Category: Wage and Hour
California passed AB241, known as Domestic Worker Bill of Rights. The bill essentially provides wage and overtime protection to these workers. Domestic work means services related to the care of persons in private households or maintenance of private households or their premises. Domestic work occupations include childcare providers, caregivers of people with disabilities, sick, convalescing, or elderly persons, house cleaners, housekeepers, maids, and other household occupations.
A domestic work employee who is a personal attendant shall not be employed more than nine hours in any workday or more than 45 hours in any workweek unless the employee receives one and one-half times the employee’s regular rate of pay for all hours worked over nine hours in any workday and for all hours worked more than 45 hours in the workweek.
Here’s an interesting article on the bill. While the intentions behind this bill seem well intended it will be interesting to see the impact affects the ability to now afford this care in the first place.
Worklaw® Network firm Swerdlow Sanchez wrote the following about AB241:
Starting January 1, 2014, nannies, caregivers, and other “personal attendants” working in private homes in California will be entitled to overtime pay. The Domestic Worker Bill of Rights was signed into law by Governor Jerry Brown on September 26, 2013, and requires domestic employees who are “personal attendants” to receive one and one-half times their regular rate of pay for all hours worked over nine hours in any workday and over 45 hours in any workweek. “Personal attendants” are employees who: (1) supervise, feed, or dress a child or person who by reason of advanced age, physical disability, or mental deficiency needs supervision, and (2) spend at least 80% of their time in those activities.
Personal attendants have historically been excluded from many of California’s wage and hour laws, which allowed flexibility for households and families who rely on domestic workers for personal care. Prior to the Domestic Worker Bill of Rights, personal attendants were exempt from California’s overtime-pay requirements. The new bill specifically provides overtime premium pay for personal attendants, including live-ins, for hours worked over nine in a day or 45 in a week. The bill does not, however, require domestic employers to provide personal attendants with meal or rest periods.
The bill provides several exclusions to the overtime requirement for personal attendants. Most notably, the bill does not provide overtime pay for casual babysitters. A casual babysitter is defined as a person who babysits on an irregular or intermittent basis and whose vocation is not babysitting. If a babysitter does a significant amount of work other than supervising, feeding and dressing a child, the babysitter will be considered a domestic work employee and will be entitled to overtime pursuant to the bill.
Also exempt from the overtime requirement is any person under 18 years of age who is employed as a babysitter for a minor child in the employer’s home, as well as any parent, grandparent, spouse, sibling, child, or legally adopted child of the domestic work employer.
Domestic employers in California should be aware that in addition to complying with California’s Domestic Worker Bill of Rights, they must also comply with existing federal law regulating domestic caregivers. Under the Federal Labor Standards Act (FLSA), employers with non-live-in nannies (i.e., personal attendants to care for a child) remain responsible for complying with federal overtime rules which require overtime pay of one and one-half times the nanny’s regular rate of pay for all hours worked over 40 in a workweek. Further, an employee who provides at-home companionship for adults who cannot care for themselves due to advanced age or physical or mental infirmity remains exempt from the FLSA’s minimum wage and overtime requirements.
The new bill does not affect the wage and hour requirements of other domestic work employees, such as housekeepers, maids and other workers engaged in the maintenance of private households and their premises. Those employees generally remain entitled to overtime pay at one and one-half times their regular rate of pay for all hours worked in excess of eight hours and up to 12 hours in any workday, in excess of 40 hours in any workweek, and for the first eight hours worked on the seventh consecutive day of work in a workweek. Those employees also remain entitled to double-time for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek. Such housekeepers, maids, and other domestic work employees who are not personal attendants remain entitled to meal and rest periods.
The bill is set to expire on January 1, 2017, unless it is extended. In the meantime, the bill requires the Governor to convene a committee to study and report the impact of this overtime requirement on domestic workers and their employers.
