Legal Question in Employment Law in California
Hi all,
Im running at small non-profit with 10 employee's. For convienence and as a corporate cultural choice we have been paying all of our employee's as if they are on salarly. Everyone gets CA minimum wage for 35 hours a week, and we pay them once monthly.
We track hours, but casually, because they get paid for 35 hours whatever they do. This is how it is "like" a salarly.
Now, ive been reading about CA's wage laws and have been unable to discern whether or not this is OK. My employees are all definitely non-exempt, which according to the way I am reading the book means I should pay twice a week hourly, with overtime, etc.
But there is also this "Flat Rate" idea in there, which says I can pay them based on the "job completed" which is sort of what we do. The jobs need to be done and they are paid for 35hrs a week to them.
So my question is, do I really need to change the way Im paying them? Do I need to track their hours closely, or can I just keep it the way it is, paying them the same each month for the "job done" as long as they do not do overtime (which is easy to avoid).
Lastly, it isn't clear whether the once a month pay period is ok either.
2 Answers from Attorneys
I recommend that you consult with an employment law attorney asap. The "culture" that you describe is probably a violation of state and federal labor laws. I recently was involved in a wage and hour lawsuit against a large non-profit for similar practices. It is better to invest in a consultation than face a lawsuit.
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Hello.
You are running a risk of being liable for overtime compensation. It is important that you reclassify your employees, start keeping track of their hours, and make sure that you pay their overtime as well as comply with other laws (meal breaks, rest breaks, paying twice a month, keeping payroll records, etc.) If you are not doing this, the risk is facing a liability for underpayment of wages to all the employees, and depending upon how much overtime they work, if 10 people collectively bring a claim for 3 or 4 years back (as they are allowed) it might be a significant sum.
Thanks, and feel free to follow up.
Arkady Itkin
San Francisco & Sacramento Employment Lawyer
http://www.arkadylaw.com
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