As we start 2023 it is a perfect time for companies to conduct a California employment law practices audit to ensure that policies are compliant, managers are properly trained, and the company is maintaining the required records for the necessary length of time. Here are five topics to review in conducting an audit and a few suggested questions for each topic:
1. Hiring Practices
- Are applications seeking appropriate information?
- Ensure compliance with state and local ban the box regulations.
- Are new hires provided with required policies and notices?
- Are new hires provided and acknowledge recommended policies?
- For example: meal period waivers for shifts less than six hours
- Are hiring managers trained about the correct questions to ask during the interview?
- Does the company provide new hires (and existing employees) with arbitration agreements that comply with California law?
- Are employee files maintained confidentially and for at least four years?
- Are employee time records maintained for at least four years?
- Are employee schedules maintained for at least four years?
- Do the managers have set forms for the following:
- Employee discipline and write-ups
- Documenting employee tardiness
- How is the employee documentation provided to Human Resources or the appropriate manager?
- Who is involved in reviewing disability accommodation requests?
- How are employee absences documented?
3. Wage and Hour Issues
- Does the company have its workweeks and paydays established?
- Are paydays within the applicable time limits after the pay period as required under the law?
- Are employees provided with compliant itemized wage statements?
- Are employees provided a writing setting out their accrued paid sick leave each pay period?
- Are employees properly classified as exempt or nonexempt?
- For exempt employees, review their duties and salary to ensure they meet the legal requirements to be an exempt employee.
- Any workers classified as independent contractors, and if so, could they be considered employees under AB 5?
- Are nonexempt employees properly compensated for all overtime worked?
- Is off-the-clock work prohibited?
- Policy in place?
- Are managers trained about how to recognize off-the-clock work and what disciplinary actions to take if find employees working off-the-clock?
- Does the company’s time keeping system round employee’s time?
- If so, is the rounding policy compliant with the law? (note that meal breaks cannot be rounded pursuant to Donohue v. AMN Services)
- Are meal and rest period policies set out in handbook and employees routinely reminded of policies?
- Does the company pay “premium pay” for missed meal and rest breaks? If so, how is this documented on the employee pay stub?
- Do employees record meal breaks?
- Are managers trained on how to administer breaks and what actions to take if employees miss meal or rest breaks?
- Are employees provided attestations to document the reason if the employee missed, took a short, or a late meal break? (See Donohue v. AMN Services)
- Is vacation properly documented, tracked, and is unused vacation paid out with the employee’s final paycheck?
- Are all deductions from the employee’s paycheck legally permitted?
- Are employees reimbursed for all business expenses, such as uniforms, work equipment, mileage for work, and for expenses incurred for working from home (such as internet, cell phones, etc.)?
4.End of Employment Issues
- Are employees leaving the company provided their final wages, including payment for all accrued and unused vacation time?
- Are final paychecks provided to employees within the required deadlines?
- Does the employer deduct any items from an employee’s final paycheck?
- If so, are the deductions legally permitted? (Use caution, very few deductions are permitted under CA law.)
5. Anti-harassment, discrimination and retaliation
- Are supervisors provided with sexual harassment training every two years? (If employer has 50 or more employees, supervisors are legally required to have a two-hour harassment prevention training that complies with California law).
- Are there steps in place to provide nonsupervisory employees with 1-hour sexual harassment prevention training and once every 2 years thereafter? (Required for employers with 5 or more employees.)
- Are supervisors and managers discussing the company’s open-door policy to employees at routine meetings with employees? Is this being documented?