California’s labor laws have given it a reputation as a “non business friendly” state that makes life difficult for employers. In my consulting practice we have audited many California small businesses and found most of them to be seriously non-compliant with many state employment standards and regulations.
A business owner could face serious fines or disruption if a government agency finds his or her company in violation of California’s labor code regulations, which are extensive. Disgruntled ex-employees can find “trolling” lawyers who will pay them a fee for insider information that leads to their filing suit against you for even minor infractions. The plaintiff bar attorneys have prospered from this state’s confusion of rules and regulations and have targeted numerous small and medium sized businesses with employment related litigation.
If you are a small California business employer, it is in your best interests to take the steps necessary to ensure you are compliant with the state’s labor laws. The links in this article can assist the small employer in taking the steps he or she needs, using free or inexpensive resources available on the Internet, to avoid labor law compliance problems. The guidelines outlined here are intended for use by employers with under 50 employees. For those firms with over 50 employees, this advice is still valid but there are other major legal requirements that the larger employer must consider to be fully compliant with the labor codes, such as state and federal leave laws and sexual harassment training for your managers. For the smaller business, here are the primary five areas on which you will need to focus.
1 :Update your Employment Law Posters!
The California Department of Labor and the federal government require employers to post information related to wages, hours and working conditions in an area frequented by employees where it may be easily read during the workday. The number of posters required is determined by the size and nature of your business but could total up to 10 or more. You can obtain the requisite California and federal posters through these websites: [http://www.dir.ca.gov/WP.asp] .and [http://www.dol.gov/osbp/sbrefa/poster/matrix.htm]. If display space is an issue, you may want to consider purchasing an approved “combination” poster which condenses and combines all the necessary posters.
2 :Be compliant with all Safety and Health regulations – In California, every employer has a legal requirement to provide and maintain a safe and healthy workplace for its employees, according to the California Occupational Safety and Health department standards. As of 1991, each employer must have in place a written, effective Injury and Illness Prevention Program (IIPP).
3 :Pay close attention to how you pay your employees – In California, most state employment regulations “trump” federal regulations because state standards are usually stricter. Many small business owners make the mistake of paying all or many of their employees a straight salary in order to keep payroll a simple process. This is especially true in businesses which have an office environment. This can be a very perilous approach as you most probably will be in violation of overtime rules which have very stiff penalties.
Acritical area many small businesses fail to recognize is the proper classification of employees, as they apply to mandatory overtime pay – exempt from overtime or not exempt. This can be a technical area which you may need some professional advice, but the general rule is that every employee should be paid hourly and paid overtime according to the IWC orders unless the proper testing is done to make a case for an exemption which usually only applies to top managers or certain professional employees.