People who occupy their time running a business know that sometimes—and by sometimes we mean all the time—your employees will be partially consumed by the subject of compensation. After all, compensation is the quantitative expression of the employer-employee relationship. To make sure that you are in compliance with both the United States Department of Labor and the Industrial Commission of Arizona, we will cover some of the finer points of compensation.
- Pay schedule: Obviously you have to pay your staff, but legally you are required to keep some form of a payment schedule. You must pay at least twice a month and your pay periods cannot be separated by more than sixteen days. You can, of course, pay weekly if you prefer. Many wage employees seem to prefer frequent paydays. We even make pay available daily to our temporary workers.
- Amount of pay: We all know that we must pay at least minimum wage, which has been set at $7.35 per hour since January 1, 2011. We must also pay overtime to any employee who works more than forty hours per week. As soon as their workload hits forty hours, you must pay time and a half. This is a federal guideline, not one from the state of Arizona, which does have exceptions. By and large the exceptions apply to sales people and other professionals. Hospitality employees, construction workers and manufacturing staff are all due overtime pay. You cannot make an arrangement in advance with the employee that allows you to omit overtime pay or use any other form of compensation outside of wages paid on a paycheck. If overtime is a necessity for your business but seems to be affecting your bottom line, we would be happy to help.
- No holding wages- In most cases you cannot withhold an employee’s wages from them. This also means that you must pay employees who quit, under any circumstances, the full amount for their time worked. The only exceptions involve:
- The employer being bound to withhold wages by state or federal law
- The employer having the employee’s written permission in advance
- The employer has a “reasonable good faith dispute as to the amount of the wages, including the amount of any counterclaim, reimbursement, recoupment or set-off asserted by the employer.”
If you fail to comply with regulations associated with compensation, you may end up in trouble. You can be reported to the State Labor Department for violations. If you are reported, the department will perform an investigation, which will include looking into your compensation policies and practices. If they feel that you are out of compliance, they will request that you get caught back up in a reasonable amount of time. If you fail to do this, they will exact other punishments including fines.
It is important to keep in mind that sometimes State and Federal laws differ when it comes to compensation law. For instance, in California and Nevada overtime is paid to employees who work more than eight hours per day as opposed to more than forty hours in a given week. The regulations described here are pertinent to the State of Arizona. Taking the time to brush up on employment law in your state is a necessary part of running a business.
Large orders require manufacturers to work their staff more; busy season means restaurateurs need more man hours worked; and deadlines can do the same thing to the construction industry. If you would like to avoid the possibility of being fined or subject to oversight, then temporary employees might just be the answer to your troubles.