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Legal Pitfalls


Here are some strategies to avoid employee lawsuits.   

By Todd Wulffson and David Szwarcsztejn

Let’s face it – if it were not for the weather, most employers would not set up shop in California.  This is particularly true in the construction industry, where employers face a myriad of regulatory and other legal challenges, in a highly competitive market.  It can be extremely difficult to manage the legal risk exposure and still maintain a profitable business.  The following are 10 very common legal pitfalls for employers in the construction industry in California, and suggestions for how to minimize legal exposure:

Communicate Effectively During Hiring –  Avoid potential exposure during the hiring process from failing to communicate clearly by providing every new hire with a written offer letter that includes the terms of employment in easy-to-understand language. The letter should include an “at-will” provision and specify that it supersedes all prior discussions and negotiations.

Review Meal and Rest Period Policies – Meal and rest period violations continue to generate new class action lawsuits against construction companies every year – particularly for employees working remotely or on different job sites. Provide employees with a description of their rights to meal and rest periods, post it on the job site and train supervisors properly. If the onus is on the employee to inform the company of any missed break, the legal risk is dramatically reduced.  

Check Your Travel Time Policies – Regular commuting time does not have to be paid, but time spent in excess of the “regular commute” does. If employees drive to various job sites – particularly in traffic – a system for capturing excessive travel time needs to be created and monitored. Again, putting the obligation on the employee to report anything beyond a regular commute credit is fine, but a policy or practice of not paying for travel time to job sites is simply a class action lawsuit waiting to happen. 

Safety Violations Carry Huge Liability – Lax workplace safety can result in a slew of negative consequences, including expensive workers’ compensation claims and insurance, Cal-OSHA investigations and citations and even orders stopping work at your job sites. Review your policies periodically to ensure compliance with evolving standards, train all supervisor and employees and strictly enforce workplace safety rules — before an accident occurs. Consider having a consultant do a periodic assessment of your policies and job sites. Being proactive and consistent can go a long way toward reducing claims and fines.

Classify Employees Correctly – Federal law looks at an employee’s “primary duties” to determine whether they are exempt from overtime. California law, however, looks at what they spend more than 51 percent of their time doing. Just because someone has the title of supervisor, foreperson or lead and is paid a salary, does not mean they are exempt from overtime.  Similarly, just because you have an independent contractor agreement with someone, does not mean they are not legally your employee. Misclassification of employees is a common class action claim, and the penalties for violation make these common audit issues for the Labor Commissioner. Do a self-audit about once per year with counsel so you can correct any issues and the audit is not discoverable in a lawsuit.

Don’t Discriminate Based on Immigration Status – California employees have the right to update their personnel information – including their social security number (SSN). If a long-term employee wants to “update” his or her SSN, and admits the one you have on file was fraudulently obtained, you cannot take negative employment action. It is also a crime in California to threaten to deport someone, and the penalty can include loss of your business license. Make sure your supervisors know this.

Respect Employee Privacy – Employers often track employee activity for various work-related reasons. Common monitoring methods include tracking company vehicles, reviewing employee email, social media and cell phone use and using hidden cameras. Most monitoring is allowed as long as the employees are notified of the potential invasion of their privacy – but the act of notifying them may defeat the purpose of monitoring. Audio recording is almost always illegal – as are cameras in changing rooms or bathrooms. Reading personal emails and monitoring off-duty behavior is also almost always illegal. Make sure there is a legitimate reason for each potential intrusion into the employee’s life, and have your monitoring practices reviewed by competent counsel.

Adopt a Smartphone Policy – Nonexempt employees who check emails and texts, make and receive phone calls or work remotely after hours can create overtime liability for the company – and the smartphone records each and every violation. Reduce your risk by not giving company phones to nonexempt employees and have a policy covering personal phone use and/or company phone use that is legal and enforced consistently. California law requires reasonable reimbursement when employees use their personal smartphones to conduct company business – even if the employee has an unlimited plan. Finally, all employers must have a policy forbidding cell phone use while driving for work, even if the company does not provide cell phones.

Review Your OFCCP Compliance – Federal law requires federal contractors to attract, retain and track the hours worked by certain covered categories (including women, minorities, disabled individuals and veterans), and to comply with an affirmative action plan. The rule to avoiding potential violations here is simple: conduct a self-audit of your practices (with counsel) to ensure you are compliant and correct any deficiencies before you are audited by the OFCCP and face potential liability.  

Be Prepared for Medical Marijuana Issues – California employers are not required to allow medical marijuana use at work, but must accommodate the underlying medical condition. Applicants and employees will often “volunteer” their medical marijuana status. Medical marijuana should be listed as an “illegal drug,” for the purposes of your policy, and make sure that your managers are trained on how they should respond to medical marijuana questions. 


Todd R. Wulffson is managing partner in the Orange County office of Carothers DiSante & Freudenberger LLP, a leading California employment, labor and business immigration law firm providing litigation defense and counseling to California employers. Wulffson has 25 years of experience counseling and defending businesses in labor and employment issues and has extensive experience representing employers across the entertainment, manufacturing, banking, hospitality, financial services and retail industries. To contact Wulffson, email him at twulffson@cdflaborlaw.com or call (949) 622-1661.

David Szwarcsztejn is an attorney in the Orange County office of Carothers DiSante & Freudenberger LLP, an award-winning California labor and employment law firm. Szwarcsztejn represents California employers in a wide variety of employment claims, including wrongful termination, wage and hour violations, discrimination, harassment, breach of contract, trade secrets, fraud and unfair competition. To contact him, email him at davids@cdflaborlaw.com or call (949) 622-1661.

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