Apparel Company to Pay Thousands for California Labor Law Violations

Orange County, CA An Orange County apparel company has been ordered to pay $887,000 to current and former workers for allegedly violating California labor laws, including failing to pay minimum wage and overtime, the Los Angeles Times reports.

Laundry Room Clothing Inc., which is based in Westminster, California, and owner Milton Kaneda were told to pay the money to 115 current and former employees who were not sufficiently compensated for work between February 7, 2009 and March 31, 2010, the Labor Department said.

Under the Fair Labor Standards Act, employers are required to pay workers at least the federal minimum wage of $7.25 for every hour worked in addition to time-and-a-half for hours after 40 per week.

The ruling was handed down by US District Judge A. Howard Matz after Kaneda allegedly failed to defend a lawsuit filed against him by the Labor Department in April, according to the news provider.

According to the Labor Department's Web site, the Fair Labor Standards Act does not require employers to pay overtime for work on weekends, holidays or normal days of rest unless overtime hours are worked on those days.

Hotel in Violation of California Labor Law

Arcata, CA A California labor law case involving the Valley West Days Inn was settled for four claimants who allege unpaid wages after the hotel failed to show up last week for a labor department hearing. When that happens, the claims automatically default to the plaintiffs.

The Eureka Times Standard reported on December 4 that the Valley West hotel facility has seen 11 unpaid wage claims filed against it and owner Penta Hospitality (now doing business as Silver Creek Hospitality) since 2007. So far, eight of those claims have gone to court and a total of $19,000 in back wages has been awarded to former employees of the facility.

However, aside from one partial payment, the lion's share of that $19,000 bill has yet to be paid, according to the Eureka Times Standard.

The California labor code holds that employees are owed a fair day's wage for a fair day's work. When an unpaid wage claim is filed, a deputy labor commissioner is assigned to the case and attempts to arrive at a resolution between the parties. When a resolution isn't possible, the claim proceeds to a hearing before an administrative law judge.

Beyond back wages allegedly owed to former workers, Valley West Days Inn is said to owe the city some $150,000 accrued from unpaid bed taxes and water bills. The city indicated that garbage collection at the hotel had also been stopped due to lack of payment.

In its defense, the hotel owner noted an ongoing slump in the hotel and accommodations industry that is the worst since the Great Depression. In sum, the hotel simply doesn't have the money to pay their bills. Silver Creek Hospitality principal Mukesh Mowji added that the three principals of the chain have declined drawing a salary for quite some time.

In an interview with the Times Standard, former employees of the hotel indicated that the Valley West Days Inn failed to pay their employees on time, which flies against California labor employment law. One former employee noted that following a two-week stint at the hotel, he went looking for his paycheck and was told by management that as a subcontractor, he would not be paid regularly. The employee suggested he never agreed to his status as a subcontractor.

Hotel management allegedly told other employees that their first paycheck was withheld as policy. When the second paycheck came due, it was late. The former employee who spoke to the newspaper indicated that he had been told a complaint to the labor board would constitute a legal action, and thus he would not receive what he was owed??"another violation of California employee labor law.

Carwash Owners Sued by State for Violating California Labor Law

Los Angeles, CA The owners of a posh Hollywood restaurant are being accused of violating California labor law in connection with eight carwashes they also own.

California Attorney General Jerry Brown filed the lawsuit against the Sikder family, claiming that they denied workers at the carwashes minimum wage and overtime pay, did not pay wages owed to those who quit or were fired, failed to provide rest and meal breaks, and falsified time sheets, according to the Los Angeles Times.

The lawsuit is seeking $6.6 million in lost wages and civil penalties from the defendants, who also run the popular Koi restaurant in Hollywood.

"While Koi served up yellowtail tartare and Kobe beef carpaccio to Hollywood celebrities, the restaurant's owners routinely denied wages, breaks and overtime pay to workers at their unlicensed carwashes," Brown said in a statement.

In one instance cited by prosecutors of the alleged misconduct, the owners of the carwashes failed to pay a nearly $15,000 court judgment to two of its employees that had been handed down more than three years ago.

Brown is the Democratic nominee in the California governor's race, which will be decided in November.

