Su has been aggressively trying to bring that number down - a number, according to a 2010 UCLA study, estimated to be $26 million in lost wages each week affecting workers in Los Angeles County alone.
But it’s a tough go. And in spite of impressive California labor code victories during Su’s tenure, the majority of assessed penalties and wage claims are never paid by the perpetrators. According to the Los Angeles Times (6/27/13), a study undertaken by the National Employment Law Project and the UCLA Labor Center discovered the collection rate remains painfully low.
The report, covering a three-year period from 2008 to 2011 and entitled, “Hollow Victories: The Crisis in Collecting Unpaid Wages for California Workers,” found that only 17 percent of court-ordered claims for back pay and penalties under California labor employment law are ever collected. Even with signed judicial orders and settlement agreements in place, less than half of penalties and unpaid wages - $165 million out of $390 million so ordered - were ever successfully collected.
Su is aware of such lax compliance with California and labor law orders, and in June, issued citations against an LA-based garment manufacturer after it was discovered the company had changed its name to avoid paying previous citations assessed for non-compliance. The most recent citation, in response to the alleged attempt to avoid compliance with a previous California labor law violation, will cost the company $300,000 in new wage and hour violations.
But will they pay?
The Times article told the story of a worker who won a $20,000 California prevailing wage judgment against her employer in 2009. However, plaintiff Anita Herrera never had a chance to enjoy her windfall. Rather than pay the court-ordered judgment, Herrera’s former employer changed its name, acquired new business licenses and moved into new offices. “I feel very defrauded,” Herrera told the LA Times, in Spanish. “The company continues with its contracts and continues doing business.”
Beyond Labor Commissioner Su’s efforts to bring justice to bear against employers who skirt around court-ordered citations and penalties as mandated by California state labor laws, a new bill introduced to legislators in Sacramento would mandate the placement of wage liens against an employer’s property as a means to ensure that adequate assets are available to undertake payment of any settlement once a California labor law judgment is rendered. Dubbed the Fair Paycheck Act, AB 1164 is nonetheless getting a rough ride by business groups and lobbyists, and has stalled.
Assemblywoman Bonnie Lowenthal (D-Long Beach) vows to re-introduce the measure to state legislators next year.
Meanwhile, in addressing the issue of cited employers doing an end run around California labor law and court-mandated settlements and repayment orders, Su referenced her $300,000 order to the unnamed garment manufacturer. “This case demonstrates our commitment not just to addressing wage theft but also to cracking down on the shell games used to avoid detection,” said Labor Commissioner Julie Su.
In the meantime, disadvantaged workers must remain vigilant in holding their employers to account for violations to California prevailing wage law and other affronts to state employment statutes, knowing those charged with upholding labor laws will continue putting teeth into laws designed to hold employers accountable.
According to court documents, Reyna García’s job as general merchandising manager at an Albertson’s in California involved loading and unloading large quantities of merchandise and pushing or pulling heavy pallet jacks. The lawsuit alleges that because of a previous premature birth, García had a note from her doctor medically restricting her from lifting more than 15 pounds. This letter was reportedly given to her supervisor, as were two other doctor’s notes, written after she complained of increasing pain and discomfort, including nausea and pelvic pressure.
García alleges in her lawsuit that her supervisor refused to accommodate her requests for accommodation, a violation of California’s Fair Employment and Housing Act.
“Although Ms. García was concerned for her health and the health of her baby, she stayed on the job because she needed the income and because her health insurance was provided through Albertson’s,” the lawsuit alleges.
On November 12, 2012, García reportedly complained to her supervisor of pelvic pressure and asked to leave work but was denied. That evening, she was reportedly rushed to the hospital. Her baby stayed alive inside her until November 17, when the doctor informed her that the baby was brain damaged. That day, the baby girl was delivered. She survived only 10 minutes.
According to the lawsuit, however, García’s issues with work continued as she was allegedly retaliated against when she returned to work after her six weeks of recovery. The retaliation reportedly included “eliminating her supervisorial and merchandise ordering responsibilities and issuing her a baseless write-up for alleged insufficiencies in her job performance during a period when she wasn’t even at work due to prescheduled days off.”
