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With certain exceptions for specific industries, occupations, and limited situations, California Labor Code 512 and the Industrial Wage Commission Wage Orders require employers to provide non-exempt employees with a minimum 30-minute...
With certain exceptions for specific industries, occupations, and limited situations, California Labor Code 512 and the Industrial Wage Commission Wage Orders require employers to provide non-exempt employees with a minimum 30-minute off-duty meal break starting before the end of the fifth hour of work. Employers must provide a second off-duty minimum 30-minute meal break for shifts greater than 10 hours. (“Non-exempt” means not exempt from overtime pay.)
“Off-duty” means the worker is relieved of all duties and free to leave the worksite during the meal period.
Unfortunately for business owners and management, employee lawsuits and Labor Board complaints containing a meal break deprivation claim have become a virtual epidemic over the past decade and more. A company facing such allegations may well also be at risk of many thousands in back wage and penalty liabilities.
An employer’s conscientious encouragement and promotion of meals is no protection or deterrent against such challenges if management has failed to take the simple – and vital – step of ensuring that workers clock out for the break and back in at break’s end. Without such documentation, a disgruntled former employee can be expected to push such a meal deprivation claim regardless of the truth.
On the other hand, time records routinely recorded and attested as accurate by the employee for each meal break provide solid evidence that violations did not occur. Best practice includes regular management review of such records for any omission and to promptly resolve the matter with the subject worker.
If the employee had forgotten to make the entries, then he/she should correct it personally or, with proper documentation, instruct payroll to make the adjustment.
Alternatively, if the employee missed one or more meals due to work demands on a given day (and not by personal choice), the employer will owe premium pay under Labor Code 226.7 for having caused the missed meal or meals.
Of course, employee-generated time entries can be by any number of systems – e.g., time clocks, via computer or cell phone apps, or even by hand-written notes -- so long as they accurately furnish the date and all in- and out-times. Some computer systems enable explanation of why a meal break was missed, thereby electronically informing the employer whether it owes premium pay.
Of course, another good reason to keep such records is Labor Code 1174, requiring their maintenance and safe storage and permitting the Division of Labor Standards Enforcement to “freely access” any company premises to inspect them.
See also:
For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
Tim Bowles
June 4, 2021
To level the playing field for those without access to workplace-based retirement plans, California is phasing in employer requirements to either: ● offer a retirement savings vehicle such as a 401(k) plan ; or ● facilitate employee access...
To level the playing field for those without access to workplace-based retirement plans, California is phasing in employer requirements to either:
Affected employers must register with CalSavers and comply with specified administrative duties (see Employer FAQs ).
Registration deadlines vary by business size:
Employers must not encourage or discourage employee CalSavers participation, relay investment or savings-related advice, or make/match any additional contributions.
If employees take no action within 30 days of receipt of their initial CalSavers paperwork, they will be enrolled under the current default saving rate of 5% of gross pay after tax withholdings. (See Employee Program Details). Employers must show these deductions on the worker’s itemized wage statement (see California Labor Code section 226(a)(4)).
There is no employer fee for program participation. However, affected employers who fail to register within 90 days of service of a noncompliance notice shall pay a $250 penalty for each eligible employee and, after 180 days, an additional $500 per employee.
For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Cindy Bamforth
June 4, 2021
With Memorial Day and July 4 approaching, California employers should review and, as needed, update their written holiday policies. California law does not require employers to provide or to pay for holiday time off .
With Memorial Day and July 4 approaching, California employers should review and, as needed, update their written holiday policies.
California law does not require employers to provide or to pay for holiday time off.
However, for employers opting to offer holidays off, paid or unpaid, written policy should cover the scope of the benefit, including:
As holidays must be tied to a calendar event, policy should also correctly regulate any additional “personal” or “floating” holiday. Best practice can thus include:
The Labor Commissioner FAQs offer additional detailed information including the effect of holidays on overtime calculations.
