Wage Theft a Rampant Problem in California

wage theftStarbucks is the latest big-name business that has been vilified for widespread wage policies that rob employees of earned wages. The court case has been brewing for six years and has undergone numerous twists and turns. Initially, the case, which was filed by former employer Douglas Troester, was deemed by the courts to be too trivial to even consider. Ultimately, though, California’s Supreme Court overturned that ruling, and found in favor of Troester. If you find yourself suffering from unethical wage theft practices at your place of employment, consider seeking the assistance of a local employment attorney to resolve the problem.

What Constitutes Wage Theft?

Wage theft can rear its ugly head in many forms. At Starbucks, the issue involved superiors asking workers to complete additional tasks after clocking out. Additional forms of wage theft include:

  • Failing to pay overtime;
  • Refusing to provide an employee’s final check after said employee leaves the job;
  • Paying for fewer hours than actually worked, or not at all;
  • Failing to pay minimum hourly wages or higher.

Employers Break Several Laws with Wage Theft Practices

Wage laws are outlined in a number of places, including:

  • The Fair Labor Standards Act (FLSA): Outlines federal minimum wage requirements and time-and-a-half pay for any hours over 40 in a week;
  • Bacon-Davis Act: Provides that workers who are employed by federal contractors are entitled to the prevailing wage in the vicinity in which their work occurs;
  • Tax Laws: Guidelines outline when employers may classify workers as independent contractors (saving employers money) and when workers must be classified as employees.

Common Fields for Wage Theft

Although it can happen in any field, certain industries tend to exploit wage theft practices more often than others. In particular, wage theft is prominent in restaurant work, the agricultural field, janitorial work, retail employment, and home health care services.

California Tops States for Wage Theft

Surprisingly, of the nearly $9 billion wage theft claims in the country in the last couple of decades, more than 50% have come from right here in California. One report states that wage theft is actually “built into the business model” of many American corporations. In California, a good chunk of the infractions are related to strict state codes for the rest and meal breaks to which employees are entitled. Another common issue relates to whether employees should be paid for the time it takes to put on and remove protective equipment and clothing. Disturbingly, the lion’s share of these cases are not against small operations that may be struggling to survive. Most labor probes involve large, profitable businesses that know better but choose to cut corners when it comes to fair pay to their employees. [Read more…]

Subcontractors Cheating Employees. Who is Responsible?

subcontractorsIf you are an employee of a company that subcontracts services for another business, you may be interested to know that if your company fails to adhere to California laws regarding wages, breaks, and so forth, you may be entitled to damages from multiple sources. A case in point involves the Cheesecake Factory, which contracted with Americlean Janitorial Services Corporation for cleaning services. Americlean then hired subcontractors Magic Touch Commercial Cleaning. Magic Touch failed to pay minimum wages, denied workers rest breaks, and ignored overtime rules. When the California Labor Commissioner’s Office got wind of the problem, they wound up assessing the three companies for a combined total for $4.57 million in fines.

California Law Butts up Against Specifics of This Subcontractors Case

According to California law workers are entitled to specific rest and meal breaks, including:

  • A 10-minute break for every four hours on shift;
  • These rest breaks should be as close to the middle of the work period as possible;
  • They must be in addition to toilet breaks;
  • Meal periods must be provided for every five hours worked, and must be a minimum of 30 minutes long;

At three different California Cheesecake Factory franchises, cleaning personnel were required to work daily shifts without appropriate rest and meal breaks. They typically worked roughly 10 hours of overtime weekly, but were paid only a flat rate for eight hours of work each day.

Businesses are responsible for workplace violations committed by their subcontractors according to California law SB 588,  putting Cheesecake Factory, Americlean, and Magic Touch all in a precarious position. Workers received almost $4 million. Liquidated damages were calculated based on the money underpaid in wages plus interest, in addition to a full hour of pay for each day workers were denied their 10-minute rest breaks. Furthermore, the companies shared over $500,000 in civil fines.  

Thanks to SB588, big corporations can no longer hide behind contracts with smaller companies. When violations occur under their umbrella, they share in culpability with their subcontractors. The Labor Commission is streamlining procedures to speed up collections on unpaid wages. Employers are now required to post bond for and judgments related to these liabilities, and get the employees paid. [Read more…]

Wage Disputes in California

wage disputesWage disputes are avoidable. Employers are required to pay employees their due on time. It just makes sense, and the principle is supported in both state and federal law. Nonetheless, wage disputes are not uncommon in California. If you find yourself fighting for earnings to which you are legally entitled, a local employment attorney may be worth visiting.

