3 Things Your Business May Be Doing Wrong
Labor lawsuits are on the rise, and it is more important than ever to stay wage and hour compliant. However, most compliance issues happen accidentally, as employers are not aware of the rules. As an employer, it is important to stay on top of current legislation to ensure your business practices are compliant with wage and hour law. Learn more about hot topics in wage and hour compliance and what you can do to avoid a wage and hour lawsuit.
Hot Topics in Wage and Hour Compliance
Uniform Policy
Does your business require employees to wear a uniform? Did you know that the cost of uniform upkeep cannot put an employee below the minimum wage rate? If your business is concerned with this being a potential problem, you may want to consider changing your uniform policy.
There are specific phrases that constitute articles of clothing being considered a uniform. Instead of forcing employees to wear a specific brand, your company can avoid using the term “uniform” if the clothes could be considered part of someone’s regular wardrobe1. This would mean that there are no specifics to what the employee is required to wear, but rather a dress code that they must adhere to. Additionally, the uniform dilemma can be alleviated if your company does the laundry for your employees, or the employees’ uniforms can be thrown in with their regular wash, (i.e. the uniform doesn’t need to be dry cleaned). If going with the latter option, it is best to provide enough uniforms for the amount of days that employee works in a given week.
Commission and Minimum Wage
When dealing with minimum wage requirements, it is important to remember that minimum wage covers each hour an employee is working. Commission cannot be added to an hour it was not earned in to cover the requirement. If your employees get paid a per hour amount that is lower than minimum wage, but earn commissions on sales, they must still be compensated up to the minimum wage level for every hour that they do not receive commission. In order to avoid this compliance issue, consider raising your employees’ hourly rate and adjusting commission incentives to even out the employees’ wages.
Tip Pools
Tip pools are a common practice for jobs that regularly receive tips. However, be mindful of who participates in the tip pool. In many cases, only the workers who receive the tips are allowed to participate in tip pools. This excludes managers, cooks, janitors and other workers from participating in the tip pool. Also, the tip must be voluntary. If the customer is obligated to pay an additional fee, it cannot count as a tip, but rather a charge2. Misclassification of tips can lead to compliance failure.
How EPAY Can Help
EPAY Systems offers a cloud based time and attendance system that can conform to the unique needs of your business. Our solution can factor in complicated pay rules to help you manage commission and tips. And with our built-in safe guards, you can ensure compliance and prevent labor lawsuits. Contact us to learn more.
Want more? Download the report: Top 5 Ways Not to Get Sued.
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