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Total Articles: 309

California’s New “Two-Tier” Minimum Wage

Starting January 1, 2017, California now has two different minimum wages – $10.00 per hour for “small” employers, and $10.50 for “large” employers. This “two-tier” minimum wage structure will remain in place for the next seven years, and will provide several ongoing challenges for employers in the Golden State. In this podcast, California Littler Shareholder, Bruce Sarchet, breaks down the impact of this two-tier approach on businesses and provides guidance on employer compliance with these new obligations.

Why Learning How to Count to 26 Just Became Important: Recent Changes to California and Local Minimum Wage Laws

Recently California’s Division of Labor Standards Enforcement (“DLSE”) issued an FAQ concerning 2016 legislative changes that impact the state minimum wage in 2017 and future years. The most notable change was the creation of a two-tier system in which a $10.50 minimum wage rate applies to employers with 26 or more employees and a $10.00 minimum wage rate applies to employers with 25 or fewer employees. The FAQ do not provide concrete guidance as to how employer size is calculated, but do provide a glimpse into how DLSE might interpret the law. The lack of clarity in the FAQ will particularly frustrate some Southern California employers that must also comply with local minimum wage laws which, like their state counterpart, use a 26/25 employee cut-off, but a different test to determine employer size.

New Year, New Minimum Wage – Or Maybe Not

Time was, answering the question “What is the minimum wage?” was simple. There was the federal minimum wage and the state minimum wage, and for most California employers, only the latter number really mattered. Now the answer to the question is “It depends.” As California employers begin a new year they face a confusing patchwork of laws regarding the minimum wage.

California Wage/Hour Update (No. 1, January 2017)

The past several years have been a difficult time for many California employers when it comes to wage and hour compliance. But if enterprising plaintiffs’ attorneys have their way, times will get even worse in the coming years. By examining what we have experienced in the recent past along with current trends shaping the future of wage and hour law, you can be ready to handle the expected onslaught of new claims that could be heading your way.

California Supreme Court Tells Employees To Rest Assured

Executive Summary: After a years-long battle, the California Supreme Court finally issued a ruling defining what it means for an employer to provide a rest break to non-exempt employees under California law: rest breaks cannot be “on-duty” or “on-call,” as employers must relieve their employees of all duties and relinquish any control over how employees spend their break time. This includes a prohibition against requiring employees to keep work cell phones, pagers, and walkie talkies on during breaks, but it may also prohibit other policies such as requiring employees to stay on the premises during breaks or single/limited staffing models.

Employees on Rest Breaks Must Be Off Duty, California Supreme Court Rules

A class of security guards received an early holiday present from the California Supreme Court on December 22.

California Supreme Court: On-Call Rest Breaks Are Not Permissible

Today the California Supreme Court issued a surprising and unfortunate decision in Augustus v. ABM Security Services, Inc., holding that employers cannot require employees to remain “on-call” during rest breaks, even though these short breaks are part of the employees’ paid hours worked. The Court held that the same standard that applies to off-duty meal breaks applies to paid rest break time. More specifically, California law requires that during unpaid, off-duty meal breaks, employees must be relieved of all duties and free from employer control as to how they spend their time. The Court today held that this is also true for paid rest break time and that an employer does not comply with this standard if it requires employees to remain “on-call,” i.e. viligant and available for possible interruption during rest breaks. This ruling results in the potential reinstatement of a $90 million verdict against the security company, whose security guards remained on-call during rest breaks and carried radios or other communication devices in the event they needed to return to work. Even though the record showed that breaks were rarely interrupted and that this on-call requirement was tied to the nature of the work as a security guard, the Court held that the on-call requirement invalidated the rest breaks.

Sit Down. Rest for a Period. OK, Now Get Up and Rewrite All Your Policies and Procedures.

The California Supreme Court has just issued a Christmas present to the plaintiffs' bar. The Court was generous with a coal delivery to employers as well.

California Employer Gets Landmark Criminal Conviction For Wage Theft

In a first-of-its-kind criminal conviction in California, a San Diego restaurant owner has been sentenced to two years in jail for promising wages to immigrant workers but paying them only in tips. San Diego County Superior Court also ordered the employer to repay $20,000 in stolen wages and tips to six of the restaurant workers.

San Jose, California Ordinance Aims to Increase Job Opportunities for Low-Income Workers

San Jose, California voters have approved the Opportunity to Work ordinance, which is intended to provide part-time, low-income workers with more job opportunities that will help them increase their earnings and access benefits. Under the new ordinance (aka Measure E on the San Jose ballot), before certain employers may hire new part-time or temporary workers, they will be required to offer additional hours of work to current part-timers who they believe have the skills and experience to do the work. According to Silicon Valley Rising, the group that authored the ordinance, the measure will curtail the practice of large- and medium-sized Silicon Valley employers limiting workers' hours to avoid paying for health insurance and other benefits (like paid sick days).

California Employers Issuing W-2 or 1099 Must Revise Earned Income Tax Credit Notice

For several years, California employers have been required to notify employees regarding the federal Earned Income Tax Credit. Beginning January 1, 2017, new California law (AB 1847) requires those same employers to also notify employees that they may be eligible for the California Earned Income Tax Credit (“EITC”).

Twice in Two Years: California Expands the Fair Pay Act for the Second Consecutive Year

Starting January 1, 2017, companies of all sizes doing business in California will need to take extra care to ensure they are not paying employees differently based on their race or ethnicity or basing new employees’ compensation solely on their prior salary. California Governor Jerry Brown recently signed two pieces of legislation that significantly expand the state’s recently revamped Fair Pay Act (FPA). Employers seeking to reduce legal risk amid the growing pay equity movement should take note.

California Statewide and Local Minimum Wage Rates to Increase in 2017

The California minimum wage is scheduled to increase on January 1, 2017 to $10.50 per hour for businesses employing 26 or more employees. Small employers with 25 or fewer employees will not see an increase until 2018. The increase is a result of SB-3, which was signed into law earlier this year. The law will increase California’s minimum wage to $15 per hour over 6 years, with cost of living increases scheduled thereafter.

Soto v. Motel 6 Operating, L.P.: Employees’ Wage Statements Need Not Include Accrued Vacation Time Prior to Termination

All California employers should know by now that if they have a paid vacation policy, the vacation benefits constitute a form of “wages” under California law. (See Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103; Suastez v. Plastic Dress-Up Co. (1982) 31 Cal.3d 774, 784.) California employers are also likely readily familiar with the requirements of Labor Code section 226(a), which require employees’ wage statements to contain certain information, including gross wages earned.