Governor Edmund G. Brown Jr. will join business owners, legislators and dozens of working Californians tomorrow in Los Angeles and Oakland to sign AB 10 which will raise the minimum wage in California from $8.00 per hour to $10.00 per hour. AB 10 will raise California’s minimum wage in two one-dollar increments, from $8 per hour today to $9 per hour, effective July 1, 2014 and from $9 per hour to $10 per hour, effective January 1, 2016. Click here to see the new law.
California law provides that, absent an exemption, an employee must be paid time-and-a-half for work in excess of 40 hours per week. To be exempt from that requirement the employee must perform specified duties in a particular manner and be paid “a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” (Lab. Code, § 515, subd. (a).)
The question presented in this case is whether a compensation scheme based solely upon the number of hours worked, with no guaranteed minimum, can be considered a “salary” within the meaning of the pertinent wage and hour laws. We conclude that such a payment schedule is not a salary and, therefore, does not qualify the employee as exempt. Since the trial court found the employee was exempt, we shall reverse.
In the case of Busk v. Integrity Staffing Solutions, the plaintiffs were former employees of Integrity Staffing Solutions, which provides warehouse space and staffing to clients such as Amazon.com. They work as hourly employees at Nevada warehouses filling orders placed by Amazon.com customers. In 2010 Jesse Busk and Laurie Castro sued Integrity on behalf of a class of workers in these warehouses claiming violations of federal and Nevada labor laws. The plaintiffs brought two basic claims: 1) claiming that they were not compensated for being required to pass through a security clearance at the end of each shift, which at times lasted up to 25 minutes. Plaintiffs claim that these clearances “were necessary to their work product” to help minimize warehouse theft. 2) They also sought compensation under the law for their entire 30-minute unpaid lunch periods because they spent up to 10 minutes of the meal period walking to and from the cafeteria and/or undergoing security clearances.
The court ruled that the time they spent waiting to go through security was in fact compensable. They distinguish this situation from things like airport security and other security measures that everyone entering a facility had to undergo. So, for example, if everyone has to go through a 25 minute physical security check upon leaving the warehouse then that time would not be deemed compensable. Remember that under the Portal-to-Portal Act preliminary and postliminary activities are compensable if they are “integral and indispensable” to employees’ principal activities. In order to be so the activity must be necessary to the principal work performed and done for the benefit of the employer. For example the “donning and doffing” of workplace clothing or gear is generally considered compensable time.
When it comes to their lunch duties the court reminded us that federal law does not have mandatory lunch requirements. The employees are not claiming that they did not get to have a lunch, rather they claim that they had their pay deducted for lunch time they did not get to fully enjoy, in part due to the hassle of taking lunch. The court remanded the lunch break argument back to the District Court.
Lesson learned: Any time an employee engages in unique preliminary or postliminary work activities, you should seriously consider whether or not those activities are compensable under federal and state law. You may even go so far as to pay a separate wage rate for those activities.
In the May 2013 case of Heyen v. Safeway decided out of Los Angeles, the appellate court affirmed a ruling that poses a large risk exposure for retailers of all kinds. Bottom line is that if a manager spends more than 50% of their time doing non-exempt work, they are non-exempt….even if they have significant managerial responsibilities. Safeway pointed out the reality of multi-tasking at these jobs but the court wasn’t buying it. “In order to count as exempt work, the employee must ‘clearly’ disengage from the non-exempt activity and engage in the exempt activity.” At issue were the jury instructions which the court upheld. The instructions told the jurors the following:
“Exempt” tasks include:
- Forecasting of store sales.
- Scheduling the work of store employees.
- Monitoring store sales and adjusting schedules to ensure compliance with payroll budgeting
- Directing the work of store employees.
- Inspecting store conditions.
- Inspecting and reviewing the work of store employees.
- Activities, such as audits and pulls, authorizing overrides, and providing for the safety of the employees and property.
- Training employees.
- Coaching store employees.
- Counseling, disciplining and firing store employees.
- Interviewing and hiring employees, including time spent instructing and supervising others in the process of selecting job candidates.
- Preparation and review of management paperwork such as: 259 reports, and profit and loss reports.
