Compliance Stuff

A company hires workers and calls them independent contractors. They sign agreements. They get 1099s. Everyone is aligned with what they are. Until they’re not. That’s exactly what happened in  Dynamex Operations West, Inc. v. Superior Court —a case that reshaped how California looks at independent contractors and made one thing very clear:  You don’t get to decide classification. The law does. Here’s the problem. In California, classification is not about what you call someone. It is not about what’s written in the agreement. It is not about what the worker prefers. And it is definitely not about what “makes sense” for your business. Classification is about how the relationship actually functions. And California applies that analysis aggressively. Employers rarely get tripped up because of their bad intent. It’s speed. It’s trying to solve real business problems in real time. “We just need someone flexible—a contractor.” “They’re paid a salary—exempt.” “They’re learning—inter...

Wage and hour violations are rarely intentional. They typically stem from common missteps such as outdated job descriptions, payroll errors, miscommunication, or genuine confusion about complex federal and state laws and regulations. So, as too many employers know, a wage and hour lawsuit or Department of Labor (DOL) investigation can hit a business out of the blue, often without prior notice. Such actions can cripple even a well-run organization due to stringent laws that impose heavy penalties and encourage collective and other actions with their provisions for recovery of extensive damages, including back wages, liquidated damages, and attorneys' fees. While many employers understand that a proactive wage and hour audit is the most effective way to reduce exposure to such an action, the prospect of conducting one may seem daunting, even to the most sophisticated HR professional. The good news is that an audit becomes more manageable when approached with clear objectives and disc...

  When winter storms strike, businesses often face the challenging decision of whether to shut down operations to ensure the safety of their employees—bringing a host of wage and hour issues to the forefront. During unexpected closures, employers face considerations such as whether employees are entitled to be paid under the Fair Labor Standards Act (FLSA) . Here’s an overview of some of employers’ basic legal obligations during work disruptions caused by the weather. Quick Hits Generally, under the FLSA, employers must pay exempt employees their guaranteed salary during business closures caused by inclement weather, as deductions for employer-caused absences are not permitted . Employers are typically required to pay nonexempt employees for all hours worked, but if they cannot work remotely due to the nature of their jobs during a weather-related closure, employers are not required to pay them. Connectivity problems during inclement weather affect wage and hour obligations similar...

Employers reclassifying employees as nonexempt due to this year’s overtime rule should clearly explain the basis for the change to minimize morale problems resulting from the change. Employers should communicate that reclassification is not a reflection of the quality of the employees’ work or their contributions to the organization, said Keith Kopplin, an attorney with Ogletree Deakins in Milwaukee. “This is simply something required by virtue of a change in the law,” he said. Organizations also could reference the fairness of being paid by the hour and being entitled to overtime, he added. If possible, employers should find ways to minimize the impact of other changes required by reclassification, Kopplin said. For example, employers could use exception timekeeping for employees who work fixed schedules so they are only required to indicate when they deviate from their schedule, instead of recording the start and end of every workday and every unpaid break. Employers should also be ...

The proper classification of employees as exempt or non-exempt is often at the root of wage and hour litigation, and there are many common misunderstandings about the subject. Below are some of the questions SLG attorneys most frequently receive about employee classification: Q: Are all salaried employees exempt? A: No! Although many use the word “salaried” as synonymous to “exempt,” the analysis is significantly more complicated. Most California exemptions require employees to be paid at least double minimum wage on a salary basis and to be primarily engaged in exempt duties, which are specifically defined for each exemption. Some exemptions have a higher salary threshold, such as certain physicians and computer professionals, and there are different rules for some commissioned salespeople. Q: Do California employers need to worry about the U.S. Department of Labor’s recently released Overtime Rule? A: Mostly likely no. Under the new Overtime Rule, effective July 1, 2024, the minimum ...