Monetary Amount of Accrued Vacation Need Not Be Included on Wage Statements

As election day approaches, employers are reminded that California law requires them to post a notice 10 days before the election informing employees of their voting rights under state law. Specifically, employees must be informed that if they do not have sufficient time outside of working hours to vote, they may take off enough working time that, when added to the voting time available outside of working hours, will enable them to vote. Up to two hours of this time must be paid. The employer can require that the time off for voting be taken at the beginning or end of the employee's shift, whichever allows the most free time for voting and the least time off from the regular working shift.

New Laws Enhance California’s Equal Pay Act

On September 30, 2016, California Governor Jerry Brown signed into law two bills designed to address ongoing concern of pay inequity. A.B. 1676 amends the California Fair Pay Act by prohibiting employers from relying on an employee’s prior salary to justify a disparity between the salaries of similarly situated employees. S.B. 1063 extends the Fair Pay Act by providing additional protections on the basis of race and ethnicity. A.B. 1676 and S.B. 1063 are effective January 1, 2017.

California’s New Fair Pay Act: Employer’s Compliance Action Plan

In this podcast, Littler Shareholder Bruce Sarchet provides historical insight into California’s Fair Pay Act and breaks down the recent major changes in the law. He discusses the impact of those changes on your workplace now, and what specific steps you can be taking to help limit liability in this area. Bruce’s basic, nuts and bolts approach to breaking down the Fair Pay Act will help your team make sense of this otherwise confusing law, and his five action steps will provide guidance to all employers to develop an approach to the challenges presented by this revised law.

Minimum Pay for Exempt Computer Professionals and Hourly-Paid Physicians Set for 2017

On October 5, 2016, the Director of California’s Department of Industrial Relations set new minimum pay rates for next year for certain professionals exempt from overtime. Effective January 1, 2017, exempt computer professionals must be paid at least $42.39 per hour, or a minimum salary of $7,359.88 monthly or $88,318.55 annually.

San Francisco Paid Parental Leave Becomes Effective in Less Than 3 Months

Beginning January 1, 2017, employers with 50 or more employees who have employees in San Francisco will need to begin providing payments to eligible employees who take time off to bond with a newborn child.


Misclassifying employees as “exempt,” maintaining “use-it or lose-it” vacation policies, and denying employees meal and rest breaks are examples of wage-hour law violations we have already thoroughly discussed. Below are a few unlawful practices of which employers may not be as aware.

Should You Still Be Worried About Meal and Rest Breaks?

Meal and rest breaks are important because missed breaks create significant liability. An employee who misses a meal period or takes a late meal period or a short meal period is owed a penalty.

California Legislature Adds Extra Set Of Teeth To Fair Pay Act’s Protections

On September 30, 2016, California Governor Jerry Brown signed the Wage and Equality Act of 2016 (SB 1063) into law, which will prohibit employers from paying employees of one race or ethnicity a lower wage than employees of different races or ethnicities. The bill is a virtually verbatim extension of the Fair Pay Act’s requirements that apply between workers of opposite genders. It will go into effect on January 1, 2017.

San Francisco Amends Paid Parental Leave Law to Adapt to State Law Changes and to Clarify Requirements

On September 14, 2016, San Francisco amended its Paid Parental Leave Ordinance (PPLO). The law will go into effect on January 1, 2017 for employers with 50 or more employees.1 The law requires private employers to provide supplemental compensation to employees who use California paid family leave (PFL) benefits for new child bonding. The amendments both respond to changes the California Legislature made to the PFL benefits program and attempt to clarify an employer’s PPLO supplemental compensation obligations.


The American custom of tipping wait staff can lead to wage-hour compliance issues under California and federal law. Because of tips, wait staff may be among the highest compensated employees in a restaurant, sometimes earning more than their managers. Meanwhile, cooks who prepare the food typically earn only a fixed wage, and dishwashers may work for minimum wage. Yet, each of these employees contributes to the customer’s dining experience.

California Agricultural Industry Wage Pains Not Just A Phase

On September 12, 2016, Governor Jerry Brown signed the Phase-In Overtime for Agricultural Workers Act of 2016 (AB 1066) into law, providing more stringent overtime protections for agricultural workers. California law currently requires that employers only pay agricultural workers overtime when they work more than 10 hours in a day, but under the new law, sponsored by the United Farm Workers’ union, employer compensation obligations will increase considerably.

Wage and Hour Self-Audit: Five Steps To California Compliance

In this podcast, Littler Shareholder Bruce Sarchet unveils his personal “5-Step Self-Audit” process to help California employers and Human Resources departments avoid wage and hour class actions and related claims. Although Bruce’s process will not guarantee that your company won’t get sued, it will provide an overview of wage and hour litigation along with a very short and simple way to double check your compliance efforts. Bruce’s methodology can help reduce the chance that you are hit with a wage and hour claim in the first place.

California Supreme Court to Address De Minimis Time

Last week, the California Supreme Court agreed to review Troester v. Starbucks, a case involving the issue of whether de minimis work time must be compensated under California law. In Troester, the plaintiff was a former employee of Starbucks who sued the coffee giant because he was not paid for certain closing-related activities such as time spent walking out of the store after activating the alarm and time spent locking the door -- activities that took a minute or two and effectively had to be performed after the plaintiff clocked out on Starbucks' timekeeping software. Plaintiff sued for unpaid wages under California law. A federal district court in California granted summary judgment in favor of Starbucks, ruling that this "work" time was de minimis and that Plaintiff was not owed compensation for it. Plaintiff appealed to the Ninth Circuit.

California Cities and Counties Can Now Join the Effort to Enforce State and Local Wage Payment Laws

California S.B. 1342 is a new law which allows cities and counties to work with the California Division of Labor Standards enforcement (“DLSE”) to enforce wage payment laws. The new measure was intended to give local enforcement programs the tools required to conduct wage claim investigations in order to recover unpaid wages including the ability to issue subpoenas. The law encourages cities and counties to develop specific measures to target and remedy wage theft. Many cities have already adopted city minimum wage and paid sick leave laws and the list is growing.

California Assembly Bill 2535 Further Limits the California Pay Stub Requirement for Reporting Total Hours Worked

On July 22, 2016, the Governor approved California Assembly Bill 2535 (“AB 2535”), which relates to itemized wage statements (more commonly known as pay stubs). Specifically, AB 2535 revises California Labor Code Section 226. The prior version of Labor Code Section 226 required employers to include on a pay stub total hours worked by the employee unless the employee was paid a salary and exempt from overtime. AB 2535 expands on Labor Code Section 226 and alters reporting requirements by asserting that employers do not need to report total hours worked on a pay stub for employees who are “exempt from the payment of minimum wage and overtime” under specified statutes or any applicable order of the Industrial Welfare Commission.

