Total Articles: 79
California Appellate Court Holds Insurance Agents Not Employees Under California Law
In Arnold v. Mutual of Omaha Insurance Company, a California appellate court issued a published decision holding that insurance agents are not employees under the California Labor Code. This appears to be the first time the court has addressed the status of insurance agents.
California Division of Labor Standards Enforcement Revises Guidance Regarding Wage Theft Prevention Act Notices for Current Employees
As we reported in our January 4, 2012 Alert, the California Labor Commissioner recently published a template form to comply with the Wage Theft Prevention Act of 2011 ("WTPA") (AB 469). In connection with the publication of the template, the California Division of Labor Standards Enforcement ("DLSE") posted on its website a "Frequently Asked Questions" section on AB 469. As we noted in our initial Alert, the "FAQ" section stated that employers should provide an initial WTPA notice to all current nonexempt California employees as soon as the new law takes effect. AB 469 itself, by contrast, only requires a WTPA notice to be provided at the time of hire and within 7 calendar days of any change to the relevant information.
California Labor Commissioner Publishes Template to Comply with Wage Theft Prevention Act of 2011 (AB 469)
As we reported in our October 24, 2011 Alert, on October 9, 2011, California Governor Jerry Brown signed into law the Wage Theft Prevention Act of 2011 (AB 469). This law adds a new section to the California Labor Code (Section 2810.5) that requires employers to provide all newly hired non-exempt California employees with a written notice at the time of hire that contains all of the following:
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.
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."
Notice Compliant with New California Wage Payment Law Available from Labor Division (DLSE)
The California Division of Labor Standards Enforcement has released a form notice that is compliant with the new California Wage Theft Prevention Act of 2011. Effective January 1, 2012, the Act requires employers to provide many new employees with written notice that details their rates of pay, employer name and address, workers’ compensation carrier, and other information specified in the Act. Since Governor Jerry Brown signed the law in October, California employers have struggled to develop notices that are compliant.
California's New Wage Disclosure Notice and the Wage Theft Prevention Act of 2011
California's Wage Theft Prevention Act of 2011 ("WTPA" or "Act")1 takes effect on the first day of next year – January 1, 2012. The WTPA is one of half a dozen new laws that affect an employer's wage payment obligations. The WTPA amended five existing statutes within the California Labor Code, and created five new statutes in the same code.2 All are discussed below.
Court Finds One Plaintiff Not Owed Reporting Time or Split Shift Pay For Scheduled Meetings and Finds Second Plaintiff Waived Claims - But Employer Denied Award of Fees!
In Aleman v. Airtouch Cellular, a California Court of Appeal ruled on December 21, 2011 that one class representative was not entitled to additional reporting pay or split shift premiums and a second class representative could not pursue such claims because she had signed a release in exchange for enhanced severance compensation. The court did, however, reverse the award of attorneys’ fees to the employer.
Ninth Circuit Unconvinced that Out-of-State Employee Claims Are Invalid
On December 13, 2011, the Ninth Circuit Court of Appeals reconsidered the case, Sullivan v. Oracle Corp., after the California Supreme Court had decided several certified questions of law. The Ninth Circuit had previously delayed ruling, and instead asked the California Supreme Court to decide three questions of California law, including whether a company with its principal place of business in California was required to pay out-of-state employees temporarily working in California according to California’s daily overtime rules.
Court of Appeal Makes Christmas Come Early for Employers re Reporting Time and Split Shifts
The Court of Appeal issued a ruling that may change the way us employment lawyers advise clients. But WARNING, this decision is not yet final and cannot be relied upon just yet.
Landmark Decision Limits "Reporting-Time" Pay and Clarifies "Split-Shift" Premium Requirements
A California appellate court has just handed down a major decision on reporting-time pay in California, limiting situations where such pay would be due, and rejecting an enforcement guideline used by the California Labor Commissioner. The court also clarified the law regarding split-shift premiums. Michael Aleman, et al v. AirTouch Cellular.
"Wage Theft Prevention Act" Takes Effect January 1, 2012
A recently-passed piece of California legislation that will impact employers is the Wage Theft Prevention Act of 2011 (WTPA), which takes effect January 1, 2012. This law adds a new section to the Labor Code and is similar to a law passed in New York this year.
