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Wage and hour claims: How can employers protect themselves?

It is critical for both employers and employees to be aware of what constitutes wage theft. For example, plenty of employers try to get out of paying overtime. California has strict laws on what accounts for overtime, so business owners need to make sure they do not inadvertently run afoul of the law. 

Occasionally, employees will bring up baseless allegations of unpaid labor. Employees may falsely claim that they deserve overtime or received less than minimum wage. To resolve any of these issues, there are several steps all employers should take to ward off these kinds of unwarranted accusations. 

Keep detailed records

The simplest action to take is to maintain records detailing the names, hourly rates, daily hours worked and overtime pay all employees accumulate. You should hang onto these records for at least three years. It is possible an employee did not understand when overtime kicked in. You can provide these documents showing how many hours the employee worked and what California law states to avoid a lawsuit before lawyers even become involved. 

Classify employees and independent contractors accurately

Many companies rely on independent contractors, but you do not want to categorize someone as such if his or her duties fall well beyond the limits of a standard freelancer. For example, if you control the exact hours a person can work, then that is an employee, not a contractor. Many employees eventually realize an employer misclassified them and could choose to sue. 

Pay wages on time

Problems with payroll can come up at a moment's notice, but you need to do everything within your power to make sure you pay everyone on time. You never want to withhold any overtime earnings with the promise to pay it back on the next paycheck. In the event that overtime never comes, employees can grow restless. All these steps help mitigate your risk and keep your employees happy. 

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