Former Employee says am/pm Store Violated California Labor Laws

Los Angeles, CA Janice worked as a cashier at an am/pm franchise, a gas station and convenience store owned by BP America Inc. Janice says am/pm is making their employees work double shifts - in different locations - and not paying overtime, which is a violation of California labor law.

According to Janice, am/pm managers should brush up on the California labor code, and not just regarding overtime laws. "I see how hard my fellow employees work and don't get paid for it," she says. "One guy was ill and went to urgent care; he called the manager and said he was too sick to return to work that day. 'You really let me down,' she said.

"One of my co-workers is working 80 hours a week. I've woken him up in his car a few times, telling him it is time to go to work. He just goes into the bathroom and washes up before starting his shift. I had to work at one am/pm store from 5:30 am until 1:30 pm, then drive 10 minutes to another store and work the 2-10 pm shift, without any overtime pay. The franchise owners justified no overtime pay by saying different stores have different payrolls. But am/pm owns both locations - they own a lot of convenience stores/gas stations in many states. And I was told that if one owner or company owns the same workplace, you must be paid overtime." (In this case, the owner is BP America.)

Janice says many am/pm employees work double shifts every day and some of them are even sleeping in their cars. "One of my co-workers is working 80 hours a week," Janice says. "I've woken him up in his car a few times, telling him it is time to go to work. He just goes into the bathroom and washes up before starting his shift. Another older gentleman is so exhausted having to do all these hours. He asked the manager if he can just stay at one store but they said no. He was afraid of losing his job if he didn't do what he was told. By the way, one man is from India and the other man is from Asian descent - I think they are being taken advantage of.

"A few days after working a 17-hour shift, I was suspended. A secret shopper came in that day and tried to buy alcohol underage. I didn't sell her alcohol but I still failed the test because the bathroom was dirty. We were so busy because the pumps outside weren't taking credit cards so everyone was paying at my cash register. I was alone for three hours, with no time to clean the bathroom.

"I was put on a three-day suspension, apparently because I rang in too many voids. I phoned on the fourth day (Monday) and my manager said the weekends didn't 'count,' so I was also suspended Monday and Tuesday - five days. This is like some Mickey Mouse joke: I had done no wrong and things were getting worse by the minute. I was treated like a child. Every day I called to find out when I was scheduled back to work, but 13 days later I was still suspended. I wrote a respectful letter to the supervisor and asked what was going on. The supervisor said, 'I'll get back to you.'

"Next day they fired me. All they said was, 'Sorry, we have to let you go.' That is when I got my final check - after waiting 13 days on suspension.

"This is why I had a lot of voids: I would ring in a sale and the customer would give me their credit card. But we don't accept credit cards, only debit. (You have to pay for gas beforehand, not at the pump.) Oftentimes, the customer would have no other way to pay so I had to void the sale. This happens all day long because there are no signs saying 'we don't accept credit cards.' Sometimes we had a line to the back of the store with people complaining that the pumps don't even accept debit cards outside - they have been broken for a year. Customers would yell at us. We were so swamped we couldn't do our regular duties like cleaning the bathroom.

"I was wrongfully terminated - another labor law violation. My manager even admitted I didn't do any wrong after I was fired. The lady from main office said I had to be fired because I had too many voids on my cash register. What am I supposed to tell a potential employer? The assistant manager advised me to say I was laid off for lack of hours because I didn't do anything wrong.

"Now I'm on unemployment. I have a four-year-old daughter and I'm a single mom. I am such a good worker and this is so disappointing. But an attorney called from LawyersandSettlements and they sent me some paperwork. I want my co-workers to get what they deserve and stop being treated this way. It's not just about me."

California Overtime: Threatened and Harassed

San Diego, CA "I worked at a restaurant where the managers consider tips to be our overtime," says Cheryl. "We didn't get any breaks, nor were we allowed to bring food on the premises from another eatery. When I complained to my manager that they were violating the California labor law, I was laid off. Now my lawyer is filing a lawsuit against them."

Cheryl worked for three years at the restaurant, collecting minimum wage. She worked five days a week, eight hours per day. But on Friday and Saturday she worked from 5 pm until 2 am, and she wasn't paid overtime.