Employers Subject to California Prevailing Wage Beware! California Will Resume Enforcement of The Requirement To Electronically Submit Certified Payroll Records

On July 20, 2016, California Department of Industrial Relations (“DIR”) issued a press release stating DIR enforcement of a contractor and subcontractor’s requirement to submit certified payroll records(“CPRs”) using DIR’s online system will resume on August 1. DIR clarified that the requirement to keep CPRs has not changed. Previously, DIR suspended enforcement of filing CPRs electronically because of problems with the system and improvements.

Are My California Pay Stubs Compliant?

Nearly all California employment wage and hour class action lawsuits assert a cause of action under California Labor Code Section 226 as plaintiffs’ attorneys almost always automatically include such cause of action when there are other alleged underlying wage violations, i.e. failure to pay overtime.

Update on San Diego Minimum Wage and Paid Sick Leave

On July 11, 2016, the results of San Diego’s June election were certified, meaning that the minimum wage and paid sick leave ordinance that was approved by San Diego voters on the June ballot officially took effect on Monday. Our prior post on this new ordinance is here. If you are not already in compliance, you must begin compliance with both the minimum wage increase and the paid sick leave provisions this week. The City has released a FAQ on the new ordinance, available here. San Diego employers should also be aware that the San Diego City Council is already making changes to the paid sick leave requirements. The City is doing so pursuant to a provision in the ordinance that requires the City to create and issue an “implementing” ordinance. Under that implementation authority, the City has determined that it can also revise/clarify the paid sick leave requirements. The City has proposed an implementation ordinance that includes some significant changes to the paid sick leave provisions of the original ordinance.

Los Angeles One-Two Punch Revisited: More FAQs on the New Minimum Wage and Paid Sick Leave Ordinance

On June 1, 2016, the Los Angeles City Council passed an ordinance impacting employers in the city of Los Angeles and mandating paid sick leave beyond that which is required under the recently passed California statute (Cal. Labor Code section 245, et. seq.).

REMINDER: City of Los Angeles and Unincorporated Areas of Los Angeles County Minimum Wage Increases to $10.50 Per Hour on July 1, 2016

Effective this Friday, July 1, 2016, employers with 26 of more employees, must pay employees who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week at least $10.50 for each hour worked.

Don't Wait for the $15 Minimum Wage - San Francisco's Goes Up to $13 Today!

If you know someone doing business in San Francisco, remember to let that special person know that the minimum wage goes up to $13.00 per hour effective today. The SF minimum wage web page with access to the poster etc. is here.

California Wage/Hour Update (No. 3, July 2016)

California employers continue to struggle with how to comply with their obligation to provide meal and rest periods to their non-exempt employees.

Los Angeles Approves Minimum Wage Increases and Mandates Employers to Provide 48 Hours of Paid Sick Leave

Employers in the City of Los Angeles will need to review their current minimum wage and paid sick leave policies to ensure they comply with the new City ordinance increasing the minimum wage and extending paid sick leave benefits to employees working in the City.

San Diego Earned Sick Leave and Minimum Wage Ordinance Approved by Popular Vote

Employers in the City of San Diego will need to review their current paid sick leave and minimum wage policies to ensure they comply with a voter-approved ordinance extending paid sick leave and raising the minimum wage for workers in the City.

Minimum Wage Increases Advance in San Diego and Washington, DC

Two more cities are expected to join the growing ranks of municipalities around the country that have adopted local minimum wage laws.

California Corner: San Francisco Mandates First Employer-Funded Paid Parental Leave

On April 21, 2016, San Francisco Mayor Ed Lee signed a new ordinance making San Francisco the first municipality in the United States to require employers to provide fully paid leave for new mothers and fathers to bond with their newborn or newly adopted child. The law becomes effective January 1, 2017.

What Do the Obama Administration’s Overtime Regulations Mean for California Employers?

On May 18, 2016, the U.S. Department of Labor (DOL) released its long-anticipated revisions to the federal overtime regulations governing the so-called white-collar exemptions to the federal Fair Labor Standards Act (FLSA). Most notably, the revisions more than double the minimum salary threshold needed to qualify for the executive, administrative, and professional exemptions. The revised regulations also make other significant changes to the amounts that must be paid, including allowing employers to count nondiscretionary bonuses and commissions to satisfy a portion of the salary threshold, scheduling automatic adjustments to the salary threshold every three years, and increasing the annual salary threshold for the “highly compensated employee” exemption. Fortunately, the new regulations do not make changes to the duties tests for the white-collar exemptions. The new regulations will go into effect on December 1, 2016.

Ninth Circuit Upholds Time Rounding Policy

Yesterday, the Ninth Circuit issued its decision in Corbin v. Time Warner-Advance Newhouse, rejecting an employee’s claim that he was unlawfully denied compensation for hours worked due to his employer’s poilcy of rounding time entries to the nearest quarter hour. The Ninth Circuit further rejected the employee’s claim that the trial court erroneously denied class certification on the rounding claim.


When Governor Brown signed Senate Bill 3 into law on April 4, 2016, California joined New York as the first states in the nation with a plan to implement a $15 per hour minimum wage. The news stories over simplify the new law, which not only phases-in minimum wage increases over several years, but also includes some potential delays and different schedules based on business size. Employers therefore have time to plan for the economic effects on the cost of running their businesses.

Bonding by the Bay: San Francisco Mandates Paid Parental Leave

On April 21, 2016, Mayor Ed Lee signed an ordinance making San Francisco the first municipality to require private employers to compensate employees while on parental bonding leave. Under the law, when covered employees use California paid family leave (PFL) benefits for new child bonding – bonding with a minor child during the first year after birth or placement through foster care or adoption – covered employers must pay “supplemental compensation.” The new ordinance, operative on January 1, 2017, continues San Francisco’s legacy of progressive employment standards.1

San Francisco Will Become First US City With Fully Paid Parental Leave

San Francisco will become the first US city to require employers to offer six weeks of fully paid parental leave to new parents. The city's Board of Supervisors passed the groundbreaking ordinance unanimously, which provides covered employees with the opportunity to bond with a child during the first year after the birth of the child or after placement of the child through foster care or adoption. The ordinance will apply to both same-sex and opposite-sex couples.

Ninth Circuit's Tip Case Makes a Hash Out of California Tip Pool Law

The Ninth Circuit decided 2-1 that the U.S. Department of Labor was allowed to issue a regulation that applies to tip pooling arrangements, but even if the tips are not taken as credits against the federal minimum wage. This is an interesting decision about federal agency power, but you don't care about that. I'll just fume about that alone.

A Typo In Your Paystubs Could Cost You Millions

Imagine being sued by every single one of the employees who worked for you over the past four years because your paystubs have an extra comma in your company’s name. Or because the zip code is missing from your company’s address. Or perhaps because the paystub includes the pay period end date but not the beginning date.

