Workforce Bulletin

We have written frequently in this blog about the great many wage-hour class actions filed against employers doing business in California.  

Those lawsuits often allege that a class of employees performed work off-the-clock, and that the employees are not only entitled to compensation for that time, but to a slew of penalties that often dwarf the amount of alleged damages.

Depending on the nature of an employer’s business, a plaintiff might allege that employees were not paid for the couple minutes it might take to “boot up” a computer in the morning, or for waiting to punch in their ...

By Jennifer Nutter and Amy Messigian

The beginning of a new year means new laws that will take effect in California.  Some of the laws that are of particular interest to employers in the hospitality industry are below:

-          Minimum Wage Increases: The minimum wage in California is increasing to $9/hour effective July 1, 2014.  Employers should confirm whether currently exempt employees will continue to meet any minimum compensation requirements once the minimum wage increases (e.g., twice the minimum wage will become $720 a week or $37,440 a year).  Additionally, San Jose and San Francisco ...

A California plaintiff who prevails in a wage-hour lawsuit generally may recover his or her attorney’s fees.  The same is so for employers -- but only for the next few months.

A new statute will take effect in January 2014 that will change whether and how an employer who prevails in such a case may recover its fees.  In a state already overrun with wage-hour lawsuits with questionable merit, that new statute seems to ensure that even more meritless wage-hour lawsuits will be filed by plaintiffs’ counsel who count on the in terrorem effect of those lawsuits to force employers to settle such claims – and who pocket 40% of what they recover.

Governor Jerry Brown has signed into law a bill that raises the standard for a prevailing employer to recover fees when they prevail in wage-hour actions.  Effective January 2014, an employer must meet a higher standard than an employee to recover fees.   It must not only prevail in the lawsuit, but it must establish that the lawsuit was brought in “bad faith.”  

By Andrew J. Sommer

There has been a lack of clarity in California wage and hour law on how compensation must be structured to meet the “salary basis test,” particularly where an exempt employee is paid based on hours worked. However, in Negri v. Koning & Associates, the California Court of Appeal addressed this very issue and concluded that a compensation scheme based solely upon the number of hours worked, with no guaranteed minimum, is not considered a “salary” for the purpose of state overtime laws. 

Under California law, an employee exempt from overtime laws must ...

We have written previously in this blog about California’s obscure “suitable seating” law, which requires that some employers provide “suitable seating” to some employees.

In short, the plaintiffs’ bar recently discovered a provision buried in California’s Wage Orders requiring employers to provide “suitable seating” to employees when the nature of their jobs would reasonably permit it. The provision was not designed to cover employees in the hospitality industry who often stand to show that they are ready to assist customers. Instead, it was written to ...

By Michael Kun

As we have written before in this space,  the latest wave of class actions in California is one alleging that employers have not complied with obscure requirements requiring the provision of “suitable seating” to employees – and that employees are entitled to significant penalties as a result.

The “suitable seating” provisions are buried so deep in Wage Orders that most plaintiffs’ attorneys were not even aware of them until recently.  Importantly, they do not require all employers to provide seats to all employees.  Instead, they provide that employers ...

By William Stein

In rolling out arbitration policies, retail employers should heed the recent California Court of Appeal decision Gorlach v. The Sports Club Co. That case gives employers reason to be cautious when asking employees to sign agreements requiring them to arbitrate any disputes arising out of their employment.  In that case, the trial court found the former Director of Human Resources, who was responsible for obtaining employees’ signatures on a mutual agreement to arbitrate claims, intentionally misled the company into believing that had signed the agreement ...

By Michael Kun and Aaron Olsen

To the surprise of few, the California Supreme Court has decided to review the Court of Appeal’s decision enforcing a class action waiver in Iskanian v. CLS Transportation Los Angeles, LLC.

We wrote in detail about that decision on this blog earlier this year.

In reaching its conclusion, the Court of Appeals relied on the April 2011 United States Supreme Court’s landmark decision in AT&T Mobility, LLC v. Concepcion.  Whether the California Supreme Court will follow Concepcion or attempt to distinguish it is impossible to predict.   Unfortunately ...

