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Total Articles: 282

San Francisco's OLSE Issues "FAQs" On Fair Chance Ordinance

Starting on August 13, 2014, employers doing business in the City of San Francisco, California have had to comply with sweeping amendments to San Francisco Police Code, Article 49, and Administrative Code, Article 12 ("the amendments," "the ordinances" or the "FCO"), which significantly restrict the ability of covered employers to inquire into, and use, criminal records for hiring and other employment purposes. The scope of the amendments far exceeds the breadth of any of the other so-called "ban-the-box" laws.

San Francisco Imposes New Burdens on Retail Employers

In addition to federal and state laws, San Francisco currently has ten labor and employment laws that apply only to employees working within the City. On December 5, 2014, the eleventh San Francisco-specific employment law was enacted, expanding the rights of some retail workers employed by specified retail employers. The “Retail Workers Bill of Rights,” which consists of two ordinances (Nos. 140880 and 141024), will regulate the employment of some part-time retail workers in San Francisco.

Approved San Francisco Retail Workers Ordinance Means More Restrictions For Employers

The San Francisco Board of Supervisors has voted unanimously to approve a city ordinance, which will create a number of obstacles for many businesses – including retail stores, restaurants, and banks. The ordinance, referred to as the “Retail Workers Bill of Rights,” will severely limit employers’ flexibility and discretion in hiring and allocating work hours among employees. In addition, employers will be penalized if they fail to meet the burdensome and intricate requirements established by the ordinance.

Beware of How you Pay Your Employees You May Pay More

Todd Scherwin and Jonathan Liu’s article “Beware of How you Pay Your Employees You May Pay More” was featured in California Clubs of Distinction’s Third Quarter Newsletter.

Court of Appeal: Meal Period Class Action Not "Welcome to Walgreens"

This is not a class action post, bored blog readers. Read this one if you are interested in meal and break issues.

Oakland, California, Passes Minimum Wage, Paid Sick Leave, Hospitality Service Charges Measure

A City of Oakland ballot measure increasing the minimum wage for most employees, requiring paid sick leave and mandating payment of employer-levied service charges to employees has passed with over 80 percent of the vote. Measure FF’s provisions raising the minimum wage and requiring paid sick leave will go into effect March 2, 2015; the provision tendering payment of service charges takes effect 10 days after the Oakland City Council formally declares the election results.

San Francisco Minimum Wage Going Up; Oakland's Too

The San Francisco minimum wage will increase as follows in the years to come:

Calif. Employers Must Take Care With Overtime Exemptions

For those of us who work with employees in highly specialized fields, it is important to never lose track of the recurring issue of whether exempt classification of employees for overtime purposes is appropriate. While all employers should make it a practice to evaluate the classification of employment positions, employers in the professional and technical industries, such as engineers, architects and contractors, should pay close attention to whether the professional exemption correctly applies to certain skilled employees.

FAAAA Does Not Preempt California Meal and Rest Period Requirements

In Godfrey v, Oakland Port Services Corp., which was decided on October 28, 2014, the California Court of Appeal issued a published decision holding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt California’s meal and rest period requirements. The case is significant because it is the latest California decision holding that the FAAAA does not preempt California’s wage and hour laws

Voters Approve Minimum Wage Hikes In San Francisco And Oakland

On Tuesday, San Franciscans overwhelmingly voted to raise the City’s minimum wage to $15.00 over the next few years. The San Francisco current minimum wage of $10.74 is already higher than both the federal minimum wage of $7.25 and California’s minimum wage of $9.00. Under the new law, wages will rise to $11.05 on January 1, 2015, then to $12.25 in May 2015, before increasing every year until they reach $15.00 in 2018.

It's Payback Time: Reimbursement Of Employee Expenses Is A Hot Issue In California

As class actions continue to plague employers in California, one area that is often overlooked is expense reimbursement. The California Labor Code makes clear that employers must indemnify employees for all necessary expenditures or losses incurred as a direct consequence of discharging their duties, or obedience to the directions of the employer. This is so even if the duty is unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

Federal Court Limits California's Wage-Hour Laws

Three years ago, the California Supreme Court addressed the scope of California’s overtime regulations contained in the California Labor Code and Wage Orders promulgated by its Industrial Welfare Commission. Sullivan et al v. Oracle Corporation. The Supreme Court held that work performed in California by nonresident employees of Oracle was covered by the California Labor Code.

California Appellate Court Rules That California’s Prevailing Wage Laws Do Not Apply to Off-Site Fabrication

On August 27, 2014, the California Court of Appeal issued its decision in the long-anticipated Russ-Will case, Sheet Metal Workers’ International Association, Local 104 v. Duncan; Russ Will Mechanical, Inc., Court of Appeal of the State of California, First Appellate District, Division Three, No. A131489 (August 27, 2014). The court held that the California prevailing wage law does not apply to employees who fabricate materials for a public works project at a permanent, offsite manufacturing facility that is not exclusively dedicated to the project. It is a published decision, which means it is binding upon the California trial courts, the California Department of Industrial Relations (DIR), and the Division of Labor Standards Enforcement.

Is the Los Angeles Minimum Wage Increasing to $13.25 per Hour?

On Monday, September 1 in a Labor Day speech, Los Angeles Mayor Eric Garcetti announced his proposal to increase the city’s minimum wage to $13.25 per hour by 2017, and to tie the minimum wage to the Consumer Price Index going forward. California’s minimum wage increased this summer to $9 per hour, and will increase again to $10 per hour in January of 2016.

9th Circuit Upholds Statistical Sampling to Determine Liability in Off the Clock Overtime Class Action

Allstate re-classified its adjusters to be non-exempt some years back. Rather than require employees to keep their work time on time sheets or use a time clock, the employees were paid a standard eight hours per day / 40 hours per week.

WHEN COURTS DISAGREE WITH THE CALIFORNIA LABOR COMMISSIONER

The California Division of Labor Standards Enforcement, or DLSE, is the state agency responsible for enforcing state wage-and-hour laws. In conjunction with its enforcement duties, the DLSE issues “opinion letters” at the request of the public, opining as to the legality of a wage-and-hour practice that an employer has implemented, or plans to implement. The DLSE has also developed an “Enforcement Policies and Interpretations Manual,” consisting of guidelines to assist its staff in investigating and adjudicating wage claims.

California Employers Catch a Break From Unmanageable Wage and Hour Class Actions

In a significant decision that provides support for employers who are pushing back against plaintiffs’ attempts to litigate unmanageable wage and hour claims on a class-wide basis, a California federal court denied a motion for class certification in Ordonez v. RadioShack, Inc., a putative class action on behalf of current and former retail sales associates asserting a variety of claims, including claims for missed meal and rest breaks. The court denied plaintiff’s earlier motion for class certification on the grounds that some evidence of short, skipped, or late meal breaks could not answer the critical liability question of why the break was skipped, late or short, on a class-wide basis.

Employer Required to Reimburse Employees for Personal Cell Phone Use Despite Unlimited Minutes Plans

Cell phones are ubiquitous. At some companies, employees use their personal phones to make business calls. Does an employer need to “pay” for that use of the phone, even if the employee did not incur any extra expenses for doing so? Yes, according to an appellate court in a recent California case, Cochran v. Schwan’s Home Service, Inc., Court of Appeal of California, Second Appellate District, Division Two, No. B247160 (August 12, 2014).

San Francisco's "Ban the Box" Ordinance Limits Criminal Checks by Private Employers

Starting August 13, 2014, San Francisco's "Ban the Box" ordinance (the Fair Chance Ordinance) imposes strict rules on certain private employers regarding applicants' and employees' arrest and conviction records and related information.

California Court of Appeal Confirms Employers May Require Salaried Exempt Employees to Use Vacation/PTO Time for Partial Day Absences in Any Increment

In Rhea v. General Atomics, the California Court of Appeal issued an important ruling confirming that employers may require salaried exempt employees to use accrued vacation/PTO time for partial day absences in any increment, including increments of less than four hours, without violating the salary basis requirements for exempt status under California wage and hour law. Rhea puts to rest a lengthy dispute on this issue and is welcome news for many employers in California that previously adopted policies requiring employees to use vacation/PTO time for any partial day absences of any length.

Motor Carriers Face Uphill Battle After California Supreme Court Decision

Harris v. Pac Anchor Transportation, Inc., No. S194388 (July 28, 2014): In a unanimous decision, the California Supreme Court has held that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt an action brought under California’s Unfair Competition Law (UCL) when the action does not relate to the prices, routes, or services of a motor carrier with respect to the transportation of property. As a result, the state of California can proceed with its action against a trucking company and its owner for allegedly misclassifying their drivers as independent contractors and for other alleged violations of California’s labor and unemployment insurance laws.

Court of Appeal: OK to Deduct from Exempt Employees' PTO/Vacation for Partial Day Absences of Any Length

Basic wage-hour principle: With some exceptions, an employee classified as "exempt" under the federal Fair Labor Standards Act is entitled to a full salary for any week in which she / he performs any work. There are some exceptions allowing for salary deductions. For example, an employer can deduct from an exempt employee's salary for full-day absences for personal pursuits, or full day absences for illness if the employer has a bona fide paid sick leave plan.

San Francisco Bay Area Employers Must Provide Commuter Benefits by September 30th

Employers with at least 50 full-time employees in the San Francisco Bay Area must offer commuter benefits, such as payments for commuter transit passes made with employees’ pre-tax earnings, to any employee who works at least 20 hours per week no later than September 30, 2014.

Ninth Circuit Rules California Meal and Rest Break Laws Not Preempted by FAAAA

Last week the U.S. Court of Appeals for the Ninth Circuit concluded, in Dilts v. Penske Logistics, LLC, that the Federal Aviation Administration Authorization Act of 19942 (FAAAA) does not preempt the application of California’s meal and rest break laws to motor carriers because these state laws are not sufficiently “related to” prices, routes, or services. The decision is contrary to the decisions of approximately a dozen district court cases holding that such laws were preempted. Moreover, if the Ninth Circuit’s decision goes unchallenged, trucking companies that have operations in California will be required to comply with California’s meal and rest break laws instead of the Department of Transportation regulations.

California Supreme Court Narrows the Inside Sales Exemption in California

The California Supreme Court unanimously decided the following: "an employer may not attribute commission wages paid in one pay period to other pay periods in order to satisfy California?s compensation requirements."

9th Circuit: California Meal / Rest Period Laws Apply to Trucking Companies; Not Preempted by Federal Law

Trucking companies subject to the Federal Aviation Administration Authorization Act have litigated a number of cases concerning whether federal law preempts California wage-hour requirements concerning meal and rest periods. The FAAAA provides: “States may not enact or enforce a law . . . related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1).

Are Further Increases In California Minimum Wage Laws On The Horizon?

Existing law requires that California’s minimum wage for all industries be no less than $9 per hour effective July 1, 2014 and $10 per hour effective January 1, 2016. Even before the second-tier increase goes into effect, new legislation has been introduced seeking to further increase California’s minimum wage.

California Supreme Court: Undocumented Worker May Recover Lost Wages for Period Up to Employer’s Discovery of Immigration Status

Salas v. Sierra Chemical Co., S196568 (June 26, 2014): On June 26, the California Supreme Court issued a decision holding that federal immigration law does not preempt a California law that extends state law protections to all workers regardless of their immigration status. However, the court held that federal law does preempt state law on the issue of liability for lost wages for any period after an employer discovers that an employee is not authorized to work in the United States.

California Appellate Court Refuses to Certify Meal and Rest Break Class Action

Following Brinker and the growing number of issues and decisions in its wake, a recent California Court of Appeals decision is welcome news for employers faced with meal and rest break class actions. In an unpublished decision, Sutter Health Wage and Hour Cases, the California Court of Appeal, First Appellate District, upheld an order denying certification of a putative class of 21,000 registered nurses who worked for Sutter Health and 18 of its affiliates in 29 California hospitals.

California Bills for New Minimum Wage Increase, Paid Sick Leave, Liens on Employers all Advance in Legislature

May 28 was the deadline for California bills to clear their house of origin this year, and many bills of interest – and concern – to California private sector employers moved to the other chamber. Here are some of the “live” bills to watch.

Court of Appeal: Employer Not Responsible for Off-the-Clock Work

Kaiser won summary judgment against an employee who claimed he was working off the clock, contrary to Kaiser policy and procedures for reporting time worked.

San Francisco Bay Area Employers Must Comply with Commuter Benefits Program by September 30, 2014

Covered San Francisco Bay Area employers without an already-existing and compliant commuter benefits plan have until September 30, 2014, to select at least one of four commuter benefit options, notify employees of how to take advantage of the benefits, and register with the Bay Area Commuter Benefits Program (CBP).

California Corner: Employers Face New Heat for Missed Recovery Periods

Effective January 1, 2014, SB 435 expanded the scope of Cal. Labor Code Section 226.7 (known for providing premium pay for missed meal and rest periods) to require employers of outdoor workers to provide premium pay to employees who missed "recovery periods." A recovery period is defined as a "cooldown period afforded to employee to prevent heat illness."

The Alternative-Workweek: Oasis Or Mirage?

California employers are acutely aware of the typical schedule worked by employees: eight hours a day, five days a week. As we have become accustomed to doing, California law generally requires employers to pay employees overtime wages for hours worked in excess of eight hours during any 24-hour period. But in many cases, limiting employees to working only eight hours a day is not the most convenient for either the employee or the Company. End of the story? Not so fast.

San Francisco Enacts ‘Ban the Box’ Law

Private sector employers in the City of San Francisco will have to comply with new “ban the box” legislation restricting questions about applicants’ criminal records on applications for employment and during job interviews.