Take-Aways:
When a business opts to observe holidays, clearly and in writing state the rules and procedures in advance, separate from paid vacation, sick pay and other leave benefits.
For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Cindy Bamforth
May 28, 2021
California businesses do not have to offer workers paid vacations. However, the Labor Code dictates that if implemented, such pay is an accrued or accruing benefit, prohibiting a “ use it or lose it ” plan.
California businesses do not have to offer workers paid vacations. However, the Labor Code dictates that if implemented, such pay is an accrued or accruing benefit, prohibiting a “use it or lose it” plan.
Since an employee continually earns the benefit as she/he works, a policy that simply provides a few weeks of paid vacation each year without limit could become a problem. For instance, a worker who hadn’t bothered taking his/her two-three weeks of paid vacation/year over a couple of decades could suddenly have over a year of pay coming upon termination or retirement.
A written paid vacation policy should thus specify a ceiling accrual amount (for example, 18 months of benefits) after which the employee cannot earn more until he/she utilizes at least some of the benefit already earned.
As a vacation benefit “accrues” or “vests” over a work year, the employer must pay an employee that proportion earned up to her/his departure date during that benefit year (in addition to any vacation benefit accrued but unused from prior years). A company that overlooks paying this pro-rated amount on a midyear termination or resignation could be subject to a “waiting time” penalty up to one month’s wages.
Labor Commissioner FAQs offer more detailed information including permitted earning limitations for new hires, employer rights to regulate vacation times, and much more.
Take-Aways:
If a business opts to offer it, management should take care to issue clearly stated paid vacation benefit rules and procedures. With its distinct characteristics, the policy should be separate from paid holiday, sick pay and other leave provisions.
See also,
Tim Bowles
May 21, 2021
Wisely, the federal and California workplace anti-discrimination protections do not include ineffectiveness, ineptness, uselessness, or incompetence.
Wisely, the federal and California workplace anti-discrimination protections do not include ineffectiveness, ineptness, uselessness, or incompetence.
However, across the spectrum of personnel decisions – including recruitment, testing, hiring, pay scale, benefits, promotions, discipline and termination – management may not discriminate on any “protected classification.” In no particular order, the vast majority of California workers (including employees, interns, volunteers, and independent contractors) are shielded from such unequal treatment due to:
The discrimination does not have to be direct or overt. Violations may be circumstantial, e.g., a discriminatory policy against older or disabled people by recruitment campaigns and ads for “active,” “dynamic,” or “energetic” candidates.
Management’s frontline protections against such claims should start – and will hopefully end – with sound policy, regular training and prudent practice.
See also,
For further assistance, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Tim Bowles
Helena Kobrin
May 21, 2021
Employees’ attorneys are increasingly relying on the California Private Attorney General Act (PAGA) to pursue businesses for Labor Code violations.
Employees’ attorneys are increasingly relying on the California Private Attorney General Act (PAGA) to pursue businesses for Labor Code violations.
Under PAGA procedures, an employee may file a private “representative” lawsuit – on behalf of her or himself and other “aggrieved” workers – to collect civil penalties where the state chooses not to pursue such claims. The bulk of any penalties assessed – 75 percent – goes to the state with the remainder distributed among the affected employees and a modest representative award to the plaintiff. PAGA also directs payment of the plaintiff attorney’s fees.
The law can produce staggering results. In Magadia v. Wal-Mart Associates, Inc. (May, 2019), three PAGA violations affecting a portion of Walmart’s California employees yielded an award of $53,901,700.
The plaintiff asserted penalties for two pay stub violations under Labor Code 226(a).
First, while Walmart included hourly rates and hours worked as required on its bi-weekly pay stubs, it omitted this information on quarterly stubs for certain bonus and overtime compensation.
Though the plaintiff sought $131,427,750 in PAGA penalties on this violation alone, the court awarded “only” $48,046,000, finding that Walmart had operated on a reasonable belief it was complying with the law until the court ruled otherwise.