By:  Adam C. Abrahms

Last week Assembly Bill 889 cleared a California State Senate Committee, advancing it one step closer to becoming state law.  The bill, authored by Assemblyman Tom Ammiano (D – San Francisco), seeks to extend most of California’s strict wage and hour regulations to domestic employees working in private homes.  While the bill excludes babysitters under the age of 18, it extends California wage and hour protections to babysitters over the age of 18 as well as any other housekeeper, nanny, caregiver or other domestic worker.

Should the bill become law individual ...

By Michael S. Kun and Aaron F. Olsen

Earlier this week, the California Court of Appeals issued a ruling in Iskanian v. CLS Transportation Los Angeles, LLC that illustrates how the legal landscape in California has shifted in favor of enforcing arbitration agreements with class action waivers.   This, of course, is a welcome development for employers with operations in California, which have been besieged by class action lawsuits alleging wage-and-hour violations for the past 10+ years.

In 2006, the plaintiff in Iskanian filed a putative class action complaint against his ...

By Michael Kun

This morning, the California Supreme Court has just issued its long-awaited decision in the Brinker case regarding meal and rest period requirements.   It is largely, but not entirely, a victory for employers.  A copy of the decision is here.

A few highlights of the decision:

On rest periods, the Court confirmed the certification of a rest period class because Brinker’s written policy arguably did not comply with the law as to the second rest period in a day.  In so doing, it clarified when employees are entitled to rest periods:

• Employees are entitled to 10 minutes’ rest ...

By Michael Kun and Aaron Olsen

Plaintiffs seeking to bring state law wage-hour class actions against employers in the trucking industry have run into a significant road block in California.  For the second time in a year, a United States District Court has held that claims based on California’s meal and rest period laws are preempted by federal law.

In Esquivel et al. v. Performance Food Group Inc., the plaintiffs claimed the defendant scheduled their delivery routes such that the plaintiffs were unable to take duty-free meal periods.  The defendant argued that the Federal Aviation ...

By Michael Kun

Last week, the U.S. Department of Labor’s Wage and Hour Division and the California Secretary of Labor announced that they were teaming up to crack down on employers who classify workers as independent contractors.  http://www.dol.gov/opa/media/press/whd/WHD20120257.htm

The announcement that the two groups would work together on such an initiative should not come as much of a surprise to employers.  Shortly after Hilda Solis took office as the U.S. Secretary of Labor, the Wage and Hour Division announced that it would be focusing on this issue.  And California has ...

By Michael Kun

Last week, the U.S. Department of Labor’s Wage and Hour Division and the California Secretary of Labor announced that they were teaming up to crack down on employers who classify workers as independent contractors. 

The announcement that the two groups would work together on such an initiative should not come as much of a surprise to employers.  Shortly after Hilda Solis took office as the U.S. Secretary of Labor, the Wage and Hour Division announced that it would be focusing on this issue.  And California has enacted a new statute that provides additional penalties in ...

by Marisa S. Ratinoff, Susan Gross Sholinsky, Eric A. Cook, and Jennifer A. Goldman

California’s Wage Theft Prevention Act of 2011 (“CAWTPA”) went into effect on January 1, 2012. The CAWTPA requires most private-sector employers to provide notice to non-exempt employees of certain wage payment information, among other things. As we previously reported (see Act Now Advisory “New California Laws Increase Penalties for Employee Misclassification and Wage Theft”), the CAWTPA requires the Labor Commissioner (“Commissioner”) to create a template for employers to ...

By Dena L. Narbaitz and Marisa S. Ratinoff

While everyone awaits the California Supreme Court's ruling in Brinker Restaurant Corp. v. Superior Court (Hohnbaum) – which is expected sometime in early 2012 and will determine the scope of an employer's meal and rest period obligations – employers must not lose sight of other important developments in California employment law. Below are brief summaries of some of the legislative enactments in California that will affect employers. Unless otherwise noted, these laws will take effect on January 1, 2012.

Read the full advisory ...

by Michael S. Kun, Eric A. Cook, and Jennifer A. Goldman

California Governor Jerry Brown has signed two employment-related bills into law, raising the stakes for employers doing business in California. The two laws, which increase the penalties for employers that wrongly classify employees as independent contractors or engage in "wage theft," both go into effect on January 1, 2012.

Read the full advisory online

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The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.