San Francisco Passes Fair Chance Ordinance Restricting Employers’ Ability to Use Criminal History Information

San Francisco has “banned-the-box” on employment applications and has added other restrictions on private employers’ ability to obtain and use criminal history information. The City and County of San Francisco Board of Supervisors passed Ordinance number 131192 on February 11, 2014, and the mayor signed it on February 14, 2014. The ordinance will become effective on August 13, 2014. San Francisco joins Buffalo, Newark, Philadelphia, and Seattle as the fifth major municipality to “ban the box” on employment applications for private employers. Four states “ban the box”: Hawaii, Massachusetts, Minnesota, and Rhode Island.

“Ban-the-Box” and Beyond: Employers That Do Business In or Contract with the City of San Francisco Should Review Sweeping Restrictions Regarding Inquiries Into, and the Use of, Criminal Records

On February 11, 2014, the San Francisco Board of Supervisors passed sweeping amendments to San Francisco Police Code, Article 49, and Administrative Code, Article 12 (“the amendments” or “the ordinances”) that significantly restrict the ability of covered employers to inquire into, and use, criminal records.

San Francisco Employers: Time to Revise Employment Applications, Background Check Rules, as Supervisors "Ban the Box"

"Ban the box" means to get rid of boxes on employment applications asking for criminal history. The idea is so that employers don't automatically reject applicants with criminal convictions if they might otherwise be qualified to hold a job.

San Francisco's Board of Supervisors "Bans The Box" and Further Complicates Criminal History Checks by the City's Employers

Yet another legislative body, San Francisco’s Board of Supervisors, has “banned the box,” the widely used criminal history check box on employment applications. The ordinance, which will become law no later than Thursday, February 13, 2014 unless the Mayor vetoes it, would make San Francisco the ninth jurisdiction to enact ban-the-box legislation applicable to private employers. In addition to banning the box, the new San Francisco legislation imposes a host of additional new restrictions on the use of criminal history for employment purposes. These restrictions supplement those already imposed by the federal Fair Credit Reporting Act (FCRA) and arguably make San Francisco the toughest jurisdiction in the U.S. for employers to use criminal history.

SAN FRANCISCO’S FAMILY FRIENDLY WORKPLACE ORDINANCE

The San Francisco Family Friendly Workplace Ordinance is set to take effect on January 1, 2014. The new law will require employers to consider workers’ requests for flexible work arrangements and predictable work schedules due to caregiving responsibilities.

California Labor Department has Wage Theft in Sights

The California Division of Labor Standards Enforcement (DLSE) is taking aim at employers for wage theft. In the latest example of the Division’s aggressive stance, it claimed Little Lopez Corporation, a janitorial services provider, owed wages to 41 current and former employees and, following an investigation, has issued citations to the company totaling $332,675.

Happy 2014 – Gear Up For New Wage And Hour Laws

As the new year begins, California employers, already weary from added wage and hour laws and regulations enacted over the past several years, have yet more to comply with. Here are the highlights.

Ninth Circuit Poses Questions to CA Supreme Court Re Suitable Seating Obligations

The Ninth Circuit is considering several class action appeals over California's "suitable seating" requirement contained in its wage orders.

Managers’ Class Action for Unpaid Overtime May Proceed, California Court Rules

Announcing that “class-wide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof,” the California Court of Appeal reversed an order denying certification of a class of restaurant managers who claimed they were misclassified as exempt employees and denied overtime pay in violation of California law. Martinez et al. v. Joe’s Crab Shack et al., No. B242807 (Cal. Ct. App. Dec. 4, 2013). The Court found that the trial court incorrectly focused on factual disputes regarding how the managers spent their time, rather than on the employer’s policies the managers alleged resulted in their misclassification. In so doing, the trial court improperly shifted the burden of proving the exemption to the employees, the Court noted.

San Francisco Flexible Family Friendly Fully Fabulous Foster!

Sorry. I meant "Pabulous!" Looks like I almost ran out of F-words to describe the new San Francisco Flexible Family Friendly Ordinance.

Employees May Proceed with Fraud Suit for Unpaid Bonus, California Court Rules

Employees who alleged they remained in their jobs after the employer made oral promises of a bonus upon completion of the sale of the company, which bonus was never paid, had adequately pled claims for promissory fraud (concealment), breach of contract and promissory estoppel, the California Court of Appeal has ruled, reversing dismissal of those causes of action. Moncada et al. v. West Coast Quartz Corp. et al., No. H036728 (Cal. Ct. App. Nov. 22, 2013). However, the Court affirmed the dismissal of the employees’ claims for intentional infliction of emotional distress, negligent misrepresentation, and equitable estoppel.

Wage-Hour Class Action Challenging Employer’s Policy on Pre-Shift Work May Proceed, California Court Rules

As common issues predominated regarding whether the employer had a policy of denying compensation for certain pre-shift work in violation of California’s wage and hour laws, denial of class certification is not appropriate, the California Court of Appeal has ruled, reversing the lower court. Jones et al. v. Farmers Ins. Exchange, No. B237765 (Cal. Ct. App. Nov. 26, 2013). However, the Court also ruled that the named plaintiff was not an adequate class representative and allowed the employees to amend their complaint to name a new class representative.

New Overtime Pay Requirements for Domestic Employees

Recent additions and changes in both California and federal wage law have made it far more costly to employ household help. We explain below.

MAKING LAWFUL DEDUCTIONS FROM ADVANCED COMMISSIONS

Sales commissions can lead to wage-hour disputes. Commissions are wages. Wages are due when they are earned. Employees naturally want to be paid as soon as possible. Employers desire control over when a commission is “earned” to avoid premature payment. Some sales transactions take time to complete. Products can be returned and payment refunded.

Nurses Must Go It Alone: Federal Court Denies Class Certification on California Meal & Rest Break Claims

Despite the effort of the California Supreme Court to set forth definitive guidelines on meal and rest period obligations in last year’s seminal Brinker Restaurant decision, employees continue to bring numerous class actions alleging their employers have a common policy or practice of unlawfully denying meal and rest breaks. By suing on behalf of a class, plaintiffs’ counsel seek to increase the potential damages in a lawsuit and thus exert more pressure on employers to settle rather than risk an adverse judgment.

PAYING EMPLOYEES WHO TRAVEL

Most California employers know they must pay non-exempt employees for all their work hours. However, understanding pay and related obligations can be significantly more complicated when an employee’s workday does not begin and end in a single location—for example, if the employee services several clients throughout the workday.

San Francisco's New Flextime Ordinance

Under the San Francisco Family Friendly Workplace Ordinance signed on October, 30, 2013 by Mayor Edward Lee, parents and caretakers have been afforded the right to request modified work schedules, such as a change in start times, part-time and part-year schedules, telecommuting and schedule predictability.

How the New California Laws Will Impact Your Business in 2014 and Beyond, Part 1: Wage and Hour Legislation

In 2013, Governor Jerry Brown signed into law approximately 9 out of 10 bills presented to him. This three-part blog series summarizes the new legislation and captures the key employment law related bills that are likely to affect the most private employers in California. The first part of this series focuses on the newly-signed wage and hour legislation in California. Parts two and three will focus on the EEO, disability, leave, and immigration-related bills that the governor recently signed. Unless otherwise specified, all of the newly enacted legislation will become effective on January 1, 2014.

California Meal and Rest Break Class Actions Regain Momentum After Brinker

Brinker Restaurant Corp. v. Superior Court made it clear that California employers do not have to police meal and rest periods, so it would seem they have a safe harbor so long as employees have the freedom to take meal and rest breaks, right? Not only that, Brinker cited (albeit in a footnote) the same commentator (Professor Richard Nagareda) as the U.S. Supreme Court did in Wal-Mart Stores, Inc. v. Dukes for the proposition that “what really matters to class certification is not similarity at some unspecified level of generality but, rather, dissimilarity that has the capacity to undercut the prospects for joint resolution of class members’ claims through a unified proceeding.” Given the convergence of Brinker and Dukes on the basic elements required for class certification, wouldn’t it be reasonable for California courts to follow the Supreme Court’s opinion in Comcast Corp. v. Behrend denying class certification where individual damages issues would overwhelm issues common to the class?

Nannies Join Employees Required to Receive Overtime Under California’s Domestic Worker Bill Of Rights

Effective January 1, 2014, California will become the third state after New York and Hawaii to require overtime compensation for all nannies and other domestic work employees.

Nannies Join Employees Required to Receive Overtime Under California’s Domestic Worker Bill Of Rights

Effective January 1, 2014, California will become the third state after New York and Hawaii to require overtime compensation for nannies and other domestic work employees.

San Francisco Adopts Ordinance That Prohibits Caregiver Discrimination and Provides Flexible Work Arrangements for Caregivers

San Francisco recently adopted the “Family Friendly Workplace Ordinance,” which prohibits caregiver discrimination and gives employees a right to request “flexible” or “predictable working arrangements” to assist employees with caregiving responsibilities for children, family members with serious health conditions, or parents 65 years or older.1 The ordinance goes into effect on January 1, 2014, and applies to all employees in the City and County of San Francisco who work for employers with 20 or more employees in the city.2 The ordinance applies to employees who have worked for a covered employer for at least six months and regularly work at least eight hours per week. The ordinance is based on federal legislation rejected three times by Congress, and a similar statute adopted by Vermont.

San Francisco Enacts Flexible Work Arrangement Ordinance

San Francisco Mayor Edwin M. Lee (D) has signed an Ordinance allowing employees working in the City to request flexible work arrangements to care for a child, family member with a serious health condition, or parent over age 65 without retaliation. Employers must consider employees’ requests and must provide business reasons for denying them. San Francisco joins the State of Vermont, which enacted similar legislation in May 2013, in adding another dimension to employee leave management. The Ordinance becomes operative January 1, 2014.

Domestic Workers to Receive Overtime Pay under California Law

Effective January 1, 2014, private individuals employing domestic workers in California, such as childcare providers and caregivers, must pay such employees overtime at a rate of time-and-a-half for all hours worked in excess of nine in one day or more than 45 hours in one week. The new law will expired on January 1, 2017, unless it is extended.

San Francisco Flexible Schedule Ordinance - Update

We posted about San Francisco's newest ordinance here. Here's an update.

Minimum Wage Increase Impacts Overtime Exemptions, Work Rules and Agreements

Under new legislation signed by Governor Brown last week, the California minimum wage will increase to $10 per hour by the beginning of 2016, a 25% increase in just over two years. The legislation makes California the first state to raise its minimum wage to $10.

New California Law Requires Overtime Pay for Personal Attendants

On September 26, 2013, Governor Jerry Brown signed into law a bill which entitles personal attendants in California to overtime pay. Previously, Industrial Welfare Commission Wage Order 15 provided a complete overtime exemption for all such workers. Beginning January 1, 2014, AB 241 mandates that personal attendants be paid one and one-half times their regular rate of pay for all hours worked in excess of nine hours in any workday and 45 hours in a workweek. Personal attendants include any persons employed by a private householder or by any third-party employer recognized in the healthcare industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision.

BRINKER REDUX: California Superior Court Certifies Meal Break Class and Denies Decertification of Rest Period Class

After the tortuous appellate process that finally resulted in the seminal California Supreme Court Brinker Restaurant Corporation1 decision defining the legal duty to provide a meal period and authorize rest breaks, you might have thought the battle was over, at least for Brinker Restaurants. You would be wrong. That was just Round One. In Round Two, last week San Diego County Superior Court judge William Dato addressed the question the California Supreme Court did not decide during the multi-year appellate process: whether a class should be certified to litigate whether meal periods were "provided" to thousands of employees of restaurants owned and operated by Brinker throughout California. While the California Supreme Court decision was widely viewed as a victory for employers on the meal break requirement under California law, last week's decision gave the green light to employees to continue this now nine-year fight as a class action to seek premium pay, penalties and possibly injunctive relief from their employer for failure to provide meal and rest breaks.

San Francisco Enacts Ordinance Requiring Employers to Consider Employees' Requests for Flexible Schedules

The San Francisco Board of Supervisors passed an ordinance requiring an employer to consider employees' requests for "flexible or predictable" working arrangements to assist with care giving responsibilities. The employer can deny the request for legitimate reasons. But there will be another poster, and the city's Office of Labor Standards Enforcement will enforce its anti-retaliation provisions.

California's Regular Rate: Getting It Right Can Save Money

With the increasing focus on wage-and-hour litigation, the issue of an employee’s “regular rate” arises in most every case involving alleged unpaid overtime. It also factors into an employer’s payroll, each and every pay period. Here’s a brief roadmap through this sometimes rocky terrain.

California Increases Minimum Wage Next Year October 1, 2013

Governor Jerry Brown recently signed into law a bill that will increase California’s minimum wage in two phases. Beginning July 1, 2014, the minimum wage for California employees will rise from the current $8 per hour to $9 per hour. On January 1, 2016, the minimum wage will increase to $10 per hour.

Raising the Floor: California Increases its Minimum Wage

For the first time since 2006, California's Legislature passed legislation increasing the state's current minimum wage of $8 per hour. Governor Brown signed the bill on September 25, 2013.

Ninth Circuit Upholds Certification of On-Duty Meal Period Class

The Ninth Circuit Court of Appeals decided that an employer's "on duty" meal period program for security guards was susceptible to class action treatment.

Raising the Floor: California Increases its Minimum Wage

For the first time since 2006, California's Legislature passed legislation increasing the state's current minimum wage of $8 per hour. Governor Brown signed the bill on September 25, 2013.

California Passes Increase to State Minimum Wage; What Else is Affected?

