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Archive for wage and hour

NEW YEAR USHERS IN NEW EMPLOYMENT LAWS IN CALIFORNIA

Another year, another dozen or so new laws for California employers and employees to brush up on. (It’s the most wonderful time of the year.) Here are my top three:

1. Paid Sick Leave Posting and Notice Requirements

While California’s new paid sick leave law does not go into effect until July 1, 2015, employers are required to provide notice of employees’ paid sick leave rights beginning January 1, 2015. Employers must post notice of these rights where employees can easily read it in the same manner as they do (or should do) with respect to their employees’ minimum wage, overtime, and worker’s compensation rights. Further, employers must provide newly-hired non-exempt employees with notice of their paid sick leave benefits pursuant to the Wage Theft Prevention Act Notice (Labor Code section 2810.5), or “WTPAN,” as it is referred to by . . . absolutely no one.

2. Protection for Unpaid Interns and Volunteers Under FEHA

Assembly Bill 1443 closes a pretty egregious loophole exempting unpaid interns and volunteers from the discrimination, harassment and retaliation protections of the California Fair Employment and Housing Act. AB 1443 extends such rights to unpaid interns and volunteers.

3. Extended Statute of Limitations on Liquidated Damages for Minimum Wage Violations

Assembly Bill 2074 clarifies that the statute of limitations for liquidated damages stemming from minimum wages violations under California Labor Code sections 1197.1 and 1194.2 is the same as the underlying minimum wage violations themselves, three years. Previous case law had suggested that these liquidated damages were penalties and thus subject to a one-year statute of limitations.

Please contact the Leichter Law Firm, APC located in Los Angeles, California to learn more about your legal rights in the workplace.

CA Appellate Court Admonishes Trial Judges to “Stay Classy” in Certifying Wage and Hour Claims

In Martinez v. Joe’s Crab Shack Holdings (Nov. 10, 2014), the Court of Appeal for the Second District of California reinforced the importance of the class action as a preferred means of adjudicating wage and hour cases. “Litigation by class action has long been recognized as a superior method of resolving wage and hour claims in California, including those seeking redress for unpaid overtime wages.”

In September of 2007, Roberto Martinez filed a class action seeking to represent a class of salaried managerial employees who worked at different Joe’s Crab Shack (JCS) restaurants in California and had been misclassified as exempt employees and denied overtime compensation. In June 2011, Martinez and other former managers moved for certification of a class consisting of “[a]ll persons employed by Defendants in California as a salaried restaurant employee in a [JCS] restaurant at any time since September 7, 2003.”

The plaintiffs presented training and operation manuals demonstrating JCS’ uniform hiring and training practices throughout its stores. Specifically, the operations manual applied to all restaurants and every employee; each restaurant offered the same menu; and all managerial employees were evaluated using the same form and procedure. Plaintiffs also introduced declarations from twenty two (22) current and former salaried, managerial employees who (1) claimed they routinely worked more than the 50-55 hours they were told they would be working and (2) estimated performing hourly employee tasks between 50 percent to 95 percent of the time. Under the executive employee exemption to overtime compensation, an exempt employee must spend at least half of his or her time performing managerial functions.

Though the Appellate Court acknowledged obstacles in certifying certain cases, it ultimately reversed the trial court’s order denying class action status: “[W]e understand from Brinker, Duran and Ayala that classwide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof. By refocusing its analysis . . . the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs’ overtime claim.”

Amen.

Minimum Wages Make Waves in Midterm Elections

As reported in the Wall Street Journal, voters in four states on Tuesday approved ballot measures to increase the minimum wages paid to the lowest earning workers in Alaska, Arkansas, Nebraska, and South Dakota. Illinois also approved a symbolic, non-binding measure which will have no effect on the current law.

In San Francisco, a ballot measure to raise the minimum wage from $10.74 per hour to  $15 in 2018 also passed. The minimum wage in California is currently $9.00 and will increase to $10 by 2016.

 

New Legislation Sure to Sicken California Employers

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Supporters are calling it “historic” and a shot in the arm to working class Americans. Critics contend it’s a job killer. Me? Just one more thing I can blog about.

On September 10, 2014, Governor Jerry Brown signed the Healthy Workplaces, Healthy Families Act of 2014 (Assembly Bill 1522), making California the second state in our great union (damn you, Connecticut!) to provide paid sick leave to employees. Under the legislation, which will take effect on July 1, 2015, employees will earn a minimum of one hour of paid sick leave for every 30 hours of work.

Before all you California employers start making plans to relocate to Mexico, the law is not as economically crushing as it appears. The HWHFA (seriously, no one could think of an act name with a better acronym?) authorizes employers to limit an employee’s use of paid sick days to 24 hours or 3 days in each year of employment. And the employee’s right to use accrued sick days does not begin until the 90th day of employment. See? Not so bad, right? You can live with that. Just be sure to satisfy the posting, notice and recordkeeping requirements. And make sure not to retaliate against any employee who requests paid sick days—that’ll get you into trouble.

 

Cochran: Employers Can’t Piggyback On Employees’ Unlimited Cell Phone Plans

The great philosopher and poet Alanis Morisette once defined irony as “a free ride when you’ve already paid.” In Cochran v. Schwan’s Home Service, Inc. ___ Cal.App.4th ___ (August 12, 2014), the California Court of Appeal for the Second Appellate District addressed whether an employer is allowed a free ride on unlimited cell phones plans for which its employees already paid. Ironic, huh? No? What exactly is irony anyway?