- Review and sort email and conventional mail and determine follow up action needed.
- Review of store employees‟ time and attendance records, including identification and completion of paperwork for edits needed to ensure accuracy of such records.
- Monitoring store conditions and delegating tasks to employees to meet federal, state and local laws and regulations regarding licensing, food safety, worker and customer safety, and consumer protection law (for example, food recall, weights and measures requirements).
- Handling employee complaints and grievances.
“Non-Exempt” Tasks include:
- Ringing up sales for customers.
- Bagging groceries and/or assistance to customers with carry out.
- Assisting customers with routine matters (for example, finding an item in the store).
- Stocking or facing merchandise, including items in the general merchandise, health and beauty aids aisle(s).
- Mopping and sweeping floors.
- Retrieving shopping carts from parking lot.
- Constructing merchandise displays.
- Selling money orders and lottery tickets.
- Stocking and replenishing stock on shelves, including out-of-stocks.
- Fetching items for customers.
- Unloading trucks and unpacking merchandise.
- Stocking beverage and other coolers.
- Labeling shelves, completing signage including shelf and price tags.
- Driving motorized pallet movers.
- Gathering shopping carts.
- Maintaining the back room.
- Putting up and taking down product displays and decorations.
- Preparing payroll.
They then had the jury determine the apportionment of time. In its opinion the court reminded employers in a footnote as follows:
California’s distinct approach to defining overtime exemptions “can also be illustrated in its treatment of the exemption for administrative, executive, and professional employees. … With regard to such employees, “[t]he federal exemption for this category of employees adopts a core test which focuses on the employee’s “primary duty”; if the “primary duty” test is met, then he or she is deemed exempt regardless of how much time the individual actually spends performing the primary duty. ….By contrast, the state law exemption, as in the case of “outside salespersons,” adopts the requirement that the employee must be “engaged primarily” in exempt work … the term “primarily‟ is defined as “more than one – half the employee’s work time.”
Conclusion: Employers won’t be able to get around the broad, pro-employee ruling in this case. I expect it will generate a flood of new claims along these same lines. It’s getting to the point where I advise California employers to simply treat these employees as non-exempt and figure out what you would need to pay them straight time to keep their total compensation, including overtime, the same as their salary.
In the recent case of Leyva v. Medlin Industries, Inc. (9th Cir. 11-56849 5/28/13) the court allowed a class action case to continue. What I want to focus on however is the type of claims being prosecuted because I am seeing them as a common trend. Here are the allegations taken out of the ruling which can be read in full here.
Medline manufactures and delivers medical products. The putative class members are current and former hourly employees in Medline’s three California distribution warehouses. Because Medline’s warehouse employees earn low wages, the amount each could claim for unpaid wages is relatively low—for example, Plaintiff’s individual claim is for less than $10,000.
Plaintiff alleges that Medline violated the California Labor Code, California Industrial Commission Wage Order 1-2001, and California’s Unfair Business Practices Law.
Plaintiff seeks to certify separate sub-classes to pursue the following four claims:
1. Rounding violation: Medline rounded its hourly employees’ start times in twenty-nine minute increments. For example, workers who clocked-in between 7:31 a.m. and 8:00 a.m. would be paid only from 8:00 a.m. onward even though they began work beforehand. Putative class members would clock-in before their scheduled start times because they had to complete tasks such as inspecting their machines and picking up scanners before they could begin their duties.
Plaintiff alleges that the rounding practices resulted in employees performing unpaid work before their scheduled start times, in violation of California Labor Code §§ 510 and 1197, and that they are entitled to compensation pursuant to California Labor Code §§ 1194, 1194.2, and 1197.1.
2. Bonus violation: Medline allegedly excluded non-discretionary bonuses from employees’ overtime rates, thus lowering overtime pay. Plaintiff claims that this practice violated California law, citing to Marin et al. v. Costco Wholesale Corp., 169 Cal. App. 4th 804, 807 (2008).