California Governor Jerry Brown on September 25, 2013, signed into law a bill that increases the state’s hourly minimum wage rate from $8.00 an hour up to $10.00 an hour by January 1, 2016. The new law (AB 10) amends Section 1182.12 of the California Labor Code and does not automatically increase the wage rate annually based on inflation. The rate increase will take effect in two stages: a $1.00 increase on July 1, 2014, to $9.00 an hour, and another $1.00 increase on January 1, 2016, to $10.00 an hour. The last time California increased its minimum wage was on January 1, 2007.

BREAKING NEWS: California’s Minimum Wage Goes Up—But There Are Some Pitfalls Employers Need to Avoid

Minimum wage earners across the state are celebrating.

California State Minimum Wage Going Up...and Then Up Some More

The Governor will sign AB 10 on 9/25. The new bill will raise the California minimum wage from its current $8.00 per hour to $9.00 on January 1, 2014. Then it will go up to $10.00 on January 1, 2016.

New California Law re Attorney's Fees in Wage Cases

Governor Jerry Brown signed SB 462 (here). This law amends Labor Code Section 218.5, which allows attorney's fees to be awarded to the prevailing party in lawsuits over unpaid wages, fringe benefits, or pension fund contributions.

California State Supreme Court Denies Review Of Piece-Rate Case: Lower Court Ruling To Stand

The California Supreme Court denied review of a California Court of Appeal case, which held that piece-rate-paid employees are entitled to separate hourly pay for “waiting” time. Gonzalez v. Downtown LA Motors.

Security Guards’ Weekend On-Call Time was Non-Compensable Sleep Time, California Court Rules

Security guards who worked 24-hour weekend shifts were not entitled to compensation for eight hours of sleep time, the California Court of Appeal has ruled. Mendiola v. CPS Security Solutions, Inc., No. B240519 (Cal. Ct. App. July 3, 2013). Reversing a preliminary injunction ordering the employer to compensate its guards for all nightly on-call time, the Court found that excluding eight hours of sleeping time during weekend shifts from the guards’ compensation was proper under California law. However, the Court found the guards’ weekday nightly on-call hours were compensable.

Court of Appeal: On-Call and Sleep Time

CPS guards construction sites. Some of the security guard employees sleep in on-site trailers. CPS compensated them for the time they were required to investigate potential problems at the sites, such as break ins. Otherwise, the employees were considered "on call," but were uncompensated.

BE CAREFUL! PIECE RATE COMPENSATION IS TRICKY

Some organizations pay employees by the piece rate, that is, based on certain tasks completed rather than based on the number of hours worked. Piece rate compensation is particularly common in the automotive repair industry. In Gonzalez v. Downtown LA Motors, LP, the California Court of Appeal decided that auto technicians paid a piece rate for work performed must be paid by the hour for all time spent on tasks not specifically included in the piece rate (referred to by the court as “waiting time”).

Who's Minding the Store? -- California Court Ignores FLSA Regulation on Multi-Tasking and Rejects Employer's Claimed Exemption for Store Manager

A state appellate court in Los Angeles recently addressed the "multi-tasking" responsibilities of managerial employees and interpreted California's wage and hour laws in a manner different from FLSA regulations. In Heyen v. Safeway, Inc., the Court of Appeals for the Second Appellate District affirmed an advisory jury and court decision in favor of a grocery store assistant manager whom the jury and court found did not qualify for the executive exemption from overtime compensation under California law because the assistant manager regularly spent more than 50 percent of her work hours doing "non-exempt" tasks such as bagging groceries, bookkeeping, and stocking shelves.

Court of Appeal: Meal/Rest/Wage Statement Class Action Should Be Certified

Safeway compensated truck drivers based on a compensation formula rather than a straight hourly rate:

Court of Appeal - Managers Supervising While Performing Non-Exempt Tasks Are Non-Exempt

Safeway stores employ assistant managers who supervise many employees and have responsibility for hiring, supervising, budget compliance, etc. But the stores' "operating budgets" and other policies allegedly require assistant managers to work the cash register and perform bookkeeping duties at times. The assistant managers can supervise associates while "multi-tasking" / working the checkout line.

Insurance Adjuster Paid on an Hourly Basis not Exempt, California Court of Appeal Rules

Is an insurance adjuster who is paid $29 for every hour worked an employee exempt from overtime pay under California law?

Guards’ Class Action for Meal and Rest Periods, Unpaid Overtime to Proceed, California Court Rules in Post-Brinker Decision

Reversing the denial of class certification in an action for meal and rest period violations and unpaid overtime under California law brought by private security guards, the California Court of Appeal has ruled that the plaintiffs’ claims were amenable to class treatment because they alleged that the employer had unlawful, uniform policies regarding meal and rest periods. Faulkinbury v. Boyd & Associates, Inc., No. G041702 (Cal. Ct. App. May 10, 2013). Likewise, the Court held the employees’ claims that the employer incorrectly excluded certain reimbursement payments and bonuses from the calculation of overtime also were subject to common proof and could be resolved on a class basis.

Court of Appeal - Hourly Pay X Busy Employee = Non-Exempt Compensation

The plaintiff was an insurance adjuster. He was paid $29 / hour for every hour worked, including overtime. He always worked more than 40 hours per week. In a wage-hour lawsuit, he claimed he was not properly classified as exempt because he was not paid on a salary basis. (He challenged the duties test as well it appears). The employer argued that he was never paid less than 40 X $29 because he always worked overtime. Therefore, he earned the equivalent of a salary. The trial court bought that argument.

Brinker Restaurant Corporation v. Superior Court

Meal periods in CA.

Hospital Defeats Class Certification of Meal and Rest Break Claims

Attempts to certify classes of employees in lawsuits against healthcare industry employers continues to be a growing trend. In yet another such case, Alberts v. Aurora Behavioral Health Care, a California judge denied class certification of more than 1,000 psychiatric hospital workers in a wage and hour lawsuit stemming from alleged missed meal and rest breaks. Unlike other cases we have reported recently, this case did not involve automatic deduction of meal periods, but the resulting claims are the same.

Managerial Exemption And Class Actions

On March 20, 2013 a California Appellate court reinforced the fact that employees who attempt to certify class claims of “misclassification” of exempt employees (and related meal- and rest-period claims) face an uphill battle. William Dailey v. Sears, Roebuck and Company.

Late Breaking News

As most California employers know, the state generally requires that all employees who work more than five hours must be provided an unpaid, duty-free meal period of no less than 30 minutes, to commence before the end of the fifth hour of work, and a second meal period of similar length if employees work more than 10 hours, to commence before the end of the tenth hour of work. In most cases, the employee must be free to leave the premises, and the meal period must be documented on the employee’s time record.

Court of Appeal: CA Employer Violates Minimum Wage By Averaging Total Compensation Over Hours Worked

An auto dealership compensated its mechanics based on a "piece rate" system. For repairs, the company would pay the employees based on a standard period of time allowed for a repair (flag hours). The pay rate was significantly higher than minimum wage. So, if the job took longer than standard hours, there was enough wages to ensure the mechanic earned more than minimum wage.

"That Can't Be Right!" California Appellate Court Rules that Piece Rate Workers Are Entitled to Separate Hourly Compensation

A California Court of Appeal dealt another blow to employers this month when it held automobile mechanics, who earned at least minimum wage for every hour worked, were entitled to separate hourly compensation for any time not spent performing auto repairs. See Gonzales v. Downtown LA Motors, LP, 2013 Cal. App. Unpub. LEXIS 1728 (March 6, 2013). The attorneys for Downtown LA Motors (DTLA) argued it "can't be right" to find that employers who guarantee their employees the minimum wage for every hour worked somehow failed to satisfy their minimum wage obligation. The appellate court disagreed, awarding the class in excess of $1.5M.

The City of San Jose's New Minimum Wage Ordinance Takes Effect on March 11

This past November, voters in the City of San Jose, California ("City") approved their own minimum wage ordinance (MWO) – the largest city in the United States to take this action. The ordinance takes effect on Monday, March 11, 2013, and requires covered employers to pay covered employees a minimum wage of $10.00 an hour.1

New Rules For Commission-Paid Employees Take Effect January 1, 2013

Effective January 1, 2013, a new California law requires that employees entering into employment agreements which involve compensation, even in part, on a “commission” basis must be provided a written contract which sets forth the method by which the commission is computed and paid. Employers must provide the employee with a signed copy of the commission agreement and obtain a signed acknowledgment of receipt of the copy. We first reported on this in a Legal Alert, which you can access here.

New California Law Affects Commission-Paid Employees

Beginning January 1, 2013, a new California law requires that employees who are paid on commission must be provided a written contract which sets forth the method by which the commission shall be computed and paid. This new law further requires that the employer provide a signed copy of the commission agreement to the employee and obtain a signed receipt for it.

Is It OK To "Round" An Employee's Worktime?

For many years, some employers have chosen to "round" non-exempt employees' time entries in computing their wages. News items in recent days have reported on a California appellate court's ruling in See's Candy Shops, Inc. v. Superior Court and Silva that a properly administered "rounding" practice does not violate California wage-hour law.

Timekeeping Rounding Policies Permitted, California Court Rules

Under California law, employers’ timekeeping policy that rounds employee punch-in and -out times to the nearest one-tenth of an hour is permissible, the California Court of Appeal has ruled. See’s Candy Shops, Inc. v. Superior Court, No. D060710 (Cal. Ct. App. Oct. 29, 2012). Previously, no California statute or case law expressly permitted this common employer practice, though the practice is permissible under federal law, which is followed by the California Division of Labor Standards Enforcement (DLSE). The Court reversed summary judgment for the plaintiff in the certified wage and hour class action. Jackson Lewis’ David S. Bradshaw, James T. Jones, and Paul F. Sorrentino represented the employer in this case.

Do You Know Minimum Pay in San Jose?

"LA is a great big freeway. Put a hundr"...oh, is this on? Oops.

Do You Know the Way to Pay in San Jose? San Jose Becomes the Fifth – and Largest – U.S. City to Enact Its Own Minimum Wage Ordinance

At this month's general election, 59 percent of the voters in the City of San Jose, California approved an initiative measure to institute a $10 per hour minimum wage for covered employers and employees. The ordinance1 will take effect in early 2013, raising San Jose's minimum wage to two dollars an hour more than California's minimum wage.

Put It In Writing: California Requires Written Commission Plans Beginning January 1, 2013

Effective January 1, 2013, California’s new Labor Code section 2751 requires employers to provide written commission plan agreements to all employees who perform services in California and whose compensation involves commissions. The agreement must explain the method by which the commissions shall be computed and paid. The commission plan must also be signed by the employer and the employer must obtain a signed receipt from each employee.

San Francisco Minimum Wage to $10.55 effective January 1, 2013

The San Francisco Office of Labor Standards Enforcement announced that the San Francisco minimum wage will increase to $10.55 per hour, effective January 1, 2013. The statewide minimum is $8.00 per hour.

California Wage Statements — New Reporting Requirements, Increased Exposure for Employers

Amendments to the California Labor Code impose new wage reporting requirements on “temporary services employers” and allow all employees to recover statutory penalties for violations, even where they suffer no actual loss in wages as a result of a deficiency in a wage statement.

California Announces 2013 Minimum Pay Requirements for Exempt Computer Software, Physician and Surgeon Employees

California Labor Code sections 515.5 and 515.6 provide that certain computer software employees, as well as licensed physicians and surgeons, are exempt from state overtime requirements if they receive a minimum hourly, monthly, or yearly rate. The rate is determined annually based upon changes to the California Consumer Price Index for Urban Wage Earners and Clerical Workers. Because the Index experienced a 2.6% increase from August 2011 to August 2012, the California Division of Labor Standards Enforcement (DLSE) adjusted the rates these individuals must be paid to be considered overtime-exempt.

California Supreme Court De-Publishes Administrative Exemption Case

I posted about the Court of Appeal's opinion in Harris v. Superior Court here. That decision, on remand from the California Supreme Court, would have severely limited the administrative exemption. Fortunately, the California Supreme Court has now de-published the decision (here), so it is no longer good law. The bad news is that the Supreme Court's guidance on the administrative exemption is rather vague and remains open to lower courts' interpretations.

Sweet News on Rounding for California Employers: See's Candy Shops, Inc. v. Superior Court

In See's Candy Shops, Inc. v. Superior Court, the California Court of Appeals for the Fourth Appellate District explicitly held that in California employers are entitled to use a timekeeping policy that rounds employee punch in/out times to the nearest one-tenth of an hour (a "nearest-tenth rounding policy") if the rounding policy is "fair and neutral on its face" and "is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked." The court adopted the standard used by both the United States Department of Labor and the California Division of Labor Standards Enforcement, bringing "sweet" news to employers who use rounding policies.

California Court Reverses Anti-Rounding Decision

In See’s Candy Shops, Inc. v. Superior Court, the California Court of Appeal for the Fourth Appellate District explicitly held that in California employers are entitled to use a timekeeping policy that rounds employee punch in/out times to the nearest one-tenth of an hour (a “nearest-tenth rounding policy”) if the rounding policy is “fair and neutral on its face” and “is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.” The court adopted the standard used by both the United States Department of Labor and the California Division of Labor Standards Enforcement, bringing “sweet” news to employers who use rounding policies.

THE INSIDE SALES EXEMPTION IN CALIFORNIA

There are state and federal law provisions that exempt certain employees from laws requiring overtime pay. The various exemptions apply only to those workers who meet the exemptions’ particular criteria. These criteria may differ under state and federal law. As a result, an employee may be entitled to overtime under federal law, even if his job qualifies for an exemption under state law (and vice versa).

