Wages & Breaks
The California Labor Code provides perhaps more protections for employees than any other state or federal statute as it relates to wages, rest and meal periods, wage statements and other workplace conditions. While the federal FLSA covers California employees as well, the California Labor Code, which is almost always more protective, will be applicable to most California non-governmental employees.
The rights of employees under the Labor Code is generally known as Wage and Hour Law. While there are way too many statutory protections under the Labor Code to outline here, the following is just a summary of some of the more prevalent wage and hour issues that arise in today’s workplaces.
Misclassification of Employees as Independent Contractors
It is quite common for employers to attempt to avoid the costs and administrative burden of employees by instead hiring people to work for them as independent contractors. Many times the employer and the employee agree to this arrangement. However, the law looks past any such agreement and independently determines if the reality of the situation is that the worker is really an employee and not an independent contractor.
The California Supreme Court modified and simplified the old “economic realities test” that had been created by case law years ago, and established the new “ABC test” as the analysis to use to determine if a worker is an employee or independent contractor. The Court explained that the Wage Order’s “suffer or permit to work” definition must be interpreted broadly to provide protection to all workers who would ordinarily be viewed as working in a business, but it should not include the type of individual workers, like independent plumbers or electricians, who have traditionally been viewed as genuine independent contractors who are working only in their own independent business. Under the “ABC test,” workers are presumed to be employees included within the Wage Order’s coverage unless the hiring entity demonstrates each of the following three factors: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
This standard adopted by the California Supreme Court on April 30, 2018, makes it far more difficult for an employer to identify a worker as an independent contractor.
If you have been working as an independent contractor where you are actually an employee, you have likely lost out on several important benefits, including workers compensation coverage and contributions to Social Security, Unemployment Insurance, and State Disability on your behalf. Furthermore, if you would have been a non-exempt employee, you have likely not been provided with other important protections built into the Labor Code, such as minimum wage and overtime payments, proper meal and rest periods and proper wage statements.
Proving the misclassification of an employee as an independent contractor, and determining the extent of the financial losses you may have incurred as a result of that situation, is not easy to handle yourself. Therefore if you think you have been misclassified as an independent contractor the prudent move is to immediately consult with an experienced employment law attorney, like those at Pedersen Law, to determine your rights and the proper course of action.
Misclassification of Non-Exempt Employees as Exempt
Another common violation of the Labor Code comes from employers who classify non-exempt employees as exempt to avoid paying them overtime, or minimum wage or providing them with proper meal or rest periods.
To classify someone as an exempt employee in California, the employer must establish two distinct tests are met related to that employee – the wage test and the duties test.
The wage test requires the employer to pay the employee at least double the then existing minimum wage for the jurisdiction where the employee works. The double the minimum wage rule is determined by taking the weekly salary paid to the employee and dividing it by 40, regardless of the actual number of hours the employee is being asked to work. If the resultant number is less than the present minimum wage for the employee’s jurisdiction, the wage test fails. Regardless of the duties of the employee, if the employer fails to pay at least double the minimum wage, the employee cannot be considered exempt.
The duties test requires the employer to establish that the majority of the time the employee is working, he or she is performing duties that fall into the categories of administrative, executive or professional, as those terms are defined in the IWC Wage Order for their particular industry.
This analysis is often complicated and is almost always dependent on the specific facts of your situation. Whether you have been substantially damaged by the misclassification is also not clear. Therefore, if you believe you have been improperly classified as a salaried, exempt employee, it is very important that you seek out the assistance of an experienced employment law attorney like those at Pedersen Law.
Minimum Wage Violations
All non-exempt employees are entitled to be paid a minimum wage. Until the last few years, the minimum wage was a single hourly rate set by the State of California and was applicable to practically all private employers. However, recent trends are that local governments are getting involved in the minimum wages to be paid employees within their jurisdiction, and California law has also made, at least for the time being, two different rates depending on the size of the employer. Additionally, there are several exceptions to the minimum wage laws for specific types of industries and specific types of workers. Therefore, determining what minimum wage applies to you is a somewhat complicated analysis that must consider many factors. If you believe you are not being paid what you understand the minimum wage is in your community, it would be prudent for you to discuss it with an experienced employment law attorney, such as those at Pedersen Law, to determine your rights.
