Wage & Hour News
Workers Owed $1 Million in California Labor Law Violation
California Labor Commissioner Angela Bradstreet seeks the recovery of more than $1 million in unpaid wages, together with liquidated damages and other penalties in excess of $16.5 million.
According to the September 15th issue of Business Wire the red flags over FLM Law Center were first raised only recently, in May of this year. That's when complaints began to roll in to the Division of Labor Standards Enforcement (DLSE) with regard to wage claims against the firm.
A subsequent investigation determined that FLM Law Center was allegedly not compensating their employees on the regularly established paydays. The DLSE determined that this conduct diverted about a million dollars from the pockets of employees who were entitled to the funds for hours legitimately worked.
"This company has committed egregious Labor Code violations by not paying their employees as required by law," said Bradstreet. "This lawsuit not only seeks restitution for their employees, but should also send a strong message to all employers that we won't stand for a company that cuts corners at the expense of their workers."
A Grievous Affront to California Employee Labor Law
The FLM Law Center is a fairly young facility, opening in December of last year. According to Business Wire the company listed two separate business addresses: a location on Irvine Center Drive in Irvine, with a second in Woodland Hills.
Labor Commissioner Bradstreet brought the lawsuit against the company in tandem with several additional entities and individuals believed to be alter ego and / or partners and affiliates with FLM Law Center.
California state labor laws, as well as laws observed by other states in concert with laws at the federal level, are designed to protect workers from the willful, or accidental neglect of employers with regard to their responsibilities to their employees. Various statutes govern things like lunch breaks and rest periods, working conditions, safety and the payment of wages for hours worked. The latter also often involves extra pay for additional hours worked, according to an overtime scale that guarantees any non-salaried employee will be properly compensated for working salutatory holidays, weekends, or any hours over and above the standard 40 hours that represent the standard work week.
California Labor Lawsuit Sees Settlement of $22 Million
According to an article at Cincinnati's CityBeat (August 20, 2009), Cintas Corp. will pay over $22.75 million to settle a federal lawsuit that alleged the company failed to properly pay employees overtime wages. The lawsuit was filed on behalf of employees who said they were misclassified as exempt from overtime pay as required by both state and federal laws.
The employees were uniform delivery drivers, responsible for picking up dirty uniforms and dropping off fresh ones. They were classified as salary instead of hourly workers; however, the plaintiffs argued that they drove trucks and delivered uniforms and therefore should not have been classified as exempt from overtime pay.
It has not yet been decided how many drivers are included in the settlement or how much those drivers will receive. The lawsuit was filed in the US District Court for the Northern District of California and sought compensation for unpaid overtime dating back to March, 2000.
Cintas CEO Scott Farmer said in a statement that the suit was unfounded but that the company resolved the claims through mediation to avoid the expense of litigation.
Meanwhile, former employees of Aurora Las Encinas Hospital, a psychiatric facility in California, have filed a class action lawsuit against the owner of the facility, alleging that understaffing has not only compromised patient care but has also put employees in a position of working overtime without proper compensation. The suit also alleges that employees worked in unsanitary conditions, including using a bathroom that had a toilet but no sink.
According to an article at latimes.com (August 7, 2009) employees say they were given the answers to mandatory examinations so that the hospital did not have to pay workers for time spent studying for the exams. They also say they were overworked, not paid for overtime and felt they could not provide safe care for patients.
The lawsuit seeks unspecified restitution and legal fees. One plaintiff said the goal of the suit was to improve Las Encinas, a facility that reportedly had three unexpected adult patient deaths in a five-month period during 2008. In the same time frame, a 14-year-old patient was raped.
California Labor Law: Stand Up for Your Rights Sooner than Later
David's main complaint is not being paid overtime. He worked in the computer IT department and all techies were covered under a union contract??"that excluded technicians' classification for overtime pay. "We belonged to a union that was covering the airline mechanics and we were part of that same contract," says David. "We were called 'remote terminal maintainers' back in 1979 and it wasn't until years later that the company changed it to 'computer terminal technicians'. Changing the name was more descriptive of what we did, even though it was lacking.