No Overtime for Commissioned Recruiters under California Law, Appeals Court Affirms

Ruling a recruiter was a commissioned salesperson because his job involved sales and his compensation was based on those sales, the California Court of Appeal, Fourth Appellate District, has rejected an employee’s claims for unpaid overtime and meal period premium pay against his employer on behalf of himself and a class of current and former employees. Muldrow v. Surrex Solutions Corp., No. D057995 (Cal. App. 4th Dist. Aug. 29, 2012). The Court found the employees were subject to California’s commissioned employee exemption and affirmed the judgment in favor of the employer.

New California Bill Clarifies that Non-Exempt Employee Salary Covers Only Regular Non-Overtime Hours

The favorable outcome for some employers in Arechiga v. Dolores Press, 192 Cal. App. 4th 567 (2011), which we previously discussed, has been undone by the California Legislature. In Arechiga, a California Court of Appeal ruled that a non-exempt employee’s salary could provide compensation for more than 40 hours of work in a week.

Decision Provides Greater Flexibility In Scheduling Meetings

Employers in California have been perplexed by various state regulations that have confusing and inconsistent provisions. One regulation addresses the "reporting-time" premium which requires employers to pay a minimum amount of hourly wages when employees report to work. Different standards apply depending on whether an employee reports for the first or second time within a single calendar work day.

Commissioned-Salesperson Ruling Is Big Win For Employers

Employers who have commission-sales employees working under two California Wage Orders recently received good news from a California appellate court which essentially clarified and strengthened the commission-sales exemption contained in Section 3D of Wage Orders 4-2001 (certain listed occupations) and 7-2001 (mercantile). Muldrow et al v. Surrex Solutions Corporation.

Court of Appeal on Reporting Time (Redux)

We first blogged about Aleman v. Airtouch Cellular here. I was pretty excited because I'm a dork. Oh, and because the Court of Appeal addressed two issues that come up all the time for clients, but never in court: "reporting time" and the "split shift" premium. You remember.

California Meal-and-Rest Period Class Actions after State Supreme Court Decision

In a long-awaited ruling, the California Supreme Court held in April 2012 that employers need not ensure that their workers take meal and rest periods required by California law, but only that workers are provided the breaks. One effect of Brinker Restaurant Corp. v. Superior Court, welcomed by many California employers, was to make it harder for plaintiffs to get classes certified. Several meal-and-rest-period cases were returned to the state Courts of Appeal for reconsideration in light of Brinker. Thus far, the courts have affirmed dismissal of claims for meal-and-rest period violations in one case (Muldrow v. Surrex Solutions, Inc., No. D057955 (Cal. Ct. App. Aug. 29, 2012)) and affirmed denial of class action certification for such violations in two cases (Hernandez v. Chipotle Mexican Grill, Inc., B216004 (Cal. Ct. App. Aug. 30, 2012), and Lamps Plus Overtime Cases, No. B220954 (Cal. Ct. App. Sept. 5, 2012)).

California Court Validates Piece-Rate Pay for Drivers

In a significant victory for trucking companies operating in California, in Carson v. Knight Transportation, No. VCU234186, Tulare County Superior Court Judge Lloyd Hicks decertified a class of California truck drivers who alleged that it is illegal to have a "combined" piece rate – a piece rate that covers both driving and non-driving duties – when compensation for the "piece" is based generally on the number of miles driven. The decertification order is particularly important not only because it is the first state court order addressing the legality of a combined piece rate, but also because three federal courts in California's Northern and Central Districts have concluded that such a combined piece rate runs afoul of California's law prohibiting the "averaging" of hours worked.

California Superior Court Validates Piece-Rate Pay For Drivers That Covers Both Driving And Non-Driving Duties

In a significant victory for trucking companies operating in California, a superior court judge decertified a class of California truck drivers who challenged the legality of compensating drivers on a “combined” piece rate that covers both driving and non-driving duties, when compensation for the “piece” is based generally on the number of miles driven. The decertification order in Carson v. Knight Transportation is particularly significant not only because it is the first state-court order addressing the legality of a combined piece rate, but also because three federal courts in the Northern and Central Districts of California concluded that such a combined piece rate runs afoul of California’s law prohibiting the “averaging” of hours worked.

Court of Appeal: Rare Opinion on Inside Sales Exemption

Tyrone Muldrow and a class of recruiters sued their employer, Surrex Solutions Corporation, for unpaid overtime, meals and breaks.

California Appellate Court Approves Employer Commission Plan with a Year-Long Chargeback Period

Pursuant to the newly amended California Labor Code section 2751, all California employers who pay employees by commission must have a written contract specifying the terms of the commission compensation at issue by January 1, 2013. Against that backdrop, a California Court of Appeal has provided another helpful decision regarding the enforceability of California commission agreements.

Court of Appeal: Administrative Exemption After Harris

Harris v. Superior Court (discussed here and article here) is the California Supreme Court's recent interpretation of the administrative exemption. The Supreme Court reversed the lower court's decision, saying the court of appeal mis-applied the law. Of note, the court insisted that the court of appeal apply the relevant standards in the wage order, which includes reliance on certain federal Department of Labor Regulations. The court sent the case back down for the court of appeal's re-consideration.

California Supreme Court Rules That State’s Prevailing Wage Law Is Not Quite So Prevailing: Charter Cities Need Not Require Prevailing Wages on Publicly Funded Municipal Construction Projects

On July 2, 2012, the California Supreme Court issued its long-awaited decision in State Building and Constructions Trades Councils of California, AFL – CIO v. City of Vista, No. S173586. The court held that locally funded public works projects performed by chartered cities are municipal affairs under the California Constitution and, as a result, the wages paid to workers on charter city projects are not subject to California's prevailing wage law. While this decision resolves the issue as to whether the municipal affairs or "Home Rule" doctrine can be used by charter cities to avoid the application of the state’s prevailing wage law, interested parties will seek to explore the boundaries of the ruling.

Court of Appeal: Advanced Commissions May Be Recovered

Verizon paid certain employees on commission. The commissions were paid on wireless subscriptions. However, if customers canceled their service, Verizon would charge back commissions advanced to employees, under the assumption that the customer would pay for the entire subscription. Here is the court of appeal's description of the commission plan:

California Supreme Court: Certain Cities Don't Have to Pay Prevailing Wage

Many employers who do business with the government have heard of the "prevailing wage."

A Closer Look At The Brinker Decision

On April 12, 2012, the California Supreme Court decided Brinker Restaurant Corporation v. Superior Court (Hohnbaum), pending since 2008. We reported on the decision in a Legal Alert, and in an extended webinar, which you can access here and here. Because it's such a significant decision, more remains to be said.

Is Immoos A Bigger Win For Employers Than Brinker?

On April 12th, 2012, the California Supreme Court issued its long-awaited decision in Brinker Restaurant Corp. v. Superior Court. The decision finally determined that employers do not need to ensure that their employees take advantage of legally-mandated meal and rest periods. Employers need only provide employees the opportunity to do so. An employer is not liable for a missed meal or rest period if such a break is provided but the employee voluntarily chooses not to take one – or voluntarily chooses to work during the break or end the break early. We reported on the decision in a Legal Alert, which you can access here.

THE DLSE HAS BROAD AUTHORITY TO AWARD "LIQUIDATED DAMAGES"

Governor Brown signed legislation amending Labor Code sections 98 and 1194.2 effective January 1, 2012. The new provisions allow the Division of Labor Standards Enforcement (DLSE) to award "liquidated damages" to employees who file administrative claims with the agency. Previously, liquidated damages were available only in court actions.

Car Wash Operator Found Liable for Unpaid Wages, Penalties as Successor of Unrelated Business

A car wash was liable for unpaid wages and penalties owed by a separate and unrelated business that had operated a car wash at the same location before the property owner evicted it, the California Court of Appeal has held under Section 2066 of the California Labor Code, which applies exclusively to the car washing and polishing industry. People ex rel. Harris v. Sunset Car Wash, LLC, No. B233915 (Cal. App. Dist. 2 Div. 5 May 16, 2012). Affirming a $120,000 judgment against the new car wash operator, the Court concluded it was a “successor” within the meaning of Section 2066 of the California Labor Code because it operated in the same location and performed the same services. Justice Orville A. “Jack” Armstrong issued a vigorous dissent, declaring the Court’s decision violated the precepts of statutory interpretation, misapprehended legislative intent, and visited a gross injustice on the new car wash operator.

California Court Rejects Health Task Exception to Personal Attendant Exemption from Overtime

Last week, in Cash v Winn, a California Court of Appeal flatly rejected an exception to the personal attendant exemption from overtime for individuals who provide in-home “health care services.” Under California Industrial Welfare Commission Wage Order No. 15-2001 (“Wage Order”), individuals employed as “personal attendants,” defined to mean employees who “supervise, feed, or dress” the client, are exempt from overtime pay requirements. However, if the caretaker performs a “significant amount of work” in addition to these tasks, the caretaker is not exempt from overtime pay requirements. In addition, with certain exceptions, if the caretaker is a registered nurse employed to engage in the practice of nursing in the home, the nurse is not exempt from overtime pay requirements.

Brinker Restaurant Corporation v. Superior Court

Brinker Restaurant Corporation v. Superior Court

Prevailing Parties Cannot Recover Attorney’s Fees for Meal or Rest Violations under California Law

The California Supreme Court has reversed an award of attorney’s fees to an employer that successfully defended a claim for failure to provide rest periods mandated under Section 226.7 of the California Labor Code. Kirby v. Immoos Fire Protection, Inc., No. S185827 (Cal. Apr. 30, 2012). In a seminal decision, the Court ruled the California Labor Code does not permit an attorney’s fee award to a prevailing party on such a claim. This ruling follows on the heels of the Court’s decision that employers need not ensure that their workers take meal periods required by California law, but only that workers are provided the meal periods. Brinker Restaurant Corp. v. Superior Court (Hohnbaum), No. S166350 (Calif. Apr. 12, 2012). For more on Brinker, see our article, California High Court Clarifies California Meal-and-Rest Rules.

CALIFORNIA SUPREME COURT CLARIFIES MEAL AND REST PERIOD LAW

Under California law, employers are required to make available to nonexempt employees meal and rest breaks. Employers that fail to do so must pay certain premium wages. After years of litigation over these seemingly simple requirements, the California Supreme Court on April 12, 2012, issued its long-awaited opinion in Brinker Restaurant Corp. v. Superior Court. The Court provided welcome guidance to the bench and bar regarding class certification law and meal and rest period requirements.

Out of the Darkness, into the Shadows:The DLSE Further Modifies Its Interpretation of the California Wage Theft Prevention Act

On April 12, 2012, the Division of Labor Standards Enforcement (DLSE) substantially revised its template notice form ("Notice") and once again amended its FAQs regarding an employer's obligations under California's Wage Theft Prevention Act (WTPA). Cal. Lab. Code § 2810.5; see www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html.1 This ASAP explains the changes in the template notice and the FAQs.

California High Court Clarifies California Meal-and-Rest Rules

In welcome news for many California employers facing class actions based on the state break rules, the California Supreme Court has held that employers need not ensure that their workers take meal periods required by California law, but only that workers are provided the meal periods. The employer’s obligation “is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires, but the employer need not ensure that no work is done,” the Court explained. Brinker Restaurant Corp. v. Superior Court (Hohnbaum), No. S166350 (Calif. Apr. 12, 2012). Should the employee choose to work after being relieved of duty, however, he or she must receive pay for the time worked, but is not entitled to the one hour of premium pay under California law for working during a meal break.

Brinker Decision by California Supreme Court Clarifies Meal and Rest Period Obligations

Yesterday morning, the California Supreme Court issued its long awaited decision in the case Brinker v. Superior Court (Hohnbaum), S166350. The Brinker decision involved a class action against a number of restaurants operated by Brinker Restaurant Corporation, alleging that Brinker failed to provide meal and rest periods required by California law and required employees to work off the clock, and seeking to certify a class of approximately 60,000 restaurant employees.

SUPREME COURT ISSUES LONG-AWAITED RULING ON STATE-MANDATED MEAL AND REST PERIODS

After a wait of more than three years, the California Supreme Court finally has issued a unanimous, landmark decision in the Brinker Restaurant case. The court's decision clarifies employers' duties in connection with providing meal and rest periods for employees. It also addresses important issues involving wage-hour class action lawsuits in general, especially where meal and rest period violations are claimed.

Random Post-Brinker Thoughts

I have taken more time to read Brinker. Here are some thoughts to add on to yesterday's post.

The California Labor Commissioner Updates Its Wage Theft Forms

Effective 4/12/12, the DLSE updated its templates and FAQs to help employers comply with the Wage Theft Prevention Act. You can find the page of forms here. I guess they couldn't wait until the Brinker hoopla died down a little?

California Supreme Court Clarifies Employer Meal & Rest Period Duties

After three years, the California Supreme Court has finally issued its much-anticipated decision regarding how employers must manage meal periods and rest breaks. On April 12, 2012, the state's highest court issued its unanimous decision in Brinker Restaurant Corporation v. Superior Court, clarifying California employers' obligations to "provide" meal periods and "authorize or permit" rest periods. To hear a detailed discussion of the decision and its implications for employers, please join Littler's webinars on April 17, 2012, from 10 to 11 a.m. PST, and on April 26 from 10:00 to 11:00 a.m. PST.

California Supreme Court Hands Down Major Decision On Meal And Rest Periods

On April 12, 2012 the California Supreme Court clarified the meal- and rest-period laws, as well as standards for class certification for these claims, and for off-the-clock claims. This case has been pending before the court since 2008, and its legal impact of the decision is far reaching. Brinker Restaurant Corp. v. Superior Court of San Diego.

Brinker: Employers Need Not Force Meal Periods

I will digest the Court's unanimous Brinker opinion a bit later. Those of you waiting to read it, it is here.