If your employer is not paying you the legal minimum wage, you can bring either an administrative wage claim or a lawsuit to seek the money you should have been paid.
When an exempt employee works a great deal of hours, there is no right to overtime. Exempt employees agree to work as many hours as it takes to get the job done for the salary they have been promised. However, non-exempt employees must be paid overtime when they work excessive hours.
A non-exempt employee is entitled to time-and-a-half overtime pay whenever they work more than 8 hours in a workday, or more than 40 hours in a workweek, or for the first 8 hours they work on the seventh consecutive day of a workweek. Those same employees get double-time overtime whenever they work more than 12 hours in a workday, or any time they work after the first 8 hours of the seventh consecutive day of the workweek.
A common misunderstanding is that overtime is calculated based on number of hours worked in a shift. Not so. It is possible to work a 16-hour shift and not be entitled to overtime. That is because overtime is determined based on the number of hours in a workday, or a workweek.
A workday is a designated 24 hour period of time. The default workday is midnight to midnight, but the employer can designate another 24 hour period of time. A workweek is a designated 7 day period of time. The default workweek is Monday through Sunday, but, again, the employer can designate another 7 day period of time.
Several legal issues arise related to the proper payment of overtime. Many times we see employers paying out cash at straight time or doing other things to avoid the proper payment of the overtime rates. If you are not being paid properly for your overtime work, it is important that you consult with an experienced employment law attorney like those at Pedersen Law to know your rights and consider your options.
Failure to Provide Non-Exempt Employees with a Reasonable Opportunity to Take Proper Meal Periods
One of the most prevalent violations of the Labor Code in California is the private employer’s failure to properly provide employees with proper meal and rest periods. Regarding meal periods, the law requires the employer of a non-exempt employee to provide a reasonable opportunity to take a 30-minute off-the-clock, duty-free and uninterrupted meal period whenever the employee works more than 5 hours in a shift, and a second such meal period if the employee works more than 10 hours in the same shift. California Supreme Court case law has made clear that the employer is not required to make the employee take the meal period, but the employer can do nothing to discourage the taking of the meal period either. If the employer creates a press-of-business or other impediments to the taking of the meal period, it is deemed to have not provided a reasonable opportunity to provide the required meal period.
The law allows the employer and employee to agree to waive the meal period requirements in only two very narrow exceptions: where the shift ends before the beginning of the 6th hour, or where the first meal period was provided the second meal period can be waived. The meal waiver must be truly voluntary to be effective. A meal waiver that is provided to the employee as a required document to be signed, is not a voluntary meal waiver.
Where is it determined that the employer has failed to provide a reasonable opportunity to take a proper meal period, a wage penalty is awardable to the employee in the amount of one hour of pay for each shift where the meal period was denied.
Failure to Provide Non-Exempt Employees with a Reasonable Opportunity to Take Proper Rest Periods
A California non-government employer is required to give its non-exempt employees a reasonable opportunity to take a ten-minute, on-the-clock, uninterrupted and duty-free rest period every four hours (or substantial portion thereof) the employee works. The right to a rest period is not affected by meal periods. An employee who works an 8 hour day should be provided with the opportunity to take two rest periods and a meal period.
Just like with meal periods, the employer is not required to force the worker to take the rest period, but the employer is not allowed to do anything to discourage taking the break either. Failing to relieve the worker from their duties or placing other difficulties before the employee can be considered a failure to provide the legally-mandated rest period.
Similar to meal periods, a failure to provide a reasonable opportunity to take at least one of the required rest periods in a shift can result in the employee being entitled to a wage penalty of one hour for every day a rest period is denied.
It is important that the employee do what he or she can to keep track of the days meal and rest periods are denied, and the circumstances of each denial. Keeping a personal log of hours and rest periods would be prudent. Proving these denials can be difficult. For that reason, you will likely need the assistance of an experienced employment law attorney like those at Pedersen Law to hold the employer accountable for these violations.
