Silly Little Things That Can Be A Big Un-Funny Problem


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There are a lot of them, and they’re small, and mostly go unnoticed –  until they are.  Am I talking about termites?  Nope, but I am talking about something potentially equally destructive.  Those seemingly small, inconsequential employment compliance issues that rarely get thought or talked about.

Oh, you hear about the big ticket items all the time, misclassifying employees as independent contractors, not paying overtime, or paying below the minimum wage.  I’m sure you’ve all heard the horror stories – in fact, you’ve heard some of them from me.

But in this episode, I’m going to focus on some of the tiny, easy to miss, compliance items that can cause you a huge headache later.  Now some of these are federal rules, but I do have to admit, many of them are state based – specifically California based.

But before you go feeling all “I don’t live in California so I don’t have to worry about all that” – just remember that many, in fact most, states have their own flavor of “say what now” regulations.  So make sure you check on your specific state.  And as an added bonus, I’ve included a link to the 2023 state by state updates – I think you’ll find it  handy.

Anyway, back to the termites – uh, I mean compliance issues.

Like I said, there are a lot, but I’m going to do a call out of my top 5.

First up, the pay stub.  Well the first thing is – you have to have them.  Don’t laugh – that’s not the case in every state.  But in California (and 36 other states) you are required to provide access to a digital, written or printed pay stub.  Again, different states have different guidelines – but in those states you have to provide a pay stub.

Now, I know you might be thinking – why should I worry about that – my payroll company takes care of all that.  Well, because even if you do have a payroll company, the final responsibility is on you.  And again, while the payroll company may be providing some sort of pay stub, does it include all the required information.

Again, from a California perspective, the pay stub has to have the employee’s name and the last four of their social or their Employee ID number.  It needs to list the pay period that the payment covers, the wages have to be itemized for non-exempt employee (meaning how many straight time hours, how many overtime hours, how many vacation hours etc.) and the corresponding rate for each.  It also has to show the gross wages (that’s their pay without any deductions, and the total hours worked for the period.

Of course, that all sounds normal, but here’s the thing, the stub also has to have company information on it – so the company name and address has to also be included.

…before you go feeling all “I don’t live in California so I don’t have to worry about all that” – just remember that many, in fact most, states have their own flavor of “say what now” regulations.

And since we’re talking about the pay stub, you are also required to provide your employees with information around their sick time – this was part of the California sick time law that went into effect in 2015.  That law requires you to give the amount of sick time taken and the amount remaining, to each employee on their pay date.  You can provide it under separate cover if you want (in fact, we do), but most companies elected to simply start tracking sick time in their payroll systems and putting the required info on the pay stubs.

Next up is accounting for meal periods.  There are very specific rules around when and how much time you have to give an employee for their meal period (normal, non HR people call this lunch time!).

Anyway, they have to take it no later than the 5th hour of working , except in specific circumstances.  And if they don’t, or if they don’t take a least 30 minutes, then you, the employer, automatically owes a penalty of 1 hours pay.  Oh, and by the way, that goes for any missed break times too – the penalty is 1 hours pay, even though a break is usually only 15 minutes.

You see, your aren’t compensating them for the actual time, you are paying a penalty for violating the rule.  It’s just that the penalty is paid directly to the employee.  So, if you have to check each pay period to see if you have any missed, or short meal periods, or if anyone notified you they didn’t take their break – because if that happens, you need to put that 1 hour penalty on that very payroll run – so you don’t incur any additional fees.

And, a quick word about timecards for overtime eligible employees.  They have to have them.  It’s the only record you have of when they worked.  Believe me, if you’re just going on their word, or what you think you saw – well, you’re going to be a in world of hurt if something gets challenged.  Because as the employer, the burden of proof is going to be on your shoulders, and you’ll have nothing to stand on.  So, make sure you are getting timecards, submitted by the employee, and approved by their supervisor or manager, for each pay period.

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And please make sure it’s not just a piece of paper that say 9 – 5 straight down the line.  Believe me, if you are audited, that will get challenged.  The timecard should also show when the meal period was taken.  There are various opinions on whether or not it should show rest breaks – I’ll just say that most companies we work with don’t track breaks on their timecards.

Now a quick word about I-9s – because there are lots of little rules around I-9s and they can really hang you up.  First of all, you have to give them the whole form, including the instructions.  Lots of companies miss this step because the instructions are a separate document – but it has to go with the I-9.

Next, Section 1 has to be completed by the employee – so no, you can’t just fill it in for them.  And Section 2 has to be completed by the employer no later than 3 days after the person starts.  You can’t, I repeat, you cannot request specific documents.  So saying something like, ‘give me your drivers license and social security card” is a huge no-no.  Just give them the form, have them read the list of Acceptable Documents, and provide you with the appropriate documents for their circumstance.

Now, you have an option here – you can keep a copy of the documents or not, as you wish.  But whatever you decide to do, you have to be consistent.  So if you do copies, do copies for everyone, and if not, then don’t for anyone.  By the way, that choice doesn’t exist for remote document verification – if you are doing the remote option, you have to keep copies.

And finally, make sure you aren’t filing I-9 forms in with the personnel files.  That’s an easy fine for the auditor.  They have to all be kept together, in a separate file (electronic or hard copy), away from the personnel files.

And last, but not least – make sure you have up to date federal and state required posters.  I’m sure you, like many of us, get those notices from poster companies saying we have to purchase.  Well, I will say, that’s one of the easiest options – to get them from a vendor or your HR consultant (we provide them for our clients).  But either way, remember – there are sections where you’ll need to fill in some information.  Don’t ignore that part and simply slap the posters on the wall without that info – it’s a requirement.

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