Preventing Labor And Employment Lawsuits In California

Every day, businesses across the State of California face frivolous and harmful lawsuits from employees. Small businesses, who cannot afford large-scale compliance efforts and struggle with record keeping, are the most vulnerable to these abuses. This article explains:

• Why employee claims and lawsuits against employers are so common in California.
• What form these claims take, and how to avoid the most common types of lawsuits.
• One easy-to-implement solution that can double your company’s defenses against employee claims.

Why Are Employee Claims And Lawsuits So Common In California?

California labor laws and regulations are complex and hard for anyone to keep up compliance with – especially small businesses. No employer will get everything right 100% of the time, but 100% of mistakes can be exploited by employees. And they will.

The problem is that the current rules attract a lot of lawsuits because the employees automatically get all of their attorneys’ fees paid for (by you!) if they win, while if you win, your legal fees are never reimbursed. This leads to a field day for employee lawyers to file lawsuits, (even frivolous ones), and they don’t even have to be good lawyers to do so.

What Are Some Of The Most Common Types Of Claims Employees File Against Employers In California?

Roughly 90% of the claims made against employers are informally called “wage and hour” claims. Most of these claims can actually be avoided if you learn the laws and how to comply with them. 

Some of the common claims that occur every day in California, ranging from the seemingly silly to the evidently serious, include:

• Rest and meal period violations. 
• Failure to pay wages on time. 
• Failure to pay minimum wages and overtime
• Working off the clock or misclassification of exempt status. 
• Independent contractor misclassification.

Depending on the claim, penalties also get tacked on for failure to pay wages on time, either during employment or final wages. These penalties are frequently in the thousands of dollars per employee.

How Can A Business Owner Or Manager Ensure Compliance With Federal And State Labor Laws To Avoid Claims And Penalties?

Complete compliance, unfortunately, is all but impossible. Even just sufficient compliance to avoid claims and penalties is difficult and unrealistic. The sunny state of California has enough employment and labor laws to give anyone a migraine. 

It takes lawyers years, if not decades, to get a grip on existing employment and labor laws – and that isn’t even counting the new laws or revisions the California legislature puts out every year.

The best you can do as an employer is to have access to a knowledgeable and experienced employment and labor lawyer who can help you prepare in advance and advise you on a day-to-day basis. In-house counsel would be great, but only the Fortune 500 can afford that. The vast majority of small businesses do not even have dedicated Human Resource Teams.

Even with employment counsel in your back pocket, however, you’ll need to place proper policies and documentation to reduce employee lawsuit risk. At a minimum, you should have an employee handbook.

Vision Law® offers something we call HR Infrastructure that provides employers with very basic documentation related to the employee life cycle, from hiring and onboarding through termination. Having appropriate employment and labor policies and documents in place can also greatly reduce employee lawsuit risk.

Most importantly, though, if there is only one tip you remember to follow from this article, let it be this: keep complete records. 

Why Is Thorough Record Keeping Essential To Defend Against Employee Claims?

Given that 90% of claims are wage and hour-related, basic documentation for wage and hour issues is critical to defend yourself against such claims.

For example, basic documentation all California employers must have in place includes accurate daily time records and specific policies on accurate timekeeping, including no working off the clock, as well as clearly allowed (and enforced) rest and meal periods. As a result, proof in any wage and hour case starts with the daily time records.

In the case known as Brinker, the employer’s written policies concerning rest periods and meal breaks play a pivotal role. These policies serve as crucial evidence to support a key aspect of your defense: demonstrating that your employees were aware of their rights to take rest breaks and meal periods. This entails maintaining an employee handbook that clearly outlines accurate timekeeping procedures along with policies regarding rest and meal breaks, and ensuring that each employee has signed an acknowledgment confirming their understanding of the handbook’s contents.

What Happens If You Do Not Take Precautions And Good Records?

Most employers will not be able to focus on the minutiae of daily record-keeping. As a result, it is all too common for them to be missing accurate daily time records, including clocking out for meal periods, proper wage and hour policies, and/or missing handbook acknowledgments from employees. 

Missing such documentation, however, leaves you at the mercy of employees who can easily lie about their hours worked or say that they never got their rest and meal periods and get away with it. Thus, even if it might seem like an extra cost in the short run, record-keeping is a straightforward and ultimately cost-saving measure in the long run.

What Kinds Of Employment Disputes Can Good Documentation Protect You From?

The importance of evidence holds true in every type of employment claim. One of the most useful types of evidence that often comes up is documentation of performance issues or leaves of absence. For example, in wrongful termination claims, discrimination under the Fair Employment and Housing Act, claims based on public policy or retaliation claims, the reason for an employee’s termination may be the key question. And it will be up to a jury to decide. 

The employee will try to argue they were fired for a discriminatory reason that violates the law when, in fact, letting them go was not just legal but also reasonable and inevitable. Written documentation regarding the business reasons you let go of each employee goes a long way to proving you had a lawful reason for doing so should they decide to sue.

For leaves of absence, it is critical to identify when the leave is taken with both the start and end time in writing. For some leaves of absence, such as the California Family Rights Act (CFRA) and Pregnancy Disability Leave (PDL), documentation is required. For other leaves, and there are many under California law, it is prudent to document:

• The nature of the leave
• All the time off 
• Your expectations for your employee to keep you informed of their return to work status. 

That way, if there is any question about whether you complied with any legal obligations with respect to required leaves of absence, you can prove you complied.

How Soon Must You Respond To A Claim? At What Point Should You Hire An Employment Law Attorney To Handle Your Case?

The amount of time you have to respond to a claim depends on what type of claim you are facing. But generally, whether an employee is raising an internal complaint without counsel or has hired a lawyer who has sent a demand letter or serves a summons and complaint, you are best off getting a knowledgeable and experienced employment and labor attorney on your side. 

The sooner your lawyer is informed, the better they will be able to guide you through the issue with minimal damage.

This Is A Lot, How Am I Supposed To Manage It All?

Just because the law is stacked against you and other small business employers does not mean there is no one on your side. Employment claim lawyers exist for small businesses as well, and unlike those for employees, our job is to keep you from even having any claims against you in the first place. 

Given how important it is to have employment and labor counsel on your side that you can afford, our pricing model is based on a monthly flat rate for an unlimited preventive advice plan. You will easily be able to call for any employment-related question without worrying about an astronomical legal bill. 

We make quality counsel affordable for the small business owner because we believe that they too have a right to have the law on their side. For more information on Employees Filing Claims Against Employers In CA, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (855) 534-1490 today.