California law requires overtime after eight hours, and after 40 hours in the payroll week, plus double time over 12 hours and on the seventh consecutive day of work. As well, federal law requires overtime after 40 hours. In some cases, California law permits an employee to waive the requirement for overtime after eight hours if she does so in advance, and if she is legitimately working a four day, 10-hour per day schedule. But Cheryl never agreed to waive her overtime rights.

"When I complained to our general manager he said I should talk to my union rep, as a joke. We aren't unionized??"no one is in a union. My employers had their own dictatorship going on: they don't provide food for us but if we order from another eatery or someone picks up a sub or pizza from next door, we would be reprimanded. You aren't written up but you are told not to do it again. We don't get lunch breaks or any break. The smokers, however, can go outside for a smoke break, but I don't smoke.

"When I complained about not getting five-minute breaks, my manager told me to get back to work and call my union rep. I was written up the next day, complaining that I wasn't a team player, the other bartenders didn't like me and customers didn't like me - after three years! I was the original waitress; they went through so many staff, mainly because of these long hours without overtime. I'm definitely not the only one. Some of the girls were young and playful and they were in favor with the boss, but if you just want to work, you aren't a team player.

"I was fed up and filed a complaint with the labor board; I took my check stubs and schedules. Then I talked to the restaurant owner to find out if she knew how I was being treated. She said that overtime was time over 40 hours a week but not over eight hours a day. I told her that the California labor law changed a long time ago and overtime kicks in after eight hours in one day. She has other employees who should be paid overtime. She said she would be willing to pay if she owed me.

"The labor board figured out that I am owed over $1,000. The owner rebutted and said she owes me $88 and she paid me $100 - I could keep $12 as a settlement. That is when I went to a lawyer.

"The lawyer told me to dismiss this claim 'without prejudice' because the owner wrote a retaliation letter to the labor board saying I had personal problems and that I tried to extort money from her by saying the law had changed ages ago. My lawyer was so disgusted with the letter; he said I have a solid case.

"We were scheduled for a meeting at the labor board last week. My lawyer told me to put off the meeting - dismiss without prejudice - until he has time to get the paperwork together. He is going to file a suit on my behalf for slander and defamation of character. And I will discuss the question of overtime at our next appointment; he is going to include that too. This letter was so scathing, there is no way that she should get away with this.

"When I was at the labor board I heard so many stories similar to mine. People know jobs are scarce and they were in the same position as me--getting threatened and harassed, not getting breaks and not getting overtime. It's like I was working on a plantation - I wasn't even allowed to bring in my own food!"

Bag Check Is on the Clock in California

San Francisco, CA There is some refreshing about an attorney like Patrick R. Kitchin who answers his own phone. Maybe that's not always the case, but on this day it was Kitchin, calm and collected, on the other end of the line. Kitchin has tugged on Ralph Lauren's shirttails over violations of California labor law a few times over the years and he's just obtained a $4 million mid-trial settlement on behalf over 6000 current and former employees who objected to the company's off the clock mandatory "bag check."

The settlement also includes payment owed to the employees since 2002 for unpaid breaks and overtime.

So-called employee bag checks at the end of a shift is common practice at many retailers across the US.

"During the trial an expert and former manager of loss prevention testified that it is not a great practice for catching people because employees know it's coming," says Kitchin. "However, retailers see it as a deterrent to internal theft, which is admittedly a big problem the industry."

However, asking employees to stand around waiting for the bag check without compensating them for their time is a violation of California labor law. It is a specific assignment required by their employer, as Kitchin successfully argued in the suit against Polo, and sales associates should be paid for it.

"From our perspective, as in the Polo case, if you are locked in a store waiting for a manager, you are under their control," says Kitchin. "Sales associates have lots of duties??"stocking, folding, generating sales, and one of their last jobs at the end of the day is to undergo a bag check."

Although there is federal labor law on the same subject, it is not as clear as the California law. "Federal law is not as protective as California labor law," says Kitchin. Some activities, including bag checks, may or may not be compensable uder federal law.

Patrick Kitchen specializes in wage and hour class actions suits as well as sex and gender discrimination in the workplace. Since 1999, his practice has been devoted to seeking civil justice for people who have been emotionally or physically harmed by others and workers whose rights have been violated by employers. He is a graduate of the University of Michigan School of Law.