Wage Disputes – When is Pay Due?

Every employer has their own systematic pay schedule for salaried, hourly, and commissioned employees. Whatever schedule has been agreed to should be adhered to, including agreements regarding bonuses, vacation pay, and/or benefits.

As a general rule, hourly employees are paid twice monthly, or, in particular situations, once monthly.

Work periods should be paid for on paydays immediately following the work period.  For example, work done from the first to the 15th of a month should be paid for within the following ten days.  If a particular payday happens to fall on a holiday or a Sunday, paychecks should be available on the following business day. Any payments that are later than this could evoke stiff penalties.

Administrative Pay

For administrators, executives, and other professionals who are paid on a monthly basis, paychecks for a given month of work must be available no later than the 26th day of the month.

Agricultural Workers

Agricultural workers must be paid within one week following work. For work performed between the 1st and 15th of the month, payment must be made no later than the 22nd of the month.

Garment Workers

When garment workers (those employees participating in any aspect of garment or accessory production) are not paid earned wages, they may pursue payment from either the employer or the contracting company as per California Labor Code 2673.1.

Subcontractors

Similar to garment workers, subcontractors’ employees may be able to receive payment from a general contractor if the subcontractor is unlicensed.

Temporary Agencies

Employees put to work by a temporary service are to be paid on a weekly basis, unless the job assignment is merely day-to-day work. In that case, wages should be paid at the day’s end.

Wage Disputes Over Wages After Being Discharged

Unless an employee resigns while under a contract for a defined time period, an employee who quits without notice is entitled to owed wages within 72 hours. For workers who provide 72 or more hours’ notice, payment may be expected at the close of the final workday.

Penalties for Employer Who do Not Pay on Time

Employers could get stuck with much more than the original wage due if they lose a wage dispute.  

  • They could pay an additional 30 days of wages;
  • They could be responsible for interest on late wages;
  • The court could assign them all attorney’s fees and court costs;
  • The manager or an agent of the company could be fined $1,000;
  • That manager or agent could face six months of imprisonment.

[Read more…]

California Minimum Wage Hike: Is it Set in Stone?

California Minimum WageCalifornia minimum wage changes. By the year 2022, some California employers will be required to pay their workers a minimum wage of $15 per hour. Governor Jerry Brown announced on March 28, 2016 that he had reached a deal with the state legislature that will gradually increase the state’s minimum wage.

California Minimum Wage – The Specifics

Pursuant to the deal, California’s minimum wage will rise from its current rate of $10 per hour to $10.50 per hour on January 1, 2017, but only for companies with 26 or more employees. It will then climb to $11 per hour for the year of 2018, then to $12 per hour for 2019, then to $13 per hour for 2020, $14 per hour for 2021, and $15 per hour for 2022.

The minimum wage will remain at $10 per hour for companies with 25 or fewer employees until January 1, 2018. The minimum wage for those companies will climb to $11 per hour for the year of 2019, then to $12 per hour for 2020, $13 per hour for 2021, $14 per hour for 2022, and $15 per hour for 2023.

Is This California Minimum Wage Schedule Certain?

The increases are not guaranteed to take place at these times. As part of the deal, there will be two ways that the increases can be delayed.

The first way is related to the economy. At any point, the governor can “pause” an increase if the state’s economy is bad enough. This can occur if seasonally adjusted statewide job growth has been negative over the past three months, or over the past six months – and if retail sales receipts for the prior 12 months have been negative.

The second way is related to the state’s budget. The governor will be able to pause the increase if at any point in time, the current budget year, or the year after that, or the year after that, is forecasted to be in deficit when the next scheduled increase is taken into account. This is referred to as a “budget off-ramp,” and there is a specification that it may only be used twice.

The deal will also introduce sick leave for in-home supportive services workers. In July 2018, in-home supportive services workers will be guaranteed one sick day. A second sick day will be added in the first July following the implementation of a $13 per hour minimum wage for businesses with 26 or more employees. A third sick day will be added after the minimum wage rises to $15 per hour. [Read more…]

Disclaimer

The information on this website should not be considered to be legal advice, nor construed to be the formation of any manner of attorney client relationship. Prior to taking any form of legal action, please consult with an attorney experienced in the appropriate area of law germane to your situation. Case results and testimonials presented on www.californialaborandemploymentlaw.net or any of its related websites are germane to the facts present for each individual case and is not a promise of similar outcomes for any other cases. This website is not intended to solicit clients for matters outside of the State of California.