California Employers Win on Interpretation of Their Duty "To Provide" Meal Periods

The California Supreme Court’s much-anticipated decision regarding how employers are supposed to manage meal periods and rest breaks is finally here! The unanimous decision in Brinker Restaurant Corporation v. Superior Court was issued today, and it is largely a win for California employers.

California Supreme Court Issues Major Victory For Employers In Brinker Case

Today, the California Supreme Court finally issued its opinion in Brinker v. Superior Court, a case that had been on its docket since 2008. In what has generally been acknowledged as a major victory for California employers, the court issued clear rules on how and when meal and rest periods must be provided. In addition, the justices provided additional important comments on the standards to be applied by trial courts in considering motions for class certification in cases generally. Brinker Restaurant Corp. v. The Superior Court of San Diego County

Brinker Meal Period Opinion To Be Released Thursday 4/12

I think we're finally going to find out what the law is on meal periods in California. But I have no idea if employers are going to like it or not.

Good News, Bad News: Appeals Court Clarifies Penalties For Violations Of Wage Orders

The California Court of Appeal, Fourth Appellate District, handed employers a mixed blessing in a recent case, holding that employees cannot make a Private Attorneys General Action (PAGA) claim based upon alleged violations of Industrial Wage Commission (IWC) Wage Orders. Rather, PAGA claims can only be based upon statutory rights.

SUPREME COURT CLARIFIES ADMINISTRATIVE EXEMPTION

California employers’ decisions to classify workers as “exempt” from overtime and other wage-hours laws are among the most commonly litigated claims. There is ample ground for disputes between lawyers and their clients. Determining whether an employee is properly classified as exempt is fact-specific and requires applying vague and confusing laws and regulations.

CALIFORNIA COURT OF APPEAL PROVIDES GUIDANCE REGARDING REPORTING TIME AND SPLIT SHIFT PAY

The California Industrial Welfare Commission’s (“IWC”) wage orders describe the circumstances under which California employers must pay employees for “reporting time” and “split shifts.” A “split shift” is “a work schedule that is interrupted by non-paid non-working periods established by the employer,” other than meal or rest breaks. “When an employee works a split shift, one . . . hour’s pay at the minimum wage shall be paid in addition to the minimum for that workday.”

Recruiter Qualified under California Commissioned Salesperson Exemption, Not Entitled to Overtime

Ruling a recruiter was a commissioned salesperson because his job involved sales and his compensation was based on those sales, the California Court of Appeal, Fourth Appellate District, has rejected an employee’s claims for unpaid overtime against his employer on behalf of himself and a class of current and former employees. Muldrow v. Surrex Solutions Corp., Nos. D057995 & D058958 (Cal. Ct. App. Jan. 24, 2012). The Court found the employee was exempt from overtime pay under California Industrial Welfare Commission Wage Order No. 7-2001 and affirmed judgment in favor of the employer.

Is Rounding of Employee Time Entries Legal in California?--California Supreme Court Orders Appellate Court to Decide

In a matter of significance for California employers, in See’s Candy Shops, Inc. v. Superior Court of San Diego, the California Supreme Court recently ordered the California Court of Appeal, Fourth Appellate District, to review a trial court decision holding that rounding employee time entries violated California law.

California Court of Appeal Finds Employees Are Exempt Under California's Commissioned Sales Exemption

On January 24, 2012, the California Court of Appeal, Fourth Appellate District, issued an important decision providing new and needed guidance on the commissioned sales exemption. In Muldrow v. Surrex Solutions Corporation, the court concluded that a class of “senior consulting service managers” was exempt from overtime pay requirements.

State High Court Orders Review of Case to Clarify Legality of Rounding Timecard Entries - California Chamber of Commerce

The California Supreme Court directed the Fourth District Court of Appeal to review a case involving whether "rounding" time clock entries is lawful under California law. Federal law permits rounding, and the California Division of Labor Standards Enforcement has permitted as a matter of policy, so long as the "rounding" evens out or favors the employee. A trial court recently ruled that a class action involving rounding could proceed against an employer, See's Candies. See's sought a writ in the Court of Appeal, which summarily denied the Petition. The Supreme Court, however, unanimously voted to Order the Court of Appeal to hear See's petition on the merits

BRINKER UPDATE: SUPREME COURT RULING DELAYED

For more than 3 years, California employers have been anxiously awaiting a ruling from the California Supreme Court that is expected to clarify whether employers must guarantee employees take meal breaks or must only make meal breaks available. The answer to this question can mean millions of dollars to employers who are faced with costly class actions.

California Supreme Court Applies Administrative Exemption to Claims Adjusters

In the waning days of 2011, a unanimous California Supreme Court gave California employers a holiday present in its long-awaited opinion that diminishes the importance of the outmoded analytical tool known as "the administrative/production worker dichotomy" for determining whether employees are properly classified as exempt "administrative" employees for the purposes of wage and hour law. In its decision in Harris v. Superior Court (Liberty Mutual), the court re-establishes the necessity of analyzing all aspects of the administrative exemption and emphasizes the relevance of federal law in interpreting the exemption. As a result, the decision could help California employers relying upon the administrative exemption.

California Appellate Court Holds Insurance Agents Not Employees Under California Law

In Arnold v. Mutual of Omaha Insurance Company, a California appellate court issued a published decision holding that insurance agents are not employees under the California Labor Code. This appears to be the first time the court has addressed the status of insurance agents.

California Court Sets Limits for Reporting Time Pay and Clarifies When Split Shift Pay is Due

In a case of first impression, the California Court of Appeal has clarified the scope of an employer’s obligation to pay reporting time and split shift premiums under the California Industrial Welfare Commission’s Wage Order No. 4-2001 (“Wage Order”). The Court ruled that an employee was not entitled to reporting time pay for attending scheduled meetings that ran shorter than expected because he worked at least half the scheduled time, even though the employee worked less than two hours. This is contrary to the long-held enforcement position of the California Division of Labor Standards Enforcement. The Court also held an employee was not entitled to split shift pay because the employee’s total compensation exceeded the minimum wages required under the Wage Order. Aleman v. AirTouch Cellular, No. B231142 (Cal. Ct. App. Dec. 21, 2011). Finally, the Court dismissed a second employee’s claims as barred by a prior release agreement with the employer.

Court Finds Meal And Rest Period Rules Preempted For Some Employers

California law mandates that employers provide employees who work more than five hours with a 30-minute meal break prior to the sixth hour of work, and a second 30-minute meal period for employees who work more than 10 hours. Employees are also entitled to a 10-minute rest period for every four hours, or major portion thereof, worked. A recent court ruling held that these regulations are preempted by a federal law which covers motor carriers. Dilts v. Penske Logistics.

California Supreme Court Punts on Whether Claims Adjusters Might be Exempt

Sidestepping its first opportunity to address California’s overtime exemption for administrative employees, the state Supreme Court has ruled that although the court of appeal misapplied the “administrative/production worker dichotomy,” the case should be remanded for analysis under the applicable Industrial Welfare Commission wage order. In Harris v. Superior Court (Liberty Mutual), No. S156555 (Dec. 29, 2011), the unanimous Court reversed a determination that insurance adjusters were non-exempt production workers because “the Court of Appeal misapplied the substantive law.”

DLSE revises FAQs on Wage Theft Notice...

I posted about the Division of Labor Standards' Enforcement's template Notice here and about the FAQs here. The DLSE apparently has thought better of its requirement that even current employees receive a notice (because that plainly was not in the statute). So, the agency revised its FAQ's, here. Slightly concerned employers I spoke with ... please take note.

California Supreme Court Finds the "Administrative/ Production Worker Dichotomy" Not Dispositive in Determining Insurance Claims Adjusters Exempt

In a long-awaited decision, the California Supreme Court unanimously gave California employers a holiday present in an opinion that follows the majority of federal courts in finding that insurance claims adjusters are exempt administrative employees.

[CA] State High Court Clarifies Administrative Employee Exemption

On December 29, 2011, the California Supreme Court issued its long-awaited decision in a case involving the application of the “administrative/production dichotomy” in determining if an employee meets the requirements for the administrative employee exemption from overtime under the California Wage Orders.

Wage Theft Protection Act - FAQs from the DLSE

Here are some FAQs regarding the new notices that must be provided to employees "at the time of hire."

California Supreme Court Clarifies Administrative Exemption

The Supreme Court issued a unanimous decision rejecting the lower court's interpretation of the "administrative exemption."

Notice Compliant with New California Wage Payment Law Available from Labor Division (DLSE)

The California Division of Labor Standards Enforcement has released a form notice that is compliant with the new California Wage Theft Prevention Act of 2011. Effective January 1, 2012, the Act requires employers to provide many new employees with written notice that details their rates of pay, employer name and address, workers’ compensation carrier, and other information specified in the Act. Since Governor Jerry Brown signed the law in October, California employers have struggled to develop notices that are compliant.

California's New Wage Disclosure Notice and the Wage Theft Prevention Act of 2011

California's Wage Theft Prevention Act of 2011 ("WTPA" or "Act")1 takes effect on the first day of next year – January 1, 2012. The WTPA is one of half a dozen new laws that affect an employer's wage payment obligations. The WTPA amended five existing statutes within the California Labor Code, and created five new statutes in the same code.2 All are discussed below.

Court Finds One Plaintiff Not Owed Reporting Time or Split Shift Pay For Scheduled Meetings and Finds Second Plaintiff Waived Claims - But Employer Denied Award of Fees!

In Aleman v. Airtouch Cellular, a California Court of Appeal ruled on December 21, 2011 that one class representative was not entitled to additional reporting pay or split shift premiums and a second class representative could not pursue such claims because she had signed a release in exchange for enhanced severance compensation. The court did, however, reverse the award of attorneys’ fees to the employer.

Ninth Circuit Unconvinced that Out-of-State Employee Claims Are Invalid

On December 13, 2011, the Ninth Circuit Court of Appeals reconsidered the case, Sullivan v. Oracle Corp., after the California Supreme Court had decided several certified questions of law. The Ninth Circuit had previously delayed ruling, and instead asked the California Supreme Court to decide three questions of California law, including whether a company with its principal place of business in California was required to pay out-of-state employees temporarily working in California according to California’s daily overtime rules.

Court of Appeal Makes Christmas Come Early for Employers re Reporting Time and Split Shifts

The Court of Appeal issued a ruling that may change the way us employment lawyers advise clients. But WARNING, this decision is not yet final and cannot be relied upon just yet.

Landmark Decision Limits "Reporting-Time" Pay and Clarifies "Split-Shift" Premium Requirements

A California appellate court has just handed down a major decision on reporting-time pay in California, limiting situations where such pay would be due, and rejecting an enforcement guideline used by the California Labor Commissioner. The court also clarified the law regarding split-shift premiums. Michael Aleman, et al v. AirTouch Cellular.

San Francisco Update

Employers operating in SF - couple of things to note.

"Wage Theft Prevention Act" Takes Effect January 1, 2012

A recently-passed piece of California legislation that will impact employers is the Wage Theft Prevention Act of 2011 (WTPA), which takes effect January 1, 2012. This law adds a new section to the Labor Code and is similar to a law passed in New York this year.

Nonresident-Employees Working in California Entitled to Overtime under State Law, Ninth Circuit Rules

Nonresidents of California are entitled to overtime pay under California law for work performed in California, the U.S. Court of Appeals for the Ninth Circuit has ruled, following the California Supreme Court’s responses to its questions on state law. Sullivan v. Oracle Corp., 2011 U.S. App. LEXIS 24625 (9th Cir. Dec. 13, 2011). The Ninth Circuit reversed summary judgment in favor of the employer on claims for unpaid overtime under the California Labor Code (“Labor Code”), as well as on claims under the California Unfair Competition Law (“UCL”), which were predicated on the Labor Code violations. However, the Court held that the UCL did not apply to alleged violations of the federal Fair Labor Standards Act occurring outside of California.

Brinker delayed

The Supreme Court is considering even more briefing in the Brinker case re meal and rest periods. So, they are going to delay the opinion past the normal 90 days from argument. Here is the order...

The 9th Circuit Does Their Part On Oracle Case, Extending California Labor Laws

One of the issues that I think has the potential to cause a lot of trouble for employers is the application of one state's labor and employment laws to employee who travel to work in another state. In today's mobile world that is a lot of folks, especially employees located near state borders.

SAN FRANCISCO MINIMUM WAGE RATE INCREASES TO $10.24

Employers with employees in San Francisco be aware: the San Francisco minimum wage has risen to more than ten dollars! Beginning January 1, 2012, the San Francisco minimum wage will be $10.24.

Minimum Salary Requirement Increases for California Computer Professional Exemption Announced

The required compensation levels for employees exempt from overtime under the California computer professional exemption will increase by 2.5 percent from the current levels beginning January 1, 2012, the California Department of Industrial Relations (DIR) has announced.

Employers Must Comply with Changes to San Francisco Health Care Mandate Beginning January 1, 2012

San Francisco’s Health Care Security Ordinance has been amended to require more of certain employers with workers in the City and County of San Francisco. The amendments will take effect January 1, 2012.

California - New Wage Rates Announced for Computer Exemption

Under Labor Code Section 515.5, some computer software employees are considered exempt if they meet certain duties and compensation criteria. The compensation rate is supposed to vary with the rate of inflation.

Federal District Court Holds Motor Carriers Are Not Subject to California's Meal and Rest Break Laws

A federal district court in California recently issued a decision, in Dilts v. Penske Logistics, LLC, 2011 U.S. Dist. LEXIS 122421 (S.D. Cal. Oct. 19, 2011), holding that motor carriers that transport property are not subject to California's meal and rest break laws because such laws are preempted by the Federal Aviation Administration Authorization Act (FAAA Act).

Brinker (Meal Period Case) Oral Argument

I am told there are lawyers who waited hours to get a seat at the California Supreme Court's hearing on Brinker v. Superior Court. It's called "Youtube." Look into it.

