Now that Governor Newsom has signed AB 2288 and SB 92 into law, what happens now? 

You need to get on the compliance train, pronto!  If there was ever a time to audit your wage-hour practices and ensure you are following the law, it’s now. The potential PAGA penalties are significantly reduced if you take “all reasonable steps” to cure California Labor Code violations, which may include, “an audit of the alleged violations and taking action in response to the results of the audit, dissemination of lawful written policies as to the alleged violation, training of supervisors on applicable Labor Code and Wage Order compliance, and/or taking correct action with regard to supervisors.”

Of course, California’s wage-hour laws are complex, and rarely a matter of common sense.  As a start, here are the top 10 issues to consider:

1. Are your employees properly classified as “exempt” or “non-exempt”? Very few employees legitimately may be considered “exempt,” that is, not covered by most of California’s wage-hour rules.
2. Are you calculating the “regular rate of pay” correctly for overtime? The overtime rate for non-exempt employees is based on their “regular rate of pay” for the workweek.  That rate will be different than the base hourly rate if employees receive bonuses, shift differentials, commissions, or other forms of compensation.
3. Are employees provided rest breaks and meal periods as required? Depending on the IWC Wage Order applicable to your business, the rules can differ in terms of timing and the ability to “waive” a required meal period.
4. Are you properly paying employees for travel time and work-related expenses? Although “commute” time is not compensable, you should be paying for all travel time outside of the regular commute.  Labor Code section 2802 also requires reimbursement for all “reasonable” and “necessary” expenses.
5. Are your remote employees properly recording their hours worked, taking their required rest breaks and meal periods, and being provided the equipment and services they need to do their jobs? In many circumstances, California law applies to employees working outside the state, even if they never come to California for work.
6. Are you paying on-call employees correctly? If you require employees to be available for work, you generally must pay them at least minimum wage.
7. Are you calculating California’s Healthy Workplaces Healthy Families Act sick leave properly? The rules are different depending on the employee’s classification and pay structure.
8. Are your wage statements compliant? Labor Code section 226 requires certain information to be included on the statements, and Labor Code section 212 dictates how the name of your organization is reflected.
9. Are you rounding employee time rather than paying for actual hours worked? The California  Supreme Court has cast doubt about whether this practice is still valid.
10. Are you properly paying “reporting time” and “call backs”? California law imposes strict requirements in these areas.

Need some help?  Join me for our upcoming webinar, “The Million Dollar Violation:  Wage-Hour  Compliance Steps to Take Advantage of PAGA Reform,” on August 1, 2024, from 9:00 a.m. to 10:30 a.m.  Register here!