Source: https://nuddleman.com/category/wage-hour/
Timestamp: 2019-04-22 17:03:45+00:00

Document:
San Francisco minimum wage increases to $15.59 per hour on July 1, 2019.
San Francisco, like many cities and counties in California, adopted a minimum wage rate higher than California or Federal minimum wage. The minimum wage increased to $15.00 on July 1, 2018, and now will increase each year based on the Consumer Price Index.
The City calculated the July 1, 2019 rate using the process required by S.F. Admin Code Section 12R.4. The Consumer Price Index for urban and clerical workers in the San Francisco area increased 3.934% between 2017 and 2018. The City applied that increase to the current $15.00 minimum wage to find the new July 1, 2019 rate of $15.59.
Employers must display the San Francisco Minimum Wage Poster informing employees of their rights. Download a PDF of the 8.5″x14″ poster.
For more information, visit www.sfgov.org/olse/mwo. You can also call (415) 554-6292 or email mwo@sfgov.org.
I’ll be speaking at the 2019 PFAC Conference taking place May 1-4 at the Disneyland Resort Hotel in Anaheim. This conference provides a comprehensive educational opportunity for professional fiduciaries as well as pertinent learning for estate and trust attorneys, guardians, conservators and probate administrators. I encourage you to take a look at the schedule located at PFACMeeting.org and consider attending. The conference offers up to 20 CLPF CEs and up to 18 MCLEs (non-specialized).
For more information, contact PFAC at 844.211.3151.
Who is the Employer and Why is it Important?
Four minutes a day might seem inconsequential, right? Not to the California Supreme Court. In Troester v.Starbucks Corporation, the Court held that employers are required to compensate employees for short, unrecorded periods of time worked off the clock. Such de minimus time, which can add up to substantial time over weeks, months, or years, must be compensated if it occurs “on a regular basis or as a regular feature of the job.” Tasks such as locking up, shutting down computers, or setting the alarm must be compensated under California law.
California’s stricter, more worker-friendly, employment laws supersede federal statutes like the Federal Labor Standards Act. Federal labor law and Supreme Court precedent carve out exceptions for “de minimus” work by employees. This provides some leeway for businesses to avoid compensation for seemingly inconsequential work. However, California law doesn’t contain a de minimus exception. In fact, California specifically requires compensation “for all hours worked.” That puts a requirement on employers to compensate employees for small fragments of time that easily slip through the cracks in the course of the workday. California employers must comply with California law and the FLSA.
Troester does not require employers to track every fraction of a second. There are many instances of work so minuscule, difficult to track, or irregular that it would be nearly impossible to record and compensate. But wait, isn’t that what de minimus time is? Employers must make every reasonable effort to track and compensate workers’ time. The employer bears the burden of ensuring fair and complete compensation. The Court suggests technological advances, restructuring of time recording practices, or even a time rounding policy to assist employers in meeting their obligation to compensate their workers. The Court reminds employers that the DLSE manual and opinion letters are merely “advisory” opinions, and do not hold the force of law. This case makes it clear, once again, that employers should exercise caution when it comes to paying employee wages.
Original article by JT Keane for the Nuddleman Law Firm, P.C.
When an employee quits without notice, there is a myriad of considerations and consequences for an employer. Finding a replacement and keeping the business running smoothly is at the top of many employers’ minds. However, one of the most urgent tasks for an employer when someone unexpectedly quits should be compensating that employee. No matter how abrupt or disruptive an employee’s resignation is, California law requires compensation for all unpaid wages within 72 hours of resignation. That includes accrued vacation time. If an employer fails to comply, they are required by law to pay “waiting time” penalties, equivalent to the worker’s daily wage, for up to 30 days. A new court case, Nishiki v. Danko Meredith P.C., sheds more light on what specific obligations an employer has when an employee quits.
When Does the Clock Start Ticking for Waiting Time Penalties?
In Nishiki, the employee resigned by email on a Friday night, after the close of business. The Court held that it would be unreasonable and unduly burdensome on the employer to start the statutory 72-hour clock at 6:38 on a Friday night. According to the Court, in the pursuit of justice the law must be interpreted in a reasonable, common sense way that does not allow for unjust applications of the law. Employers don’t have to constantly check their email at all hours of the night or over the weekend to ensure compliance. The 72-hour clock starts when it can be reasonably assumed the employer received the resignation. This leaves a reasonable period for the employer to calculate and pay final wages.