What Is the Duty to "Provide" a Meal Period? Oral Argument Before the California Supreme Court in Brinker Restaurant Corp. v. Superior Court

The long awaited oral argument in the seminal meal and rest break decision involving Brinker Restaurant finally occurred today. Before a packed courtroom, lawyers for a hopeful class of waiters and waitresses and the representatives of California employers battled it out before the seven justices of the California Supreme Court.

California's 2012 Minimum Hourly, Monthly and Yearly Rates for Exempt Computer Software, Physician and Surgeon Employees

Under the California Labor Code, certain computer software employees, as well as licensed physicians and surgeons, are exempt from state overtime requirements if they receive a minimum hourly, monthly or yearly rate. The rate is determined annually based upon changes to the California Consumer Price Index for Urban Wage Earners and Clerical Workers. Because the Index experienced a 2.5% increase over the past year, the California Division of Labor Standards Enforcement (DLSE) adjusted the rates these individuals must be paid to be considered overtime-exempt.

AB 469: WAGE THEFT PREVENTION ACT OF 2011

One of several employment laws recently signed by Governor Jerry Brown, AB 469 takes effect on January 1, 2012. Titled the “Wage Theft Prevention Act of 2011,” AB 469 modified a number of current laws 10and created several new Labor Code provisions.

AB 469 -California Adopts NY "Wage Theft" Law

When I covered some of Governor Jerry Brown's last minute bill signings, I left out perhaps the most obnoxious new law. That's what I get for hurrying.

New CA Law Requires Written Commission Agreement

Governor Brown has mercifully vetoed many of the loony ill-conceived employment law bills that the legislature passed this term. But he signed AB 1396, which is going to impose a serious burden on employers who pay employees via commission.

Brinker!! Argument is 11/08/11

The California Supreme Court will hear arguments in Brinker v. Superior Court (see a bunch of posts here) regarding employers' obligations to provide meal periods. Argument is November 8 in San Francisco. I'm so excited, I need a rest period. Docket is here.

Appeals Court To Employee: "You're Kidding Us, Right?"

California's Sixth Appellate District recently issued a decision upholding an employer's right to modify the compensation terms of an at-will employment agreement where the employee never made a written protest to the modification and the employee continued to accept the modified compensation offered. Foust v. San Jose Construction Company, Inc.

How Do You Recapture Debt From An Employee's Final Paycheck? Very Carefully

Employers continue to be challenged with claims from terminated employees who received payroll deductions for debts they owed the employer. In a recent case employees brought a collective action in a California federal court seeking remedies for violations of California law and the federal Fair Labor Standards Act (FLSA) for deductions taken from their final pay checks for debt balances. The federal court ruled in favor of the company on all claims.

New California Bill Allows Labor Commissioner to Award Liquidated Damages

In September, Governor Brown signed a bill (A.B. 240) that will equalize the penalties available to employees and the defenses available to employers on certain employee wage claims, brought either in court or in the administrative system.

Pre-Bar Admission Law Grads Can Be Exempt

Matthew Zelasko-Barrett graduated law school and obtained a job with Brayton-Purcell, a large, Marin County firm. Before passing the bar and becoming a licensed lawyer, he was designated a Law Clerk II; after admission he became an associate. After quitting, he decided to sue Brayton-Purcell, claiming he was "mis-classified" as exempt during his time as a Law Clerk II.

California Overtime Laws Extended To Visiting Employees

A unanimous California Supreme Court recently held that California-based employers must pay out-of-state resident employees pursuant to the more restrictive provisions of the California Labor Code even if these employees only visit the state on a limited, temporary basis. The unanimous decision held that the state's overtime laws were intended by the California legislature to apply broadly to "protect" workers visiting California (even temporarily); therefore, California's laws trump the laws of states in which employees actually reside and primarily work.

California Supreme Court: Nonresident-Employees Entitled to State Overtime When Working in State

Nonresidents of California are entitled to overtime pay under state law for work performed in California, the California Supreme Court has held, answering questions about California law at the request of the U.S. Court of Appeals for the Ninth Circuit. Sullivan v. Oracle Corp., 51 Cal. 4th 1191 (Cal. 2011).

VACATION CLARIFICATION: NEW DEFINITION MAY AFFECT EMPLOYEE COMPENSATION

What counts as paid “vacation” that vests as it is earned and cannot be forfeited under California law? The distinction between leave that is and is not deemed vacation is significant. The law generally requires payment of unpaid wages, including unused, earned vacation pay, on the employee’s termination date. Untimely payment of wages can result in significant “waiting time” penalties under Labor Code Section 203.

Take A Break: Meal and Rest Break Court Rulings Demand Caution From Franchise Employers

Almost five years ago, in April 2006, nearly 59,000 employees obtained class certification in a lawsuit claiming that Brinker Restaurant Group violated California labor laws by failing to ensure that its non-exempt employees took meal and rest breaks. In July of 2008, the appeals court vacated the class certification based upon a finding that employers need not ensure that meal and rest breaks are taken. The California Supreme Court then vacated the decision and granted review on October 22, 2008. Much to the chagrin of California employers and employees seeking clarity on the issue, the Supreme Court has yet to issue its ruling in Brinker Restaurant Group v. Superior Court.

California Court Clarifies Scheduled Overnight Shifts Not Entitled to Split Shift Pay

The California Court of Appeal has held that employees who work overnight shifts that begin on one day and conclude on the next, but which are not interrupted by unpaid, non-working periods, do not work “split shifts,” as defined in the applicable Industrial Welfare Commission Wage Order. Securitas Security Services USA, Inc. v. Superior Court (Holland), No. B227950 (Cal. Ct. App. July 7, 2011). As fact questions existed whether the employees, in other circumstances, had performed split shift work, the Court remanded the case to the trial court.

OUT OF STATE WORKERS MUST BE PAID CALIFORNIA OVERTIME PAY FOR WORK PERFORMED IN CALIFORNIA

The California Supreme Court has expanded the reach of our state's overtime pay laws, which are among the toughest and costliest in the nation. In a case involving software maker Oracle Corporation, the court ruled that these protections extend to any out-of-state resident who works in California even for just one full day.

Court of Appeal: That's Not a Split Shift

Under California's Wage Orders - “Split shift” means a work schedule, which is interrupted by non-paid non-working periods established by the employer, other than bona fide rest or meal periods. And "when an employee works a split shift, one (1) hour’s pay at the minimum wage shall be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment."

STAY HOME! Non-Residents Entitled to California Overtime Protection While There, California Supreme Court Rules

While California is mired in a $25 billion budget deficit, and companies are leaving for greener, business-friendlier pastures like Arizona, Texas, Georgia and North Carolina, the California Supreme Court is doing its best to pile on the regulatory burdens that hurt this state’s ability to compete on a national and global scale. In Sullivan v. Oracle Corporation, the California Supreme Court held that non-resident employees who perform work in this state, even for periods as short as a single day, are protected by California’s overtime laws.

California Supreme Court Expands Reach Of State Overtime Laws

On June 30, 2011, the California Supreme Court ruled that work performed in California by nonresident employees for California-based employers is covered by the California Labor Code and its unfair competition laws. That means that employees residing in states outside California but working (even occasionally) in California may bring lawsuits against their California employers for unfair competition based on violations of California's generous overtime requirements. This is not good news for employers.

California Supreme Court: Out of State Employers Bound by California Overtime Law...

Sullivan v. Oracle is a wage hour class action we addressed here. If you don't remember, you're forgiven. This was back in 2008. I had more and darker hair; Lehman Brothers was a functioning company. You could buy a Pontiac. Remember?

Court Clarifies Meaning Of "Commissions"

California Industrial Welfare Commission (IWC) Wage Orders exempt from California's overtime-compensation requirement "any employee whose earnings exceed one and one-half (1 ½ ) times the minimum wage if more than half of that employee's compensation represents commissions." State courts have looked to the Labor Code section that addresses automobile dealers, in defining "commissions," as: "compensation paid to any person for services rendered in the sale of such employer's property or services and based proportionately upon the amount or value thereof." (Italics added.)

Court Rules On Premium Payments For Denied Meal And Rest Periods

California law regulates meal and rest periods, requiring employers to provide their employees an unpaid 30-minute meal period after working for five hours, and a second meal period after 10 hours, with a 10-minute rest period for each four hours of work or major fraction thereof. Employees required to work through their breaks are entitled to a premium payment subject to a limit each day.

New Ruling Makes It More Difficult To Avoid Seventh-Day Premium

A recent California appellate decision precludes California employers from defining workweeks under a recurring work schedule that avoids payment of the "seventh day" premium. Seymore v. Metson Marine.

Do California State Overtime Laws Apply to Visiting Workers?

Do you have employees who visit California for business? If so, now may be a good time to brush up on California wage and hour law. On June 30, 2011, the California Supreme Court ruled that the California Labor Code's overtime provisions applied to three non-resident employees of Oracle Corporation who performed work within the state.

California Supreme Court Extends Reach of State’s Wage and Hour Laws to Out-Of-State Employees Temporarily Working Within the State

On June 30, 2011, a unanimous California Supreme Court ruled that California-based employers must pay out-of-state resident employees pursuant to the more restrictive provisions of the California Labor Code even if these employees visit the state on a limited, temporary basis. The unanimous decision held that the state’s overtime laws were intended by the California legislature to apply broadly to “protect” workers visiting California even temporarily and, therefore, this state’s laws trump the laws from the states in which employees actually reside and primarily work. Sullivan v. Oracle Corp., No. S170577, California Supreme Court (June 30, 2011).

Unlicensed Accountants May be Entitled to Overtime under California Law, Federal Court Rules

Reversing summary judgment for more than 2,000 unlicensed junior accountants in a class action lawsuit, the U.S. Court of Appeals for the Ninth Circuit (San Francisco) has held that the plaintiff-accountants were not “categorically ineligible” to be exempt from overtime under California’s professional and administrative exemptions. Campbell v. PricewaterhouseCoopers, LLP, No. 09-16370 (9th Cir. June 15, 2011). The Court ruled the district court erred in determining the unlicensed accountants, who were required by law to work under the supervision of a licensed accountant, could never meet the requirements for exempt employees. The Court warned against categorically excluding entire classes of employees from overtime exemption analyses.

COURT APPROVES DAILY MEAL/REST PERIOD PENALTY OF TWO HOURS

It has been nearly three years since the California Supreme Court accepted the Brinker case to define the rules employers must follow in providing employees with meal and rest breaks under California law. In the meantime, costly meal and rest break class actions continue to be filed with an alarming frequency, exposing California employers to millions in damages.

COMMISSION ACCOMPLISHED

The definition of "commission" can mean the difference between an employee who is entitled to overtime pay and one who is exempt from overtime and other wage-hour laws. Both federal and California law exempt retail salespersons who earn at least 50% of their wages via commissions (along with other requirements). An incentive payment that does not qualify as a "commission" is not counted towards the 50% threshold.

Court of Appeal Reconsiders, but then Re-Affirms Case re Work Week

We previously wrote about Seymore v. Metson Marine here. Then we wrote an article covering it and other new wage-hour cases here. This was the case in which the court held that the employer could not set a workweek to start on a day when the employees did not begin the week.

"Pay Stub" Rulings Continue

Earlier this year, a case reinforced yet again the need for employers to pay close attention to the specific requirements of the California Labor Code – this time, the itemized wage statement requirement in Labor Code section 226(a). Heritage Residential Care, Inc. v. Division of Labor Standards Enforcement.

Labor Commissioner Hearings Cannot Be Waived By Arbitration Agreements

The Labor Code gives aggrieved employees the right to file a claim for unpaid wages and other similar violations with the Division of Labor Standards Enforcement. These claims are decided by a deputy labor commissioner in an administrative hearing, sometimes called a "Berman" hearing. The process is more streamlined than a proceeding in court, and is "designed to provide a speedy, informal, and affordable method of resolving wage claims." If either party does not agree with the deputy labor commissioner's decision, they can appeal to the superior court in a process called a "trial de novo."

Non-Exempt Employees Can Agree To A Salary That Includes Overtime

A California appellate court ruled that Labor Code section 515 does not outlaw clear wage agreements that provide for salaries that include fixed amounts of overtime. Arechiga v. Dolores Press, Inc.

Several Recent Wins for California Employers in Wage and Hour Cases

In the past few weeks, appellate courts in California have issued a number of opinions in wage and hour cases, which have been helpful to employers. As all too many of our clients are aware, we have seen an explosion in the number of such cases filed in our trial courts. And, as these cases make their way through the litigation process, we also are seeing this subject predominate at the appellate level. While it seems we mostly bring you bad news on this topic, in this issue we recap four cases that will be helpful to employers as they mount their defenses to wage and hour claims.

Court of Appeal: Meals and Breaks are Penalties for Attorneys Fees Law

Did you know the Labor Code permits employers to recover attorney's fees when the employer wins certain wage claims? It's true.

California Court Rules Employer Not Required to Pay Overtime under Explicit Mutual Wage Agreement

A California employer did not owe overtime to an employee because it had entered into an explicit mutual wage agreement that provided for base compensation and overtime in one lump sum, the California Court of Appeal has ruled. Arechiga v. Dolores Press, Inc., No. B218171 (Cal. Ct. App. Feb. 7, 2011). Affirming the dismissal of the employee’s claim, the Court upheld the validity of explicit mutual wage agreements for non-exempt employees under California law.

Court of Appeal: Reporting Time Pay and Discharge

The Court of Appeal addressed California's "reporting time" pay requirement in the context of discharge.