Second, the court directed Walmart to pay $5,785,700 for failing to list the inclusive work dates on final pay statements, even though Walmart included this information on later stubs.
The plaintiff did not personally experience a third alleged violation – for inadequately compensating non-compliant meal breaks – but still secured $70,000 in PAGA penalties for other employees who did. California courts allow a PAGA plaintiff to bring multiple claims even if he or she has not experienced all of them.
Walmart will survive these results even if it loses its pending appeal . No doubt there are many thousands of employers who would be unable to endure such PAGA challenges to workplace practices non-compliant with Labor Code standards.
PAGA has been criticized as law primarily benefiting the attorneys seeking its remedies. A recent report shows:
The attorney fee component of this Walmart case has yet to be resolved. It will likely be well in excess of that average, considering the number of that company’s California employees and the scope of the case. Walmart will have to pay those plaintiff’s attorney fees in addition to the undoubtedly enormous fees it is paying its own attorneys.
Take-Aways:
The specter of PAGA claims requires that California employers take extraordinary care to maintain all of their wage and hour practices in full compliance with the Labor Code. However, once the PAGA process starts, the non-complaint business, plaintiff employee and his/her co-workers are all losers in the game, with plaintiff lawyers standing to be the only real winners. Sacramento should question whether such results support any legitimate goal of government.
See also,
For further assistance, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
May 14, 2021
No state is likely more protective of employees than California nor more likely to have more employment-based claims in its courts.
No state is likely more protective of employees than California nor more likely to have more employment-based claims in its courts. In our last 20-plus years of defending business in such lawsuits, nearly all have included worker allegations of meal and/or rest break deprivation.
This meal-and-rest suit “pandemic” is a combination of our state’s highly technical break rules, the lash-back anger of former workers out of a job (whether or not justified), and, in too many cases, an employer’s lack of thorough documentation of its provision of such breaks.
California employers must provide every not-exempt-from-overtime worker off-duty unpaid meal and paid rest breaks based on the number of hours that employee works in a given day. As we have detailed in the linked blogs below, the rules vary for such workers as specified in the 17 Industrial Welfare Commission (IWC) Wage Orders covering different industries and occupations.
For an employer’s failure to provide an employee a required meal period or rest break, that business must pay that worker one additional hour of pay/day for any missed meal periods and one hour/day for any missed rest breaks. The employer must include this additional pay in that employee’s next paycheck. See IWC Orders and Labor Code section 226.7.
The Supreme Court of California’s Brinker Restaurant Corp. v. Superior Court decision (2012) clarified the meaning of “employer provided” meal periods and rest breaks. Employers are not responsible for policing workplaces to make sure employees take their meals and rest breaks. However, employers must set out and back-up clear policies consistently encouraging and supporting employee prerogatives to take their entitled times away from their labors during the workday.
Yet, even against a conscientious employer careful to observe these rules, meal and rest break claims commonly find their way into employment cases because they are relatively easy to assert and difficult to defend if management has failed to anticipate the need to methodically document its compliant practices.
One common employer error is neglecting to ensure workers clock out for their minimum 30-minute off-duty meals and back in at meal conclusion. The remedy is obvious: impose the clock out-and-in requirement and regularly confirm compliance.
Documenting a company’s provision of the minimum ten-minute off-duty rest periods is not so easy since these are on the clock. However, management can and should implement a forms system for its workers to acknowledge in writing that they have taken – and were not deprived of -- such breaks (as well as meals) over some period of weeks just passed, with space provided to specify any exception. There are timekeeping software programs that include such features.
Such procedures are not just good practice, enabling management and employees to do their parts in the provision of meal and rest periods. They are also workable preventative measures against the risk and expense of the way-too-frequent litigation on these issues.
See also,
Tim Bowles
May 13, 2021
A federal appeals court has ruled that trucking companies must classify owner-operators as employees unless the relationship meets California’s highly restrictive “ABC” criteria for independent contractor status.
