Human Resources Management for Startup and Growing Companies

As a Human Resources consultant, I get asked a lot of wage and hour related questions to employment. Before I answer I usually have to ask a series of questions to make sure I give them the right answer. Wage and Hour laws are complicated. You have federal, state and city laws to contend with, the rules that are most favorable to the employee is the rules that the company must follow. California normally has enacted employment laws more favorable to employees. There is a new trend taking place “Cities, and Mayors” are enacting employment laws within the state that are more favorable to the employees in their city. What does that mean for employers? Confusion! It means employers are going to make wage and hour mistakes. The current set of rules do not really encourage business to expand into more than one city. It is very easy for the employer to not be in compliance and penalties are expensive. Doing business across the state just got very complicated. Example The city enacts a higher minimum wage increases the employer’s hourly rate. To be exempt from the FLSA the state of California requires a minimum salary of 2 times minimum wage to meet the salary test.  The employer has to use both the local rules and go back to the state rules for their exempt employees. If the employer does not adjust the salary to be in compliance with the rules the positions get classified as non-exempt and the employer is not in compliance with FLSA.  If the employer does business in two or more cites he could have the same position doing the same work making more or less depending on the city. It gets more complicated, the state poster for minimum wage says $9.00… it does not list the cites covered at $9.00. The poster does say that to be exempt you must make 2 times the minimum wage. But San Francisco has enacted a $10.55 per hour minimum wage. Applying the state rule of must make 2 time minimum wage to exempt means an employee has to earn $844.00 per week. In Los Angeles, the same job the weekly amount to be salaried is $720.00 per week. Employer must pay close attention to city ordinances.
Employers should hire an HR Consultant or Employment attorney as they expand their business. Having an Employment Attorney, or HR consultant audit your employment practices annually can prevent costly mistakes.