Are Waiting Time Penalties Appropriate for Honest Mistakes?
Oh, what a difference a few dollars can make. In Nishiki, the employer made a clerical error, shortchanging the employee by $80. The employee argued this error, and the delay in correcting the error warranted waiting time penalties. The employer argued the error was not “willful,” and therefore did not owe penalties. The Court held the prolonged delay in correcting that error violated the Labor Code and awarded penalties. Employers should make every effort they can to comply with the law and correct any mistakes or errors as quickly as possible.
The Nishiki court awarded $2,250 in waiting time penalties. The court also directed the employer to pay $86,160 in attorneys’ fees. This should serve as a warning for employers and employees alike. Appealing Labor Commissioner decisions or lower court rulings in wage claims can be dangerous. The law discourages frivolous appeals. The appealing party must pay the other side’s attorneys’ fees if the appeal is unsuccessful. Fighting over relatively small amount may not be worth the risk of paying the other side’s fees.
Original article by JT Keane. Edited by Robert E. Nuddleman of the Nuddleman Law Firm, P.C.
The Nuddleman Law Firm, P.C. represents employers and employees in a wide range of employment law matters. Much of his practice focuses on wage and hour issues, such as unpaid overtime, meal and rest break violations, designing or enforcing commission plans, and other wage-related claims. He also advises employers on how to avoid harassment and wrongful termination claims, and represents employees who have been victims of unlawful discrimination, retaliation or harassment. The Nuddleman Law Firm, P.C. helps employers develop good employment policies, and helps employers and employees with disability accommodation issues.
A friend and colleague, Alan Foster, asked me to write an article for his newsletter regarding independent contractors under Dynamex. I’ve seen articles, presentations and blog posts about the dramatic shift in the law regarding independent contractor versus employee tests. I have a slightly different take. The following is my take on the independent contractor landscape.
Many legal professionals and business advisors are writing about the California Supreme Court “dealing a blow” to independent contractors. Different articles claim Dymanex Operations West, Inc. v. Superior Court “makes it more difficult” for employers to classify workers as independent contractors. Many are calling it a “game changer.” But is it really?
Dynamex, a package delivery company, hired delivery drivers to deliver packages. Although Dynamex initially hired the drivers as employees, in 2004 Dynamex changed the drivers to independent contractors. Dynamex believed it provided drivers sufficient freedom it could safely classify the workers as independent contractors. The delivery drivers filed a class action lawsuit seeking unpaid wages and expenses, claiming they were really employees.
The employees claimed that under Martinez v. Combs (2010) 49 Cal.4th 35, Dynamex was the employer. Dynamex argued that Martinez only applied in the joint-employer situation and that the common law test set out in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 should apply.
In Martinez, the court adopted a very broad definition of employer based on the IWC orders.
(9) whether or not the parties believe they are creating the relationship of employer-employee.
Is This Really a New Test for the Independent Contractor?
Since this is a new test, that means this is a “game changer,” right? Not necessarily. Anyone who has gone through an EDD audit is familiar with the ABC test already. The Employment Development Department has a very useful, although not employer-friendly, test for determining whether someone is an independent contractor. The questions in the DE-38 contain the same factors that make up the ABC test.
(B) that the worker performs work that is outside the usual course of the hiring entity’s business 3. Is the work being performed part of your regular business?
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity 4. Does the worker have a separately established business?
(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact 5. Is the worker free to make business decisions which affect his or her ability to profit from the work?
One aspect of the ABC test arguably not in the DE-38 is that the hiring entity must establish each of the three factors in the ABC test. The DE-38 uses phrases such as “strong indication” and “normally,” allowing more leeway than the more definitive ABC test.
The ABC test is less a “new” independent contractor test, and more an application of an existing test that many employers ignored. I have been advising my clients against hiring workers as independent contractors unless the workers have their own established business and the workers are performing work not part of the company’s normal business. Dynamex confirms the conservative approach is the right approach, particularly in California.
