Wage & Hour News
CSU Faculty Vote to Strike under California Labor Law
In a news release issued May 2, the California Faculty Association (CFA) noted their members have been in negotiations with CSU for the past two years, without success. The talks were at an impasse, and while small delegations representing both sides in the California labor employment law dispute met last week in an attempt to find some small patches of common ground, members of the CFA voted in April to authorize rolling strikes.
Were strikes to force a delay in the start of classes at all 23 campuses of CSU this September, some 400,000 students would be affected. It is not known if such a disruption in the school year would result in a California labor lawsuit on the part of disgruntled students or their parents.
"We have said all along that we do not want to strike, but we will if that is what is necessary," said CFA president Lillian Taiz, a history professor at Cal State Los Angeles, in comments contained in the release.
Under California labor employment law, there are various steps governing the process. Were the delegations to be unsuccessful in finding any common ground, the next step would be to bring in a neutral third party??"referred to by some as a mediator. Here, the issues would be reviewed with the third party making recommendations to both sides for settling the dispute.
A rejection of third-party recommendations by both sides would trigger the expiry of the current contract. According to the release, CSU would have the power under California state labor laws to impose its contractual demands and concessions on the members of the bargaining unit??"and the CFA would have the right to strike.
While such actions would be legal under California employee labor law, a full strike by CFA faculty would have a severe impact on students either beginning their university studies or continuing in an existing program. Depending on the duration of a possible work stoppage, the delay in the commencement of classes could threaten the academic year and impact timelines and opportunities for starting a career.
With the CFA bargaining unit authorizing rolling strikes, the entire CSU system would not be affected all at once. However, in the event of a contract expiry and having the right to strike under California state labor laws, there would be nothing stopping the CFA from amending that position in an effort to put increased pressure on the CSU.
Were that to happen, would a California labor lawsuit (or series of lawsuits) by disgruntled students or parents be far behind? Stay tuned.
Car Dealership's "RO System"—Violation of California Labor Law?
The dealership had this system in place when Percy was hired four years ago. He says it was a "new concept" and seemed to be OK at first. And he didn't have much choice??"in 2008, dealerships in California and nationwide were closing. Percy says about 500 mechanics found themselves unemployed when he was hired. "I was told to take it or leave it, so there was nothing I could do about it," he says.
"Everything was going well when we were busy; I was getting $32 an hour and worked 40 hours per week. But it went sideways when the economy slowed down, and to make it worse, we had a personnel change. Now I work 40 hours a week but get paid for about 18 hours."
Working as a mechanic under this RO system is like being paid for piece-work in the textile industry??"like getting a flat rate. Say a car comes into the shop (the dealership) for an oil change. The customer is told the job will take one hour but it takes the mechanic two hours. Or it may take the mechanic 30 minutes. Regardless, they will only get paid for one hour??"the time quoted by the service writer.
Needless to say, this system boosts profits for the owner, but it would seem to be a violation of the California labor code.
"We get weekly printouts, and if there are errors (and there usually are) that we don't catch, we don't get paid," says Percy. Let's go back to that oil change. Percy is supposed to get an hour's pay, but if the service writer inputs the repair order into the computer incorrectly and Percy doesn't catch the error, he is out of pocket.
"For instance, one hour has to be input as 1.0 hours," Percy explains, "but the service writer might type in '1.1' or '0' or he might even credit the work to another mechanic. The service writers are usually careless??"they aren't affected by their errors. So there is no incentive for them to be correct and some of them even treat this like a game, seeing if we can catch the error. This is so juvenile and this system is so frustrating…
"We have all talked to our employer but he just pleads ignorance and says this system is new and, as I said, we can 'take it or leave it.' Of course, we are taking it because the alternative is unemployment."
Percy adds that there are other problems that result from this system:
"A customer brought her car in and I worked on it," he explains. "Little did I know that she had made a deal with the service writer. She was quoted three hours of labor but she told the service writer that she was unemployed with a few kids and couldn't afford three hours of work. He felt sorry for her and only charged one hour; I was paid for one hour's work, meaning that I worked two hours for free. I was never consulted; the mechanics never have any say.
"As for breaks, with this flat rate system, do we take breaks on our own time, and is our employer supposed to pay us? Nobody seems to know, but if we are on the clock and take a break, we lose money.