Court of Appeal: Up to 2 Meal / Rest Period Penalties Per Day

The Court of Appeal in UPS v. Superior Court decided that when an employee claims to have been denied both meal AND rest periods in a single day, s/he may recover two of the one-hour penalties made available under Labor Code Section 227.6.

Court of Appeal Upholds the Denial of Meal Period Class Action

While the world waits for the California Supreme Court to issue the fabled Brinker decision on meal periods, the courts of appeal continue to find that employers need only make available meal periods, and not force them.

Court of Appeal Upholds Wage Statement Penalties

So, several employees of Heritage Residential Care, Inc. lacked social security numbers. Naturally, the employer immediately fired them.

Employers on the Hot Seat

Employers with a California presence already know that they need to monitor their wage and hour practices carefully. Now that many employers have reached compliance in areas such as meal- and rest-period laws, plaintiff attorneys are on the prowl for new battlegrounds for litigation. For example, two recent California appellate decisions added yet another hurdle for California employers to leap and additional fuel for employees (and their lawyers) looking to file class actions.

New Exemption to the Meal-Period Requirement

On September 30, 2010, Gov. Arnold Schwarzenegger signed a bill providing an additional exemption to the current meal-period requirements. Existing law requires that all employees in California, with certain exceptions, receive a meal break of at least 30 minutes beginning before the fifth hour of work. The new exemption will apply to employees in certain occupations or industries who are covered by collective bargaining agreements.

GETTING TO KNOW YOUR WAGE ORDER

In the Golden State, most private employers must grapple with no fewer than six major sources of wage and hour laws when one considers statutory, regulatory, and case law in both the state and federal systems. The state Industrial Welfare Commission Wage Orders are part of this web of wage and hour laws and rules.

San Francisco Minimum Wage Going Up 1/1/2011.

San Francisco has its own minimum wage law. It is indexed to inflation. It did not rise in 2010. However, it's rising as of 1/1/2011.

California Supreme Court: Waiting Time Penalties are...Penalties!

I know, sounds obvious. But folks were claiming that waiting time penalties, like meal period penalties, are a form of wage. They were making this argument to permit claims for waiting time penalties under California's unfair competition law, because that law has a four year statute of limitations.

Avoiding California Wage & Hour Class Action Suits

Most employers with business operations in states outside of California are generally aware of the employment practices that can lead to collective actions under the federal Fair Labor Standards Act (FLSA). These include:

NO NEED TO FORCE EMPLOYEE BREAKS, SAYS COURT OF APPEAL

What does it mean to “provide” employees with required meal and rest breaks? That employers must “ensure” or “force” employees to take them, or simply make them “available”å to employees? While the law is relatively settled that employees need only be given the opportunity to take rest breaks, it is not clear whether this same standard applies to meal periods. Indeed, California employers eagerly await the California Supreme Court’s determination of this question in Brinker Restaurant v. Superior Court (Hohnbaum) and Brinkley v. Public Storage. In the interim, the Court of Appeal recently decided a case addressing the meal period issue, Hernandez v. Chipotle Mexican Grill, Inc.

Court of Appeal: Meal and Rest Breaks Need Not Be Forced

Everyone is waiting for the California Supreme Court to issue its decision in Brinker or Brinkley or both regarding whether meal / rest periods must be ensured or merely provided under California law. Well, nearly everyone.

Employers Who Win Meal and Rest-Period Claims Can Recover Fees and Costs

Employees and their attorneys have good reason to be more cautious in filing certain wage claims against employers. If they lose, they could be ordered to pay an employer's defense costs and attorneys' fees. California Labor Code § 218.5 permits prevailing employers to recover their fees and costs for any "action brought for the nonpayment of wages.…"

Minimum Wage As Class Warfare: A Creeping Activism.

Most of us who know the work history of our ancestors appreciate the gains made over the past 100 years with regard to fewer hours of work, a higher standard of living, and the opportunity to enjoy family time. However, many employees and their advocates, and some judges, are promoting causes calculated to further help workers but which actually are job killers. This creeping activism is destroying business across the country and, if not checked, could lead to greater unemployment, lower wages, and increased homelessness.

Dealing With The Labor Commissioner.

California wage/hour law is governed by the California Labor Code, the Industrial Welfare Commission's Wage Orders, and appellate or California Supreme Court decisions which interpret these laws. These laws are enforced by the California Labor Commissioner. Any employer doing business in California must be familiar with the Labor Commissioner's enforcement agency, the Division of Labor Standards Enforcement (DLSE). This article takes a closer look at an employer's dealings with the Labor Commissioner.

State Supreme Court Clarifies The Definition Of "Employ"

Recently the California Supreme Court held that third-party merchants were not "employers" as defined by the Industrial Welfare Commission, in part because they did not control the conditions of employment for the subject agricultural employees (strawberry pickers), i.e., did not hire them, fire them, or even have a right to tell them what to do or direct their work. The practical effect in this litigation was that the employees could not obtain unpaid wages from third-party merchants after the uncontested employer became insolvent. Martinez v. Combs.

RECENT DEVELOPMENTS FROM THE CALIFORNIA DIVISION OF LABOR STANDARDS ENFORCEMENT.

Although wage and hour litigation continues to keep California courts busy, employers receive much day-to-day guidance about administration of wage and hour issues not from court decisions, but from the Department of Labor Standards Enforcement (DLSE). This agency, part of the Department of Industrial Relations, enforces wage and hour requirements in the state. As part of this duty, the DLSE occasionally issues opinion letters interpreting provisions of California wage and hour law. These opinions are not binding on the courts, but are very instructive as to how the DLSE will rule on particular issues. In the past several months, the DLSE issued a number of important opinion letters, each of which is summarized below.

Annual Bonuses: Are They Factored Into Overtime?

Many employers question whether annual bonuses must be considered in overtime compensation. Although California law has more protective overtime laws than most states, it sticks with federal law with regard to what is included in the "regular rate" when calculating overtime. Federal law requires "all remuneration" to be included in the regular rate except for seven specified types of payments. Among these excludable payments are discretionary bonuses, gifts and payments in the nature of gifts on special occasions, contributions by the employer to certain welfare plans and payments made by the employer pursuant to certain profit-sharing, thrift and savings plans.

Avoiding "Reporting-Time" Claims.

In California, conditions of employment, including standards governing compensation, are set forth in the Wage Orders promulgated by the Industrial Welfare Commission. These Wage Orders are generally given legal effect to the extent that they are consistent with the California Labor Code. Unfortunately, many of these provisions go unheeded by employers despite the fact that they are published in the California Code of Regulations and have been in effect for many years.

DLSE Issues Guidance On Deductions.

On November 28, 2009, the Division of Labor Standards Enforcement (DLSE) issued an opinion letter which should help shed some light on an area of the law which has long plagued California employers due to its ambiguity -- namely, under what circumstances may employers make deductions from exempt employees' salaries without running afoul of the law?

CALIFORNIA SUPREME COURT OK’S INCENTIVE PLAN FORFEITURE CLAUSES.

The concept behind incentive compensation is to motivate employee behavior, such as employee retention. Employers commonly design the incentive by providing that employees who quit or are fired for misconduct before an established date forfeit the incentive.

SUPREME COURT UPHOLDS INCENTIVE FORFEITURE.

When it comes to properly paying employees, California law presents a minefield for the unwary employer. For example, wages must be paid in cash or in a form “negotiable and payable in cash” (e.g.., by check), without discount, within a specified time period after they are earned. Employees who quit or are terminated typically must be paid their final wages on their last day of employment or significant penalties may accrue. Once earned, wages cannot be forfeited, and it is illegal for an employer to recoup or collect from employees any part of wages already paid. Private agreements circumventing these rules are strictly prohibited.

WORK AROUND THE CLOCK.

Some people leave their jobs at the end of the day and do not even think about work until the next shift begins. Then, there is the rest of us. California's wage and hour laws are tricky, even as applied to workers on a traditional 9-5 schedule. The rules that apply to commuting, working at home, on-call time, and other incidental work performed during what is otherwise "free" time, vex even the wonkiest of employment lawyers.

EMPLOYERS BY THE BAY.

Employers looking to gain a foothold in San Francisco should carefully survey the terrain. San Francisco businesses are subject to local employment ordinances in addition to the many federal and state requirements. Even small businesses must comply with the host of mandates that do not apply outside the county borders. Here are the principal San Francisco ordinances that generally govern private-sector employers. Employers in specific industries may be subject to additional or different requirements.

Recession Relief: Employers Allowed Salary Flexibility (pdf).

California labor commissioner approves temporary pay reduction for exempt workers.

Button Up Those Commission Plans.

An employer recently found itself in the unenviable position of defending a lawsuit brought by a former sales employee, who alleged that the employer owed him a commission of 20% on a $12 million deal he brokered with AT&T. After three and a half years of litigation, an appellate court ruled in the employer's favor because the salesperson's employment agreement contained two critical provisions. Would your company's commission plan pass the same test? Nein v. HostPro, Inc.

Documentation Beyond Timekeeping Saves Dollars.

California employers continue to learn the hard lessons resulting from the failure to adequately keep time records or monitor off-the-clock activities. Timekeeping errors that occur systematically and continue unchecked can accumulate hundreds of thousands of dollars in liability, not to mention potential penalties and attorneys' fees in defending class action complaints addressing such deficiencies. The failure to keep accurate time records almost certainly is the direct result of an employer's failure to train, retain, and monitor effective first line supervisors.

RECESSION RELIEF: CALIFORNIA LABOR COMMISSIONER APPROVES TEMPORARY SALARY REDUCTION WITH CUT IN HOURS FOR EXEMPT EMPLOYEES.

Here is some good news for California employers. The California Labor Commissioner has just published an August 19, 2009 Opinion Letter which provides employers with much needed relief during these difficult economic times.

TAKING MANAGEMENT PERSONALLY.

Managers generally may do their jobs without fear of personal liability for employees' claims under California law. But a recent Ninth Circuit decision is a reminder to managers that they may not be entirely immune to claims for unpaid wages.

VACATION AND LITIGATION

With summer in full swing, many employees are taking vacations with their families. Meanwhile, Human Resources managers are checking leave balances. As the Court of Appeal recently reiterated in the case of Owen v. Macy’s, the law does not require that an employer provide its employees with any paid vacation. Any right to vacation benefits must come from the employer’s policies, an employment contract, or a collective bargaining agreement.

Defending Wage Claims Before the California Labor Commissioner.

Most employers doing business in California are familiar with wage claims brought by current or former employees before the Division of Labor Standards Enforcement (DLSE), which is the state agency charged with enforcing the California Labor Code and the state's wage-hour laws and regulations. This article highlights the rules and procedures in defending a wage claim in California.

STARBUCKS ESCAPES $100M TIP POOLING RULING.

Earlier this year, a San Diego trial court issued a $100 million verdict against Starbucks Corporation in a controversial class action involving how Starbucks distributes tip jar monies. About 10 days ago, a California Court of Appeal reversed that ruling. In doing so, the court clarified one of the important rules that hospitality industry employers must follow when devising any tip sharing arrangements.

EVERYONE INTO THE POOL: COURT EXPANDS RESTAURANT TIP POOLING RULES.

A recent California appellate court opinion has substantially expanded the group of restaurant personnel who may participate in a mandatory tip pooling arrangement. Tip pooling is a practice where some of the tips received by tipped employees are shared with other restaurant employees. Under existing law and longstanding industry practice, restaurant servers pool their tips and distribute a portion of that money to bus persons, food runners and others who directly assist in serving the customer. Kitchen personnel and others are typically left out of such an arrangement.

TIP POOLING: A NEW WAGE AND HOUR ISSUE TO BE EXPLOITED?

Maybe like your morning, the controversy over tip pooling perked up over a cup of coffee. A little over a year ago, a court awarded over $85 million dollars to Starbucks “baristas,” finding a Starbucks tip pooling policy allowed shift supervisors to unlawfully share in the pooled tips. While many employers may be familiar with other wage and hour issues, such as overtime and meal and rest breaks, tip pooling is one of those issues that has gone undisturbed for many years. Now that the sleeping giant is awake, employers in applicable industries should become fully aware of the current rules in California governing tip pooling.

Some Key Points for Wage/Hour Compliance.

Whether the economy is still declining or on the rebound, one thing is clear: the storm of wage & hour litigation continues to buffet employers, an increasing trend that began long before the current recession and plague of unemployment in California. Two key historical facts have contributed significantly to the rise of such litigation in California beginning this decade.

Federal Court Withdraws Decision Awarding Overtime to Non-Residents Who Work In California.

As we reported in our last issue (California Wage/Hour Update, No. 1, January 2009), the U.S. Court of Appeals for the 9th Circuit recently ruled that the overtime provisions of California's Labor Code apply to work performed in California by non-resident employees. Sullivan v. Oracle Corporation.

STATE BUDGET INCLUDES FAVORABLE CHANGES TO CALIFORNIA’S ALTERNATIVE WORKWEEK LAW.

Something good for employers is buried in the text of the recently concluded California budget. The Legislature has given California employers greater flexibility in implementing and administering so-called "alternative workweek schedules." The new law, which goes into effect on May 21, 2009, amends the California Labor Code to add more flexible options to employers and employees alike. Here's a rundown of the key changes.

COST-SAVING MEASURES TO PRESERVE BUSINESSES AND JOBS: ALTERNATIVE WORKWEEKS.

Our economic recession has wrought hiring freezes, lay offs, business closures, etc. Both employers and employees are suffering. To keep afloat and perhaps avoid layoffs, employers are seeking creative ways to save money and conduct business more efficiently. One option is to reduce employer liability for payment of overtime. The adoption of an “alternative workweek” may be a means to accomplish this goal.

San Francisco Mandates New Transportation Benefit.

