Law Offices of James N. Knight

08/12/2025

How do you avoid PAGA claims? Take practical steps like regularly auditing your payroll and timekeeping. Fix small wage and hour compliance issues before they become larger problems. Consistently update employee policies and handbooks and remain current with California labor laws. Train managers to follow the rules and promptly counsel employees who violate company wage and hour practices. These actions not only show good faith compliance but can also limit penalties under the new PAGA reforms. Taking a proactive approach now can save you significant cost and disruption later.

08/04/2025

What penalties can an employer face with a PAGA claim? Wage and hour penalties stack across employees and pay periods, so even a single minor wage and hour error can snowball into a huge cost.

Consider an employer with 10 current and former employees and a single non-compliant meal period in each of 26 pay periods in a year. On these facts, the employer could face over $55,000 in penalties related to meal period violations and incorrect wage statements. This example is for illustration only, but clearly shows how these penalties can overwhelm an employer, regardless of size. Next week, we will discuss practical steps to avoid these issues.

07/28/2025

Let’s discuss California’s Private Attorneys General Act (PAGA). PAGA allows employees to collectively sue their employer for wage and hour violations, such as unpaid overtime or incorrect wage statements. PAGA deputizes employees and their attorneys to address wage claims on behalf of the state and the penalties can add up very quickly, regardless of your company’s size. Every business owner should understand PAGA. I will explain in my next posts the risks and practical steps you can take to protect your business.

05/27/2025

With summer starting, California employers should revisit their Heat Illness Prevention protocols. Under state law, any business operating in high-heat environments—including both indoor and outdoor settings—must have a comprehensive plan in place. This plan should outline access to water, designated cool-down areas, emergency response procedures, and strategies for employee acclimatization. Industries such as manufacturing, warehousing, and food service are especially impacted by these regulations. Regularly reviewing and updating your Heat Illness Prevention measures is crucial for maintaining a safe and compliant workplace, particularly as temperatures rise

05/13/2025

What are the disadvantages of mandatory employee arbitration agreements? The first potential drawback is cost, especially for class or representative actions. The employer is required to pay for the costs of arbitration, which increase substantially with multiple, individual employee claims. Arbitration decisions are generally not subject to appeal, which means the parties are bound by the arbitrator’s decision. Third, not all claims are subject to arbitration, including claims for sexual harassment or government enforcement actions. A single approach does not suit all employers and you have to carefully assess whether the risks outweigh the benefits for your organization.

05/06/2025

Does your company require employees to sign arbitration agreements for employment-related disputes? Well-crafted arbitration agreements can offer significant advantages, including a streamlined and private way to resolve workplace issues while reducing the time and expense of traditional litigation. They may also limit exposure to costly class actions or representative actions, such as PAGA claims, helping companies manage risk. The law in this area is dynamic in California, and there are important considerations to keep in mind. More on that next week. Be sure to consult with counsel before updating or implementing any employment arbitration agreements.

04/21/2025

How does a business owner avoid personal liability, either under the Labor Code or by “piercing the veil”? It starts with compliance: observe required corporate formalities, like annual meetings and filings; ensure your entity is adequately capitalized and insured; strictly follow all relevant wage and hour laws; and regularly audit these functions to ensure that you maintain compliance. These are important responsibilities and you should seek advice from qualified professionals, including CPAs, human resources specialists and legal counsel.

04/08/2025

California’s Labor Code Section 558.1 is another avenue for individual owner liability. This law aims to prevent business owners from evading financial obligations to employees and holds individual shareholders, directors, and managing agents personally liable for wage and hour violations. Under Section 558.1, owners can face personal liability if they violate or cause violations of minimum wage, hours worked, or days of rest regulations. Ensuring strict compliance with these laws is crucial to avoid personal liability.

04/01/2025

Does forming a corporation shield you from personal liability? Yes in most cases, but courts can “pierce the corporate veil” to hold shareholders and directors personally liable for corporate debts or misconduct. These claims are regularly litigated and business owners should observe all corporate formalities and keep corporate assets separate from individual assets to protect themselves. Individual owner liability is also addressed in the Labor Code and I will discuss that section next week.

03/10/2025

California employers should update their employee handbooks to incorporate key changes for 2025. For example, AB 2499 significantly expands protections for crime or abuse victims and broadens the definition of "qualifying acts of violence." Employees who are victims as well as employees with family members who are victims are eligible for reasonable accommodations at work. There is more to this bill and it is just one of many critical changes for 2025 that should be included in the Employee Handbook.

03/03/2025

Recent immigration enforcement actions in Los Angeles and Kern County are a reminder for businesses to be prepared for potential ICE visits. Employers should create response plans and maintain proper I-9 documentation for their workforce. Preparation is key in navigating these situations and ensuring compliance.

Recently, U.S. Immigration and Customs Enforcement officials knocked on the doors of a handful of Los Angeles-area homes. And in January, U.S. Border Patrol agents conducted a three-day raid in rural parts of Kern County targeting Latino farmworkers and day laborers soliciting work in the parking lo...