Part 2: Combatting the rise of wage–and–hour lawsuits
This is the conclusion to this two-part series on this topic. Find the first half here.
On the subject of wage-and-hour lawsuits, in the first installment of this two-part look at this topic, we talked about common pitfalls employers often encounter with regards to employee misclassification, failing to properly pay minimum/overtime wages, and failing to adhere to additional state law requirements. With the most-common liabilities out of the way, we now turn our attention to steps hoteliers can take to protect themselves from exposure to wage-and-hour lawsuits.
BEST PRACTICES TO MINIMIZE EXPOSURE
Hire a legal professional to create and regularly update your written employment policies, to ensure your policies are compliant on their face. These policies should be given to employees upon onboarding (with reminders as necessary), with acknowledgment pages for signature to document receipt and review. Have the policies translated into the employee’s native language for heightened protection. These employment policies are the first line of defense against wage-and-hour lawsuits.
Ensure supervisors and managers are properly trained regarding your written employment policies to confirm the policies are actually put into practice and items are being documented properly.
Consider using arbitration agreements with class and collective action waivers. Although some states have been pushing back on such measures, recent favorable rulings on the federal level have resulted in continued enforceability. In fact, after California’s employee-friendly Private Attorneys General Act (PAGA) survived challenge after challenge from employers across the state, employers secured an important win (for now) when the U.S. Supreme Court, in Viking River Cruises, Inc. v. Moriana, held that the Federal Arbitration Act requires the enforcement of an arbitration agreement that waives an employee’s right to bring individual claims through PAGA. The Court further held that once the individual claims are sent to arbitration, there is no standing to bring representative claims for violations of the California Labor Code on behalf of other allegedly aggrieved employees under PAGA. There are pros and cons when it comes to arbitration agreements, and you should speak with an attorney to find out if one is right for your business. On balance, however, most employers would be prudent to adopt the measure.
Have employees timely record, review, and sign off on their hours worked each pay period, with additional attestations as needed for state and local law requirements. Supervisors and managers should also devote time to regularly monitor and review employee timecards to ensure compliance. with wage-and-hour requirements. For larger employers (given the cost involved), employers should also consider hiring an expert to conduct periodic internal audits of wage-and-hour records to ensure compliance.
Consult an attorney any time you want to change an employment policy or practice or want to reward employees. Employers with good intentions often land in hot water when such changes are not properly implemented.
Attention and resources directed toward the foregoing recommendations naturally take away from other aspects of your business, but – with wage-and-hour claims on the rise, coupled with the devastating consequences that typically follow – an ounce of prevention is worth a pound of cure.