The lawsuit claims the defendants - New Albertson’s Inc, SuperValu and García’s supervisors - violated California’s Fair Employment and Housing Act by not engaging in a good-faith process with García when she requested an accommodation based on disability and by retaliating against her for making a request for pregnancy-related leave. Under the California Government Code, García’s high-risk pregnancy was considered a disability and should have allowed for accommodations to be made at her employment.
García seeks compensatory, general and special damages in her lawsuit. The lawsuit is case number CV 130309, in the Superior Court of the State of California, County of San Luis Obispo.
A recent decision in New York is reminiscent of one in California from 2009. The lawsuit in New York involved Starbucks baristas, who alleged shift supervisors should not be eligible to participate in the tip pool because they are supervisors and make more than the baristas. According to NBC News (6/26/13), the New York Court of Appeals found that shift supervisors are eligible to share in the tip pool because their main duty is to serve food and drinks.
The court found, however, that assistant store managers should not be included in the tip pool because they have too many managerial duties, including hiring and firing, so they could not be classified as wait staff.
In 2008, Starbucks faced a similar lawsuit in California (Chau vs. Starbucks), with the Superior Court of the State of California finding that the coffee chain must pay its baristas $100 million to settle a lawsuit, arguing shift managers should not be part of the tip pool.
But in 2009, the California Court of Appeals in San Diego ruled that shift supervisors are eligible to share in the tip pool, reversing the lower court decision. The Los Angeles Times (6/3/09) reported at the time that the court found that shift supervisors performed the same tasks as baristas.
Under California state law, employers or agents of employers cannot receive any part of a tip left for an employee, with the legal definition of an employer or agent being someone who has the authority to supervise or direct workers. Baristas argued they should not share their tips with shift supervisors because they were managerial, but Starbucks said its shift supervisors spent up to 95 percent of their time making and taking coffee orders, essentially the same work that baristas perform. Furthermore, Starbucks argued that although shift supervisors had some supervision authority, they could not hire or discipline baristas, limiting their authority.
As with so many labor laws involving pay, the important thing is not the worker’s job title, but the actual duties the worker performs. So it is not enough to say that the employee is managerial. The duties the employee regularly performs must reflect that title for that employee to be exempt from overtime pay and tips.
Armen, a journeyman electrician who immigrated to the US from Armenia, was hired by a communications company that builds cell phone towers. The company’s policy included a 90-day trial period, and during that time, they promised Armen a foreman position once the training period was up.
Near the end of his training period, Armen was assigned to a crew and foreman that had an out-of-town job. Right away, the foreman- let’s call him Joe - and Armen clashed.
“Joe asked me if I had asked our mutual supervisor for a raise and I told him that I had,” says Armen. “Joe said, ‘I will give you a raise if you quit smoking. When you smoke on the job you are spending my time’. I told Joe that it wasn’t his position to give me a raise. He may have been kidding with me, but when we got to the job site, he called me a slave, in front of the other guys. I felt that I was being racially discriminated against. Some of the guys didn’t like the way I was being treated, but at the same time, they didn’t stand up for me. I think they were afraid of retaliation.”
(The reason Armen asked for a raise was because the same day he was hired, the company also hired an electrician without journeyman papers. Armen later found out that he was getting paid $18 per hour, which was $2 per hour more than Armen. When Armen asked his manager why he was paid less - as a journeyman he had a lot more responsibility - they said it was a mistake and they were going to fix it.)
“When we finished the job we had to drive to the hotel - the job was out of town so we were staying overnight,” Armen explains. “In the car I told Joe that he doesn’t have the right to call me a slave. I told him that I would report him to the office. He suddenly stopped the car, screamed and swore and kicked me out of the car, in the middle of nowhere. He said I have no right to tell him what to say or what to do. Then he said, ‘You came to the US, to my country as an immigrant and you have to do exactly what I tell you to do because you are working for me!’
“He drove away and I was left standing by the side of the road. The hotel was more than a 30-minute drive away and I had no idea where I was. Thankfully, the other crew (they were behind us in the second car) picked me up and we drove to the hotel together.
“Next day when we went back to the office I told my supervisor that I didn’t appreciate Joe’s racial slurs against me. My supervisor said he was going to investigate what happened. ‘Give me a week or two and I will do something about this guy - I will either reprimand him or fire him,’ he told me. So I waited, for three months.”
