Wage Hour

Document Sample
Wage Hour Powered By Docstoc
					California Wage & Hour Law:
    feel the pain now, or later?

                      Jeanine DeBacker
             McPharlin, Sprinkles & Thomas LLP
Feel the Pain Later?
•   overtime pay for past 3, maybe 4 years
•   meal and rest break premiums for 3-4 years
•   waiting time penalties
•   interest
•   attorneys’ fees
•   employee’s attorney’s fees
•   EDD and IRS payroll taxes and penalties
•   valuable time away from making $$$
•   claims by more employees
•   class actions
•   Private Attorney General Act (PAGA)
USDOL – “Helping”
   public awareness campaign to
    educate workers under Fair Labor
    Standards Act (“FLSA”)
   “Plan/Prevent/Protect” launched
    in 2010 to promote a “safe, secure
    and equitable” workplace for all
   “DOL-Timesheet” App launched
    to record hours, breaks, OT
California v. Federal Law

    overtime
    exemptions
       - duties
       - “highly compensated”

   where California statutory,
    regulatory or case law are more
    employee-favorable than FLSA,
    California rules apply
   out of state employees working in
    the state are covered by
    California’s wage and hour rules
      – Sullivan v. Oracle Corporation
California’s Rules
   “Wage and Hour Law” is:
    – California’s Labor Code
    – IWC Wage Orders
    – FLSA
   sources of guidance and interpretation for
    wage and hour law:
    – California courts
    – Division of Labor Standards Enforcement
    – Federal courts
    – USDOL Wage and Hour Division
Exempt v. Non-Exempt
Pay for “hours worked”
  “Hours worked” means “the time
during which an employee is subject to
the control of the employer, including all
time the employee is suffered or
permitted to work, whether or not the
employee is required to do so.”
                            (DLSE Manual, 46.1)

   Pay days at least twice a month
      - by the 26th for work performed from the 1st
      through the 15th
      - by the 10th of the next month for work performed
      from the 16th through the end of the month
   Exempt = at least once a month
      - by the 26th for work performed the entire month
Overtime Pay
   Hours worked in excess of 8 hours in a day, 40 hours
    in a workweek, or any time worked on a 7th
    consecutive day in workweek
   1 ½ x regular hourly rate = any work over 8 hours, up
    to 12 hours; and for first 8 hours on 7th workday in
   2x regular hourly rate = any work in excess of 12
    hours; and for any work in excess of 8 hours on 7th
    workday in a workweek
   OT only available for actual hours worked except for
    rest breaks
Meal and Rest Breaks

   Meal Breaks
    – Provide 30 minutes or more, duty-free, unpaid, if
      employee works more than 5 hours (can be
      waived if employee works no more than 6 hours)
    – Another 30 minutes if work more than 10 hours
   Rest Breaks
    – 10 minutes for every 4 hours worked, paid
    – Additional time to express breast milk, unpaid
Exempt Employees
 Paid for their work, not for their time
 Full weekly salary must be paid for any
  workweek in which any work is performed
  (with limited exceptions)
 The amount of time they put in can be
  evaluated as a performance issue, but you
  cannot condition pay on keeping an 8-hour
  schedule; requiring a set schedule can
  jeopardize the exemption
Exempt? What does the
employee actually do?
   duties test: employees may be classified
    as exempt if they spend more than 50%
    of their time performing job duties that fall
    within the exemption
   salary test: most exemptions require
    employees be paid at least a certain
Executive Exemption
  management of the enterprise or a division; and
  supervise 2+ employees; and
  authority to hire and fire, or suggest and be taken
   seriously; and
  customarily and regularly exercise discretion and
   independent judgment; and
  more than 50% of time doing above; and
  salary at least twice minimum wage for forty hour
   workweek, i.e., $2,774 per month or $33,280 per
Administrative Exemption

 office or non-manual work that relates to
  management policies or business operations; and
 customarily and regularly exercise discretion and
  independent judgment; and
 operates under only general supervision or directly
  assists proprietor or other exempt employee; and
 more than 50% of time doing above; and
 salary is at least 2 times minimum wage.
Professional Exemption

 licensed or certified by California AND primarily
  engaged in the practice of a Recognized Profession,
 primarily engaged in an occupation recognized as a
  “learned or artistic profession;”
 customarily and regularly exercise discretion and
  independent judgment; and
 salary is at least 2 times minimum wage.
Who is a Professional?
   Licensed by California:   But not:
      law                      paralegals
      medicine                 insurance brokers
      dentistry                photographers
      optometry                social workers
      architecture             nurses
      engineering              physician assistants
      teaching                 teachers (other than
      accounting                state certified)
Other Exemptions

   computer software
   outside sales
   inside sales commissioned
   industry-specific exemptions
Common Mistakes
 relying upon what others in industry do
 relying on job titles
 relying on parties’ intent or agreement
 allowing exempt employees to perform
  primarily production work
 treating exempt employees as
Avoiding Pitfalls

 Perform internal audit of employee
 Prepare accurate job descriptions
 Review employee handbooks
 Performance appraisals / discipline
 Watch out for minimum wage increases
Deductions from Exempt Salaries

 Use extreme caution in making any
 Partial day deductions from vacation or
  sick-day bank, BUT not from salary
 Full day deductions okay under limited
Separation Anxiety
   Final pay
    – Resign / Quit: Must pay within 72 hours
    – Involuntary termination: NOW!
    – Reporting time pay
   Waiting Time Penalty
    – Failure to pay all wages due
    – Owe daily wage rate for up to 30 days
Thank you!

                 Jeanine DeBacker
       McPharlin, Sprinkles & Thomas LLP