Regular Rate of Pay Liability – Who’s Culpable?

Regular Rate of Pay Liability: Who’s Responsible, and How Can Attorneys Help?

Despite over 85 years of guidance since the Fair Labor Standards Act (FLSA) was enacted, regular rate of pay compliance remains a significant challenge for employers. The complexity of the California Labor Code exacerbates these challenges.

While attorneys provide legal counsel, webinars train employers, and payroll companies promise solutions, litigation surrounding the regular rate of pay continues to rise.

Employers ultimately bear compliance responsibility, but what about attorneys that provide guidance, build policies, and pay plans?

Is there an obligation to inform the employer of the challenges that come with implementation or risks that can surface if modified incorrectly?

Here are three common scenarios where attorneys can either help mitigate—or inadvertently contribute to—regular rate of pay liability.

1. PTO Policies – California Sick Leave must be paid at the regular rate of pay. Sick employees would need to know how to request PTO at sick leave rates vs base rates commonly used for vacation.
   • When an attorney reviews a PTO policy, should implementation be reviewed?
2. Semi-Monthly Pay Cycles – Splitting defined work weeks in a payroll system results in data from a closed pay period being used to compute regular rate of pay, regularly resulting in adjusting entries on wage statements. Few payroll systems have the capacity to perform such computations, and even fewer employers have the expertise to execute consistently.
   • Should attorneys warn clients of the risks?
3. Modifying Compensation Plans – Changes to compensation plans frequently impact regular rate of pay computations.
   • If an attorney has concerns about their clients technical abilities to manage regular rate of pay compliance demands associated with changes to pay plans, is than an obligation to inform leadership?

How Employer’s Guardian Can Help

Employer’s Guardian partners with attorneys and employers to efficiently and effectively manage the wide array of wage and hour variables that, when controlled, mitigate risk.

• Learn why our comprehensive approach to minimizing risk works. Explore EG’s Wage and Hour Program
• Save time and reduce risks. Discover practical solutions that streamline compliance and prevent litigation. Learn More
• Be a trusted advisor. Partner with Employer’s Guardian to deliver solutions that safeguard your clients’ success. Contact Us