What Employer Needs to Know about California Wage and Hour Laws

Wage and Hour lawsuits are on the rise in California. Workers advocates see Wage and Hour suits as “low hanging fruit”.

A growing number of these lawsuits focus on the issue of failing to keep records of how many hours an employee works. California Labor Code sections 226, 1174, 1174.5 mandate that it is the responsibility of the employer to keep accurate records. This includes documenting the number of hours an employee works, rate of pay they are to receive for each hour and the total wages owed. According to Labor Code 215, it is a criminal offense for an employer to fail to keep track of the hours that their employees work.

While the law requires that employers keep track of number of hours that their employees work, many fail to do so. When the employer’s records are inaccurate, inadequate or, in some cases, nonexistent, an employee may establish a violation of state minimum wage and overtime laws by: (1) proving they performed work for which they were improperly compensate and (2) producing sufficient evidence to show that amount and extent of that work as a matter of “just and reasonable inference.” Regardless of whether an employee is paid hourly or is salaried, accurate time records must be kept in order to determine if they have been properly compensated and/or in order to determine if they have worked overtime.

By having these records, an employer can preclude being liable for potential Wage and Hour violations. Remember: the Wage and Hour coverage provided in an employment Practices Liability policy covers defense costs only – any wages deemed owed to an employee come out of the employer’s pocket.

A large percentage of the Wage and Hour law suits involve tracking the hours worked for resident apartment managers. To avoid potential issues, property owners should require their apartment managers to submit a weekly log documenting the activities that were performed by the apartment manager and the time it took to perform them. The more evidence that a property owner has that their apartment manager was properly compensated, the better position they will be in to defend against potential Wage and Hour claims.

If you have any questions or if you would like to make sure that you are in compliance, please contact us immediately.