Recent Ruling Means You May Need To Revise Your Tip-Pooling Plan

In a recent decision by the federal 9th Circuit Court of Appeals, a 2011 U.S. Department of Labor (USDOL) regulation that significantly restricts the common practice of “tip pooling” among wait staff and other service employees was revived. As a result, you should now review your tip-pooling practices and procedures to ensure compliance with the regulation, even if you already comply with California state tip-pooling rules.

San Francisco Becomes First U.S. City to Approve Fully Paid Leave for New Parents

On April 5, 2016, San Francisco, California's Board of Supervisors approved a measure mandating that San Francisco employers provide six weeks of fully paid leave during a calendar year for new parents, including mothers, fathers, and same-sex couples, who either bear or adopt a child. It is another in a long line of employee-friendly laws recently passed both in California and around the country.

San Francisco Will Require Employers To Provide Paid Parental Leave: FAQs For Employers

The City of San Francisco just became the first city in the country to pass legislation requiring many employers to provide workers with paid parental leave, entitled the “Paid Parental Leave Ordinance.” Starting in 2017, many businesses in San Francisco will be required to provide up to six weeks of fully paid parental leave to most workers after certain conditions are met. This groundbreaking law will force employers to revamp their administrative policies and practices, while adjusting their budgets to foot this new bill. The following Frequently Asked Questions will assist employers who operate in San Francisco in determining the specifics of coverage under the new law:

San Francisco on the Verge of Imposing Employer-Funded Paid Parental Leave: FAQs on the Groundbreaking Ordinance

On April 5, 2016, the City of San Francisco moved one step closer to imposing paid parental leave on certain employers when the city’s Board of Supervisors passed the “Paid Parental Leave Ordinance.” The Board will vote again at its next meeting and, if it passes, will send the ordinance to Mayor Ed Lee.

San Francisco Passes Fully Paid Parental Leave Ordinance

Today, San Francisco became the first city in the nation to pass an ordinance requiring employers to provide paid parental leave to employees. To be clear, the ordinance does not require employers to provide 100% of the employee’s pay, but rather requires employers to bridge the gap between the employee’s regular compensation and the wage replacement benefit the employee receives from the State EDD under the state’s paid family leave program. Under that program, employees generally receive 55% of their wages for up to six weeks when they take leave to bond with a new child (and/or for other covered reasons).

California Raises its Minimum Wage and Expands Paid Sick Leave

When it wants to, the California Legislature can act with impressive speed. It did so last week on a minimum wage increase bill (SB 3)1 when, in less than 96 hours, it amended the legislation and sped it through two committee hearings and two final floor considerations. On Monday, April 4, 2016, California Governor Jerry Brown signed the bill, which will eventually raise the statewide minimum wage to $15 per hour, into law. The bill’s proponents said that under this measure, nearly six million California workers—more than one-third of the Golden State’s workforce—will receive a raise.2

California Approves Nation's First Statewide $15.00 Minimum Wage

Today California Governor Jerry Brown signed into law a sweeping plan that will eventually increase the statewide minimum wage from $10.00 to $15.00 per hour. While the state of New York announced a deal last week that will also increase the state minimum wage to $15.00 in most areas (while preserving the possibility of a suspension in the rate growth depending on economic factors), California becomes the first state to implement a statewide rate at that level.

Governor Brown Signs California’s $15 Minimum Wage Bill

On April 4, 2016, Governor Brown—as expected—signed a bill to raise the state minimum wage rate to $15.00 per hour by 2022. The new law will increase the minimum wage for large and small businesses according to two schedules. It will also have the effect of increasing the minimum exempt salary requirement for exempt California employees.

California Minimum Wage Increases to $15.00!!..ZOMG..1!!1! There's Lots of Fine Print. But Much Is Not Good.

For one thing, it's not 2022. Businesses can move away or raise prices 50% by then. I kid. ::cough::

California $15 Minimum Wage Bill Awaits Governor’s Signature

On March 31, 2016, the California legislature approved the nation’s highest statewide minimum wage. SB-3, approved in both the State Senate and Assembly, will increase the state’s minimum wage to $15.00 per hour by 2022. Governor Jerry Brown has already signaled that he intends to sign the bill into law on Monday, April 4, 2016.

California Passes $15 Minimum Wage Bill

California's legislature on March 31 passed a bill that, if signed by the governor as expected, will raise the state's minimum wage to $15 per hour over the next six years.

California Governor Agrees To Unprecedented $15.00 Minimum Wage

On Monday, March 28, 2016, California Governor Jerry Brown, flanked by union and state government officials, announced an agreement with state legislators to increase the statewide minimum wage from $10.00 to $15.00 per hour.

California Lawmakers Reach Deal to Raise California Minimum Wage to $15/Hour by 2022

Last week, we reported on two labor-backed measures to increase California’s minimum wage that may be on the November ballot in California. Now, it appears that California’s lawmakers have struck a deal with labor groups to raise the minimum wage without sending the minimum wage hike proposals to the voters to decide. Governor Brown’s office issued a press release today describing the “landmark agreement.”

Santa Monica Adopts Minimum Wage and Sick Leave Ordinance

In January of 2016, the Santa Monica City Council adopted a wide-reaching ordinance that will raise the city’s minimum wage and impose paid sick leave requirements that exceed the state’s paid sick leave statute. The ordinance also establishes an even higher minimum wage for hotel workers. The city established a minimum wage working group to make further recommendations on the ordinance. Absent working group consensus on specific changes, the ordinance will take effect on July 1, 2016.

Pasadena Joins Growing List of California Cities Imposing City Minimum Wage

On March 14, 2016, the Pasadena City Council adopted an ordinance to increase the city’s minimum wage. Beginning on July 1, 2016, employers with 26 or more employees must pay a minimum wage of $10.50 per hour to all employees who work at least 2 hours per week within the city’s geographic bounds. The minimum wage will increase to $12.00 per hour on July 1, 2017, and $13.25 per hour on July 1, 2018.

California Lawmakers and Unions Agree to $15 Minimum Wage

According to media and government reports, California lawmakers have struck a deal with labor unions to increase the statewide minimum wage to $15.00 per hour over several years.

Measure to Further Increase California Minimum Wage on November Ballot

An initiative backed by labor union SEIU-United Healthcare Workers West to raise California’s minimum wage is slated to be on the November ballot, after backers gathered more than 400,000 signatures supporting the measure. The measure, dubbed The Fair Wage Act of 2016, proposes increasing California’s minimum wage to $11 per hour in 2017, with further one dollar per hour increases each year thereafter until reaching $15 per hour in 2021. A competing measure backed by another branch of the same labor group, SEIU-State Council, may also make it on the November ballot as the largest labor union in the state continues to gather signatures for that initiative. This rival measure seeks to increase the minimum wage to $15 per hour by 2020 (a year earlier than the SEIU-UHW backed measure) and also seeks to mandate that California employers provide employees with 6 days of paid sick leave per year (double the amount currently required). We will keep you posted of any significant developments related to these measures.

