Wage and hour lawsuits are the most common type of class actions for workplace issues. Many of the claims involve a failure to properly classify employees or the failure to establish a trusted and reliable system to capture all time worked. These issues can typically be resolved long before they become legal issues, with tools that clarify these problem areas.
One indication of how impactful a wage and hour class action can be to a corporation is the incredibly high settlement figures from these cases. In fact, the top 10 wage and hour class action settlements in 2017 were each about $500 million dollars. This type of financial exposure warrants prevention.
The best prevention is a simple, clear policy that is circulated to everyone and socialized so that everyone understands the wage and hour protections that apply to their role. Whether it’s classification issues of exempt versus non-exempt, overtime rules, or meal and rest period breaks, make sure everyone is on the same page by summarizing the protections and outlining the employer’s process for ensuring those protections.
The key to drafting and enforcing effective policies and procedures related to wage and hour issues is to go beyond compliance and help employees understand the “why.” For example, simply telling employees that they are required to clock in and out without explaining that the underlying reason behind that rule is to ensure payment for all time worked is an incomplete policy. Similarly, don’t just tell employees that they are required to take meal and rest periods without emphasizing your company’s commitment to prevent employee burnout by encouraging everyone to take breaks.
Our sample policy outlines wage and hour issues (based on California law) and includes language that outlines legal requirements, including:
- Information about clocking in and out for non-exempt employees
- Clarification on how overtime is calculated and paid
- Details about mandatory meal and rest periods for non-exempt employees
As with any sample template, the most effective way to use this resource is to customize it. Take the sample language related to legal requirements and add information about your company’s commitment to not only meeting legal requirements about wage and hour issues, but a deeper commitment to providing employees with an overall healthy culture that goes beyond compliance.