HR Management & Compliance

Timekeeping—If It’s So Simple, Why So Many Lawsuits?

In yesterday’s Advisor, we offered tips for managing the basics of HR legal issues. Today, the rest of the tips and an introduction to a program specially designed for smaller or even one-person HR departments.

Once again, a tip of the Advisor hat to attorneys John K. Skousen and Christopher J. Boman, partners at the Irvine, Calif. office of employment law firm Fisher & Phillips LLP.

Timekeeping

It’s the employer’s obligation to track hours worked, and these records are imperative to an employer’s compliance with wage and hour laws, say Skousen and Boman. Employers should document employees’ meal and rest periods in writing each day, including when they were taken, how long they lasted, whether they were waived, and if so, why they were waived.

One prominent problem facing companies is employees refusing to take their meal period. Employers must monitor those situations and ensure employees are taking and documenting the proper breaks to avoid class action lawsuits that can reach millions of dollars in settlements.

At the end of every pay period, the total hours worked for each employee should be verified. “Stolen” hours from manipulated time cards is outright theft, and dishonest employees will take advantage if employers are not watchful. Create timekeeping documents that are irrefutable in court, Skousen and Boman say.


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State and Federal Wage/Hour Laws

Although both state and federal wage/hour laws are operating simultaneously, the most favorable one to the employee always applies. Employers must understand the interaction between state and federal laws, and know when to refer to which rule.

Compensation Plans

Every employee who begins work for an employer has an implied contract for compensation. Employers must share what the compensation rate is before employees start working. Employee compensation plans, which detail specific information must be in writing to be binding.

In particular, companies operating with sales positions or other roles where commission or bonuses may be offered must have clear compensation plans presented to employees.

Top Goal

The number one goal for every employer should be to eliminate repetitive practices that could be found unlawful and could give rise to a class action lawsuit, say Skousen and Boman.

Sounds simple, right? Like most things HR? Right. We’re talking about intermittent leave headaches, accommodation requests, investigations, training, interviewing, and attendance problems, to name just a few. Let’s face it, in HR if it’s not one thing, it’s another. And in a small department, it’s just that much tougher.


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  • Explanation of how HR supports organizational goals. This section explains how to probe for what your top management really wants and how to build credibility in your ability to deliver it.
  • Overview of compliance responsibilities, through a really useful, 2-page chart of 23 separate laws that HR needs to comply with. These range from the well-known Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and new healthcare reform legislation to lesser-known, but equally critical, rules such as Executive Order 11246. Also included are examples of federal and state posting requirements. (Proper postings are among the first things a visiting inspector looks for—especially now that the minimum wage has been repeatedly changing.)
  • Training guidelines. No matter the size of your company, expect to conduct training. Some of it is required by law; some of it is just good business sense. Managing an HR Department of One walks you through how to train efficiently and effectively with a minimum of time and money.
  • Prewritten forms, policies, and checklists. These are enormous work savers! Managing an HR Department of One has 46 such forms, from job apps and background check sheets to performance appraisals and leave requests, in both paper and on CD. The CD lets you easily customize any form with your company’s name and specifics.

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