Labor Commissioner audits can be time consuming and expensive. Just ask Kome Japanese Seafood & Buffet, Burma Ruby Burmese Cuisine, and Rangoon Ruby Burmese Cuisine. The restaurants and their owners are facing a hefty bill after their audits.
California’s Department of Industrial Relations announced the Labor Commissioner cited seven Bay Area restaurants more than $10 million for “wage theft violations.” The restaurants included Kome Japanese Seafood & Buffet, Burma Ruby Burmese Cuisine, and Rangoon Ruby Burmese Cuisine.
The Labor Commissioner’s Office launched the investigation after receiving complaints from workers who reported wage theft to the Asian Law Caucus. The Asian Law Caucus also represented many of the workers who cooperated in the investigation.
Many of the overtime violations resulted from employees paid a salary who worked 50 or more hours each week.
Other Labor Code sections also allow the Labor Commissioner to cite individual owners.
David Tai Leung, Wendy Lai Ip, Jun Zheng, Gang Zhou, Bai Dong Zhang and Tiffany Leung, owners of the corporations Kome Japanese Seafood Buffet, Inc. and Koshi Food Service, Inc., are ordered to pay the 133 workers at Kome Buffet $4,381,461 in unpaid wages, premiums and liquidated damages, as well as civil penalties of $780,400.
The press release did not indicate whether the restaurants will appeal the citations, or how much the Labor Commissioner will actually collect.
I represent employers in Labor Commissioner audits. The audits can be time-consuming and result in serious assessments. Seemingly small mistakes can have serious consequences, and the appeal rights are somewhat limited. Employers receiving notice of an audit should speak with counsel as soon as possible. Properly preparing for an audit can reduce the exposure.
The best way to prevent an audit, or at least make it through an audit unscathed, is to review your policies with a knowledgeable attorney before a problem arises. If you have a question about your wages or employment practices, contact the Nuddleman Law Firm, P.C.
Employers in California know payroll can be particularly troublesome. Attorneys representing employees routinely file lawsuits and PAGA actions based on inaccurate or incomplete pay stubs. I previously discussed the ease with which employees can bring PAGA actions for unintentional pay stub violations that cause no harm. The Second Appellate District came out with a rare win for employers trying to handle pay stubs correctly.
In Canales v. Wells Fargo Bank, N.A., the company paid non-exempt employees a monthly, quarterly and/or annual bonus. The employees earned the bonus throughout the month/quarter/year. When paying the bonus Wells Fargo recalculated and paid overtime owed on the bonus. Wells Fargo issued pay stubs with the bonus listing the “incremental additional overtime paid to the employee for overtime hours worked during the bonus period.” No hourly rates or hours worked were identified on the pay stubs.
Additionally, in some situations when an employee was terminated, payroll would issue a cashier’s check immediately for all wages earned. Payroll mailed the pay stub the following day.
In the published portion of the decision, the court rejected both claims.
Wells Fargo argued there were no “applicable hourly rates in effect during the pay period” that corresponded to bonus payments. Therefore, defendant did not have to provide such information on the pay stub.
The court confirmed, “nondiscretionary bonuses are considered part of the ‘regular rate of pay’.” The court also confirmed an employer must “allocate the bonus over the period in which it was earned” in order to calculate overtime pay. Hourly employees earn a quarterly bonus throughout the quarter. If the employee worked some overtime hours to earn the bonus, the employee is entitled to overtime premium pay on the bonus. The employer must divide the bonus by the total hours worked to calculate the “regular rate of pay” on the bonus. The employee is then entitled to an additional 0.5 times the regular rate of pay for the overtime hours.
represented additional wages that were earned as overtime pay based on nondiscretionary bonuses being spread over the hours worked during the bonus period. Moreover, based on how OverTimePay-Override was calculated, the overtime hours were worked in previous pay periods for which employees had already received their standard overtime pay. The itemized wage statement issued by an employer need only provide the applicable hourly rates and the corresponding number of hours worked “in effect during the pay period.” In other words, the employer need only identify on the wage statement the hourly rate in effect during the pay period for which the employee was currently being paid, and the corresponding hours worked.