Hands in the Tip Jar—Violation of California Labor Law

Los Angeles, CA: Cheryl and her co-workers at the dog grooming salon suspected some time ago that their boss was taking a good chunk of their tips, but after Cheryl heard about the Starbucks settlement (the company was ordered to pay back more than $100 million to California baristas), she realized her boss was ripping them off. California labor law prohibits managers and supervisors from sharing in employee tips.

"Last month I groomed dogs for two clients who I know leave big tips but I didn't see a cent," says Cheryl. "I don't see the tips??"the boss is in charge of all the payments so he can lie to us and do whatever he wants. Last week the same clients came back and I groomed their dogs again. This time, however, the boss had gone out and I saw their files; the manager helped me find them. (I just called a few lawyers to see if it is legal for us to look at the clients' payments??"I haven't got answer yet).

"Anyway, my suspicions were confirmed. Both clients paid their bills with two separate payments, on the same credit cards: one payment was the amount of grooming and the second payment was the tip of $40. Twenty dollars was my tip and the other half should have gone to the manager, who did half the grooming with me. And we aren't the only ones who are getting cheated. Unfortunately, my manager is afraid to confront the owner.

"Last Christmas the boss kept our tips for two months and gave them to us at his own discretion as a bonus. 'That's your bonus, money I have been collecting out of the tips, from credit cards and cash,' he said. He decided, by how many hours we worked, how much money we would get. I got $235, which is likely a lot less than I am owed.

"He divided the tips between five of us: I know that one co-worker got over $300??"he told me so, and he suspected all along that the owner was stealing our tips; now we all believe that he is also pocketing some of our tip money.

"Granted, some people don't tip at all and others are very generous; it's a real crapshoot. But the amount of money he finally gave me isn't my complaint. We are supposed to get those tips within the next pay period. Period. It is not up to the owner to decide when and how to distribute those funds.

"I have decided that I want to let him know he has violated the law. He has to keep an accurate record of every tip given to every groomer. I called the California labor board for advice and they said I need to have records regarding how much I didn't get.

"I am going to keep records of every dog I groom and client phone numbers and I will ask the boss every day how that person paid and what tip they paid. After a few months, when I have sufficient information, I will take action.

"A previous employee already tried to sue him. She was abusive and volatile to us and everybody asked the boss to fire her, listing all the reasons why. I said I would quit if he didn't fire her. I quit??"she was a danger and a liability to the business. Two weeks later she faked an injury and they had to pay workers' compensation. Then she tried to sue the owner for tips she didn't get. She wasn't smart and didn't keep records: the judge threw her case out: she tried to sue for $7,000. But the owner was sweating bullets and we couldn't figure out why??"that's when we clued in! (And I got my job back.) He was so sick from stress and we couldn't understand why he was so worried.

"I'm a tough cookie; everybody who was a good groomer has quit but I am going to hang in here and document the evidence so I will have some recourse. And I want people to know what is happening and that it is illegal to take tip money."

The Starbucks lawsuit focused on a section of California Labor Code regarding the payment of tips to employees and the practice of tip pooling. Labor Code Section 351 says, "No employer or agent shall collect, take or receive any gratuity or a part thereof that is paid, given to or left for an employee by a patron," and Labor Code Section 350 defines "agent" as "every person other than the employer having the authority to hire or discharge any employee or supervise, direct or control the acts of employees."

Subcontractor Hit with $500,000 Lawsuit for California Labor Law Violations

Los Angeles, CA California Attorney General Edmund G. Brown Jr. filed a California labor law lawsuit last week against a Nevada-based contractor employing a number of drywall installers in the Golden State. Brown is seeking $500,000 in restitution for workers cheated out of pay and other benefits.

MDP California stands accused of violating no fewer than seven California employee labor law statutes. "MDP California cheated its workers and the State out of hundreds of thousands of dollars by dodging fair wage and labor laws," Brown said in a press release from States News Service. "Those kinds of business practices will not be tolerated in California."

An investigation launched last year by the Office of the Attorney General found literally hundreds of violations. Brown's office interviewed a number of workers, who reported that MDP California regularly required them to work anywhere from nine to 11 hours a day Monday through Saturday??"and sometimes on Sunday. There was no overtime pay provided for the additional hours.