Ruling May Change Tipping in California

A three-judge panel of the 9th U.S. Circuit Court of Appeals recently sent shockwaves throughout the hospitality industry, specifically restaurants, when it decided Oregon Restaurant and Lodging Association v. Perez and consolidated case Cesarz, Ngoc Tang v. Wynn Las Vegas LLC, 14-15243 (Feb. 23, 2016). 2016 DJDAR At issue was the legality of "tip pooling."

Santa Monica, California, Joins Patchwork of Minimum Wage and Paid Sick Leave Laws

California’s City of Santa Monica’s City Council has adopted an ordinance that enacts minimum wage and paid sick leave requirements for covered employees as well as new regulations pertaining to service charges and surcharges. Ordinance Number 2509 became effective on February 25, 2016, although its provisions will not be implemented until July 1, 2016.

Ninth Circuit Upholds Regulation Restricting Tip Pooling Practices

In Oregon Restaurant & Lodging Association v. Perez (9th Cir. No. 13-35765, Feb. 23, 2016), the Ninth Circuit Court of Appeals (“Ninth Circuit”) upheld a regulation promulgated by the U.S. Department of Labor (“DOL”), which prohibits employers from using employees’ tips for any purpose other to take a tip credit or to further a valid tip pool. Consequently, employers may not adopt a tip pooling policy that allows employees who are not “regularly and customarily” tipped to participate in the pool, regardless of whether a tip credit is taken.


It is human nature for employees to want to know how much their co-workers are paid. Even though most of us would not ask directly, compensation is often a topic at the watercooler, especially after the employer announces raises or bonuses.

Santa Monica Jumps on the Minimum Wage and Sick Leave Bandwagon

With little fanfare or advance notice, Santa Monica, California, became the latest municipality to enact its own minimum wage and sick leave ordinance (“Ordinance”), proposed by the City Council on January 12, 2016, and approved shortly thereafter on January 26, 2016.

California Employers Beware: Many California Cities Have Enacted Minimum Wage Ordinances

California’s minimum wage increased to $10 per hour effective January 1, 2016. This is the second increase in just 18 months under legislation originally signed by Governor Jerry Brown in 2013. Unfortunately, this latest increase to the statewide minimum wage is not the only one facing California employers. More than a dozen cities across California have already enacted their own minimum wage ordinances requiring employers to pay workers at rates as high as $15.37 per hour – and several other cities are looking to follow suit. It is a hodgepodge environment in our state, when it comes to minimum wage regulation.

A New Year’s Resolution for California Employers: Fair Pay Act Compliance

California employers are preparing for the effects the Fair Pay Act—the new law signed by Governor Brown last October that significantly changes California’s gender equality pay law. Senate Bill 358 (SB 358), which went into effect on January 1, 2016, requires employers to pay employees of the opposite sex equivalent wages for “for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” This is a significant change from the law’s former requirement that employees of the opposite sex receive equal pay for “equal work.”

Reminder: California Minimum Wage Going Up 1/1/2016

There are so many new laws and rules going into effect that one obvious one may slip through the cracks. The minimum wage in California is going up on January 1, 2016 to $10.00 per hour. It says so right here on the old Minimum Wage Notice that has been around for a couple of years now. (HERE).

California’s New Piece-Rate Compensation Requirements and a New Affirmative Defense Take Effect January 1, 2016

On October 10, 2015, California Governor Jerry Brown signed Assembly Bill 1513, which added new requirements with regard to employees who work on a piece-rate basis. The new law, which amends California Labor Code section 226.2, changes the way employers are required to pay employees paid on a piece-rate basis. The new section 226.2 goes into effect on January 1, 2016.

Pair of Decisions On FLSA Retaliation and Work Comp Retaliation

Two new employment decisions were issued today, one by a California Court of Appeal and the other by the Ninth Circuit. In Prue v. Brady Company, the California court held that a plaintiff who suffered a work-related injury and subsequently was fired stated a valid legal claim against the employer for wrongful termination in violation of public policy. The employer argued that the plaintiff’s claim was invalid because it effectively was a Labor Code section 132a retaliation claim that could only be brought before the Workers’ Compensation Appeals Board, not in court. The court disagreed, reasoning that the plaintiff adequately alleged that he was wrongfully terminated for having a disability, in violation of the public policy of the Fair Employment and Housing Act, and therefore the claim was not barred by the doctrine of workers’ compensation exclusivity. The employer argued that even if the claim was based on the public policy of FEHA, the claim would be barred by the one-year statute of limitations applicable to FEHA claims. The court rejected this argument as well, ruling that a wrongful termination in violation of public policy claim is governed by a two-year statute of limitations and not by the statute of limitations applicable to FEHA claims. This decision is not particularly novel, but is a good reminder for employers that employees who believe they have been fired for reasons relating to a work comp injury can sue their employer in court and seek punitive damages (under a disability discrimination theory) and are not limited to the remedies set forth in Labor Code 132a.

What You Need To Know About California's Amended Fair Pay Act That Takes Effect January 1, 2016

Executive Summary: California's amended Fair Pay Act goes into effect on January 1, 2016, and is considered the most stringent law in the nation. The new law received broad support from both Republicans and Democrats in the Legislature. It arises out of their finding that "in 2014, the gender wage gap in California stood at 16 cents on the dollar. A woman working full time year round earned an average of 84 cents to every dollar a man earned. This wage gap extends across almost all occupations reporting in California. This gap is far worse for women of color; Latina women in California make only 44 cents for every dollar a white male makes, the biggest gap for Latina women in the nation." California's equal pay law has been on the books since 1949, and prohibited employers from paying a woman less than a man when they are both doing "equal work" at the same establishment. The amended law requires equal pay for "substantially similar work." (The law specifically prohibits discrimination based on sex, but in light of the Legislature's focus on the gender wage gap, this article addresses pay discrimination allegations made by women.)

California CFPA: Shifts Burden of Proof to Employers in Equal-Pay Disputes

California Governor Edmund G. Brown, Jr. recently signed into law the California Fair Pay Act (CFPA) (Senate Bill 358). The CFPA, which takes effect on January 1, 2016, is intended to increase wage transparency and will be one of the strongest equal-pay laws in the country.

Sacramento Minimum Wage Increases

Anyone paying attention to national politics knows increasing the minimum wage is a hot topic being debated by employee and business groups. While the debate rages, the Sacramento City Council decided not to wait for the feds or the state to act, and recently voted 6-3 to increase the Sacramento city minimum wage, as follows:


The California Legislature recently concluded its legislative session, and a number of new wage-related bills signed by the Governor will significantly affect California employers. This article summarizes some of those laws below. We do not address laws specific to government employers, or to certain occupations or industries.

