Most small businesses are born of an individual’s passion or formed due to overwhelming need in the community. Passion in entrepreneurship is a wonderful thing. It is the American spirit to rise from less and make something of oneself in business. Often times though, the gap between passion and a comprehensive knowledge of California Employment Law is quite wide. Let’s take a look at some of the common pitfalls to ensure your operation is functioning within the law and, most importantly, that you are taking care of your employees.
Overtime
Everyone knows what overtime is, right? As a concept, sure. But let’s dive a bit deeper and look at the places on your schedule to watch as you work on controlling overtime in your business. There are two primary ways in which your employees shall be awarded a premium of paid overtime (typically at 1.5 times usual wage).
- For every hour worked over 8 in a day, but less than 12, your employee shall earn overtime. When building your employee schedule some things to then consider are coverage between overlapping shifts, increased expectations that may come at certain points of your business day or month, or business demands that could require employees to flex to greater hours than originally scheduled.
*Of note, an increase in wages to 2 times usual hourly wage is afforded over 12 hours per day. - For every hour worked over 40 in a work week, your employee will receive overtime premium.
Back to that schedule you are building, the next item to watch is the number of shifts your employee works in a week. Even if your business operates on a 7-day work week, it can boost morale to reflect a 2-day “weekend” whether it is a traditional Saturday and Sunday or not. While California law only requires a day of rest, giving your employees consistent downtime improves their productivity and helps you manage your payroll.
Reporting Time
It can be tempting to cut employees if the business is slow and their time isn’t being put to valuable effect. However, it is important to remember that you will owe that employee their minimum reporting time. Reporting time dictates that the employee will be paid for half of their scheduled day’s work, no less than two hours, no more than four hours. What does this mean?
If you have an employee scheduled for a 6-hour shift, and they come in, but business is slow and you decide to send them home after an hour, you will still owe that employee 3 hours at their hourly rate. If it were a 4-hour shift, that employee would be owed 2 hours of pay, even if you sent them home the minute they walked in the door. If they were scheduled a shift between 8 and 10 hours, you will owe them 4 hours.
If this seems unfair to the business, consider that the employee’s time has value, just as the business’ time has value. They spent the time to report to work on time as scheduled; you want to honor their effort and the law.
Meal Penalty Pay
As with overtime, there are a few major guidelines to be aware of regarding scheduling your employee lunches. The added benefit with adhering to meal penalty regulations is that your employees will have ample down time to enjoy a meal in quiet. The consequence of violating these fundamentals is that the business will owe the employee one hour of premium pay on top of their hours worked.
- Every employee that works more than a 5-hour shift is entitled to a meal break. The only exception to this is if they work less than a 6-hour shift and have a meal-penalty waiver in place. So unless your employee is sure to go home before hitting their sixth hour, and has a waiver on file, schedule in a lunch.
- The lunch for every shift over 5-hours must be taken prior to that 5-hour mark as well. So if you have an employee scheduled from 10am – 5pm, make sure they take their lunch prior to 3pm.
- Your employee is entitled to a 30-minute, uninterrupted meal break. Let them sit down, away from their work space, and eat a meal in peace.
*Of note, in an 8-hour shift, an employee is also entitled to two 10-minute rest breaks.
While California has more requirements based on wage and hour than some other jurisdictions, the policies are in place to protect employees, without whom there would be no business. Take these guidelines to heart and embrace the structure that provides your employees with the downtime they need to be the most productive and successful they can be for you!
For more information on how It’s About the Details can assist your small business, team, or company with any Human Resources needs, Training, or Business Mentoring, reach out to us at [email protected] and we will contact you directly to help facilitate enhancements for your business to thrive.