Other Labor Code Violations
Often when an employer violates one of the above-discussed laws, there are other violations taking place. There are literally dozens of rules the employer must follow to be in compliance with California law. Among the other Labor Code provisions that might apply to you are the following:
- Failure to provide legally-compliant wage statements along with your pay checks
- Failure to provide reasonable and proper seating in the workplace
- Failure to keep accurate employment records
- Improper denial of access to you of your employment records, including your employee file, your pay records and documents you signed that are in the employer’s possession
- Rules prohibiting you from talking about your pay with other employees
Alternative Methods of Enforcing Labor Code Violations
An employee faced with violations of the Labor Code has options about how to address that wrong.
One approach is for the employee to file an administrative wage claim with the California Division of Labor Standards Enforcement, also called the Labor Commissioner’s Office or the Labor Board. This administrative agency allows employees to file complaints at no charge, and the agency will assist the employee in addressing the issue. An employee is not required to have an attorney through this process. The agency will often try to settle the matter, but if either party is unwilling to settle, the agency will set a hearing and the employee and the employer will present their case to an administrative law judge who will decide who wins. If the employee wins, the DLSE has certain limited powers to assist an employee with collection of the award.
The other approach is for the employee to file a lawsuit in court. While an attorney is not required through this approach, it is highly recommended, as the litigation process can be fraught with legal minefields for the inexperienced litigant. However having an attorney fight the battle for you significantly reduces the stress of proceeding, and measurably increases the likelihood not only that you would prevail, but also that the amount awarded will be substantially higher.
There are pros and cons to each of these approaches. Because of that, it would be prudent that you locate and consult with an experienced employment law attorney like those at Pedersen Law to learn about your rights and figure out which approach is better for your particular situation.
The Right to Recover Attorney Fees in an Action to Enforce Labor Code Rights
If you do choose to proceed with some form of legal action against your employer arising out of a violation of the Labor Code, it is important to know that in a lawsuit brought by you related to most of the above-identified violations, you have the right to ask the judge to make the employer pay for your attorney fees. The law created this right to assure those who cannot afford to pay an attorney can still stand up for their rights under the Labor Code. Most often attorneys will take these kinds of cases on a contingency fee basis, meaning you pay nothing unless and until there is a paid judgment or settlement. And where the judge awards you attorney fees in addition to your wages or wage penalties, you can recover much more of what was taken from you by your employer.
The Private Attorney General Act and Class Actions
Wage and hour litigation will sometimes include use of the Private Attorney General Act or class action procedures to address wrongs done to many employees by the same employer. If the wrongs done to you are also being visited upon fellow employees, it is important that you explore with your attorney the pros and cons of each of these forms of collective actions.
The Private Attorney General Act, also known as PAGA, was enacted to address employers who were treating groups of employees unlawfully. The statute essentially deputizes a single employee who has been subjected to a violation of the Labor Code to stand in the shoes of the Labor Commissioner and seek penalties for various violations of the Labor Code that were done to other employees. When that employee proves violations done to a group of employees, the court awards penalties, per pay period, per employee. 75% of those awarded penalties are then given to the State, while the aggrieved employees get the other 25%. A PAGA claim can be made regardless of how many or how few employees have been subject to the Labor Code violation(s).
Class actions are often used when there are a large number of employees affected by an unlawful Labor Code practice. Generally, class actions are not available when the number of employees are relatively small (like less than 35 employees, give or take) or where the violations of law are somewhat unique to many different employees. However, where there is a common unlawful practice and many employees involved, a class action is one way to address the violations collectively.
Both PAGA and class action litigations are highly complicated, and involve procedures that can be more time consuming and difficult than non-PAGA and non-class action claims. Therefore it is very important that you become fully aware of all of the pros and cons of each of these claims before you agree to become involved in them. To do that you will need sound counsel and advice from an experienced employment law attorney like those at Pedersen Law.
If you’ve faced discrimination, harassment, wrongful termination, wages and breaks violations, retaliation, or medical leave violations in Orange County, Los Angeles County, Riverside County, or San Bernardino County, contact our experienced team at Pedersen Law today.