Nonresident-Employees Working in California Entitled to Overtime under State Law, Ninth Circuit Rules
Nonresidents of California are entitled to overtime pay under California law for work performed in California, the U.S. Court of Appeals for the Ninth Circuit has ruled, following the California Supreme Court’s responses to its questions on state law. Sullivan v. Oracle Corp., 2011 U.S. App. LEXIS 24625 (9th Cir. Dec. 13, 2011). The Ninth Circuit reversed summary judgment in favor of the employer on claims for unpaid overtime under the California Labor Code (“Labor Code”), as well as on claims under the California Unfair Competition Law (“UCL”), which were predicated on the Labor Code violations. However, the Court held that the UCL did not apply to alleged violations of the federal Fair Labor Standards Act occurring outside of California.
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's 2012 Minimum Hourly, Monthly and Yearly Rates for Exempt Computer Software, Physician and Surgeon Employees
Under the California Labor Code, certain computer software employees, as well as licensed physicians and surgeons, are exempt from state overtime requirements if they receive a minimum hourly, monthly or yearly rate. The rate is determined annually based upon changes to the California Consumer Price Index for Urban Wage Earners and Clerical Workers. Because the Index experienced a 2.5% increase over the past year, the California Division of Labor Standards Enforcement (DLSE) adjusted the rates these individuals must be paid to be considered overtime-exempt.
AB 469: WAGE THEFT PREVENTION ACT OF 2011
One of several employment laws recently signed by Governor Jerry Brown, AB 469 takes effect on January 1, 2012. Titled the “Wage Theft Prevention Act of 2011,” AB 469 modified a number of current laws 10and created several new Labor Code provisions.
AB 469 -California Adopts NY "Wage Theft" Law
When I covered some of Governor Jerry Brown's last minute bill signings, I left out perhaps the most obnoxious new law. That's what I get for hurrying.
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.
VACATION CLARIFICATION: NEW DEFINITION MAY AFFECT EMPLOYEE COMPENSATION
What counts as paid “vacation” that vests as it is earned and cannot be forfeited under California law? The distinction between leave that is and is not deemed vacation is significant. The law generally requires payment of unpaid wages, including unused, earned vacation pay, on the employee’s termination date. Untimely payment of wages can result in significant “waiting time” penalties under Labor Code Section 203.
California Court Clarifies Scheduled Overnight Shifts Not Entitled to Split Shift Pay
The California Court of Appeal has held that employees who work overnight shifts that begin on one day and conclude on the next, but which are not interrupted by unpaid, non-working periods, do not work “split shifts,” as defined in the applicable Industrial Welfare Commission Wage Order. Securitas Security Services USA, Inc. v. Superior Court (Holland), No. B227950 (Cal. Ct. App. July 7, 2011). As fact questions existed whether the employees, in other circumstances, had performed split shift work, the Court remanded the case to the trial court.
Out of State Residents Subject To California Labor Law While Working In State
If a company sends its out-of-state employees to work on an assignment in California, do overtime provisions of the California Labor Code apply during the assignment? The answer, according to the California Supreme Court in a case captioned Sullivan v. Oracle Corp., is “yes.”
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."
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.
California Mandatory Sick Pay Legislation Returns
For several years now, members of the California legislature have proposed legislation which would mandate paid sick leave for private industry employers in California. The legislation is back in 2011, with a vengeance.
"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."
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.
Starbucks Dodges California “Reporting Time” Pay Claim
If you instruct an employee to report to work, only to promptly send him home, does the employee get paid? Yes, if he works in California. California wage and hour law contains a number of requirements not found in federal law or in other jurisdictions. One such requirement is the rule known as “reporting time pay.” California law requires employers to pay a minimum number of hours when an employee is called into work but is not put to work or is furnished fewer hours than scheduled. In a recent unpublished opinion titled Price v. Starbucks, a California appellate court examined this wage law.
Court of Appeal: Reporting Time Pay and Discharge
The Court of Appeal addressed California's "reporting time" pay requirement in the context of discharge.
Court of Appeal 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.
GETTING TO KNOW YOUR WAGE ORDER
In the Golden State, most private employers must grapple with no fewer than six major sources of wage and hour laws when one considers statutory, regulatory, and case law in both the state and federal systems. The state Industrial Welfare Commission Wage Orders are part of this web of wage and hour laws and rules.
California Wage/Hour Newsbreak -- Waiting-Time Penalties Not Recoverable Under Unfair Competition Law.
