Transcript CA_Wage_and_Hour_Law_Jeanine_DeBacker_May_2012

California Wage & Hour Law:
feel the pain now, or later?
Jeanine DeBacker
McPharlin, Sprinkles & Thomas LLP
408.293.1900
[email protected]
Feel the Pain Later?
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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
employees
 “DOL-Timesheet” App launched
to record hours, breaks, OT
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California v. Federal Law
overtime
 exemptions
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- duties
- “highly compensated”
CA v. FLSA
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
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– Sullivan v. Oracle Corporation
California’s Rules
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“Wage and Hour Law” is:
– California’s Labor Code
– IWC Wage Orders
– FLSA
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sources of guidance and interpretation for
wage and hour law:
– California courts
– Division of Labor Standards Enforcement
(DLSE)
– 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)
Paycycles
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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
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Exempt = at least once a month
- by the 26th for work performed the entire month
Overtime Pay
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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
workweek
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
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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
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Rest Breaks
– 10 minutes for every 4 hours worked, paid
– Additional time to express breast milk, unpaid
Exempt Employees
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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?
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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
amount
Executive Exemption
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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
year.
Administrative Exemption
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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
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licensed or certified by California AND primarily
engaged in the practice of a Recognized Profession,
OR
 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:
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law
medicine
dentistry
optometry
architecture
engineering
teaching
accounting
But not:
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paralegals
insurance brokers
photographers
social workers
nurses
physician assistants
teachers (other than
state certified)
Other Exemptions
computer software
 outside sales
 inside sales commissioned
 industry-specific exemptions
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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
non-exempt
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Avoiding Pitfalls
Perform internal audit of employee
classifications
 Prepare accurate job descriptions
 Review employee handbooks
 Performance appraisals / discipline
 Watch out for minimum wage increases
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Deductions from Exempt Salaries
Use extreme caution in making any
deductions!
 Partial day deductions from vacation or
sick-day bank, BUT not from salary
 Full day deductions okay under limited
circumstances
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Separation Anxiety
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Final pay
– Resign / Quit: Must pay within 72 hours
– Involuntary termination: NOW!
– Reporting time pay
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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
408.293.1900
[email protected]