Plaintiff Colin Cochran filed a putative class action against Defendant Schwan’s Home Service, Inc. (“Home Service”) on behalf of service managers who were not reimbursed for expenses pertaining to the work-related use of their cell phones. Under California Labor Code section 2802, an employer is required to indemnify an employee “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.” The purpose of the statute, as reflected in the legislative history, is to prevent employers from passing their operating expenses on to employees.

Home Service argued that it should not have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone where the employee would have had the same expense whether or not it was used for business purposes. The Court disagreed, holding that reimbursement is always required: “Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee. Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill.”

Now about that irony…

Time Warner Cable Gets Served by California Supreme Court in Peabody

Chalk one up for the little guy. In Peabody v. Time Warner Cable, Inc. _____ Cal.4th ___ (July 14, 2014), the Supreme Court of California directly addressed “whether an employer may attribute commission wages paid in one pay period to other pay periods in order to satisfy California’s compensation requirements.” (Spoiler alert: the answer is no.)

Between July 2008 and May 2009, Plaintiff Susan Peabody (“Ms. Peabody”) was a commissioned account executive for Time Warner Cable (“Time Warner”) selling advertising on Time Warner’s television channels. Ms. Peabody regularly worked 45-hour weeks for which she was never paid overtime. Excluding commissions, she earned less than the minimum wage during weeks in which she worked more than 48 hours. As a result of Time Warner’s implementation of a new compensation plan in March 2009, she was not paid all commissions owed on her January and February 2009 sales and thus did not meet the pay requirements for a “commissioned employee” exemption during these periods.

Time Warner argued that it should be able to allocate Ms. Peabody’s commissions over the course of a month. (Side note: Isn’t that just so classically Time Warner Cable? “Please be prepared to have your commissions allocated between the days of the 1st and the 31st of this month.”). The Supreme Court did not buy this argument, citing California Labor Code section 204(a)’s clear directives that all wages, including commissions, must be paid “no less frequently than semimonthly.”

Alternatively, Time Warner argued that it should be able to allocate employee commissions according to the pay periods in which the commissions were earned not paid. The Supreme Court rejected this argument as well, choosing to narrowly construe the commission exemption language against the employer in order to protect the employee.

Now if only they would do something about those appointment schedules.

The entire opinion can be found here:

Von Nothdurft Decision a Game Changer for California Resident Managers

Residential apartment managers in California just can’t seem to catch a break. As licensees, they are not afforded the broad legal protections of tenants living at the same property. They are required to be on call 24/7 but are only entitled to compensation for actual hours worked. And they often work far more hours than they are paid for but lack the documentation to prove it.

Until recently, Industrial Wage Order No. 5-2001 (“IWO 5-2001), which regulates the wages, hours, and working conditions of resident managers, was their one saving grace. Under Section 10(C) of the order, an employer cannot credit the value of a resident manager’s apartment “against the minimum wage without a voluntary written agreement between the employer and the employee.”

On June 26, 2014, however, the California Court of Appeal in Von Nothdurft v. Steck, ___ Cal.App.4th ___, significantly weakened this protection. Von Nothdurft is the first state court case certified for publication that addresses what language needs to be included to qualify as a “voluntary written agreement” under IWO 5-2001. The court’s ruling? Far less than previously thought and less than the plain language of the order seems to require.

In Von Nothdurft, Plaintiff Brenda Leigh Von Nothdurft (“Ms. Von Nothdurft”), an apartment manager for a property owned by Defendant John Steck (“Mr. Steck”), signed a management agreement stating her compensation would include “free rent for her apartment.” At the time of the agreement, neither Ms. Von Nothdurft nor Mr. Steck was aware of the requirements of IWO 5-2001.

Ms. Von Nothdurft argued the agreement did not satisfy the requirements of IWO 5-2001 because it did not reference the minimum wage or any apartment rent credit. This interpretation of “voluntary written agreement” was adopted by the Department of Labor Standards and Enforcement (2002 Update of the DLSE Enforcement Policies and Interpretations Manual, at § 45.4.5) and a California federal district court in Brock v. Carrion, Ltd. (E.D. Cal. 2004) 332 F.Supp.2d 1320, 1330 (2004).

The Van Nothdurft court didn’t buy it:

Wage Order 5 does not define the phrase “voluntary written agreement” as used in subdivision 10(C) or otherwise specify that any particular terms must be included in such an agreement to permit a valid lodging credit – it requires only a “voluntary written agreement between the employer and the employee” without qualification. Under its plain terms, no express reference to a credit toward minimum wage, statement that the employee is entitled to minimum wage for every hour worked, or the precise amount to be credited, need be included as long as the parties understand and agree – as they did here by entering into the management agreement – that lodging is to be credited toward the employee’s compensation. Since the wage order’s language is clear, we apply it without further interpretation.

Interestingly, the court in Brock read the same “plain” language to reach the opposite conclusion: “Consistent with the statutory language, the DLSE requires that the written agreement explicitly reference that such credits are being applied toward the minimum wage obligation of the employer.” Brock v. Carrion, Ltd. (2004) 332 F. Supp. 2d 1320, 1330.

The interpretation adopted by the DLSE and the Brock court is the far more sensible one. Under IWO 5-2001, a voluntary written agreement is a condition precedent to validly crediting the employee’s lodging against the minimum wage (“…lodging may not be credited against the minimum wage without…”). This language clearly implies that the agreement must in some way relate to the employer’s minimum wage obligation.

Under Von Nothdurft, an agreement between employer and employee having nothing to do with the employment relationship would qualify as a “voluntary written agreement” as long as it was in writing and signed by the parties. The holding defies common sense and undermines the very purpose of the wage order—to inform the resident employee of her rights under the Labor Code and to protect those rights.