California employers may be subject to substantial "waiting-time" penalties for failing to pay an employee his or her final wages immediately upon separation. In an important opinion on November 18, 2010, the California Supreme Court held in Pineda v. Bank of America, N.A., that a single three-year statute of limitations period applies to all claims for waiting-time penalties under the California Labor Code. In its decision, the Pineda court rejected an employee's attempt to recover waiting-time penalties for the four-year limitations period applicable to California's unfair competition law (UCL).
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:
Wage and Hour Update: Employer Beats Hypertechnical Wage Statement Class Action
The California Labor Code is very specific about what information must be included on an employees wage statement (paystub). Employee-side attorneys often sue employers over technical violations. For example, an employer is required to list the total hours worked during the pay periodbut is it sufficient to list the total regular hours and the total overtime hours, or must the employer also list the total combined hours? Such issues are grist for the employment law litigation mill. A California court recently addressed this issue in a case titled Morgan v. United Retail.
Court Awards Attorney Fees To Prevailing Employer In Wage Claim Lawsuit.
Litigation can be a losing proposition even for employers with strong defenses, what with legal fees and other costs. Many employment laws entitle the winning employee to recover fees, but do not provide the same remedy for winning employers. But there are a few exceptions. A recent California appellate court case titled Kirby v. Immoos examined one such exception in the context of a Labor Code claim for wages.
Employer Beats Hypertechnical Wage Statement Class Action.
The California Labor Code is very specific about what information must be included on an employees wage statement (paystub). Employee-side attorneys often sue employers over technical violations. For example, an employer is required to list the total hours worked during the pay periodbut is it sufficient to list the total regular hours and the total overtime hours, or must the employer also list the total combined hours? Such issues are grist for the employment law litigation mill.
Court Awards Attorney Fees To Prevailing Employer In Wage Claim Lawsuit.
Litigation can be a losing proposition even for employers with strong defenses, what with legal fees and other costs. Many employment laws entitle the winning employee to recover fees, but do not provide the same remedy for winning employers. But there are a few exceptions. A recent California appellate court case titled Kirby v. Immoos examined one such exception in the context of a Labor Code claim for wages.
Dealing With The Labor Commissioner.
California wage/hour law is governed by the California Labor Code, the Industrial Welfare Commission's Wage Orders, and appellate or California Supreme Court decisions which interpret these laws. These laws are enforced by the California Labor Commissioner. Any employer doing business in California must be familiar with the Labor Commissioner's enforcement agency, the Division of Labor Standards Enforcement (DLSE). This article takes a closer look at an employer's dealings with the Labor Commissioner.
State Supreme Court Clarifies The Definition Of "Employ"
Recently the California Supreme Court held that third-party merchants were not "employers" as defined by the Industrial Welfare Commission, in part because they did not control the conditions of employment for the subject agricultural employees (strawberry pickers), i.e., did not hire them, fire them, or even have a right to tell them what to do or direct their work. The practical effect in this litigation was that the employees could not obtain unpaid wages from third-party merchants after the uncontested employer became insolvent. Martinez v. Combs.
RECENT DEVELOPMENTS FROM THE CALIFORNIA DIVISION OF LABOR STANDARDS ENFORCEMENT.
Although wage and hour litigation continues to keep California courts busy, employers receive much day-to-day guidance about administration of wage and hour issues not from court decisions, but from the Department of Labor Standards Enforcement (DLSE). This agency, part of the Department of Industrial Relations, enforces wage and hour requirements in the state. As part of this duty, the DLSE occasionally issues opinion letters interpreting provisions of California wage and hour law. These opinions are not binding on the courts, but are very instructive as to how the DLSE will rule on particular issues. In the past several months, the DLSE issued a number of important opinion letters, each of which is summarized below.
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.
CALIFORNIA SUPREME COURT OKS INCENTIVE PLAN FORFEITURE CLAUSES.
The concept behind incentive compensation is to motivate employee behavior, such as employee retention. Employers commonly design the incentive by providing that employees who quit or are fired for misconduct before an established date forfeit the incentive.
SUPREME COURT UPHOLDS INCENTIVE FORFEITURE.
When it comes to properly paying employees, California law presents a minefield for the unwary employer. For example, wages must be paid in cash or in a form negotiable and payable in cash (e.g.., by check), without discount, within a specified time period after they are earned. Employees who quit or are terminated typically must be paid their final wages on their last day of employment or significant penalties may accrue. Once earned, wages cannot be forfeited, and it is illegal for an employer to recoup or collect from employees any part of wages already paid. Private agreements circumventing these rules are strictly prohibited.
