Posted on February 13, 2013

7 Easy Ways to Get Sued By Wage and Hour Attorneys

Paycor recently hosted a webinar with employment attorney Jim Langendorf, who shared his insights on how companies can get into trouble for not paying their employees the way they should.

Below are seven easy ways to open your company up to the risk of wage and hour suits:

1. Don’t keep records: Without diligent records of employee hours and pay to provide a “paper trail,” your defense attorney will not be able to make a strong case.
2. Try to hide or falsify records: If you wind up in court, your records will be closely scrutinized by lawyers who have seen every trick in the book.
3. Don’t enforce policies: In most cases, executives and high-ranking managers have a good understanding of employment law—it’s the supervisors and middle managers who may end up violating the law without even knowing it. To avoid this, put company-wide policies in place and stick to them.
4. Misclassify workers to avoid paying them: Paying an employee a set amount every week does not necessarily make them a salaried, exempt employee and you may still owe them overtime. Make sure your exempt and non-exempt employees are classified correctly.
5. Don’t keep up with employees as their job duties change: Even if you have properly classified your employees, job duties may change through the years. For example, one of your employees may transition from a hands-on role to an administrative position that could be considered exempt. It’s a good idea to check in with them to ensure the nature of their job is still consistent with classification guidelines.
6. Ignore changes in employment law: Wage-and-hour suits can cost your company millions of dollars, so it pays to stay updated on the latest changes.
7. Assume you won’t be held personally liable: The Fair Labor Standards Act (FLSA) mandates personal liability, meaning that employees and officers of the company can be held individually responsible for not paying someone correctly, even if you’re incorporated or an LLC.

As the number of wage and hour lawsuits continues to rise, your business needs accurate time tracking, established procedures and a way to store your records so they are easily accessible. Paycor’s HR, time and payroll applications can provide these for you, and help keep you out of the line of fire. Get in touch with one of Paycor’s product experts to learn more.