We did tech computer maintenance from the PC, the network, infrastructure and associated hardware. This work was supposed to be based on an 8-hour shift but one year we finally made a verbal complaint to our regional manager that we were not being paid overtime. The owners of the company came to a meeting with the techies and the president of the local union. We were told by the company that it was not a company issue; it was a collective bargaining issue. The union president said at the meeting that we were excluded on the overtime issue from the union contract. 'You are either under the company rules or the state guidelines,' he said, 'and you can go for relief in the courts.'
The regional manager's eyes popped out when he heard that. Years have passed and we tried to fight this issue many times, to bring it up with the company. We had pushed at union meetings for the techs to be included in overtime pay. The union negotiated an agreement but at that time everyone else who was classified under that contract could only get paid time and a half. Prior to that, in that same contract, everyone but 2 classifications was paid time and a half and double time, except the techs and the ground radio techies.
Most techs in my department thought we might be outsourced if we were paid overtime. In 2006 that eventually happened. It was very traumatic for all of us??"I estimate that 150 techs lost their jobs nationwide. The managers, supervisors and regional manager??"everyone below the director??"lost their jobs. The whole department was outsourced to a Texas company, who subcontracted a lot of work to another company whose pay was less than half our pay.
We could have sued the union for not representing us properly but most people who tried to fight the company or bring about some type of complaint were forced??"somehow??"out of their jobs. So why didn't we fight? Nobody wanted to go through all the aggravation and the stress you are put through standing up for your rights in a hostile environment…
There was a lot of favoritism for certain individuals and in my opinion they would not join a lawsuit because they benefited most for not doing so. Others felt they were wronged but were too afraid and didn't want the pressure. We (numerous techies from several states) tried to fight in our own way: by trying to get management above us to get us better pay conditions; contacting the union to fight for us and hoping someone in our tech classification would file a lawsuit. We were hoping that someone more independent could file.
What I know now, I would have filed a suit. At that time, the environment we worked in was very hostile. They were very discriminatory in promotions and work assignments and in my opinion they violated the contracted agreement along with several California labor laws. In retrospect, we should have had a labor lawyer representing us."
California Labor Law Teeth Worth $13.5 Million
At issue is the conduct of two janitorial cleaning enterprises that were accused of evading payroll taxes, together with a failure to pay minimum wage and overtime to about 300 janitorial workers in California.
An investigation by the office of the California State Labor Commissioner revealed that workers were routinely required to work in excess of eight hours in a day, seven days per week at a flat rate of $50 per day.
Excell Cleaning and Building Services Inc. of Delaware and M.O. Restaurant Cleaning of California Inc. were assessed judgments totaling in excess of $13.5 million in a case fostered by state Labor Commissioner Angela Bradstreet and California Attorney General Edmund Brown.
"We are pleased that the court has awarded the workers their rightful wages owed, along with penalties and liquidated damages," said Labor Commissioner Angela Bradstreet. "Our coordinated effort with the Attorney General to take action against these companies sends a zero tolerance message to all California businesses that they need to play by the rules."
It was alleged that workers were also misclassified as independent contactors, allowing the two corporations to avoid paying a quarter of a million dollars in payroll taxes. Given the sorry condition of the California state economy at the moment, that's $250,000 the state would like to have in its coffers.
It has been reported that the two companies at the center of the lawsuit failed to appear, thus the court entered a default in the action. On March 15th of this year the Honorable Marvin M. Lager in Los Angeles Superior Court granted the Plaintiff's application for default and issued the judgment of $13,640,819 for wages owed, penalties for wage violations, penalties for unfair business practice violations and liquidated damages.
"As Labor Commissioner, my top priorities include protecting workers and targeting these kinds of companies that operate in the underground economy," said Bradstreet. "These illegal operations undercut legitimate businesses and are damaging to our state's economy."
The two defendant companies had contracts to supply janitorial services at various restaurants in Los Angeles, San Diego and Orange counties. By working their charges over 7 straight days for such a low stipend without provision for overtime benefits, basic workers' rights were sorely violated. Issues such as health and time spent with family would be problematic in view of the hours involved.