Recession Relief: Employers Allowed Salary Flexibility (pdf).
California labor commissioner approves temporary pay reduction for exempt workers.
California DLSE Approves Salary Reduction for Furloughed Exempt Workers.
With the economy in flux, businesses are looking for ways to reduce payroll without losing talent. Some companies have put their hourly workers on a work furlough by reducing the number of hours or days in a weekly schedule. But can the same be done for salaried exempt workers? Normally, salaries cannot be adjusted based on the number of hours worked in a workweek.
RECESSION RELIEF: CALIFORNIA LABOR COMMISSIONER APPROVES TEMPORARY SALARY REDUCTION WITH CUT IN HOURS FOR EXEMPT EMPLOYEES.
Here is some good news for California employers. The California Labor Commissioner has just published an August 19, 2009 Opinion Letter which provides employers with much needed relief during these difficult economic times.
TAKING MANAGEMENT PERSONALLY.
Managers generally may do their jobs without fear of personal liability for employees' claims under California law. But a recent Ninth Circuit decision is a reminder to managers that they may not be entirely immune to claims for unpaid wages.
VACATION AND LITIGATION
With summer in full swing, many employees are taking vacations with their families. Meanwhile, Human Resources managers are checking leave balances. As the Court of Appeal recently reiterated in the case of Owen v. Macys, the law does not require that an employer provide its employees with any paid vacation. Any right to vacation benefits must come from the employers 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.
How to Release Liability for Wage Claims in California.
When an employer pays money to an employee asserting a legal claim, it expects to receive a release of liability in exchange. A valid release for wage claims can be tricky in California because the Labor Code places limits on the right to release such claims. A recent case titled Watkins v. Wachovia Corporation illustrates that a valid release is possible only in the context of a bona fide dispute.
Company Sued By Its Temp Workers For Time Spent At Security Checkpoint.
A recent California federal district court ruling in a case titled Cervantes v. Celestica Corporation addresses two wage and hour issues: (1) Must employees be compensated for pre- and post-shift time spent waiting in line at a security checkpoint? (2) Under California and federal wage and hour law, may temporary workers sue their temp agency as well as the company to whom they are assigned?
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.
STATE BUDGET INCLUDES FAVORABLE CHANGES TO CALIFORNIAS ALTERNATIVE WORKWEEK LAW.
Something good for employers is buried in the text of the recently concluded California budget. The Legislature has given California employers greater flexibility in implementing and administering so-called "alternative workweek schedules." The new law, which goes into effect on May 21, 2009, amends the California Labor Code to add more flexible options to employers and employees alike. Here's a rundown of the key changes.
Wage & Hour Update Appellate Court Rules No Punitive Damages For California Wage & Hour Violations.
Violations of Californias wage and hour laws are costly. Aside from liability for unpaid wages, the Labor Code imposes cumulative penalties, interest and attorney fees. But what about punitive damages? Can a jury award Labor Code penalties plus punitive damages on top?
COST-SAVING MEASURES TO PRESERVE BUSINESSES AND JOBS: ALTERNATIVE WORKWEEKS.
Our economic recession has wrought hiring freezes, lay offs, business closures, etc. Both employers and employees are suffering. To keep afloat and perhaps avoid layoffs, employers are seeking creative ways to save money and conduct business more efficiently. One option is to reduce employer liability for payment of overtime. The adoption of an alternative workweek may be a means to accomplish this goal.
STARBUCKS PAYS OUT $3 MILLION TO SETTLE CLASS ACTION CLAIM OVER EMPLOYEE MILEAGE EXPENSES.
California's labor laws require employers to reimburse all employees for any personal expenses they may incur while rendering services for their employer. This includes automobile expenses if the employee is required to use their personal automobile while rendering services for the employer.
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.
Out of State Residents Subject To California Labor Law While Working In State.
If a company sends its out-of-state employees to work on an assignment in California, does the California Labor Code apply during the assignment? The answer, according to the federal Ninth Circuit in a case captioned Sullivan v. Oracle Corp., is yes.
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.
New Law Modifies Temporary Agency Employee Paydays; Companies Hiring Temps Should Confirm Compliance.
