Protecting your business: the importance of wage and hour audits

The Santa Clarita Valley Business Journal

Brian E. Koegle

Partner, Poole Shaffery & Koegle

With so much uncertainty surrounding the COVID-19 pandemic, one step that business owners can take to regain control of their circumstances is to conduct an annual wage and hour audit of their practices and policies. As a business owner, you should be asking yourself these 10 questions at least once every year:

  1. Have you maintained all time sheets and payroll records in a legible, accurate, complete and easy to access format, for no less than three (and recommended four) years?
  2. Is your timekeeping system accurately tracking hours worked for non-exempt employees – compensating for all time that the employee is “suffered or permitted” to work?
  3. Are work hours being calculated properly, with meals and rest periods properly accounted for?
  4. Is a non-exempt worker’s “regular rate of pay” being calculated correctly?
  5. Are you paying overtime under both the federal (40 hour) AND California (8 hour) regulations?
  6. Have you created policies or procedures to reduce the risk of “off-the-clock” claims?
  7. Are you certain that your salaried employees meet the criteria to be exempt from overtime pay?
  8. Are you maintaining accurate, up-to-date job descriptions for every category of employee?
  9. Are exempt employees receiving their full salary every pay period?
  10. Are every one of your workers being properly classified as employees or independent contractors?

From a strategic perspective, it is always better to conduct your own audit, with the assistance of a neutral third-party, prior to the time that a government agency comes in to confirm your (non-) compliance. Given the current climate of risk associated with wage and hour compliance, businesses should be working with competent legal counsel, trained to understand the nuances of California wage and hour laws, before implementing or revising any internal policies or procedures.

The attorneys at Poole Shaffery & Koegle, LLP are equipped to help you navigate through the maze of wage and hour laws, to help protect your business from making costly, and sometimes catastrophic, mistakes when it comes to strict legal compliance. Please feel free to contact us to coordinate your wage and hour compliance audit (661) 290-2991; [email protected]. ν

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