I was recently contacted by the owner of a health club regarding a staff member he employed as an instructor. The employee that seemed to be a qualified fitness instructor was terminated after several months due to continuous non-compliance problems.
The question that the owner had for me was related to what the employee did after the termination. The upset employee filed a complaint with the Employment Development Department. The employee claimed to be owed for services performed during his tenure that were never covered as part of normal payroll. It turns out that when the employee was happy he volunteered his time for on-sight and off-sight events, but after being terminated for such problems as taking personal training fees under the table, became upset and filed the complaint.
At this point there was not much that was able to be done to resolve the problem for this club owner. It does, however, validate the importance of knowing the labor laws and compliance of the laws in your area. Now as it turns out the labor laws in this club owners area do dictate that an employee be paid for any actions that are performed in a positive nature for the business. (The owner needed to be familiar with this law and having the employee clocked in and out during all hours he was providing club related services.) By not having the employee’s volunteered hours documented this left many hours open for interpretation as to what actually was due to the employee. He should have never been allowed to do any volunteer work.
Also, after the claim was settled it came to the owner’s attention that this particular employee had no less than four previous cases filed with the EDD related to other businesses where he had worked the same angles to take advantage of his employers. Both stealing from the businesses, then filing claims for unpaid hours after being caught and terminated.
If you are not completely up to date and comfortable with the laws it may be a good idea to look into such programs as Professional Employer Organization (PEO), Human Resource Outsourcing (HRO), Payrolling, and Staffing. These types of programs can ensure you are in compliance with payroll administration, regulatory compliance, workers’ compensation coverage/administration and other related employee administration requirements. Also making sure that you (or an outside agency) perform the necessary pre-employment screening, testing, reference and background checking that will help avoid employment issues.
So get in compliance today to save yourself unforeseen problems tomorrow!
