Practice Area
02. Classifications & Wages
Classifications
An organization's workforce may be comprised of several different categories that are governed by law. Depending on business operations and strategy, there are many reasons to classify personnel based on their role and function.
However, California continues to strengthen its laws to protect workers from being placed in the wrong category. Employers must be wary of the financial risk that results from incorrectly classifying workers. All it takes is one disgruntled employee to blow the whistle on an incorrect classification, and the employer may be facing a class-action or PAGA lawsuit.
Civil damages resulting from an incorrect classification can include, without limitation, waiting time penalties, unpaid wages, unpaid overtime, value of benefits, payroll taxes, missed breaks, interest, attorneys' fees, court costs, etc. These damages would be calculated based on the past several years, and depending on the size of an organization's workforce, the damages could reach several millions of dollars.
PractiCali Law helps protect employers from risk exposure by advising on the following classifications:
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Independent Contractors (1099)
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Employees (W-2)
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Shared Employees / Joint Employer (Staffing Agencies)
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Interns & Volunteers
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Exempt / Non-Exempt
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Salaried / Hourly
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Supervisor / Manager
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Alternative Work Schedules
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Temporary & Seasonal
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Full-Time / Part-Time
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Benefits Eligibility
Wages
Assuming that each person is placed in the correct employment classification, an employer still has the duty to correctly and timely pay their workers. Failure to pay employees accurately and on time can result in hefty financial damages similar to those that may result from inaccurate classifications.
There are several ways an employer can mitigate their risk of financial exposure to wage claims. From strong timekeeping policies that hold people accountable, to the routine auditing of common low-hanging fruit issues, employers in California are expected more than ever to ensure they have the safeguards in place to correctly pay their employees.
Additionally, employers should not rely on their payroll vendor to set them up for legal success. Many companies that face payroll lawsuits already use payroll vendors or software. This demonstrates that payroll vendors are not in the business of providing legal advice, so they commonly refrain from advising companies about compliance issues.
Employers are encouraged to contact us for advice relating to these risky wage issues that employers face every day:
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Timecards & Accurate Timekeeping
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Defined Workweek & Payday Notices
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Physical Locale
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Employee Acknowledgements and Waivers
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Overtime & Doubletime Calculations
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Bonuses & Commissions
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Meal & Rest Break Penalties
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Minimum Wage
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Minimum Salary for Exempt
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Tax Withholding
- Pay Stub & Wage Statements
- Final Paychecks
- PTO and Sick Leave Accruals
- Alternative Work Schedules (4x10, 3x12)
- Retail Bill of Rights
- Call-Back Pay
- On-Call & Standby Pay
- Split Shift
- Travel & Reporting Time
- Shift Differential
- Piece Rate Pay
- Deductions & Garnishments
- Gifts
- Expenses & Reimbursements