House Passes Transportation Bill with Meal and Rest Break Implications

On November 5, 2015, the House of Representatives approved a transportation funding bill with an amendment that would reverse a 2014 Ninth Circuit decision that California's meal and rest break laws are not preempted under the Federal Aviation Administration Authorization Act of 1994 (FAAAA). This amendment is of critical importance to truck operators in California as well as the rest of the country.

California Court Deems Truck Drivers Employees, Not Independent Contractors

Companies that classify workers as independent contractors are facing increasing scrutiny in court and before administrative agencies. A recent unpublished California Court of Appeal decision in a case titled Garcia v. Seacon Logix, Inc. highlights the factors considered by a court in determining worker status.

California Strengthens Current Equal Pay Law – Is This Fair Warning to Employers in Other States?

With the recent passage of the California Fair Pay Act, California strengthened its existing equal pay law by requiring employers pay men and women the same for not only “equal work,” but also for “substantially similar work.” As a result, employees may now challenge the fairness of their pay by drawing comparisons to “substantially similar” jobs with different titles.

California Equal Pay Law Changes Have Big Implications

California Governor Jerry Brown has signed a flurry of bills into law, but the most notable includes significant changes to the state's equal pay statute. California law and federal law already required equal pay to employees of the opposite sex for equal work. But this new measure goes much further, leading Governor Brown to call it, "The strongest equal pay law in the nation."


There is a strong presumption in favor of paying employees overtime when applicable, and providing them with the protections of various wage-hour laws. Employers always have the burden of establishing that an exemption from some or all of these laws applies. The exemptions for sales employees are particularly confusing for many California employers, and misclassification in this area can be costly.

California Expands Fair Pay Act Protections

Requiring employers to prove an employee’s higher pay is determined on factors other than gender and allowing workers to sue if they are paid less than co-workers of a different gender with different job titles doing “substantially similar” work highlight California’s expanded Fair Pay Act (SB 358), signed by Governor Jerry Brown on October 6, 2015.

California Governor Signs AB 1513, Severely Limiting Piece-Rate Compensation but Throwing a Liability Life Raft to Employers

On October 10, 2015, Governor Edmund Gerald Brown, Jr. signed into law legislation that re-writes the definition and rules governing the payment of piece-rate compensation in California. Assembly Bill (AB) 1513 creates new California Labor Code section 226.2 and sets forth requirements for the payment of a separate hourly wage for “nonproductive” time worked by piece-rate employees, and separate payment for rest and recovery periods to those employees.

Health Care Workers Allowed to Waive Meal Period

On October 5, 2015, Governor Jerry Brown signed into law a bill confirming that employees in the health care industry can waive one of their two meal periods when working a shift of over eight hours in a workday. This law clarifies confusion caused by a recently decided appellate case, Gerard v. Orange Coast Memorial Medical Center, 234 Cal.App.4th 285 (C.A. 4th, 2015) (review granted). The Gerard case is currently under review by the California Supreme Court.

Ninth Circuit Addresses When Commuting Time May Be Compensable Under California Labor Code and What Must be Included in a PAGA Notice

The U.S. Court of Appeals for the Ninth Circuit recently addressed the compensability of commute time under the California Labor Code and the content required in a Private Attorneys General Act of 2004 (PAGA) letter.

CA Governor Signs New Equal Pay Law

The California Legislature has turned its attention to anti-discrimination law: equal pay. Now, who is against equal pay? If you raised your hand, you violated at least four laws that already existed before Jerry Brown signed SB 358 (text is here). Four laws? At least.

New California Law Eases Employees’ Burdens in Proving Gender-Based Pay Claims and Creates Additional Protections for Employees to Discuss Their Wages

On October 6, 2015 Governor Jerry Brown signed Senate Bill 358 (“SB 358”), a law that substantially eases California employees’ burden in proving gender-based pay claims. This law also increases the number of years that employers must retain employee records, and creates additional protections for employees who wish to discuss or disclose their wages.

Legislative Update: Fair Pay Act, Right to Cure Wage Statement Defects, Paid Sick Leave, and More

As California’s current legislative process heads into its final days, we have a few updates on employment-related matters relating to paid sick leave, wage statement violations, meal period waivers in the health care industry, and the Fair Pay Act.

California Passes Law Aimed to Bridge the Gender Wage Inequality Gap

On October 6, 2015, California's Governor Edmund G. Brown, Jr. signed into law Senate Bill (SB) 358, legislation intended to increase wage transparency and which will make it more difficult for an employer to defend against an equal pay claim. This measure, which amends Section 1197.5 of the California Labor Code relating to private employment, will take effect on January 1, 2016. When it takes effect, California's law on this subject will be one of the strongest equal pay laws in the nation.

California Health Care Industry Meal Period Waivers Are Back

Governor Jerry Brown just signed SB 327 (text here). This bill overturns a court of appeal opinion that was going to significantly affect the health care industry and its meal break scheduling practices. That decision, Gerard v. Orange Coast Memorial Medical Center (2015) 234 Cal.App.4th 285, is on review to the California Supreme Court. It may be moot now. And yes, the issue applies only to the health care industry (hospitals, nursing homes, etc.). Everyone else, go back to your Facebook.

New California Law Allows Employers to Correct Wage Statements to Avoid Litigation—Review Your Wage Statements Now

On October 2, 2015, Governor Jerry Brown signed into law Assembly Bill 1506 (AB 1506). The new law amends the California Private Attorneys General Act (PAGA) to allow employers the right to “cure” certain commonly litigated defects in employee wage statements within 33 days of notice by the employee in order to avoid litigation. The cure provisions for wage statements, which can be onerous, apply only to California Labor Code section 226(a)(6)—which requires employers to specify the inclusive dates of the period for which the employee is paid—and section 226(a)(8) —which requires employers to state the name and address of the “legal entity” that is the employer. AB 1506 is urgency legislation and therefore effective immediately.

CA Governor Signs AB 1506, a Bill Granting Limited PAGA Relief Re Wage Statements

Governor Jerry Brown signed AB 1506 (text here), which amends the Private Attorneys General Act, or PAGA.

How Employers Can Combat Timecard Fraud And Employee Wage Theft

There is nothing so central to wage-hour laws than the sacred domain of “hours worked.” The concept is simple: employees record the time they spend working, and from this data employers generate labor budgets and employee pay checks.

California Minimum Wage Bill Stalls in Legislature

A controversial bill to increase California’s minimum wage has failed to pass in the state legislature. The bill would have phased in a $3.00 per hour increase to the minimum wage rate and also would have imposed annual cost of living increases.

