Articles Discussing California Wage & Hour Laws.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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