3. Waiting time penalties: Plaintiff alleges that because of the time rounding and bonus violations, Medline owes its employees penalties under California Labor Code § 203,which provides that an employer who willfully fails to pay any wages due to a terminated employee owes waiting time penalties.
4. Wage statement penalties: Plaintiff alleges that because of the rounding and bonus violations, Medline’s payroll records did not accurately record the hours employees worked and the wages they earned. California Labor Code § 226(e)(1) provides that an employee can recover up to four thousand dollars in damages, and additional civil penalties, for such violations.
My point is this: Know the law in each one of these areas. While the particular laws may vary within your jurisdiction, the principles remain similar. 1) Make sure employees get paid for every minute of work they do and be clear about when that work begins and ends. 2) Make sure you know how overtime is calculated. For example, the California standard may not be the same as the Federal one or one that applies in your state. 3) Understand that the non-payment of wages comes with stiff penalties and very often attorneys’ fees too. If ever a conflict, pay any amount not in controversy. 4) Lastly, make sure your paychecks comply with your state laws too. Don’t blindly rely on vendor or software programs.
HR That Works Members are invited to look at the Wage and Hour Training Module, Webinars, reports and BNA State Law Summaries. You can also get info at www.dol.gov/whd/flsa/, www.dir.ca.gov and your state labor commission: www.dol.gov/whd/contacts/state_of.htm.
We were recently asked about the propriety in California of deducting wages from an employee’s paycheck for damage they were caught on video causing. The bill was over $1,500! Here was my response:
First of all please remember to look at the BNA state law summaries on HR That Works.
Here’s what it says:
Employers cannot deduct from employee wages for any cash shortages, breakages, or loss of equipment, unless the shortages, breakages, or losses are caused by employees’ dishonest or willful acts or gross negligence.
[Note: In enforcing this prohibition, the Department of Labor Standards Enforcement takes so narrow a view of the definition of “gross negligence” that an act must be criminal to qualify. Employers are advised to get a ruling from the DLSE before making deductions from wages on the basis of employee negligence, because a misjudgment can result in an employee's recovery of wages due and penalties. (Dept. of Labor Standards Enforcement Letter No. 2003.02.24 (2003)]
So I dug even further. The DIR website says the same thing but in more detail and throws in a big time caution:
Q. If I break or damage company property or lose company money while performing my job, can my employer deduct the cost/loss from my wages?
A. No, your employer cannot legally make such a deduction from your wages if, by reason of mistake or accident a cash shortage, breakage, or loss of company property/equipment occurs. The California courts have held that losses occurring without any fault on the part of the employee or that are merely the result of simple negligence are inevitable in almost any business operation and thus, the employer must bear such losses as a cost of doing business. For example, if you accidentally drop a tray of dishes, take a bad check, or have a customer walkout without paying a check, your employer cannot deduct the loss from your paycheck.
There is an exception to the foregoing contained in the Industrial Welfare Commission Wage Orders that purports to provide the employer the right to deduct from an employee’s wages for any cash shortage, breakage or loss of equipment if the employer can show that the shortage, breakage or loss is caused by a dishonest or willful act, or by the employee’s gross negligence. What this means is that a deduction may be legal if the employer proves that the loss resulted from the employee’s dishonesty, willfulness, or grossly negligent act. Under this regulation, a simple accusation does not give the employer the right to make the deduction. The DLSE has cautioned that use of this deduction contained in the IWC regulations may, in fact, not comply with the provisions of the California Labor Code and various California Court decisions. Furthermore, DLSE does not automatically assume that an employee was dishonest, acted willfully or was grossly negligent when an employer asserts such as a justification for making a deduction from an employee’s wages to cover a shortage, breakage, or loss to property or equipment.
Labor Code Section 224 clearly prohibits any deduction from an employee’s wages which is not either authorized by the employee in writing or permitted by law, and any employer who resorts to self-help does so at its own risk as an objective test is applied to determine whether the loss was due to dishonesty, willfulness, or a grossly negligent act. If your employer makes such a deduction and it is later determined that you were not guilty of a dishonest or willful act, or grossly negligent, you would be entitled to recover the amount of the wages withheld. Additionally, if you no longer work for the employer who made the deduction and it’s decided that the deduction was wrongful, you may also be able to recover the waiting time penalty pursuant to Labor Code Section 203.