"When I started working at this dealership, we were told there would be no overtime whatsoever, and if anyone works overtime, they will get written up. But we often work over eight hours off the clock because our manager insists. I believe that all these issues are California labor law violations."
The California labor law states that you must be paid for all time worked. An experienced wage and hour attorney can help Percy and others in similar situations.
California Labor Law Case Settled for $316,000
The release noted that the claims were filed against the Pho Clement and Pho Clement 2 restaurants in San Francisco. The Department of Industrial Relations' (DIR) Division of Labor Standards Enforcement, also known as the Labor Commissioner's Office, helped the parties come to an agreement following an investigation that started in June 2011.
"Regardless of the industry, employees should never feel like they have to fight to receive the full wages they are owed. In this instance, employees successfully stood up for wages taken by their employer that they were owed," Christine Baker, the director of DIR, said in a statement.
The release noted that the settlement that was reached requires that the employers pay each of the eight employees an amount that ranges from $17,432 to $85,114, depending on the amount of unpaid overtime wages that they were owed.
"While we are grateful that this process has come to an amicable conclusion, refusal to pay workers for all hours worked has no place in California. Overtime laws are on the books for a reason and the state will protect both employees and the honest employers who play by the rules," said Su.
The release noted that the collaborative effort between workers, legal and community advocates, and the state helped the employees receive the settlement that they deserved.
"The Asian Law Caucus, Chinese Progressive Association and the Progressive Workers Alliance assisted us in conducting the thorough investigation that led to our ability to get the wages owed into workers' pockets," said the labor commissioner.
According to the DIR website, the California Department of Industrial Relations' Division of Occupational Safety and Health (Cal/OSHA) also recently issued 28 citations with penalties that added up to $540,890 following its investigation of a recent explosion in Sylmar that injured three people, two of them critically.
US Appeals Court Revives Oracle California Labor Law Case
According to the news source, the court is basing its ruling on a state court decision that employers in California have to pay nonresident workers for overtime work performed within the state.
Reuters reported that the US Court of Appeals for the 9th Circuit reversed a federal district court ruling in favor of Oracle. Under the California wage and hour laws, the appellate court found, Oracle could be liable for unpaid wages if it did not compensate out-of-state computer trainers for overtime work they performed within the state.
Oracle employees who were residents of Arizona and Colorado had sued the company for not paying them overtime for work performed in California. The trial judge granted summary judgment in favor of Oracle, according to the news source.
As part of the appeal, the 9th Circuit asked the California Supreme Court to provide guidance as to whether the state's labor code applied to nonresident employees when they are performing work within the state.
According to the news source, the California high court ruled that it did apply, finding that not applying the state's law would be motivation for companies to substitute lower-paid temporary employees from other states.
"The 9th Circuit agreed with the Supreme Court's common sense analysis: If you're a business in California, you will have to comply with California's overtime laws. You can't treat people differently because they live in a different state," a lawyer for the employees told the news source.
The 9th Circuit sent the case back down to the district court for further proceedings following the judgment.
Business Insurance reported that this is the second time the 9th Circuit has ruled on the issue. A 2008 case was brought to the court regarding the same issue of out-of-state residents and California labor law.
Third-Party Walmart Warehouse Pay Lawsuit Apparently Not a New Problem
There is no signage on such warehouses, which are owned and operated by the logistics company under contract to Walmart, according to the writer. The workers, identified as mostly Latino, are not paid by Walmart but rather work for, and are compensated by, the warehouse owner. Investigators determined that workers were paid in piecemeal fashion according to the number of containers they moved, at rates of pay not articulated to the workers or reflected on paychecks.
The logistics company was subsequently fined just shy of $500,000 for various violations to California labor code, and six warehouse workers subsequently filed a lawsuit in federal court seeking back wages and other forms of compensation.
Other workers toiling for similar warehouses in California and Chicago have launched lawsuits claiming their pay does not reflect the hours worked or tasks performed. While promised a rate of pay higher than that of minimum wage, paychecks have failed to properly reflect all hours worked. The resulting shortfall in hours serves to begat an actual rate of pay that comes in lower than the minimum wage rate in Chicago or mandated under California and labor law.
Judging from previous press reports, this is far from a new problem…
It was two years ago this month that the Chicago Tribune published the comments of plaintiff Miguel Deniz, who had visited a Chicago church with 20 of his co-workers, looking for help.