Armen was separated from that crew so he wouldn’t have to work with Joe anymore. Then he was made foreman.
“I had a crew of two guys that I supervised,” Armen explains. “I worked very well and had no problems with the company. My super and manager always had good things to say about me and a lot of guys said I was a hard worker - I liked this job. But some people don’t like me being the foreman because of my accent and my nationality. Joe wrote something detrimental about me and I believe it was because he doesn’t like me being in the same position as him. He worked 10 years for the company and I was his peer right away, soon after the training period.
“Then I got demoted from electrician to a helper and I didn’t get the raise I was promised. And here is another wrong thing: they constantly took two hours from my timesheet. For example, if I worked 14 hours in one day, they paid me for 12 hours. They did this every single day, and not only with me. I complained because I know this is illegal and they told me it is a company policy. Then I got fired, because I tried to stand up for my rights.”
Armen believes he was wrongfully terminated and if not for Joe’s racial slurs, he would still be employed. Racial discrimination is not tolerated under California labor laws and Armen is pursuing a discrimination lawsuit against Joe and the company.
Christopher believes, as evidenced by many people and even some attorneys online, that it boils down to that old adage - too many cooks spoil the broth. “Overtime for commercial drivers is regulated by the US Department of Transportation and the Federal Motor Carrier Safety Administration,” Christopher says, “and they dictate how long we can drive, including breaks and overtime. Add to the fray our employer’s rules and regulations and California labor law, because it seems like a lot depends upon individual and state contracts and it gets complicated.”
California labor law attorneys seem to agree on the fact that there is no definable answer to Christopher’s overtime question - and that the overtime laws for truckers can be complex, mainly because the Department of Transportation and the Department of Labor overlap and have different regulations. And Christopher doesn’t even know if he is exempt from overtime. Most truckers are paid by the mile, whereas Christopher is paid by the hour. Some commercial drivers are classified as independent contractors and others salaried. It gets complicated.
Christopher says he talked to his HR rep and she told him that no one gets paid overtime, even though some of the other drivers in the company drive out of state. Currently, Christopher drives only interstate, i.e., in California only (If you drive in “interstate commerce,” you are not entitled to overtime. If you do not, you can claim overtime pay), but Christopher says he is slated to drive out of state soon, adding another reason why he is entitled to overtime compensation.
Christopher’s truck is licensed at 45,000 lbs and he hauls mattresses for the factory that makes them. “I have been working here for 15 months and so far I have probably chalked up 200 hours of overtime,” he says. “I always work 10-12-hour days, and once or twice a week I drive about 14 hours a day.
“A typical day starts around 4 am when I arrive at the factory and pick up the 18-wheel truck. My first stop is anywhere from three to more than six hours away, and that is when I take my first break. All six of us drivers do this every day. Next up, it is a matter of where the next stop takes me. It can be anywhere from one hour or four hours away, and we have an average of eight or nine stops a day.”
When it comes to meal breaks, Christopher may have a claim. While truck driver exemptions apply to California labor law, they do not apply to California meal breaks, so truck drivers are usually entitled to a 30-minute meal break. As of April 2012, the California Supreme Court decided that employers are required to provide employees “off-duty” meal breaks. This section of the law applies to Christopher:
No employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes, except that when a work period of not more than six (6) hours will complete the day’s work the meal period may be waived by mutual consent of the employer and the employee. Unless the employee is relieved of all duty during a 30 minute meal period, the meal period shall be considered an “on duty” meal period and counted as time worked. An “on duty” meal period shall be permitted only when the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the parties an on-the-job paid meal period is agreed to. The written agreement shall state that the employee may, in writing, revoke the agreement at any time. California Code of Regulations, Title 8, §11040.
“I sometimes take lunch on the side of the road. I usually get something to go and eat lunch while I’m driving - multi-tasking saves me time - it means I will get home 30 minutes earlier. I get home exhausted. I’m 45 years old and this is affecting my health.
“I e-mailed the California labor board several months ago and never got a reply. I am frustrated - all I want is an answer besides that my question is complex, a gray area, yadda yadda. Why can’t we get an answer? I would appreciate anything at this point.”