California law requires that all wages be paid twice during each calendar month, that wages be paid immediately upon discharge, and that wages be paid within 72 hours if an employee quits, with certain exceptions.
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.
DLSE OKs Payment Of Wages By Debit Cards And Money Checks
Californias labor enforcement agency, the DLSE, has approved the use of debit cards and money checks for payment of wages. The two methods work as follows....
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 States 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.
California and Federal Regulation of Summer Jobs for Teens
Summer is here (almost) and many teenagers will be hitting the workforce to earn a few extra dollars. California companies who hire teenagers should be aware that California and federal law restricts the use of minors or child labor.
Wage and Hour Update: Are You Personally Liable For Labor Code Violations? Appellate Court Limits Personal Liability.
A violation of the California Labor Code can be costly to a corporate employer. The risk of personal liability for owners, officers and managers of a corporation further raises the stakes.
Benefits Update: Will Sick Leave Become Mandatory In California?
Employers in California are not obligated to offer sick pay to employees. The benefit is entirely optionalfor now. Some politicians in Sacramento aim to make sick pay benefits mandatory.
California Legislature Introduces Bill Allowing Employers More Flexibility In Work Scheduling.
On February 20, 2008, the California Assembly introduced legislation aimed at allowing more flexibility in work scheduling. Assembly Bill 2127 would amend California Labor Code Section 511 to permit what is being called the Small Business Family Scheduling Option. If passed, this section would permit employers with 25 or fewer employees to approve the written request of an employee to work an alternative work schedule for no longer than 10 hours per day within a 40 hour workweek, without overtime compensation being incurred.
California Court of Appeal Expands the Administrative Exemption Under the New Wage Orders.
In a victory for California employers, a California Court of Appeal recently rejected the traditional administrative/production dichotomy test for an administrative exempt employee for certain business models. In Combs v. Skyriver Communications, Inc. (2/7/08), the Court of Appeal affirmed the trial courts decision dismissing the employees claims for overtime, unpaid meal period penalties and unpaid rest period penalties because the employee was properly classified as an administrative exempt employee. Importantly, the Court of Appeal relied heavily upon the recent changes to the Industrial Welfare Commissions Wage Order No. 4-2001 in determining that the employee was an administrative exempt employee and, therefore, not entitled to overtime, meal periods or rest periods.
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 employees pay statement. (This information must be provided separately for each pay period when the wages are paid by personal check or cash.)
High Court Wage Hour Case Rulings Hurtful to Employers (pdf).
California employers are beset with a confusing array of very technical wage hour obligations which must be followed to the letter. The stakes for non-compliance got even higher in 2007 as the California Supreme Court weighed in on a host of wage hour matters. This article discusses how four of these key rulings affect your business. Alternate Link To Article
California Supreme Court Holds that Employer May Satisfy Statutory Reimbursement Obligation By Paying Employees Enhanced Compensation.
The California Supreme Court recently held that an employer can meet its obligations to indemnify its employees for expenses by paying employees an enhanced compensation that takes the expenses into account. See Gattuso v. Harte-Hanks Shoppers, Inc. (11/5/07).
Deduction of Workers Compensation Costs In Calculating Profits for Profit-Based Incentive Plan Does Not Violate California Labor Code (scroll down).
In Prachasaisoradej v. Ralphs Grocery Co., the California Supreme Court ruled by a 4-3 vote that a profit sharing incentive plan based on a net profit calculation, which included deductions for workers compensation costs, cash and merchandise shortages and the costs of third party tort claims, did not violate Labor Code prohibitions against deducting such costs from employee wages.
Wage and Hour Laws Redux.
One thing is clear about California wage and hour laws: The rules governing law firms (and all businesses) in California are too numerous to be summarized in just one column. The first installment on this topic ran on July 27, 2007 and is available online at www.dailyjournal.com. In that piece, I discussed potential pitfalls, such as mis-classification of employees as independent contractors or "exempt" employees, minimum wage and overtime laws, independent contractor status, exemptions from overtime, payroll practices and deductions from paychecks. If those topics are not complex and confusing enough, there are many others applicable to California employees.
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.
Employer Who Loses on Wage Claim Appeal Must Pay Labor Commissioner's Attorneys' Fees.
The California Supreme Court has ruled that an employer who unsuccessfully appeals a Labor Commissioner wage decision must pay attorneys' fees to the Labor Commissioner. Lolley v. Campbell