One worker who was injured on the job had no choice but to take unpaid leave due to the alleged failure of MDP California to provide workers' compensation.

The lawsuit contends MDP California violated the following California state labor laws:

- California Labor Code section 510 by denying overtime pay.
- California Labor Code section 226 by providing wages to employees in other employees' names.
- California Wage Order 16-2001(4)(A) denying pay for all hours worked.
- California Labor Code section 226.7 by denying employees with a 10-minute break each four hours.
- California Labor Code section 3700 by failing to pay worker's compensation insurance.
- California Labor Code section 201 by failing to pay wages owed to laid-off employees immediately.
- California Business and Professions Code section 17200 for engaging in unfair business practices.

The Office of the Attorney General alleged that MDP California's failure to pay fair wages or state taxes gave the employer an unfair advantage over its competitors, which allowed it to underbid for jobs.

Co-Author of Study: Lowest Paid in LA Hit Hardest by Wage Theft

Los Angeles, CA A recent report titled "Wage Theft and Workplace Violations in Los Angeles: The failure of employment and labor law for low-wage workers" documents a particularly high rate of workplace violations in Los Angeles. "This study focuses on low-wage workers," said Ruth Milkman, one of the study's authors and a sociology professor at the University of California, Los Angeles, and the City University of New York. "Our focus is the low end of the labor market where many legally mandated standards are not being observed."

The report focuses on the findings of a survey of 1,815 workers in Los Angeles County, in conjunction with surveys conducted in Chicago and New York City in 2008. The respondents included many unauthorized immigrants and other vulnerable workers who are often excluded in standard surveys. The report found that minimum wage and meal break violation rates are higher in Los Angeles than in New York and Chicago.

Alarmingly, the survey found that low-wage workers in Los Angeles regularly experience minimum wage and overtime violations and they are often forced to work off the clock or during their breaks. "Other violations include lack of required payroll documentation, being paid late, tip stealing, and employer retaliation," said Milkman.

Domestic workers are vulnerable to labor violations in all three cities, but again, the survey showed especially high rates in LA County. "While some employers are well aware that they are breaking the law, there is a definite lack of knowledge in this area among employers of household workers," added Milkman.

Milkman said the study took several years, looking at key occupations and industries where the median pay rate was below 85 percent of the median wage in LA County, based on US Census data. "To participate in the survey, workers had to be employed in one of those occupations or industries," said Milkman. "We also wanted to find hard-to-reach people in the work force, such as unauthorized immigrants. Through the help of community groups we were able to recruit the first few survey respondents, and they in turn recruited others who were eligible. Starting from a handful of respondents, we wound up with more than1800."

The Los Angeles study reached the following conclusions:

• Almost 30 percent of the workers sampled were paid less than the minimum wage in the work week preceding the survey: 63.3 percent of workers were underpaid by more than $1.00 per hour.


• Among all respondents, 21.3 percent worked more than 40 hours for a single employer during the previous work week; those employers were therefore at risk for an overtime violation. Almost 80 percent of these at-risk workers were not paid the legally required overtime rate by their employers. Respondents with an overtime violation worked an average of 10 overtime hours during the previous work week.


• Nearly one in five respondents stated that they had worked before and/or after their regular shifts in the previous work week and were therefore at risk for off-the-clock violations. Within this group, 71.2 percent did not receive any pay at all for the work they performed outside their regular shift.


• Among all respondents, 89.6 percent worked enough consecutive hours to be legally entitled to a meal break. However, more than 80.3 percent experienced a meal break violation in the previous work week.


• California law requires that employers provide workers with 10-minute rest breaks during each four-hour shift (or two 10-minute rest breaks in a standard eight-hour shift). 81.7 percent of respondents eligible for rest breaks were either denied a break entirely or had a shortened break during the previous work week.


• California law requires that all workers??"regardless of whether they are paid in cash or by check??"receive documentation of their earnings and deductions. However, 63.6 percent of respondents did not receive this mandatory documentation. 45.3 percent were subjected to such illegal deductions.