California Labor Commissioner Issues $2.2 Million in Wage Theft Citations

California Labor Commissioner Julie A. Su issued more than $2.2 million in citations to the owners of three residential care facilities for what were deemed "egregious" wage theft violations.

$15.00 California Minimum Wage Initiative Will Likely Appear on 2016 Ballot

A union's efforts to increase the minimum wage in California to $15.00 per hour by 2021 has cleared a major hurdle.

Another City Hops Aboard The $15 Minimum Wage Trend

Los Angeles recently took a big step towards becoming the latest city to adopt the $15 per hour band wagon. Draft minimum wage and wage enforcement ordinances made their way through the Los Angeles City Council and City Attorney’s offices in May and June. Eric Garcetti, mayor of Los Angeles, formally signed the ordinances into law on June 13.

Copycat Ordinance: Los Angeles County to Adopt $15 Minimum Wage Similar to Recent Los Angeles Citywide Ordinance

On July 21, 2015, the Los Angeles County Board of Supervisors approved a motion directing County Counsel to prepare a “Countywide Minimum Wage Ordinance” to incrementally increase the minimum wage for Los Angeles County employees and employees working in unincorporated areas within the county. The motion calls for raising the minimum wage in ways that match the recently enacted Los Angeles City Minimum Wage Ordinance.1 If the county follows through, both Los Angeles City and Los Angeles County would require all covered employers to provide a minimum wage of $15 per hour by 2021.

Ninth Circuit Finds That Insurance Claims Adjusters Are Exempt Administrative Employees Under California Law

Applying California’s administrative exemption test, the U.S. Court of Appeals for the Ninth Circuit recently concluded an insurance company properly classified its claims adjusters (who handled and processed disability claims) as exempt from the overtime provisions of the California Labor Code, notwithstanding the clerical duties the adjusters performed and their characterization of their work as “routine”. See Bucklin v. Zurich Am. Ins. Co., 2015 U.S. App. LEXIS 12497 (9th Cir. July 20, 2015).

Cheerleaders in California Have Something to Cheer About!

On July 15, Governor Jerry Brown signed into law AB 202, which requires California-based minor or major league sport teams in certain sports to treat cheerleaders as employees, not independent contractors.

California Appellate Court Holds Employer Must Withhold Taxes on Back Pay

On June 26, 2015, a California appellate court rendered a precedential opinion1 that should hopefully put to rest the issue of whether an employer must withhold taxes on settlements or judgments made to former employees in employment-related litigation. The case, Cifuentes v. Costco Wholesale Corporation, is typical of many of these kinds of employment-related disputes. The plaintiff won a judgment for lost wages against his former employer, which then withheld federal and state payroll taxes from the award. The former employee claimed the judgment was not satisfied, citing to Lisec v. United Airlines.2

Burdensome San Francisco Retail Workers Bill of Rights Takes Effect Next Week

Next week, on July 3, 2015 the ordinances collectively known as the “Retail Workers Bill of Rights” - passed unanimously by the San Francisco Board of Supervisors in November 2014 - will go into effect in the City of San Francisco and the City will begin enforcing its provisions. The ordinances require the covered employers to ensure that they meet five major requirements.

California Corner: Misclassification—What Do Managers Do? They Manage, Unless They’re in California.

Store managers are typically classified as exempt from overtime based on what is known as the "executive" exemption. The California Wage Orders set out a six-part test for this exemption, but in basic form, the test asks whether the employee: manages a department or unit; directs the work of other employees; has authority over personnel decisions; exercises discretion or independence in making decisions; spends a majority (more than 50 percent) of his time engaged in managerial duties; and makes a salary above a certain level. Pretty clear that a senior management person in a retail environment would fit the bill, right? Not necessarily.

The New Highest Minimum Wage in the Country: Emeryville Expected to Reach $16 Per Hour by 2020

As of this week’s vote, the small California city of Emeryville, which is located in San Francisco’s Bay Area, is slated to have one of the highest minimum wage rates in the country. As expected, on June 2, 2015, the Emeryville City Council voted unanimously in favor of a minimum wage ordinance that will raise Emeryville’s minimum wage rate to over $16.00 per hour by 2020.

Yet Another Municipal-Level Paid Sick Leave Measure Passes in California

In addition to implementing a minimum wage rate increase, the ordinance that the Emeryville City Council unanimously approved on June 2, 2015 will provide paid sick leave to employees in Emeryville—over and above what is already provided to employees under state law. The “Minimum Wage, Paid Sick Leave, And Other Employment Standards” ordinance includes a provision—similar to that of the San Francisco and Oakland paid sick leave laws—requiring employers to allow employees to designate a non-family member for whom they may use their sick leave. It also permits employees to take leave to care for an ill guide dog, signal dog, or service dog. Below are the key components of the new law.


Employers are always looking for innovative ways to streamline their businesses and cut costs. One area many employers want to target? The cost of providing paper payroll checks to employees. The savings associated with eliminating paper checks are potentially significant. According to a recent survey, a business with 100 employees who are paid bi-weekly could save as much as $4,200 each year. A business with 500 such employees could save more than $21,000 each year.

$15 Per Hour Minimum Wage? Los Angeles and Emeryville Give Seattle a Run for the Money

On May 19, 2015, the Los Angeles City Council voted, 14-to-1, to raise the minimum wage to $15.00 per hour in increments over the next five years. As a result, the city council will draft a proposal to raise the wage rate from $9.00 per hour to $15.00 per hour by 2020.

California Supreme Court Agrees to Consider Whether California Health Care Workers Can Lawfully Waive a Second Lunch Period

This week, the California Supreme Court agreed to review the decision in Gerard v. Orange Coast Memorial Center, No. G048039 (February 10, 2015), where the California Court of Appeal partially invalidated the Industrial Welfare Commission (IWC) wage order provision that allows employees in the health care industry to waive one of two required meal periods on shifts longer than eight hours.

Los Angeles Sets Path for $15 Minimum Wage

Los Angeles is on track to have one of the highest minimum wages in the nation.

The Trend Continues: Los Angeles City Council Tentatively Approves Citywide $15 Minimum Wage and Proposes Sick Leave Ordinance

On May 19, 2015, the Los Angeles City Council approved a proposal for a gradual establishment of a citywide minimum wage of $15.00 per hour by July 1, 2020. Once adopted, Los Angeles will join other large U.S. cities, including Chicago, Seattle and San Francisco, to establish local minimum wage ordinances that far exceed the federal minimum wage of $7.25. The State of California has already raised the statewide minimum wage to $9.00 per hour effective July 1, 2014, with an increase to $10.00 per hour set to go into effect on January 1, 2016.