Bottom line: I’m not sure you want to invite the DIR to your company to make sure your deduction is proper. But since it was recorded it would be hard to say it is not willful. Problem is even the DIR says the regulations may not comply with the law! So while you may be able to make the deduction without permission, the safest thing to do is to ask them to voluntarily agree to a paycheck deduction, get a ruling from the DLSE first, or sue them in small claims!
Any time we are met with a disaster like Sandy one of the most common questions that are surface are around show up pay and payment of exempt salaries. Here’s what the law says about it:
Paying Employees Who Show Up and Have No Work to Do
While the FLSA does not address this directly, many states do. It is known as call-in or reporting pay. For example, under Mass. Law:
455 CMR 2.03– (1) Reporting Pay. When an employee who is scheduled to work three or more hours
reports for duty at the time set by the employer, and that employee is not provided with the expected
hours of work, the employee shall be paid for at least three hours on such day at no less than the basic
Here is an excellent summary created by SHRM so you can see the law in your state. http://www.shrm.org/LegalIssues/StateandLocalResources/StateandLocalStatutesandRegulations/Documents/Callbackcallinreportingpay.pdf HR That Works Members should all look at the BNA state law summaries under the Compensation folder.
Paying Exempt Employees Who Cannot Work
Bottom line is that if an employee is ready, willing and able to work, deductions may not be made for time when work is not available (29 C.F.R. 541.602(a)). You can have them use vacation or sick pay under appropriate conditions. Please see this FLSA memo for further instruction http://www.dol.gov/whd/opinion/FLSA/2005/2005_10_24_41_FLSA.htm#.UJFW1IawUYw
The BLS has released its findings on leave use by American workers. Here are just some of the findings:
- In 2011, 90 percent of wage and salary workers had access to paid or unpaid leave at their main jobs. Twenty-one percent of wage and salary workers took paid or unpaid leave during an average week.
- Workers who took leave during an average week took an average of 15.6 hours of leave.
- Fifty-six percent of wage and salary workers were able to adjust their work schedules or location instead of taking leave or because they did not have access to leave in 2011. Seven percent of workers made such an adjustment in an average week.
- Among wage and salary workers age 25 and over, 72 percent of workers with a bachelor’s degree or higher had access to paid leave, compared with 35 percent of workers with less than a high school diploma.
- Twenty-one percent of wage and salary workers took paid or unpaid leave during an average week. Workers who took leave during an average week took an average of 15.6 hours of leave.
- Women were slightly more likely than men to take leave from their jobs during an average week–23 percent compared with 20 percent.
- In an average week, 6 percent of wage and salary workers reported their main reason for taking leave was a vacation, 5 percent took leave because they were ill or needed medical care, and 4 percent took leave mainly to
run errands or for personal reasons.
- Of those wage and salary workers who took leave from their main jobs during an average week, 57 percent used only paid leave and 40 percent used only unpaid leave. Three percent of these workers used a combination of paid and unpaid leave.
- Fifty-six percent of wage and salary workers were able to adjust their work schedules or location of their main jobs instead of taking time off from work in 2011. This includes wage and salary workers who adjusted their work schedules or location instead of taking leave as well as those who did so because they did not have access to leave but needed time off from work.
- Among wage and salary workers age 25 and over, 61 percent of those with a bachelor’s degree or higher were able to adjust their work schedules or location instead of taking time off from work, compared with only 38 percent of workers with less than a high school diploma.
- In an average week in 2011, 7 percent of wage and salary workers adjusted their work schedules or location of their main jobs instead of taking time off from work.
- Parents of a household child under the age of 13 were more likely to adjust their work schedules or location instead of taking time off from work in an average week than workers who were not a parent of a household child under 18–10 percent compared with 6 percent.