I was walking around a landscaping conference the other day, and my cell phone rang. Not unusual, since I get several phone calls from unfamiliar telephone numbers connecting me with various business owners looking for an answer to a pressing human resources question, every day. However, this call was very different to say the least.
An employee from a California-based company found my telephone number and sought my advice on a payroll practice. By way of background, as most rational people would attest, California has numerous wage and hour laws that easily exceed the definition of being burdensome. One such set of wage and hour laws addresses pay stubs: The document that accompanies a paycheck given to an employee. California law stipulates that 10 pieces of very precise information must be found on every pay stub, lest the employer be confronted with severe financial penalties. Beyond that requirement, California law requires that every employee receive a pay stub from their employer each pay day. That point was the premise for the employee phone call.
The employee told me that his employer provides all company employees with an electronic pay stub each pay day. But he wanted to know if that electronic document satisfied all legal requirements in the same manner that a paper document would meet the standard. In response to his question, I simply said “yes.”
Incredulously, he pursued further by stating, “Are you telling me that both the electronic and the paper pay stubs satisfy California law?.” Again, I repeated “yes.” After some interesting combinations of profanity, the employee said: “But that means I can’t sue my employer!” To which I remarked, “So you are upset that your employer is treating you fairly, in compliance with state law?” As you would gather, he then responded, “You don’t understand, that means I can’t sue my employer.” I ended the conversation immediately thereafter.
It’s difficult for business owners to not be paranoid.
Aside from the specific issue in this phone call, business owners must always be prepared, compliant, and clairvoyant, especially when involving wage and hour issues. For example, employers must:
- Become fluent with all relevant local, state, and federal wage and hour laws,
- Train relevant managers and supervisors on the proper administration of those laws,
- Hold managers, supervisors, payroll staff, etc. accountable for ensuring legal compliance,
- Conduct regularly-scheduled (e.g., monthly, quarterly, annually) wage and hour audits,
- Purchase the wage and hour add-on coverage, as part of your company’s EPLI policy, and
- Remember there is “personal” liability for many local, state, and or federal wage and hour violations.
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Steve Cesare Ph.D.
has more than 25 years of Human Resources experience. Prior to joining The Harvest Group, Steve worked with Bemus Landscape, Jack in the Box, the County of San Diego, Citicorp, and NASA. Steve earned his Ph.D. in Industrial/Organizational Psychology from Old Dominion University, and has authored 34 human resources journal articles. As a member of The Harvest Group, Steve’s areas of expertise include: staffing, legal compliance, wage and hour issues, training, and employee safety. Read Steve's full bio.