"I worked 57 hours and I only got paid for 35," said the 62-year-old Deniz. "I think it's unjust that we're not getting paid complete hours and for overtime. We're being defrauded."
In early December of 2009, Deniz joined seven other workers in the filing of a class-action lawsuit against SelectRemedy, an independent contractor doing work for Walmart. SelectRemedy was named as the defendant, although Walmart wasn't mentioned. In a statement published December 11, 2009 in the Chicago Tribune, a spokesperson for Walmart indicated that the retailer tries to comply "with all labor laws and regulations.
"And we rely on our third-party vendors to do the same," said Walmart spokeswoman Michelle Bradford.
In California, US District Court Judge Christina Snyder was reported to have issued a preliminary injunction requiring agencies that hire temporary workers to alter their pay practices, in an attempt to persuade the agencies to better conform to California state labor laws. It was issued October 31 of this year.
Panera Bread Settles California Labor Law Dispute
The news source reports the class-action lawsuits were filed by former employees who claimed the cafe chain did not pay overtime or provide breaks to them at stores in California.
While Panera noted in the regulatory filing that it has set aside $5 million to settle the claims, the California Superior Court still needs to approve the settlement, according to the news provider. Additionally, Panera has reportedly denied any wrongdoing and did not make any admission of guilt in the proposed settlement, according to the filing.
The Dispatch reports that in the lawsuits, which were filed in 2009 and 2011 in the counties of Contra Costa and San Bernadino, former Panera employees accused the company of violating the California Labor Code.
In addition, the plaintiffs claimed Panera failed to provide meal and rest periods and "termination compensation," and violated California's Unfair Compensation Law.
Panera is not the only corporation to have been hit with allegations of labor violations recently, as California Labor Commissioner Julie A. Su recently issued additional citations totaling more than $600,000 against Premier Warehousing Ventures for issues uncovered during an inspection on October 12.
According to a release from the state's Department of Industrial Relations, the citation was the result of the company's alleged failure to provide proper wage statements for its workers. The Labor Commissioner also said the company failed to keep its payroll records in the state, which was another violation.
"We hope this citation sends a message to all employers in California that when the failure to keep and provide records as required by law is part of a concerted effort to deny workers their hard-earned wages, we will not tolerate it," Su said in a statement.
Some California Labor Law Applies to Nonresidents
Last month, a group of nonexempt employees traveled to Sacramento, where their HQ is based, from New York to work on a project that lasted about 45 days. They all worked long hours, typically 60 hours per week. The workers were familiar with the Supreme Court ruling last June because when they returned to New York, they indicated on their time sheets that overtime pay was due, as well as meal and rest breaks.
Just like those employees at Oracle Corporation, the new ruling applies to the New York workers - at least on the overtime issue. The Oracle employees sued the company (Sullivan v. Oracle Corp) for unpaid overtime wages under California's overtime and unfair competition laws. The Ninth US Circuit Court of Appeals (which covers California) asked that the California Supreme Court weigh in, and it found that out-of-state employees working in California for a California-based employer are entitled to the protections of California's overtime laws.
The court further wrote that "To exclude nonresidents from the overtime law's protections would tend to defeat public policy goals by encouraging employers to import unprotected workers from other states."
But the California court's decision didn't include meal and rest breaks, nor did it address other California labor laws pertaining to nonresident employees working in California under the same circumstances as residents. Furthermore, the court didn't rule on whether or not the California overtime law applies to nonresident employees who are working temporarily in California but their employer has headquarters in another state.
It is understandable that employers, and even out-of-state employees, may not understand the new nonresident ruling. And it is very likely that a number of lawsuits regarding nonresidents and California labor law issues will be forthcoming. Regardless, employers should expect to incur overtime costs when sending employees to work on a temporary basis in California. If not, they may be facing possible liability. And before sending employees to California, it might be a good idea to seek legal advice from an experienced California employment attorney.
California Labor Law: "I'm Stuck between a Rock and a Hard Place," Says Bus Driver
Michael drives the school bus three hours a day and performs maintenance work for the remaining five hours. He also gets paid a stipend as the school's volleyball, basketball and track coach. But for the past seven years he has also been driving students to and from sports tournaments, a job he should be getting paid for. Michael diligently records the hours he drives to the tournaments on his time card but he says that, instead of getting paid overtime, his hours are "whited out" before getting sent to the payroll department at the Department of Education.