Such a violation of California labor laws suggests a blatant disregard for California state labor law, but also for basic human rights. As shown here, California labor employment law exists to protect worker's rights in the state. Violations are not taken lightly. If you, or a co-worker have evidence of these types of violations, it would be prudent to discuss the matter with a qualified attorney.
California Labor Law Violation: Workers Exploited
It appears as if justice will prevail for employees holding the job titles of Systems Integrators and Graphics System Validation Engineers, after their action against Intel has been granted class certification status in Superior Court of California, County Santa Clara.
Intel is the world's largest manufacturer of semiconductor chips for the computer industry. And yet, even given that status it appears to be not above the alleged practice of misclassifying employees with the intent to freeze them out from receiving the overtime pay they are owed.
While the granting of class action status cannot be seen as a ruling on the merits of the case, insiders report that the plaintiffs are one step closer to potentially claiming back overtime pay and other related costs.
There are strict provisions in California labor law governing the computer IT industry and software engineers in particular, with overtime considered exempt with regard to certain job classifications and work that is performed.
Companies that employ software engineers and computer professionals have been known to bend the rules and play fast and loose with classification parameters, in an effort to avoid paying overtime and thereby reducing costs. However, computer IT professionals work hard enough without giving up extra pay that is their due. Many are fighting back through lawsuits.
Meanwhile the California State Labor Commissioner has yanked the carpet out from under a California provider of flooring. All Floor Commercial and Residential Flooring and its owner have been frozen out of participating in public tenders for 3 years after serious violations of public works laws were found, together with a 'clear intent of fraud.'
The list of alleged misdeeds, which are presumed given the State's position, is a sorry example of how an employer is capable of taking advantage of employees who are probably impoverished to begin with.
Among the allegations and evidence uncovered during work completed by the company in 2007 and 2008:
Failure to pay proper prevailing wage rates; Misclassification of workers; Failure to pay travel and mileage reimbursements; Falsification of certified payroll records; Falsely reported work hours of employees.
The investigation also revealed that the contractor maintained two separate sets of books in which they falsely reported dates, hours and projects on which employees worked. The contractor was also found to routinely misclassify employees as lower-paid laborers to avoid paying the higher wage. In some cases the workers were paid less then half the required prevailing wage for their true classification.
As a result of the investigation and evidence found, the Labor Commissioner issued an Order of Debarment against the firm.
"The debarment proceedings are necessary to remove employers operating in an illegal manner at taxpayer expense and to the detriment of employees on public works projects," said California Labor Commissioner Angela Bradstreet. "The action that I am taking will help to create a level playing field for legitimate employers operating in this tough economic time.
"Our investigation revealed serious violations of the public works laws and a clear intent of fraud against employees and the awarding bodies on two separate projects," Bradstreet continued. "I cannot allow a company to continue operating while deliberately taking advantage of their employees and the tax payers who fund these public works projects."
While it is a sad state of affairs to witness such blatant violations of workers' rights and California labor laws??"especially in the midst of one of the toughest economies in decades??"it is heartening to know that California state labor law is defended and upheld on behalf of workers made to suffer from unscrupulous employers that have little regard for California labor employment law. If you know of, or suspect, such a violation in your own workplace, don't take the abuse. Fight it, with the help of an attorney.
Managers Exploited under California Labor Law
The gray area lies here: What separates exempt from non-exempt seems to be the level of responsibility. "At times I did supervise staff," says Bill. "On any given workday, I spent one hour actually performing strictly management responsibilities such as planning and organizing activities and setting work schedules. And sometimes customers wanted to see the manager so I fulfilled that role. But in a 10-hour workday, definitely 8 hours were spent performing hourly worker's job duties, and nothing remotely managerial. Being on the floor and helping customers with questions could be classified as managerial but it amounted to about a 15-second conversation.
