Articles Discussing California Wage & Hour Laws.

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

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

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

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.

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.

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.

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.

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

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

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

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

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.

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

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.