There are many things that companies get sued for but at the core, there are a handful of practices that you need to pay attention to so your company is not sued.  And, if you are an employee and feel like you're not being treated fairly or being provided lunch meals and breaks, listen up! Here are the top things companies do to get sued:

1.   Not adhere to lunch breaks. Employees must be provided at least a 30-minute, unpaid off-duty meal period if they are employed for a work period of more than five hours. The meal period must be provided no later than the end of the employee's fifth hour of work. Failure to provide the meal break within this time frame can result in one additional hour of wages owed to the employee at the employee's straight time pay.

2. Use non-compete agreements to protect trade secrets, expertise in an area, etc. Non-compete agreements are prohibited in California, with only a few exceptions. There are ways to protect trade secrets -- such as customer lists and pricing information. Prohibiting an employee from working from someone else is limited because it infringes on the employee's ability to work and earn a living. You cannot force employees to stay with you, nor may you prevent them from earning a living if they choose to leave your company.

3. Classify all employees as exempt, whether they are or not.  Merely paying someone a salary does not guarantee that employee is truly exempt, nor do job titles. Under both state and federal law, certain types of positions may be exempt from overtime requirements, as well as meal and rest breaks. Other positions may be exempt only from overtime. An exempt employee is usually someone who is paid a specified amount of money, regardless of the number of hours worked in a week. An employee who does not qualify for one of the exemptions is considered to be nonexempt and therefore subject to overtime, as well as the required meal and rest breaks and time-keeping requirements. An exempt employee is normally someone who is a high-level executive, administrative or professional employee.  Employers sometimes designate employees as "nonexempt salaried." This status does not exist. A nonexempt employee must be paid for all hours worked in the pay period, including overtime. There is a specific requirement in California that all hours worked and the corresponding rates of pay be included on the detachable portion of the employee's check. Once the employee challenges the exempt status of the job,  additional wages and penalties can include back pay for overtime, penalties for failure to pay overtime, additional "wages" for failure to provide meal and rest breaks, and penalties for failure to pay all wages at termination, if the employee is no longer with the company. There are also penalties for failure to provide employees with the required wage statement information. The nonexempt employee may be joined by other employees who wish to challenge their exempt status. 

4. Implement "lose it or use it" vacation policies to avoid paying out vacation at termination.    Use it or lose it vacation policy is not permitted in California.  To limit your liability, the best option is to implement a reasonable cap on vacation accrual. "Reasonable" is open to interpretation, but it is usually one and one half to two times the annual accrual. For example, an employer's policy provides for up to two weeks of accrual each year. The employer implements a policy that caps the accrual at four weeks. 

5. Let employees decide which hours and how many they want to work. Most employees are restricted by law as to the number of hours they can work without payment of overtime. One exception to overtime laws is an alternative workweek schedule. However, employees can't simply decide that they want to work four days a week, 10 hours each day. A valid alternative workweek schedule requires that employers follow specific steps to institute such a program. Failure to meet the specific requirements can mean back pay for overtime, as well as penalties. Employees may request make-up time and work without payment of overtime if they are taking time off for personal reasons under certain special conditions: they make up the time in the workweek in which the time is to be or was missed; they work no more than 11 hours in a day or 40 in the week; the employer agrees; and the request to do so is in writing.

6. Don't offer harassment and discrimination training to managers and supervisors. Employers with 50 or more employees are required by law to provide two hours of training on sexual harassment for their supervisors. This training must be conducted every two years.  Make sure to provide mandatory supervisor sexual harassment training.

7.  Terminate any employee who takes a leave of absence, whatever the reason.  Employees have legal protection when they are away from work for various reasons, including workers' compensation, disability, pregnancy, family and medical leave, military leave, jury duty, etc. The laws also provide protection from retaliation for taking the leave -- thus the employer cannot wait and terminate the employee once the employee returns to work. If you terminate an employee while the employee is on a protected leave, or soon after the employee returns to work, you will have to prove that the termination was for a legitimate, nondiscriminatory business reason, unrelated to the protected leave.

8. Make everyone an Independent Contractor because having employees is too much trouble.  Let's say the Franchise Tax Board or the Internal Revenue Service want tax money, but the "independent contractor" hasn't been paying his/her quarterly payments, owes lots of money, can't be found or has no assets. The employer has money and failed to make the required tax withholdings -- so now the employer owes. Independent contractor status does not have a fixed definition by all the government entities that may have a claim for money owed. The primary determining factor is degree of control: Who determines the manner in which the work is performed, how it is performed, who supplies the tools or equipment, and where is the work performed? Also important in determining employee or independent contractor status is whether the work is a regular part of the employer's business.

9. Don't give employees their final checks if they fail to return company property. Employees who quit or are terminated often don't turn in company property such as laptops, cell phones, pagers, uniforms and tools. In California, final paycheck deadlines carry a hefty penalty if the deadline is not met. If an employee is terminated or quits and gives more than 72 hours' notice (calendar days, not business days), the employee's final check must be ready on the last day of work. If you terminate an employee, the final paycheck is due the moment the words "You are fired" come out of your mouth. The final check(s) must include payment for all hours worked through the last day, including any overtime, as well as any accrued and unused vacation. If an employee quits without giving at least 72 hours' notice, you have 72 hours to prepare the final check. 

10. Provide loans to employees and deduct the money from their paycheck each pay period.  If you decide to loan money to an employee, or make any other type of payment for which repayment may be required, you should have the employee sign a promissory note that has been reviewed by your legal counsel. The employee should then make payments to you, according to the specified payment schedule.