Here's Why Employers Choose to Run Non-Compliant Payroll

Why do so many employers insist on sticking their head in the sand when it comes to payroll compliance?

One of My HR Guy's employees just beautifully summarized the answer: "The easiest way to stay within labor budget is fraud and/or non-compliance."

Based on my experience, roughly 90-95% of companies running a performance pay structure are not compliant due to lack of calculating Overtime premiums. In California, this jumps up to 98% non-compliance with the added bonus of missing Double-time and Rest Break premiums.

These premiums are owed on ALL non-discretionary wages paid to employees. Hourly rates, commissions, piece rate, individual KPI bonuses, spiffs, etc. About the only commonly paid item you can make a case for not paying OT on is "5-Star Review Bonuses" (they are paid based on what the customer chooses to do, not the employee...).

My team builds out Performance Pay Plans that minimize the expense of these premiums while rewarding efficiency rather than JUST production. But at the end of the day, whatever performance pay structure you are using needs to be compliant to protect your Brand from the hassle of dealing with a wage theft complaint/lawsuit, and lawyers/government making your life miserable for the next year+.

While AI may not fully understand the rules or how to apply them to the Trades, it's really good at letting inquisitive employees know how their employer is shorting them...

It's MUCH easier to just contact us to get the vulnerabilities closed BEFORE a lawsuit hits your desk!