It is important to note that the court’s conclusion is based solely on how the bonus plan worked in this instance. Different bonus plans–such as weekly bonuses–would be treated differently. The case will be useful to employers that pay monthly, quarterly or annual bonuses provided the employees previously received pay stubs showing the hours worked and rates paid during the pay period.
The court agreed with the employer. The court noted the Labor Code requires the pay stub to be provided at least semi-monthly or at the time the wages are provided. The legislature did not include the “whichever is first,” language cited by the Labor Commissioner.
This could result in interesting situations. For example, an employer could pay an employee every week but only provide pay stubs twice a month. I have no idea why an employer would do that, but employers do strange things sometimes.
Canales v. Wells Fargo Bank, N.A. represents a rare win in the wage and hour arena. I don’t know that the cases will result in fewer lawsuits. It will hopefully provide guidance to employers and employees regarding some of the pay stub issues employers face.
If you have questions about your pay stubs or your pay practices, Robert Nuddleman has been representing employers and employers in wage and hour matters for over two decades. Contact the Nuddleman Law Firm, P.C. today for a reduced rate consultation.
Two recent court decisions expand the Labor Code Private Attorney General Act (PAGA) … Again. In Raines v. Coastal Pacific Food Distributors (CA3 C083117 5/22/18), the court held employees can bring Labor Code Private Attorney General Act claims for pay stub violations without suffering an injury even if the violations were unintentional. In Huff v. Securitas Security Services USA, Inc. (CA6 H042852 5/23/18) the court held that an employee could bring such an action for violations that never effected the employee.
Labor Code section 226 requires employers to provide pay stubs with specific information on each pay stub. An employee “suffering injury” from a “knowing and intentional” violation of Labor Code section 226 can sue the employer for penalties. According to Raines v. Coastal, the employee can sue the employer under PAGA even if the employee suffered no injury. and does not have to plead or prove the failure was “knowing” or “intentional.” In essence, it makes Labor Code section 226 a strict liability statute.
As we explain, a representative PAGA claim for civil penalties for a violation of section 226(a) does not require proof of injury or a knowing and intentional violation. This is true even though these two elements are required to be proven when bringing an individual claim for damages or statutory penalties under section 226(e).
PAGA allows an aggrieved employee to bring a lawsuit for any violation of the Labor Code. The plaintiff can bring the claim on behalf of other “aggrieved employees.” In Huff v. Securitas Security Services USA, Inc., the plaintiff brought a PAGA action seeking penalties not only for the Labor Code violation that affected him, but also for different violations that affected other employees.
PAGA allows an “aggrieved employee” ––a person affected by at least one Labor Code violation committed by an employer––to pursue penalties for all the Labor Code violations committed by that employer.
Based on these two cases, an employee who never suffered an injury, can bring a claim against an employer who unknowingly made a mistake, and the employee can include claims for other employees even if the plaintiff never suffered the same harm the other employees suffered.
I used to think Labor Code Private Attorney General lawsuits were a “lighter” version of a class action. Now I think they are more like class actions without the protection of a class action lawsuit. In class actions the plaintiff has to at least suffer the same injury as the rest of the class.
These cases remind employers to review payroll practices to ensure they comply with the law.
If you have questions or concerns about your pay practices, contact the Nuddleman Law Firm, P.C. today.
Every employer, at the time of hiring, must provide a notice to most employees regarding certain basic terms of employment. Labor Code 2810.5. The employee must sign the notice, receive a copy of the signed notice, and the original should be maintained in the employee personnel file.
(H) That an employee: may accrue and use sick leave; has a right to request and use accrued paid sick leave; may not be terminated or retaliated against for using or requesting the use of accrued paid sick leave, and has the right to file a complaint against an employer who retaliates.
(I) Any other information the Labor Commissioner deems material and necessary.
The Labor Commissioner developed a form employers can use for this purpose. You can download the form here.
For whatever reason, employers are not using the Labor Commissioner’s standard form, and many are neglecting to include the notice to employees in the hiring documents. If any of the items in the notice to employees change (i.e., pay rate, workers’ compensation carrier, etc.), the employer has to provide a new signed notice to the employee.
Even if your offer letter or employment agreement contains all the required information (it likely wouldn’t because no one includes their workers’ compensation carrier information in an offer letter), employers should still use a standard form.

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