A federal appeals court has ruled that trucking companies must classify owner-operators as employees unless the relationship meets California’s highly restrictive “ABC” criteria for independent contractor status. Thus, haulers not in a position to change their independent relations with owner-operators must swiftly determine if they can meet the detailed “business-to-business” exception to the ABC test.
“Assembly Bill (AB) 5,” effective January 1, 2020, imposed a three-part “ABC test” for classifying independent contractors, with prong B almost certainly fatal to the traditional relationship between trucking companies and small owner-operators: “a person [i.e., the owner-operator] performs work that is outside the usual course of the hiring entity’s business.”
The California Trucking Association quickly took action, winning a January 16, 2020 injunction for interstate drivers, a San Diego judge ruling that the Federal Aviation Administration Authorization Act of 1994 (F4A) overrode AB-5.
However, in California Trucking Ass’n (CTA) v. Bonta (Bonta) (April 28, 2021), a Ninth Circuit panel overturned that injunction, agreeing with the state that California’s ABC criteria did not improperly interfere with the federal government’s exclusive powers over the prices, routes, or services of the interstate transportation of property.
Unless overturned in turn by the U.S. Supreme Court, the decision requires trucking companies to hire owner-operators as employees unless the parties can meet the ABC test (again, a virtual impossibility for the traditional relationships) or can meet an exception the California law provides to that test.
While not yet confirmed by any court decision, Labor Code 2776 (effective September, 2020) may provide such an exception for hauling companies and their independent operators provided the relationship can meet the strict, detailed “business-to-business” criteria of that section.
To qualify for the exemption, the service provider [owner-operator] must:
In addition:
Even if a trucking company – owner/operator relationship can meet all the criteria of this exception, the parties must still satisfy the requirements of the traditional “Borello” factors to properly classify that owner-operator as independent.
Take-Aways:
if they are to maintain the independence of owner-operator relationships in California, trucking companies must be sure to meet all the criteria of an exception of this state’s ABC test. Otherwise, best practice is to reclassify such owner-operators as a hiring company’s employees.
See also,
For further assistance, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
Tim Bowles
May 7, 2021
New California Labor Code 2810.8 requires all hospitality and business services employers -- e.g.
New California Labor Code 2810.8 requires all hospitality and business services employers -- e.g. hotels; private clubs; event centers; airport-related hospitality operations or service providers; and janitorial, building maintenance or security services provided to office, retail or other commercial buildings -- to offer new positions to qualified former employees laid off due to COVID-19, through 2024.
Governor Newsom announced: “As we progress toward fully reopening our economy, it is important we maintain our focus on equity…by assuring hospitality and other workers displaced by the pandemic are prioritized to return to their workplace.”
Employees qualify if:
Covered employers must:
Employers may make simultaneous, conditional employment offers to multiple covered employees, but the position must be ultimately offered to whoever has seniority (based on hire date).
If the employer “declines to recall a laid-off employee” due to “lack of qualifications” and instead hires someone else, the employer must provide a written notice to the laid-off employee within 30 days describing “the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision.”
Recordkeeping: Employers must maintain all relevant records for at least three years for each laid off employee including name, job classification, hire date, last known address and other contact information, and copies of the written notices and all records of communications concerning this job recall procedure; and comply with the law’s anti-retaliation provisions.
Enforcement: California’s Division of Labor Standards Enforcement will directly field employee complaints and award damages, which can include hiring and reinstatement rights, recouping lost pay and benefits, civil penalties of $100 per affected employee, and ongoing damages of $500 per day per employee.
Employers should promptly familiarize their hiring managers with the new law and any similar local government ordinance(s); document the reason(s) for every employee’s separation, such as voluntary quit, retirement, layoff (specify if COVID-related or not) and termination for cause; and implement a compliant rehire process, prepare sample notices, and confirm accurate record-keeping before filling any job vacancy.
For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
Cindy Bamforth
April 30, 2021