This is generally the basis of my overtime concern. On researching the California overtime law, if a worker spends more than 50 percent of their time performing hourly work duties, then they should be paid overtime. But the gray area is the level of responsibility that a general manager or store manager has??"it is basically just by title. In other words, this position, especially when it comes to retail, is classified as exempt based on job title rather than duties.
Here is another example: my store had to perform a timesheet audit for all the associates for an entire year. When my district manager assigned the task to me, he said it was because ' I was free labor.' I didn't say much because I didn't want to lose my job. But he said it in front of an assistant manager (I was the manager) and I didn't want to be insubordinate??"I just took it. I was so used to that type of environment--where we basically picked up any hours that were needed.
As a group of store managers, we discussed overtime compensation at district meetings but we were told 'That is just the way it is,' and the expectation is that we work a minimum of 50 hours per week. As general managers, we must meet certain goals and objectives to keep our jobs. The upper management gives us a payroll figure or percent that makes it extremely difficult to operate on a daily basis all the requirements that the company sets forth. So in order for us to meet those goals and objectives, store managers need to work excessive hours in order to keep their jobs.
And it is even more prevalent given this economic climate because payroll is the easiest expense to cut.
I calculated that if I were paid an hourly wage with overtime (time and a half after 8 hours) I would make a lot more than my salaried wage. It turned out to be in the six figures, substantially less than I was getting paid.
I have been talking to an attorney and he agrees with me that I certainly performed more hourly functions each day than managerial functions, but based upon present labor laws, by my title and in the course of the day that I performed supervisory functions, it would be difficult to win the case.
I know that assistant managers have been awarded back pay in overtime and are now paid hourly as opposed to salary. Store managers are still being exploited. The California labor laws would have to be changed, starting with state legislature. I think everyone agrees that it is an abuse, but with the present labor laws I couldn't win in a courtroom.
This incident has taught me to be cautious: if I take on another salaried position as manager, I would look more deeply at the store environment, my job duties and number of associates available to perform daily functions."
Automotive Company Downsizes-- California Labor Law Violation?
Sean has family with 2 young kids to support so this lay-off has been devastating. He has never been laid off or fired in his life. "I've never been in this situation before??"I filed for unemployment and it is really hard to take," says Sean.
"I understand times are tough but a few months back they just changed my pay from salary plus commission to an hourly rate which gave me a substantial pay cut, but I still did my job regardless," says Sean. "Getting a reduction in pay was bad enough??"for the last 3 months I got about $600 per month less than my regular salary. Overtime wasn't allowed so I was just working an 8-hour day. When I was on salary, it was the same schedule; nothing changed in my job description. And my pay reduction happened right before my father passed away so it's been rough.
I more or less resigned myself to the fact that I had to live with this cut in pay, but when I was laid off my position was filled from someone inside the company with less seniority than me, and that wasn't right. I called my ex-boss and asked why; in all my yearly reviews I got perfect scores and was always told I was doing a great job.
He said that 'I was not going above and beyond my call of duty'. I didn't know what else to say to him except 'Thank you'.
The only thing that changed from my salary to hourly position was that we had 4 people in the department and the business opened a wholesale division, which meant one of my guys moved into the wholesale store, leaving me short-staffed. The guy who moved was also 'buddies' with my boss so when they laid me off, the next day he was back at our store. And the day after I was 'laid off' I got a lot of phone calls from co-workers and suppliers I dealt with telling me the news--that he had just moved into my former position.
I believe that I was laid off because there was no justification to fire me. But I haven't been told when I can return to work and I don't think I will ever get a call to return.
I think the main reason I was laid off was simply because my boss and this guy were good friends. And that isn't fair. The chances of my finding another job in my particular field are pretty slim; I think it is going to take a while??"or maybe never. As you probably know, California car dealerships are going out of business??"my prospects aren't good. In fact I'm looking at switching careers; I'm thinking about computer design or construction of some sort but my automotive days are likely over.
I want to file a complaint against my former employer so he won't be able to do this again, to somebody else. This company is huge so I am sure their lawyers research and advise them on how to get rid of employees without any recriminations. And that isn't right??"even in these times."
