Friend Hudak Harris

There are a lot of factors that an employer must stay on top of to make sure his or her business is a success. Some of these are internal to the business (such as trying to produce and sell quality products and services while keeping costs down), while others require focusing on external factors (keeping an eye on trends in the economy and the relevant industry, as well as staying abreast of what the competition is doing). Given all this, it can be all-too-easy to give short shrift to an area of your business that is not only crucial to your success but also a minefield of potential liability and compliance issues – namely, your workforce and your employment practices.

Your business is growing and fortune is shining. Out-of-state opportunities are increasing. Perhaps you are considering expanding operations. If you haven’t already, you’re likely to end up serving the world’s sixth largest economy—California. And who wouldn’t want to be in California? It has nearly 40 million consumers.
Before heading out with your sunscreen and order book, there are a few intricacies of California law that any out-of-state business should keep in mind when doing business with California-based employees and parties.

On November 22, 2016 a federal judge blocked the implementation of the Final Rule by granting a motion for a nationwide preliminary injunction filed by twenty-one states and joined by over fifty business organizations.

Many businesses prefer to classify members of their workforce as independent contractors rather than as employees because it usually seems cheaper and easier for the business to do so. However, as recent cases involving Lyft and Uber demonstrate, the consequences of misclassifying workers as independent contractors when they should have been classified (and paid) as employees can be significant, maybe even catastrophic, to your business.

The Department of Labor has promulgated new regulations that could have a significant impact on whether you choose to – and even whether you are able to – continue to classify certain of your employees as exempt from FLSA requirements come December 1, 2016.