Young Upstarts

All about entrepreneurship, intrapreneurship, ideas, innovation, and small business.

Don’t Get Sued By Employees – Avoid These 3 Careless Mistakes

Employees frequently bring lawsuits against current and former employers to settle labor law violations. Being involved in a lawsuit is time consuming, expensive, and can ruin your personal and business reputation. If you haven’t retained a corporate lawyer yet, now is a good time.

Ignorance of labor law is never a good defense. The court won’t let you slide if you didn’t know you were breaking the law. If the court finds your ignorance sincere, you might not get hit with criminal charges, but if you failed to pay proper wages, for example, you’ll be ordered to pay what you owe, plus penalties. 

To avoid getting hit with a lawsuit, you need to avoid mistakes that violate labor law.

Here are the top 3 mistakes that result in employment lawsuits:

1. Wage theft.

According to the Department of Labor (DOL), more than 70% of employers violate the Fair Labor Standards Act. Sometimes the violations are accidental, but many aren’t. Employers steal wages from employees in a variety of ways. 

Sawaya Law lists 8 examples of wage theft, but the list isn’t exhaustive. Wage theft is any intentional or unintentional failure to pay employees money that is legally owed to them. For example, unpaid overtime, being required to work on a break without pay, relinquishing tips, not being paid minimum wage, and being misclassified as exempt from overtime compensation are all examples of wage theft.

Not including bonuses when calculating an employee’s regular rate of pay is another form of wage theft.

It’s impossible to understand the entirety of labor law by yourself. It’s best to speak with a labor law attorney from your state to develop a compliance protocol for your business to follow.

2. Rest and meal break violations.

The most common reason employers get sued is for rest and meal break violations. Both federal and state laws apply to breaks, and many employers aren’t familiar with either set of laws. For example, in California an employee is allowed to waive their right to a 30-minute unpaid meal break, but only when working 6 hours or less. The waiver must be optional; it cannot be required. 

Many employers break this law by requiring kiosk employees to waive unpaid meal breaks as a condition of employment. What they should do is require an on-duty meal period instead. When an employer doesn’t know the law, it’s a common mistake.

Know how many breaks your employees get.

Some employers don’t know how many ten-minute rest breaks are required per shift, and unintentionally short employees their last break. This also happens when a business is too busy to provide coverage for a last break. In California, an employee who doesn’t get all of their required breaks is entitled to an hour’s pay for each day a break was missed. 

Don’t be stingy with breaks.

Don’t count down the seconds and penalize employees for being 1 minute late from a break. Not only will you kill morale, but you’ll get into tumultuous territory where employees can claim it takes a couple minutes to walk to and from the designated break area. In some states, an employee’s break officially begins only when they reach the designated break area. If you don’t give them extra time, you’ll owe them more money.

Lawsuits are more expensive than wage claims.

Although it’s the easiest option, not all employees will file a wage claim with the labor board. Some will go straight to a lawsuit.

Make sure you know Federal and state laws pertaining to breaks, and follow the law to the letter and be generous. If employees are only entitled to ten-minute breaks, give them fifteen-minute breaks instead.

3. Unequal dress code standards for men and women.

Dress code standards shouldn’t be gender-specific. For example, you can prohibit all employees from wearing earrings, but don’t prohibit only men from wearing earrings. Likewise, dress codes requiring men to wear ties and women to wear skirts can now be considered discriminatory. Although gender-specific dress codes are technically legal, they leave you vulnerable to a sex discrimination lawsuit.

You can enforce a conservative dress code that includes no blue jeans or long hair, but you cannot require gender-specific attire or different hairstyles for men and women. If your company policy makes distinct rules between male and female attire or grooming, there has to be a legitimate, non-discriminatory reason.

Make sure all dress code policies are clearly written out in the employee manual and enforce your policies across the board.

Labor law is complex; seek advice from an attorney.

Read your state’s labor law statutes and join mailing lists to stay on top of changes, but don’t try to figure the law out for yourself. Always consult an attorney before creating employee manuals.

Share

Young Upstarts is a business and technology blog that champions new ideas, innovation and entrepreneurship. It focuses on highlighting young people and small businesses, celebrating their vision and role in changing the world with their ideas, products and services.

Tagged as: , , , ,