California Car Wash Takes its Employees to the Cleaners
Such is the case in Los Angeles, after 60 workers at a Redondo Beach car wash will receive almost a half million dollars in back wages after they were stiffed by their employer. The California Labor Commissioner brought a lawsuit against the employer on the workers' behalf, and a settlement was reached November 19th.
Sometimes, the little guy gets his due. And in this case, the little guy wouldn't have had much to start with, before the employer began to take away even that.
At the center of the investigation was the Bruno Scherrer Corporation, doing business as the Hollywood Riviera. After starting an investigation in October of 2006, the Office of the California Labor Commissioner found that the Hollywood Riviera would pay their employees minimum scale for as little as 3, or 4 hours of work??"only to require them to finish out their day with pay from tips only. For some employees, this would amount to half their day working for tips.
It was also alleged that beyond shorting their employees on their earnings, the employer failed to properly record, and keep accurate records of an employee's work hours.
"Employees must be fully paid for all hours that they work," said Labor Commissioner Angela Bradstreet. "Businesses are required by law to keep accurate records showing when the employee begins and ends each work shift and properly compensate for those hours.
"Clearly this case reveals a deplorable situation where employees were being taken advantage of by not being paid their proper wage," said Bradstreet. "This case is an excellent example of why we register carwash companies in California."
The California Labor Commissioner filed a lawsuit against Hollywood Riviera in Los Angeles Superior Court, on behalf of the 60 workers, in September of last year. They stand to collect $450,000 in unpaid wages, as a result of the successful litigation.
The California Labor Commissioner, and other commentators familiar with the case, agree that the case represented a blatant violation of minimum wage laws??"and specifically AB 1688, a Bill passed by the California State Legislature in 2003 that granted a registration system for all car wash and polishing enterprises.
California Labor Code sections 2050-2067 addresses the car was and polishing industry, and is known collectively as the Car Wash Worker Law. Its very existence provides protection for employees of the car wash and polishing industry against the actions of unscrupulous employers.
And there are some nasty violations out there that go beyond illegal cash pay. Failure to provide adequate worker's compensation is another oft-cited violation, and officials often see child labor violations at car wash and polishing enterprises. Sure, the kid wants some pocket coin. He'll do the work for tips, or for a couple of bucks in his jeans. He's glad for the cash, and hey who's gonna know? Better than the kid being on the street. We'll put him to work…
Sorry, but that doesn't cut it. There are laws and statutes, and the Division of Labor Standards Enforcement adjudicates various violations in the area of wage claims, discrimination and various other complaints??"and more importantly enforces State labor law and Industrial Welfare Commission wage orders.
In short, there are various checks and balances in play to ensure that employers refrain from flaunting California labor laws, and taking their already low-paid workers completely to the cleaners. California state labor laws ensure that you can't do what Hollywood Riviera was accused of doing, an accusation that appears as fact after the employer, following the California State labor law investigation, agreed to cough up $450,000 to be split amongst its 60 workers. A nice Christmas present indeed.
Employers Violate California Labor Law
Marie worked full shifts at the gas station, but the majority of her time was spent alone, meaning that she could not take breaks, including lunch breaks, and could not go to the bathroom. Because she was not allowed to take breaks, she never had the opportunity to sit down while at work, until she took matters into her own hands. Unfortunately, her employer's wife came by the gas station while Marie was sitting down.
"She didn't like that," Marie says. "That was one of the reasons stated on the paper he gave me when I was terminated??"that I sat down. I worked without a break??"not even a lunch break??"so I felt that I should be able to sit down for a while.
"The paper also says that he gave me warnings, but I never received any type of warning, not even a verbal warning. Once, I had a drive off of $80, which was my fault and I took responsibility for that. At the end of my shift, I wrote a note explaining what had happened and I said I would pay back the $80, which I did by taking $20 off my next four paychecks. But then the paper says I received another warning for a drive off of $42, but that never happened.
"The other thing is that we're a gas station??"drive offs happen. All the employees had drive offs, not just me. I don't feel that is justification for firing me.
