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3 common reasons workers file wage claims against employers

Dec 22, 2023 | Employment litigation

Worker lawsuits are a risk for many California businesses. The more workers a company requires, the more opportunities there are to run afoul of employment laws. Employees sometimes sue businesses because they allege that they did not receive the wages they deserve in accordance with California and federal laws.

Those wage claims can lead to very expensive litigation and damage to a company’s reputation as an employer. In the worst-case scenario, a worker wage claim could cost a company thousands of dollars and do lasting damage to its reputation.

Companies in California that prioritize compliance with wage laws can potentially reduce the likelihood of a current or former employee taking legal action against their organizations. The following issues are most likely to trigger wage claims filed by California workers.

Unpaid overtime

California has numerous overtime rules that expand on federal protections. It is very easy for companies, especially those that operate in multiple states, to make mistakes regarding overtime pay rules that apply specifically in California. Too many hours in one week, too many days in one week or too long of a shift could trigger overtime pay obligations that could lead to worker lawsuits if they do not receive the overtime pay they believe they deserve.

Timeclock rounding practices

Employers have long streamlined payroll procedures by paying workers in specific increments of time. Many companies round a worker’s total time worked to the nearest 10, five or 15-minute increments. The practice is legal at the federal level. However, in California, timeclock rounding could lead to wage claims, particularly if a company collects accurate timekeeping information or tends to round down time more frequently than it rounds up the time worked by employees.

Duties performed off the clock

Employers sometimes try to reduce payroll obligations by asking that workers do certain tasks off the clock. Other times, other workers who train new hires may take it upon themselves to teach them to do certain tasks before or after a shift. Workers could then potentially take action against the company for failing to pay them for the time when they performed those routine job responsibilities.

Organizations in California need to be proactive about ensuring that they fully compensate hourly workers to avoid wage claims. Reviewing the law with an attorney, establishing clear employment contracts and keeping thorough records can all help businesses prevent employee lawsuits and successfully resolve any that may arise.