"I know they are whiting out these hours on my time sheet because I looked before it got faxed to the payroll department, and I also have a photograph of it on my phone," Michael says. "When I told the superintendent that I have to be paid overtime for driving, he said that I couldn't get paid to drive and coach because that would be 'double-dipping.' But I didn't think that was true and now the Department of Labor confirmed that not paying me is a violation of the California labor code.
"I get paid a stipend for coaching and I'm fine with that. But I started driving kids to and from the tournaments when I started coaching so they owe me a substantial amount. Unfortunately I'm not in the union because three other classified employees are required to form a union. I called the union's headquarters, however, and asked them if I should be paid to drive. They said it is definitely illegal for them not to pay me.
"As for forging my time card, the California Labor Board said that is also absolutely illegal. But I'm afraid of retaliation: I need my job, so right now, I'm caught between a rock and a hard place??"I am the only breadwinner in the family; I take care of my wife, my mom and my mother-in-law; I even rented my house and moved in with my mother-in-law??"that's not easy.
"And here's yet another California labor law violation: The two people in the school's administration office are already mad at me because I told the auditors that I bought stuff with my own money and turned in the receipts but never got paid. For instance, I bought a lock, varnish and paint from the hardware store and never got reimbursed. Ever since the auditor brought this up with admin, they only talk to me when they have to. So it's got to the point where I feel like I'm working in a hostile environment. I just do my job and come home and try to ignore it.
"If I quit my job I won't be able to collect unemployment without good reason for leaving. If and when I get another job I wouldn't hesitate to leave. In the meantime, I would still like to pursue legally what can be done about getting compensated??"I want to know the process before going ahead. But at the same time I really don't want them to know…I believe getting an attorney rather than filing a claim with the Department of Labor will be my best recourse."
California Labor Law: Independent Contractor vs Employee Misclassification—Attorney Weighs In
If you are an employer and have misclassified your workers as independent contractors, you could owe the Internal Revenue Service a big chunk of change in employment taxes for your workers. "You may also be liable to the worker for reimbursement of business expenses, overtime pay, meal and rest period violations, and other damages and penalties," says Emma. Conversely, if you have a solid basis to classify workers as independent contractors, you can significantly decrease your overhead.
"In California, classification of workers as independent contractors or employees ultimately comes down to the degree of control exerted by the employer over the worker - the more control that an employer exerts, the more likely the worker is an employee," says Emma. So the more you are told what to do and how to do it, the more you resemble an employee. Emma also points out that a signed contract stating that the worker is an independent contractor does not determine the matter; "Courts look beyond the contract to the actual conduct of the parties."
In addition to "control," California Courts consider other factors in determining whether a worker is properly classified as an employee or independent contractor. The following factors, among others, suggest that you are an employee and not an independent contractor:
1. You perform work that comprises the core business of the employer and is not a distinct occupation or business from that of the employer. "For example, if you are a cab driver working at a taxi company, then your occupation is not distinct from that of the employer and actually comprises the core business of the employer. That suggests an employment relationship," says Emma.
2. The employer supplies the instrumentalities, tools and the place for you. "If you work from the employer's office and make use of the employer's computers, machinery and infrastructure, then you are more likely to be an employee," explains Emma.
3. You are not permitted to subcontract or hire employees of your own to complete the work. "If you are not permitted to outsource your work to others or employ helpers, then you may not be truly independent and may actually be an employee," notes Emma. "Similarly, if you have no opportunity to profit from effective management of your business, then you may not truly be operating an independent business and may actually be an employee."
4. You perform the same work as employees. "If you find yourself doing the same work as employees and reporting to the same managers as employees, then you are probably also an employee."
5. You work at-will, on a full-time basis, for an extended period of time. "Independent contractors are typically engaged by employers on a project-basis or for a limited period of time specified by contract. If you have been working full-time for months or years without any specified termination date, then you resemble an employee and may be misclassified," explains Emma.
6. You are paid the same amount on a regular interval without submitting invoices. Emma says that "Independent contractors typically bid on projects or specify an hourly rate and then submit invoices to the employer. Employees, on the other hand, simply show up to work and are paid for their time on a weekly or bi-weekly basis. If you are routinely paid the same amount without having to submit invoices and regardless of the project or work your are performing, then you are more likely to be an employee."