"My employer wrote that I got 'another' customer complaint, but I never had any customer complaints. My customers were regulars and they loved me. Plus, I got 100 percent on a secret shopper visit??"I got an award of $40 for that. So it's not true that I had a customer complaint. If I did have complaints, they didn't tell me about it??"nobody said anything. I'm accused of being belligerent and insubordinate when questioned on things, but nobody questioned me on anything.
"We had to stand most of the time and it was a hard cement floor. I asked my boss if he could just get us a rubber mat to stand on and he flat out refused. I asked a few times because it was hard standing on the floor, but he wouldn't do it.
"I was responsible for maintaining restrooms while on shift, but he did not provide us with gloves for cleaning??"even though I requested some. One time, I had to clean up a child's vomit from the counter and the front of the store and I had no gloves to clean with. I was really mad about that."
There are some employers who have no trouble asking their employees to do things they would never do themselves. Standing for full shifts with no possibility of a rest break, lunch break or even a break to go to the bathroom is ridiculous and it should not be asked of employees. Cleaning restrooms without gloves goes beyond the bounds of what is reasonable.
Employers get away with these violations because many employees are too afraid to fight back. Hopefully as more employees come forward, employers will think twice before breaking California state labor laws.
California Labor Law: Employees Keep Quiet to Keep Their Jobs
Dannie S. worked for a large, well-known pet store chain for a year and a half, until approximately 4 weeks ago when he was fired. At the time, Dannie was told he was fired for talking back to a customer at the front of the store??"something Dannie says there was no policy against when he was fired. In fact, Dannie says that the company has enacted many new policies since he was fired, including a policy against working off the clock.
"All the time that they [the pet store chain] were violating the labor laws, I knew they were doing it but because I wanted to keep my job, I never said anything," Dannie says. "I have to be honest about that right away. I knew it was going on.
"The thing is, they [the company] have an expectation of a certain amount of money each store [in the chain] has to make. But, they don't want anyone to get overtime. But in order to make the kind of money that they want you to make, you have no choice but to work overtime. I would come in way before I had to be at work, up to 2 to 3 hours early. I would clock out for lunch, but work through that lunch hour, then clock back in. Then, I would clock out before the day was over and work for another 2 to 3 hours. In the year and a half I was there, I actually took my lunch maybe 12 times??"and for those times I was still eating my sandwich while I was working.
"They [management] knew I was doing this. There was pressure from the district manager to make money. It wasn't the store manager's fault really, although she knew I was doing this. She probably should have intervened and told me not to work off the clock, but she worked off the clock, too.
"The other thing they would do was they would go into the files and edit your times for you. I know they have my signature on a couple of edited times, but I didn't sign all of them. Again, I didn't say anything because I wanted to keep my job.
"I know that they know they are wrong. I was the grooming manager and I got along well with my employees??"we are still in touch. My employees called to tell me that since I was fired, everyone is required to take their lunch breaks and leave the premises during lunch. They also now have a policy against talking back to customers at the front of the store [Dannie says he was fired for refusing to groom an elderly, sick cat, which was consistent with company policy, and then, after the customer became verbally abusive, telling the customer to leave the store or the police would take care of her]. That's now grounds for automatic termination, but I never saw a policy like that when I was there.
"No one ever told me not to work off the clock and everybody knew I was doing it. We all knew we had to do whatever we could because there was so much pressure from the district manager to make our sales goals. We had no choice but to work off the clock. Normally, a dog groomer sees about 5 or 6 dogs a day. I would do 12 to 13 dogs a day??"that's double the amount a normal groomer does. I did it because I took no breaks and I worked off the clock. By not saying anything about it, I've been encouraging it."
Some employers argue that employees make their own decision to work off the clock and they cannot be held responsible if the employee makes that decision. However, those companies have no problems benefiting from employees who work off the clock (for example, in profits from increased sales) so they should either properly compensate employees for overtime hours or prohibit employees from working off the clock. These are the only ways to ensure that employees are not taken advantage of.
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