Comstock's magazine 0919 - September 2019 | Page 25

The Fair Labor Standards Act has strict rules regarding paying nonexempt employees, and California is even stricter. One of the key components is that employees must be paid for every hour they work. One of the key components is that em- ployees must be paid for every hour they work. By not keeping accurate hours, your boss has opened the company up to pos- sible disastrous results if someone com- plains or if the U.S. Department of Labor does an audit. I’m sure he’ll argue he’s adding to their paychecks, not taking away from them, so there’s not a problem. And it’s probably true that none of the employees are going to complain about extra money in their paychecks. But that’s not the only problem. Let’s talk about fraud. Let’s talk about theft. Because that is what is going on. Employ- ment attorney Jon Hyman says he prob- ably wouldn’t advise a company to press charges in this situation, but he would ad- vise that the manager be fired. He’s put you in a terrible situation. You’ve got to tell employees their pay- checks are going to be cut, and you need to report what has been going on to hu- man resources. If you don’t report it, you are complicit in the fraud. And as much as you want to forget this, at least one em- ployee will complain about how you cut pay, so it’s no longer going to be a secret. 1 Report the fraud to HR or to pay- roll or to your boss’s boss. Any one of those is fine. 2 Meet with HR to discuss salaries for your employees. Make sure they are currently receiving market rate salaries; if they aren’t, create a plan to increase their pay. 3 Sit down and meet with the em- ployees. Normally, tough conversations should be held one-on-one, but because this is the same conversation with ev- eryone, you can do it as a group. Explain that you have to bring paychecks into le- gal compliance. That means: • People clock in when they arrive at work and clock out when they leave. • If they work additional hours at home, they must clock in at home and clock out when finished. • Lunch breaks will be accurately record- ed. Keep in mind, California has strict break laws that you need to comply with, making working through lunch almost always illegal. • Employees will be paid for overtime (in California, that’s more than eight hours in one day and more than 40 hours in one week). • If you and HR agree that salaries should be adjusted, tell them you’re working on it. Make sure you express how much you appreciate their work and how excited you are to be working with them. They will probably not be happy, although you may find that some are relieved that the pro- cess will be legal now. You will need to be an extra awesome manager to help during this transition, but you’re likely to experi- ence some turnover due to this as well. The biggest lesson here is how much of a mess things can become when some- one ignores the law and best practices in an attempt to be nice. n Suzanne Lucas spent 10 years in corporate human resources, where she hired, fired, managed the numbers and double- checked with the lawyers. On Twitter @RealEvilHRLady. Send questions to [email protected]. Have you ever had to work during what should be your lunch break? TWEET US @COMSTOCKSMAG September 2019 | comstocksmag.com 25