“Failure to pay the proper prevailing wage is a form of wage theft,” said Labor Commissioner Su, in a statement.
Legal Monitor Worldwide (6/7/13) reported the California and labor law citations stemmed from work performed on four public works projects undertaken by the prime contractors and their subcontractors.
According to the report, Cyrcon Builders was hired to perform work on Gateways Hospital and Mental Health Center in Los Angeles. Cyrcon, in turn, subcontracted carpentry and masonry work to KAY General Services, d/b/a Rudy’s Construction. The latter was found by investigators to be in violation of California labor employment law due to wage violations, and Rudy’s was assessed $98,187 for unpaid wages, $24,075 in penalties and $2,307 in apprenticeship training funds.
In another example of a violation to California prevailing wage law, a subcontractor hired by Tutor Perini Corp. was cited for various violations in association with work performed on a newly built branch of the Orange County Public Library in Laguna Niguel. The subcontractor, Cal Framing, failed to pay prevailing wage and overtime to 25 workers and was assessed $117,837 in unpaid wages, $30,800 in penalties and $539 in contributions to a Department of Industrial Relations-approved training program for the California Apprenticeship Council.
Yet another contractor, Tidwell Concrete Construction, found itself facing the wrath of the California Labor Commissioner over work performed at the Miramar Library Learning Resource Center. Tidwell, originally hired for the new build by the San Diego Community College District, was found following an investigation to have violated California employee labor law through the failure to pay 16 workers the correct California prevailing wage, together with failure to make CAC training fund contributions. Tidwell was also found not to have hired the correct number of apprentices as required.
Tidwell was assessed $152,079 in unpaid wages, $100,950 in penalties, $7,926 in unpaid training fund contributions and $16,000 in apprenticeship fines, according to the report.
“We will crack down on not only the subcontractors who steal workers’ wages and fail to pay apprenticeship training contributions,” said Labor Commissioner Su, in a statement, “but also on the general contractors so we put proper incentives on them to deal only with honest, law-abiding businesses in California.”
According to various reports, one of the mandates behind the aggressive pursuit of wrongdoing by investigators with the Office of the California Labor Commissioner is to ensure honest businesses get a fair shake in the market, and don’t suffer loss of potential contracts to other bidders able to low-ball on a contract by not paying their workers, and committing other violations to California state labor laws. Also cited were Intermountain Electric of Denver and Campbell Certified Inc. of Oceanside.
At issue is an incident that happened almost a year ago. Valerie (not her real name) was injured on the job. She filed a workers’ compensation claim and took a few weeks off work. Her doctor said she could return to work on modified duty: she couldn’t lift anything more than 10 lbs. Then Valerie had a death in the family and requested time off to attend a memorial service for a family member. She got permission and decided to take three weeks total: two weeks vacation leave and one week family leave.
“On the day I was scheduled to return to work, I was terminated as soon as I walked in the door,” says Valerie. I couldn’t believe it - I had nothing negative in my personnel file. However, one of the board members had an issue with me from last March regarding the board fundraising and recruitment, which they insisted I did even though it was against the bylaws and articles of incorporation of the company. I believe they were just waiting for an opportunity to fire me and save money.”
Valerie was told some financial issues warranted her termination, but that took place two years ago and she was cleared of any wrongdoing. “They told me that because of my long service I had the opportunity to resign,” says Valerie. “I refused to resign because I haven’t done anything wrong.
“They told me that all my stuff was packed. I left my keys behind, made sure I had all my belongings and left. I was stunned. I literally bent over backwards for this agency and I have gone without pay. I was on salary and worked many hours without overtime compensation. I never even asked for overtime pay. They were short-staffed (that is how I sustained my injury - because maintenance wasn’t around to help me move furniture and boxes) so I did much more than my job description called for. I even cleaned toilets.
“I was devastated. I don’t even know where to begin regarding unemployment and filing a claim with the labor board. I am still fumbling my way around because this is something I never expected. I do know that if I were to resign I wouldn’t be entitled to unemployment.
