Ricci Partners, LLC

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How to protect your business from wage and hour claims

| May 18, 2020 | Firm News |

As a business owner, one of your biggest concerns is likely your company’s bottom line. Your enterprise’s viability is imperative, but it cannot come at the expense of proper compensation. By focusing on profitability above all else, you could run the risk of wage and hour claims from workers. By keeping these tips in mind, you can do your best to avoid them.

Comply with Louisiana’s wage laws

Louisiana is one of five states that has not adopted its own minimum wage law. Rather, it complies by the federal government’s minimum wage standard of $7.25 per hour. All employees must receive pay of this amount or greater unless:

  • They receive tips
  • They are under 20 years old
  • They are full-time students or student learners
  • They are messengers
  • They are an apprentice
  • They have a disability

Exempt employees must still receive pay at or exceeding a rate designated by their classification. And beyond fair wages, it’s crucial that your employees’ breaks and paid sick-time fall within federal guidelines, too. Violations of these policies can also lead to claims.

Keep track of employee records

By law, business owners must keep track of the pay rates and hours worked of all non-exempt hourly employees. These records must date back two years. Maintaining a paper trail of wage and hour data can help you defend against an employee’s claim that you believe is untrue. If it corroborates their claim, your documentation allows for an easier fix than its absence would.

Classify your employees properly

Many businesses misclassify employees as independent contractors. They do so to save money on benefits and payroll taxes. In many states, these behaviors put you at risk for hefty fines and employee legal action. Yet, Louisiana is the only state that issues a warning letter to first-time offenders, rather than a fine. If you receive one, it’s crucial to take corrective action before you pay more down the road.

Keeping your business profitable is crucial to its long-term operation but following labor laws is as important. Observing these rules decreases the odds that your business will face claims from unhappy employees. And abiding by them can save your business from economic strain in the long run.