Of course, not all employers abuse their employees and the study noted that many low-wage employers comply with wage and labor laws. On the other hand, some small businesses claim they are forced to violate wage laws to remain competitive. "Such employers are perfectly aware that they are not obeying the law, but that is not the case among all employers," said Milkman.

Many of the workers in the survey were afraid of retaliation. "Those who complained were often fired or demoted, or given undesirable jobs or schedules??" the usual kinds of things employers do when they are unhappy with the employee. And a number of unauthorized immigrants told us that they were afraid of being reported by their employers to immigration authorities in retaliation for complaints."

Milkman said the report had gotten a positive reception. "Many members of the general public were shocked, and rightly so. Now the biggest danger is complacency, if nothing is done to fix this problem."

The LA City Council is currently considering passing a wage theft ordinance, which will make it a criminal offence if employers violate wage and hour laws. And there are more steps to take at the state and federal level.

In response to the 2008 report, Labor Secretary Hilda L. Solis said, "There is no excuse for the disregard of federal labor standards ??" especially those designed to protect the neediest among us… [this] report clearly shows we still have a major task before us." Solis hired 250 more wage-and-hour investigators in November 2009.

"Right now there is a lot of concern but it is important that there be extensive follow up and beefed-up enforcement," said Milkman. "It's a big job but there are some positive signs."

California Labor Law Breach of Contract: "I'm Not the Only One"

San Marino, CA One California labor law violation is breach of contract. In California an employee can sue for lost wages and benefits, wages they would get in the future, minus what they should earn and have earned at a new job, assuming they get a job within a reasonable amount of time. Paul (not his real name) left his job because he did not receive monies from a profit-sharing account, and he is now in the process of arbitration, with the help of his attorney.

"I was the chief lending officer at a nationally chartered commercial bank," says Paul. "Part of my compensation included bonuses and a non-funded profit sharing account. I worked at this bank for just over nine years and received all my bonuses but nothing from the profit-sharing account."

Paul's employment contract states that this account (he is owed over $1 million) would be paid no later than 60 days after his termination date. "My immediate supervisor assured me at the time of my resignation that the owner of the bank said I had nothing to worry about, relative to payment of the profit-sharing account," says Paul. "Then my boss gave me a letter indicating they couldn't pay me (which was not true??"they did have the cash resources at that time) and that I would be paid when they raised additional capital."

Paul didn't take action right away, assuming correctly that it would set the alarm button and negatively impact the bank's capital raising. "The bank was ultimately not successful and was taken over by the FDIC in October 2009--at that point I sought legal counsel."

Paul says he resigned because he couldn't assess the likelihood of the bank's survival??"it had invested heavily in Fannie Mae and Freddie Mac. "If the bank wasn't going to survive, I would wind up with nothing, not even my bonuses; however, my resignation letter made it clear that I was grateful for the time there and for the opportunity and it was one of the most difficult decisions I ever had to make. And I know many others made this same decision…

"But the bank wasn't happy with my resignation, which I learned after I left. Within 30 days of my departure, a co-worker told me, 'when word gets out as to why Paul left, he will likely have great difficulty obtaining a job in this industry again.' My boss was pissed off because I built this franchise from scratch and if I am leaving, there must be real problems here. Not only did it make him look bad, he was one of the principals responsible for the investment that took the bank down."

(Paul's former employer may be in violation of another California labor law: California Labor Code Section 970 refers to misrepresentations by an employer to prevent a former employee from obtaining new employment.)

"My attorney is sure that I will be granted the award in arbitration and it will be affirmed as a judgment," says Paul. "There is no way of determining whether I will actually receive payment. The bank's holding company is not bankrupt but they have larger obligations so I have to get to the back of the line.

"My job prospects don't look good: the banking industry in the US is dismal, as everyone knows. I still believe I did the right thing by resigning but I also believe my decision alternatives were taken away from me. Any sensible, thoughtful person would do the same thing. From the owner's perspective I am in the wrong, but the owner put me in this position. I could have stayed and lost everything??"instead I made the decision to preserve what I built in nine plus years.

"I believe that the California labor board can take action against the company. My attorney and I have filed a complaint with the board. It has only been 30 days, so I am hopeful that they take action and some portion of the monies due to me will take priority over their other clients."