“I believe they gave me the opportunity to resign so that they wouldn’t be held responsible for their actions, meaning wrongful termination. Knowing this board, they believe in what they think is right, and that is why they don’t fundraise. In the case of wrongful termination, they likely believe my workers’ compensation case has ended and therefore they have a right to fire me and not consider it retaliation.”
Although Valerie was able to return to work, she was still under her doctor’s care and was getting workers’ compensation for her injury. Her claim is still open. Her doctor’s “Return to Work Order” received by the board of directors before she took those three weeks off stipulates that Valerie would have to “stand at will” because she has a bulging disc, she cannot sit for long periods of time working on the computer, and she would have to take breaks throughout the day for the pain to subside.
At this point Valerie doesn’t know if she has a wrongful termination claim.
However, the California “at will” employment policy does not allow employee termination for filing a workers’ compensation claim; Retaliation; Disability; Time off for Family Leave and Medical Leave, among other reasons.
California Labor Code section 132a makes it a misdemeanor for an employer to discriminate in any way, including discharge or threat of discharge, against an employee who has filed or is thinking about filing a workers’ compensation claim, or an employee who has received a workers’ compensation award. The employee who has been discriminated against is entitled to a penalty (not to exceed $10,000), reinstatement, and reimbursement for lost wages and work benefits.
To that end, a California labor lawsuit has been filed. According to a release from PRWeb Newswire (5/29/13), Lyon Management Group Inc. - a property management enterprise - provides bonus pay and non-discretionary commissions to its workers based on their performance on the job in communities at which the individuals are based. However, according to the California labor lawsuit, the bonus and commissions are not factored in with their regular rate of pay when additional hours above an eight-hour day, or 40-hour week, are logged, for which overtime must be paid according to California labor code.
By not including the bonus pay and commissions, employees are being shortchanged, according to the California and labor law case, which has been filed as a pending class action.
According to the California labor lawsuit, filed May 8 in Orange County Superior Court, Lyon Management Group “failed and still fails to include the commission and bonus compensation as part of the employees’ regular rate of pay for purposes of calculating overtime pay.” Such failure, the complaint continues, “has resulted in a systematic underpayment of overtime compensation” to non-exempt, hourly employees.
According to California labor employment law, only employees working in certain positions, or those who work in management, can be classified as exempt from claiming overtime pay. A popular gambit amongst many employers is to misclassify their employees as exempt from claiming overtime in order to avoid paying same to deserving employees.
However, in this California employee labor law case, the defendant correctly pays its non-exempt employees overtime. The quarrel the plaintiff has with the firm is the alleged failure to include bonus pay and non-discretionary commission with regular pay, for the calculation of overtime. Employees, as such, would be in for a bigger pay packet were the defendant to include all pay - including bonus pay and commissions - prior to calculating overtime.
The California and labor law action alleges that wage statements issued to the plaintiff and other prospective members of the class violate California state labor laws and, specifically, California Labor Code Section 226(a).
The California labor lawsuit is Sullivan v. Lyon Management Group, Case No. 30-2013-00649432-CU-BT-CXC
Anthony, 20 years old, suffers from bi-polar disorder, but it didn’t interfere with his work as cook/dishwasher at a Mountain Mike Pizza franchise. In fact, nobody even knew about his condition (he had worked there for six months) and Anthony wasn’t required to divulge that information to his employer, unless he was asked.
“On my day off I had a nervous breakdown and had to be hospitalized overnight,” Anthony says. “Because I couldn’t go back to work the next day, my employer told me to get a doctor’s note, which said ‘Crestwood Psychiatric Clinic’ on the letterhead. I just missed one day of work and I was under the assumption that I would resume my usual work schedule. I worked the night shift, starting at 6 p.m. until midnight, five days a week.”
Despite Anthony’s positive work record, his boss (the franchise owner) fired him. Anthony has looked into the California labor code and believes he has been both wrongfully terminated and also discriminated against due to his disability.
“As soon as my boss knew that I suffer from bipolar, my hours were cut to zero, but she kept me on as an employee for more than a month,” Anthony explains. California is an “at will employment” state, but that is no excuse to lead Anthony on for that amount of time: It is unfair and illegal to discriminate, but it is downright mean to leave him hanging for more than a month without any income.
