure to make accommodation efforts for employees with disabilities. If a doctor proves an employee has a disability, an employer should make an effort to work with employee to see how the employer is able to work with the employee to support their continued employment.
#4. Document all warnings. Performance evaluations should document employees’ behavior, performance, and discipline. When the unfortunate time comes to terminate an employee, a proper written record showing that the employee was warned each month may prevent any lawsuits of wrongful termination.
#3. Social media discipline. Employers should keep in mind the tort of invasion of privacy, which prevents employers from looking through employees’ social media content. Many employers worry that their employees may be tempted to trash talk the employer on their personal social media sites. Technically, trash talk is protected under National Labor Relations Act (NLRA). What employers can prohibit are trade secrets HIPPA information, client information, or any private employer information from being posted on social media. Employers may also prohibit employees from friend-requesting employer clients on Facebook or connecting in any way on social media. The only major prohibited posts are threats against employers, or employees harassing employers.
#2. Misclassifying employees as overtime exempt. Most employees are entitled to overtime pay under the Fair Labor Standards Act. They are called non-exempt employees. Employers must pay them one-and-a-half times their regular rate of pay when they work more than 40 hours in a week. However, many employers erroneously label non-exempt employees as exempt.
#1. Requiring employees to volunteer. Employers cannot require employees to volunteer for fundraising or after work programs. This should be considered work and must be paid if employees are “required” to volunteer.
I hope that you have found this information helpful! Contact us to learn more.
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