California-Specific Webinar Highlights Pressing Handbook Issues

California employers face a host of unique employment law issues at both the state and local levels that must be taken into account when developing, implementing and enforcing employee handbooks. Littler Mendelson employment attorneys Chris Cobey and Ben Emmert, of the firm’s San Jose office, explored those challenges during a recent XpertHR webinar. After the webinar, Emmert provided answers to some key California-specific questions.

Court of Appeal Holds Truckers Entitled to Hearing on Whether Federal Arbitration Act Applies

The Federal Arbitration Act preempts state law that would preclude arbitration of claims. California has such a law, which prohibits arbitration of wage claims. See Lab. Code section 229. So, if the FAA applies, it preempts that law. The U.S. Supreme Court has so held.

California Supreme Court Takes Up Important Rest Period Case:

I posted about Augustus v. ABM here. The California Supreme Court has granted review of the case.

Answering The Call

California leads the nation in vigilantly regulating the conditions which constitute “hours worked.” Definitions are established, modified, and expanded by the California Labor Code, its Wage Orders, and decisions by appellate courts. The California Supreme Court recently made clear that California’s standard defining “hours worked” is more protective of employees than the rules set forth under the federal Fair Labor Standards Act (FLSA).


When non-exempt employees are performing their “regular” duties, employers typically understand their responsibility to pay for the time. But in some circumstances, it is unclear whether an employee’s time is compensable. Recently, in Mendiola v. CPS Security Solutions, Inc., the California Supreme Court addressed two such situations: on-call time and sleep time.

New FLSA Overtime Exemption Regulations Still Under Consideration By Department of Labor

Earlier this week, Secretary of Labor Perez announced that her agency is still working hard on revising the regulations governing the existing white collar overtime exemptions. These regulations were originally expected to be published in early 2015. However, that did not happen. Secretary Perez now expects that the regulations will be finalized and published this spring.

California Corner: There's a Classification for That—Recent Cases Challenge Whether Application-Based Service Platforms Misclassify Independent Contractors

As the number of services offered to consumers through applications ("app" or "apps") on their tablets and smartphones continue to expand, the companies that are profiting from them are facing a series of lawsuits that may redefine how they (and others) do business. These cases are not the first instance—and will undoubtedly not be the last—where wage and hour laws lag behind technological advances. Mobile apps such as Uber, Lyft and Sidecar have taken a number of markets by storm, revolutionizing the way consumers request, track and pay for taxi and "black car" rides. TaskRabbit, meanwhile, is an app attempting to redefine the way consumers complete their "to do" lists by enabling them to arrange for someone else (the "Tasker") to perform a number of different tasks such as cleaning, shopping or making deliveries. With an ever-growing number of people earning a living by serving as someone else's "private driver" or errand runner, the question being asked is whether these companies should be classified as employees or independent contractors. The answer may well determine whether certain businesses survive and/or prosper.


California law requires employers to provide non-exempt employees paid rest periods of at least 10 minutes during each four-hour work period, or major fraction thereof. Because these rest periods are short and paid, they are fundamentally different from legally mandated meal periods. For example, may an employer require employees to be “on call” during a rest break? Or must a rest break, like an unpaid meal period, be entirely free from the employer’s control?

Ninth Circuit to California Supreme Court: About that One Day's Rest in Seven Law?

If only I could ask the California Supreme Court to answer some wage and hour questions for my clients and me. Fortunately, the federal Ninth Circuit Court of Appeals has that authority.

California Court Decision on Meal Breaks May Cause Health Care Industry To Go To Code Blue

Executive Summary: A new California Court of Appeal decision has invalidated a 22-year-old healthcare industry exception that had given the industry some flexibility with respect to how it provided its employees working extra-long shifts with meal breaks. The decision is expected to have serious and immediate ramifications for employers in the patient care industry not only because of its invalidation of a long-standing exception but also because of its retroactive effect on previously existing practices.

Court of Appeal Limits Meal Break Waivers in Healthcare Industry

Here's one of those cases where California's labyrinth of employment laws conflict, the employer chooses to rely on one of them, and the employer finds out it made the wrong choice. The lesson arises in the context of a meal break class action.

New California Court of Appeal Opinion Provides Guidance on Rest Breaks

Executive Summary: On January 29, 2015, a California appeals court published a modified version of an opinion examining, in part, an employer's obligation under the state's rest break requirements. Critically, the opinion concludes that the rest break requirement only prescribes that an employee not be required to work on a rest break, not that he or she be relieved of all duties. The opinion provides much needed guidance to employers in understanding the distinction between California's meal and rest break requirements.

Court of Appeal Finds Rest Periods Valid Even If Employees Potentially Could be Interrupted

The Court of Appeal ruled that security guards' rest periods were lawful, even though employees might have to respond to an emergency call during a rest period. We're especially happy about this decision because we wrote an amicus curiae brief supporting the employer on behalf of the California Chamber of Commerce.


On December 5, 2014, the city and county of San Francisco enacted two ordinances, collectively known as the “Retail Workers Bill of Rights” (“RWBR”). The ordinances are aimed at giving chain store employees more predictable work schedules and the opportunity to work more hours.

California Supreme Court Rules On-Duty Guards Entitled to Pay for On-Call and Sleep Time

On January 8, 2015, the California Supreme Court issued a decision holding that the on-call hours for security guards who work 24-hour shifts constituted compensable hours worked. Further, the court ruled that the guards’ employer could not exclude “sleep time” from the guards’ 24-hour shifts and in doing so rejected the analysis under earlier California decisions, Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 Cal.App.3d 16 and Seymore v. Metson Marine, Inc. (2011) 194 Cal.App.4th 361. Mendiola v. CPS Security Solutions, Inc., No. S212704, California Supreme Court (January 8, 2015).

CA Supreme Court: On-Premises, On-Call Time = Hours Worked (All Sleeping Time Too).

The California Supreme Court (unanimously) affirmed the Court of Appeal's decision in Mendiola v. CPS Security Solutions, Inc. We posted about the Court of Appeal's decision here. However, the Supreme Court actually went farther than the Court of Appeal in deciding that security guards' on-premises, on-call time is compensable as hours worked.

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.

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.


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.

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).

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.

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.

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.

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 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.

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.


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.

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.

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.


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.


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.

San Francisco Flexible Schedule Ordinance - Update

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

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.

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.

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.

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.

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.


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”).

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.

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.

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.

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.

Do You Know Minimum Pay in San Jose?

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

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 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.


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).

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.

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.

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.

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.


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.


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.

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 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 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.


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.


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.”

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

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.

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.

[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."

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.

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.

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.

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.


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.

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.


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.

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."

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).


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.

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.


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:


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.


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?


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.


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 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.

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.


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.


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.


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.


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.

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.


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.


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.)

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.

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 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.

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.