The key to beating an employee wage & hour claim

It seems like the wage and hour labor law sector is heating up with more and more disgruntled employees filing lawsuits for alleged unpaid overtime, work off the books, failure to allow mealtime breaks and rest breaks, insufficient information on check stubs being the most popular.  We were able to actually settle one yesterday after an all day mediation session based on the simple fact that our client, the contractor, maintained good written records.  In our case the employee was claiming he worked at least 2 hours of overtime everyday and 8 hours on Saturday without being compensated for any of his time for the last 3 years.  When pressed to prove this, the employee had no documents nor any witnesses to support his claim.  The real issue was after my guy performed an internal audit, he found that he had underpaid the employee approximately $1,850.  The dilemma--say nothing about the underpayment and hope the plaintiff misses it during his audit or disclose the shortfall and pay the employee.  The problem with the latter choice is that these employee based labor codes provide for the mandatory recovery of attorney fees if the plaintiff proves you failed to pay him everything he was due.  The employee was asking for $125,000 which included his claim and his attorney's fees to date.  We had tendered a Ca. Civil Procedure section 998 offer to compromise at $25,000 early in the litigation with the hope that this would cut off the continuing exposure of having to pay the plaintiff's attorneys fees as the matter worked its way thru the system.  We ultimately convince the claimant and the mediator that the employee's claim was bogus.  The attorney on the other hand was not wiling to give up his right to collect his fees. The economics of the matter made it foolish for the contractor to continue to litigate, pay his lawyer fees and ultimately the employees attorneys fees which would have to be paid since the employer admitted short paying the employee $1,850.  The matter settled very close to our client's CCP 998 amount.  The lesion- You as the employer have the burden of proof in establishing the accuracy and adequacy of your employee time related records.  IF you have not reviewed your record keeping procedures in a while, I suggest you do so sooner rather than later.  The construction industry has become the industry of choice for Plaintiff based employment attorneys.  The better records you maintain, the less likely you will be forced to pay around $25,000 (not including our fees of about $25,000) for an $1,850 inadvertent error.  Protect yourself.