A new San Francisco Ordinance went into effect January 20. It requires employers with 20 or more employees (regardless of where they are located) to provide incentives for their San Francisco employees to use public transportation. The San Francisco based employees must work at least 10 hours per week to qualify.

STARBUCKS PAYS OUT $3 MILLION TO SETTLE CLASS ACTION CLAIM OVER EMPLOYEE MILEAGE EXPENSES.

California's labor laws require employers to reimburse all employees for any personal expenses they may incur while rendering services for their employer. This includes automobile expenses if the employee is required to use their personal automobile while rendering services for the employer.

Federal Decision Awards Overtime to Non-Residents Performing Work in California.

A federal appeals court recently handed down a significant decision addressing the application of the overtime provisions of California's Labor Code to work performed in California by non-resident employees. The case has important consequences for employers who hire non-residents to perform work in California Sullivan v. Oracle Corporation.

The Explosion of Overtime Claims (Part 2).

In our last issue we looked at some of the most important timekeeping problems that employers should be aware of, in order to keep from being engulfed in the virtual tsunami of overtime claims being filed in recent years.

Big Win for Employers in Wage-Hour Litigation: Punitive Damages Ruled Improper

On December 3, 2008, in a long-awaited decision, the California Court of Appeals for the Fourth Appellate District addressed the issue of punitive damages in the context of a wage-and-hour lawsuit. This case represents a victory for employers in an area where the laws and penalties in California tend to be draconian.

Restaurant Association Challenge to SF Healthcare Ordinance Fails.

In what may become a trend statewide, or even nationwide, the San Francisco City Council passed what is called the Health Care Security Ordinance (HCSO). The purpose of the ordinance is to require employers to pay certain monetary amounts for health care, based on the number of persons employed.

Meal And Rest Period Decision to Be Reviewed by High Court.

Last July we reported on Brinker Restaurant Corp. v. Superior Court, an employer-friendly decision by a California Appeals court which addressed the legal standards under California's laws on meals and rest periods for employees.

State Reduces Thresholds for California Computer Professionals' Overtime Exemption: Changes Take Effect Immediately.

Last week Gov. Arnold Schwarzenegger approved an amendment substantially changing the law concerning overtime pay for certain computer software professionals. The law amends the California Labor Code and restores the overtime exemption for qualifying computer programmers, analysts and engineers who are paid a monthly salary equivalent to at least $75,000 per year, or who continue to be paid at least $36 per hour for all hours worked. The bill was passed as urgency legislation and took effect on September 30, 2008.

The Explosion of Overtime Claims (Part 1)

Employers in California are still being pummeled with claims by current and former employees seeking compensation for allegedly unpaid overtime. Employers should tackle this problem by conducting self-audits and improving internal procedures for eliminating overtime complaints. The fact is, many overtime claims have identifiable causes and are completely avoidable.

Pay Stub Payoffs: Check Yours Now to Make Sure You're in Compliance.

There is a California law which costs employers millions of dollars each year, all of which could be avoided with almost no effort on the employer's part – no lengthy training, no notices to post, and no changes to employee handbooks.

California - New Wage and Hour Ruling Welcomed by Employers.

The California Court of Appeal recently overturned a class certification order in a lawsuit brought by a group of hourly, non-exempt employees who claimed that they were denied rest and meal periods and were forced to work off the clock. In a key ruling, the court held that employers “need not ensure meal breaks are actually taken, but need only make them available.” The court also held that the employer’s practice of providing an “early lunch” within the first hour of an employee’s shift did not violate California law, even where the employee might then have to work in excess of five consecutive hours without an additional meal period. The court found such “rolling five-hour” meal periods to be inconsistent with the plain meaning of the Labor Code. In addition, the court found that employers are liable for off-the-clock work only if they “knew or should have known” employees were working.

California - New Law Changes Frequency of Payment To Temp Workers.

On July 22, Governor Arnold Schwarzenegger signed into law Senate Bill 940 which will change payroll practices applicable to "temporary service" workers. Under the new law, which will go into effect in January of next year, temporary service agencies must pay temps every week instead of every other week. The law also requires agencies to pay temps daily when they work for a client on a “day-to-day basis.” The new legislation creates another exception for workers on an assignment “for over 90 consecutive calendar days.” The weekly payment requirement does not apply to these employees unless their employers pay them weekly.

MEAL AND REST PERIODS: BEST PRACTICES IN LIGHT OF BRINKER.

The California Court of Appeal recently rendered an opinion in Brinker Restaurant Corp. v. Superior Court (Hohnbaum) which addresses several heavily litigated meal/rest period issues. While employers obviously welcomed the clarification provided by the ruling, lively celebration may be a bit premature. First, the case may find its way to the California Supreme Court. If the Supreme Court grants review as many anticipate, the law pre-Brinker will apply until the high Court rules. Additionally, the Legislature could decide to take a stand on Brinker as part of the continued budget stalemate. In that case, we may end up with compromise legislation and an unanticipated new law.

Appeals Court Decision Provides Clarity to Law Governing Meals and Rest Periods.

A California appellate court has handed down a long-awaited decision addressing legal standards for employee claims including meal and rest period violations. The court also overturned legal rulings regarding the employees' "off-the-clock" claims.

MEAL AND BREAK CLASS ACTIONS: ON THE “BRINKER” OF EXTINCTION?

The Court of Appeal's opinion in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), ___ DJAR ____ (Jul. 22, 2008), addresses several heavily litigated issues regarding meal and rest period claims. If the decision withstands an anticipated petition for review to the Supreme Court, the court's opinion will sharply curtail class action litigation over alleged meal and rest period violations.

Tips on Tip Pooling.

In March a California court awarded more than $105 million to Starbucks baristas due to the company's practice of permitting supervisors to share the tips. The case is significant to all California employers that have tip-sharing arrangements.

Court Affirms: Holiday Pay Premiums May Be Credited Toward Overtime Obligations.

California law sets out basic overtime requirements for non-exempt employees in California. Among other things, the law requires an employer to pay an employee time and one-half of the employee's regular rate of pay for both 1) more than 8 hours of work in one workday, and2) more than 40 hours of work in any workweek. A double time premium is required for hours in excess of 12 in a work day, or in excess of 8 hours on the seventh consecutive day of work in a work week.

The California "Multiplier Effect": How Small Wage and Hour Violations Create Big Class Settlements in California.

Employers sued in California wage and hour class actions are all too familiar with the State’s “multiplier effect.” What is the California “multiplier effect,” you ask? Simply put, it is a small wage payment violation (e.g., for non-payment of overtime hours or off-the-clock work), that can trigger a range of penalties under the California Labor Code far exceeding the value of the original unpaid wage amount. In wage and hour class actions, minor wage violations can cost employers millions.

Much Ado About Lunching

Effective Jan. 1, 2000, Assembly Bill 60 implemented a number of changes to California's wage and hour laws. Many employers and their lawyers focused on the statutory restoration of daily overtime pay, which the Industrial Welfare Commission previously had abolished in several of its Wage Orders. As it turned out, though, AB 60's sleeper issue was the relatively small section of the law devoted to meal periods. AB 60 codified existing regulations mandating meal periods. However, the Legislature determined that employers were not following the rules because there were no financial consequences. So, AB 60 included a requirement that employers pay one hour's wages to employees who were not given a timely meal period in accordance with the law.

Starbucks in Hot Water Over Tips.

Here is something to ponder as you enjoy your next beverage from Starbucks: How many venti, half-caf-half-soy-no-foam-latte-whips does it take to generate $87 million in tips over a seven-year period? It might take more than one refill for you to do that math. But wait, there's more. Consider that the recent and widely reported $100 million-plus award to about 100,000 Starbucks "baristas" compensates them only for a portion of the total tips customers paid (plus interest). That is, just a fraction of what must have been hundreds of millions in total tips wrongfully distributed to shift supervisors. The award, one of the largest reported employment law verdicts, is striking not only because of its sheer size, but also because it is based on optional "gratuities" that are paid by customers rather than the employer.

Start Me Up: New Case holds Start-Up Company Employee Qualifies for Administrative Exemption.

In California, unless specifically exempted, an employee is presumed to be non-exempt and subject to the provisions of the applicable Wage Order. Perhaps the most frequently mentioned exemptions are the "white collar" exemptions involving executive, professional, and administrative occupations. A white-collar exemption exempts an employee from entitlements under many sections of the Wage Order, including meal & rest periods, recordkeeping, and the minimum wage and overtime provisions.

Commission and Bonus Plans: Is a Deal a Deal?

Commissions and bonuses are forms of "wages" in California. The Labor Code imposes on employers a number of obligations regarding payment of wages. For example, wages must be paid within a specified time period after they are earned. Employees who quit or are terminated typically must be paid their final wages on their last day of employment or penalties may accrue. Wages must be included in the "regular rate" of pay, which is used to calculate overtime. They also must be detailed on the "wage statement" that is furnished employees with every paycheck.

Should Pay Cards Be Treated The Same As Paychecks?

California's wage and hour laws are more detailed than any other state's. To facilitate education about the myriad requirements, the Legislature has included at least one substantial penalty for each failure to abide. So, employers must be cautious before deviating from the letter of the law.

California Wage & Hour: Understanding The "Tool Rate".

California employers are increasingly being challenged on whether they properly compensate and reimburse employees for usage of the employee's money or property in the course and scope of the employee's employment. Courts continuously acknowledge the California Legislature's intent that employers should not pass the cost of doing business onto employees such that the employees bear losses or incur expenses in conjunction with their employment.

Important Change to California's Pay Statement Requirements, Effective January 1, 2008.

As the New Year approaches, California employers should be mindful of an important change that will take effect on January 1, 2008, relating to information that can be listed on employee pay statements. Under California Labor Code section 226, employers must include certain itemized information on each employee’s pay statement. (This information must be provided separately for each pay period when the wages are paid by personal check or cash.)

High Court Wage Hour Case Rulings Hurtful to Employers (pdf).

California employers are beset with a confusing array of very technical wage hour obligations which must be followed to the letter. The stakes for non-compliance got even higher in 2007 as the California Supreme Court weighed in on a host of wage hour matters. This article discusses how four of these key rulings affect your business. Alternate Link To Article

New Year Brings Automatic Increases To California Payroll Costs.

Effective January 1, 2008, the California Minimum Wage will increase from $7.50 to $8.00 per hour, a 6.7% increase. This increase will trigger several automatic changes in your minimum-compensation requirements.

Rest Break and Meal Period Claims After Murphy v. Kenneth Cole Productions.

The California Supreme Court decided earlier this year, in Murphy v. Kenneth Cole Productions, that the one-hour premium employees receive for violation of meal break or rest period laws is a wage and not a penalty. Because the statute of limitations for unpaid wages is three years (or four years under an unfair competition theory), and the statute of limitations for penalties is only one year, Murphy means that multi-million class actions against state-wide employers are potentially three times more lucrative for plaintiffs and their lawyers. As a result, the plaintiffs’ bar continues enthusiastically to file class actions alleging violations of the meal and break laws.

Deduction of Workers Compensation Costs In Calculating Profits for Profit-Based Incentive Plan Does Not Violate California Labor Code (scroll down).

In Prachasaisoradej v. Ralphs Grocery Co., the California Supreme Court ruled by a 4-3 vote that a profit sharing incentive plan based on a net profit calculation, which included deductions for workers compensation costs, cash and merchandise shortages and the costs of third party tort claims, did not violate Labor Code prohibitions against deducting such costs from employee wages.

Wage and Hour Laws Redux.

One thing is clear about California wage and hour laws: The rules governing law firms (and all businesses) in California are too numerous to be summarized in just one column. The first installment on this topic ran on July 27, 2007 and is available online at www.dailyjournal.com. In that piece, I discussed potential pitfalls, such as mis-classification of employees as independent contractors or "exempt" employees, minimum wage and overtime laws, independent contractor status, exemptions from overtime, payroll practices and deductions from paychecks. If those topics are not complex and confusing enough, there are many others applicable to California employees.

Insurance Adjusters Held Not Exempt from California Wage Orders (scroll down).

In Harris v. Superior Court, a divided California Court of Appeal panel held that insurance adjusters are not exempt from employees under the administrative exemption to California’s wage orders because their work does not “rise to the level of management policy or general operations” – despite the majority’s acknowledgment of no less than eight contrary rulings by federal courts applying identical regulatory language to insurance claims adjusters and contrary determinations by the U.S. Department of Labor in interpreting its own regulations.

Avoiding Wage-and-Hour Risks.

When Shakespeare wrote in Henry IV, "Uneasy lies the head that wears a crown," he could have been describing law firm managing partners. Client development and satisfaction, billable hours, expense control, office leases, hiring and retaining associates and staff, fierce competition, oh, and the practice of law, are just a few of the challenges facing the lawyer who accepts the responsibility of running a law firm or office.

Employers Must Comply With State Laws on Meal Breaks, Rest Periods

California employers must furnish employees with both rest periods, which are paid, and meal periods, which are not paid. These requirements first appeared in the Industrial Welfare Commission's Wage Orders in 1916. But in 2000, the Legislature imposed on employers significant financial consequences for failure to comply with rest and meal period laws.

California Supreme Court Ruling Could Quadruple Potential Damages For Meal and Rest Period Violations.

The California Supreme Court has sent a shockwave through the California business community by ruling that premium pay issued to employees under California Labor Code section 226.7, to compensate them for missed meal and rest periods carries a three-year statute of limitations as opposed to a one-year statute of limitations.

Alternative Workweeks.

California has a narrow exception to the general rules on overtime pay with regard to alternative workweeks.

"Exempt" Status Under California Law: Avoid the Pitfalls.

It's been difficult for California employers to determine who is and who isn't exempt from overtime and minimum wage requirements; this article helps you sort it all out.