“When it was time to get the week’s schedule, she would call and say they didn’t need me,” says Anthony. “This is a fast food restaurant; there is no way over 30 days that you don’t need one of your cooks, or need the dishes washed. A co-worker told me that she had hired three new people during my absence.
“I finally sat down and talked to my boss. She said that I had threatened her, the company and an employee! I didn’t learn that I had threatened anyone until I had this conversation with her, which took place about three weeks after the hospital incident. She said this employee feared for her life, which was ridiculous. Fortunately, when I tried to talk to her, I had one of my co-workers, Christina, with me. ‘I have no idea what you are talking about because he would never threaten anyone,’ Christina told my boss. But she was still adamant that she had no hours for me.
“I explained to her that I really needed the hours, even though I was getting paid $8 per hour, which is exactly the minimum wage. I would take any shitty job she had, including standing outside waving the restaurant’s sign. She even denied me that. I could blow the whistle and report her to the health department if I wanted to be vindictive, but she will get her just desserts eventually and I don’t need to add to it.
“I contacted the California Labor Board because I am not the only one she is messing with. She has also discriminated against other employees; she has treated them wrongly. As for a California labor lawsuit, I don’t expect anything. I just want her to know, through the proper legal channels, that she can’t treat people this way. Given the economy and employers like her messing with you, it is extremely hard to find work.
“I recently found a better job and I am getting paid $9 per hour. And I told my new employer that I am bi-polar. He didn’t ask so I wasn’t obligated to tell him anything. But I explained the previous situation and he wants to give me a chance. ‘I have heart,’ he said.”
According to a release from the Office of the California Labor Commissioner (PR Newswire [5/7/13]), the penalties relate to various California prevailing wage and apprenticeship violations associated with three public works projects undertaken by the contractors involved.
Those contractors were identified as: B.A. Marble & Granite Inc., which performed work on the DeNeve Residence Halls project at the Westwood Campus of UCLA; Phoenix Floors, associated with work undertaken at the Learning Resource Center at Saddleback Community College in Orange County; and Johnson Business Holdings, doing business as Production Plumbing, which was hired for the Global Green Generational (G3) Charter School at the Vaughn Next Century Learning Center in Pacoima.
All three were hit with wage, training fund and penalty assessments under the California labor code, stemming from three separate investigations by Division of Labor Standards Enforcement. Total fines equated to about $1.8 million.
“Let these enforcement actions serve as notice that wage theft - whether it be through nonpayment of overtime, failure to pay proper prevailing wage, underreporting of hours worked, bounced checks used to pay working people, and cheating on apprenticeship training funds - will not be tolerated in this state,” said Labor Commissioner Julie A. Su, who has vigorously defended California labor employment law since assuming office.
Looking at specifics, Production Plumbing was found to have willfully misclassified nine workers in an attempt to pay a lower California prevailing wage. The plumber was also found to have issued NSF checks to employees, and under-reported hours of work.
Phoenix Floors was found to have falsified certified payroll records, which is an affront to California labor code. Following an investigation, it was revealed that Phoenix Floors established a scheme whereby a third party, an employee, was paid 90 percent of the invoice amount and used that money to pay out wages to 30 workers, who were subsequently paid far less than the prevailing wage for the project. Among other citations, Phoenix failed to pay overtime.
Of the three California labor employment law cases, B.A. Marble & Granite Inc. (B.A. Marble) came away with the biggest hit following an investigation through the Division of Labor Standards Enforcement, a division of the Department of Industrial Relations (DIR). According to the release, B.A. Marble was found to have failed to pay 55 employees proper wages under California state labor laws. B.A. Marble was also found to have falsified documents, intimidated their workers in an attempt to impede the investigation and failed to provide requested information.
B.A. Marble was a subcontractor brought into the UCLA project by primary contractor PCL Construction Services, Inc. Labor Commissioner Su ordered tile contractor B.A. Marble to pay $539,051 in wages, $4,693 in apprenticeship training funds and $652,600 in fines for the failure to pay 55 employees the proper wage.
“The Labor Commissioner has reinvigorated public works enforcement in the state,” said Christine Baker, director of the Department of Industrial Relations. Total fines and penalties in the California employee labor law case were $1,821,453.
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