In a post last week we discussed the Fair Labor Standards Act and how it affects employees across the nation, especially in the area of fair compensation for work done. According to the federal law, all nonexempt employees must be paid overtime pay for time worked past 40 hours in a work week. But as some of you may already know, California's hour and wage laws go beyond this rule.
According to the Department of Industrial Relations, employers in California must not only pay nonexempt employees time and a half for hours worked past 40 hours, but this is also true for time worked beyond a standard work shift as well. In our state, eight hours is considered a standard workday, meaning any time worked beyond eight hours in a single day should receive overtime pay. The details of overtime compensation vary and are spelled out in "Wage Orders" published by California's Industrial Welfare Commission. There is a different Wage Order for every major category of business.
While not every state has the eight-hour workday stipulation in their employment laws, overtime pay is required in every state. But even though it's required by law, some employers have tried to work around this rule.
In the case of Dunkin' Donuts last month, the doughnut shop was ordered to pay restitution to 64 employees who were misclassified as managers and therefore not paid overtime pay. Dozens of companies, from Shell Oil to Office Depot to JPMorgan Chase Bank, have all been accused of failing to pay some employees overtime pay. In each case, a civil claim was filed against the company, seeking restitution for violating wage and hour laws. Employers need to make sure they are properly classifying and paying their employees, not only to ensure compliance with the law but to have a strong defense against an unwarranted lawsuit.
Cases such as the one levied against Dunkin' Donuts highlight one of the major problems with not understanding state and federal labor laws: litigation. Depending on how complex the case is, litigation can last months or even longer. This often proves problematic for both parties and may even result in harsh penalties for employers.
Avoiding litigation through proper adherence with complex employment law--and minimizing the risks of litigation when it happens--requires the help of a skilled attorney.