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Controlling your risk in wage and hour compliance
The Department of Labor estimates that 70% of employers are out of compliance with federal laws governing wage and hours. Class actions have emerged as one of the most significant employment law trends of this decade.
According to Tammy McCutchen and Lisa Schreter of Littler Mendelson, experts in wage and hour compliance, the most significant wage and hour risks faced by employers today include meal and rest periods, off-clock work, continuous workday issues and employee misclassification. To control risk they recommend:
• Conduct an audit to ensure jobs are classified correctlyEmployers who demonstrate they have made a sincere effort to comply with the FSLA can avoid significant additional liability on top of whatever back wages are owed. In addition, state laws may be more restrictive than FSLA and employers must also understand the laws in all states where they have employees.
• Keep job descriptions up to date and have employees confirm accuracy during performance appraisal – there is often a disconnect between what’s on paper and what an employee is actually doing
• Centralized review of new and changed jobs by HR/Legal
• Periodic training for HR/Legal
• Adopt employment policies, including “off-the-clock” policy, payroll integrity policy, overtime policy, and rest and meal break policies
• Conduct periodic audits of payroll records
• Provide training to front-line managers and employees
• Hold managers accountable