7. You work exclusively for one employer on a full-time basis. Emma explains that "Independent businesses typically provide services to multiple customers and clients at any given time. If you work exclusively for one employer on a full-time basis, this fact suggests an employment relationship."
The following factors that suggest you are an independent contractor:
1. Your work is distinct from that of the employer.
2. You supply the materials, tools and place to work.
3. You have invested in your own equipment.
4. You have employees.
5. Your work requires a special skill or license.
6. Your contract is on a project basis or for a limited time period.
7. You have other customers/clients.
8. You can increase or decrease your profits based on managerial decisions.
If you are classified as an independent contractor instead of an employee, you should consider whether the classification is in your best interest. "California is progressive and has many laws that protect employees that do not apply to independent contractors," says Emma. "These include minimum wage laws, overtime laws, meal and rest period laws and many others. Most workers are unaware of their rights in the workplace." By selecting a lawyer instead of representing yourself at a government agency hearing, the lawyer can investigate your situation and assert claims on your behalf that you are not aware of. A lawyer will also know how to maximize the value of your claims. "For example, you may believe that you are misclassified and owed $1,000 for missed meal breaks," explains Emma.
"However, if an attorney were to review your case, he or she might find additional claims that you are not aware of such as unpaid overtime claims, missed rest periods, claims against the employer for failing to reimburse you for business expenses, and various other penalties and damages. In this example, if you were to proceed on your own, the government would only consider what you originally claimed (i.e., that $1,000) and nothing more." Most employment attorneys take cases on a contingency basis. "If you think you may be misclassified as an independent contractor, consult with a lawyer and find out where you stand," says Emma.
More about independent contractor misclassification from attorney Leonard Emma of Law Office of Randall Crane next week - stay tuned!
Summertime and Many Unpaid Interns Misclassified, according to the California Labor Law
Contrary to what some employers believe, an internship does not mean free labor; many people are exploited and misclassified, and therefore owed wages and possibly overtime pay.
Brittany wants to become a dog groomer. She couldn't afford to attend school so she searched Craigslist and accepted on-the-job training at a "doggie daycare" with a promise that she would learn the trade within a few months. Instead, she spends most of the day "cleaning up the premises, feeding the dogs and getting coffee for the owner." According to California labor law, if you are an unpaid intern, no work can be performed that is of any benefit at all to the company.
In other words, Brittany should only be grooming dogs. No coffee runs, no mopping the floor. Brittany must be paid at least minimum wage, California overtime (any time over 8 hours in a day and 40 in a week) as well as meal and rest breaks if her employer hasn't met the Department of Labor's (DOL's) six criteria, as follows:
• The training, even though it includes actual operation of the employer's facilities, is similar to that which would be given in a vocational school.
• The training is for the benefit of the trainees or students.
• The trainees or students do not displace regular employees, but work under their close observation.
• The employer derives no immediate advantage from the activities of the trainees or students, and, on occasion, the employer's operations actually may be impeded.
• The trainees or students are not necessarily entitled to a job at the conclusion of the training period.
• The employer and the trainees or students understand that the latter are not entitled to wages for the time spent in training.
Clearly, Brittany's employer is deriving "immediate advantage from the activities of the trainee(s)." In the US, internships are illegal in the "for profit" sector if the intern isn't there strictly to learn. Recently, an Oregon jury awarded two men who installed solar panels for their "internship" $3,350 each in pay, determining they were actually working rather than learning. And California isn't far behind: California labor law officials are now issuing warnings to companies with internship programs.
According to a 2008 survey by the National Association of Colleges and Employers, 50 percent of graduating students had participated in internships. And in 2010, Stanford University's job board had 643 unpaid internships posted by employers, which was more than triple that of two years ago. In 1992, however, a Northwestern University study reported 17 percent had interned. Possibly because of the recession??"employers are trying to keep costs down and jobs are scarce??"unpaid internships would appear to be on the upswing.
Unfortunately, many unpaid interns are not reporting this abuse; they are afraid of retaliation and possibly not getting the job they are promised. But retaliation is also a violation of the California labor code??"ask an experienced California labor law attorney.
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