Employment Law is not something that employers should really be playing with.
Employee Lawsuits are hitting employers very hard these days and are increasing at an alarming rate. When you add to that the increased fines and penalties from Cal-OSHA, it just does not make any sense for employers to skimp on compliance when it could cost you so many dollars if you are found out of compliance.
In California if an employee works over 8 hours in a day or 40 hours in a week they are entitled to overtime. In the headings that follow we will address each area and aspect of overtime that applies. This will include the following
Time and a Half
Exempt versus Nonexempt Employees
While all of these topics have to do with overtime you may as an employer find yourself on the hook for either one of them are all of them. Starting with Time and a Half we will cover them all one by one.
Let us begin our discussion with Time and a Half
California law states that any employee who works over 8 hours in a day must receive a rate of time and a half for every hour worked up to12 hours in any workday. This rate of pay is good until the employee works 12 hours and then from the 12th hour on you must pay him/her double time. In addition, to the above in an employee works seven days in a row the 7th day must start at time and a half for the first eight hours of the shift.
Next Up Is Double Time Employment Law
California Labor law requires employees to double the rate of an employee’s pay once the employee has worked over 12 hours in one day. Overtime law also requires that employers double the employee’s regular rate of pay for all hours worked in excess of 12 in any workday, as well as all hours worked in excess of 8 on the 7th consecutive day of work in a workweek.
Now For Miss-Classifying Employees Employment Law
Many employers make the mistake of thinking that because they have put an employee on a salary that they do not have to pay that employee overtime when he/she works over 8 hours in a day.
The next way that employers miss-classify their employees is by thinking that since they have given the employee a title of manager that the title makes the employee exempt from overtime. Both of these misnomers are wrong.
According to California Law, it is the nature of the employee’s job duties that determines whether or not an employee is exempt. Again, an employee is not exempt from overtime simply because you pay them a salary or because you have given them a title.
The miss-classifying of employees as exempt when they are not exempt and thus subject to overtime is one of the most frequently litigated issues when it comes to overtime.
California overtime law requires that in order for an employee to be exempt the employment must be engaged in duties that are considered management in nature. And as far as these duties are the employee must be spending more than 50% of their time performing such duties.
The exempt duties that we are talking about are called executive, administrative, and professional. Along with these duties, the exempt employee will exercise business discretion and demonstrate executive decision making such as hiring and firing of the people that he or she is supervising or managing.
The burden of proof is always on the employer’s shoulders when it comes to the exempt status of an employee. If the employer cannot meet the Burden of proof, then the employer must pay all back overtime as well as penalties.
California’s laws governing overtime pay are extremely strict. An employer’s violation of those laws may result in payment of up to 4 years of back overtime pay, interest, penalties, and the employee’s attorney fees.
Any employee who is classified as non-exempt must be paid overtime. For an employee to be classified as exempt, they must meet some very strict guidelines. These guidelines or both financial and duty based. If these guidelines are not met then, the employee in non-exempt and must be paid overtime.
As stated above this is one the most popular employee brought lawsuits in the labor law field. Trust us when we tell you that this is not an area that you want to get wrong.
Failure to Reimburse for Business Related Expenses
The California Labor Code Section 2802 requires employers to reimburse employees for all necessary expenses that are incurred during the employee’s employment. This means that employees need to be reimbursed for things like equipment, training, travel, uniforms, and certain legal expenses.
Section 2804 prevents employers from waiving an employee’s reimbursement rights under 2802 and prevents an employee from signing away any of their rights as an employee.
Mileage Reimbursement-Employee’s Vehicle
Employers need to be aware that any time an employee uses their car for company business whether it is running an errand, or traveling from job site to job site, the employee has incurred expenses. The expenses that we are talking about are fuel, and wear and tear on their personal vehicles.
The DLSE allows employers to choose between two options if they are going to have employees using their vehicles for company business.
- The company can pay the employee the IRS Standard Mileage Rate
- The company can reimburse the actual expenses incurred.
Employers need to understand that these are not the only method that employers can use, any method that totally reimburses the employee of all of his or her expenses is acceptable.
If the employer chooses to pay the employee less than the standard IRS Mileage Rate, then the burden of proof is on the employer to make sure that the actual that the company pays does indeed cover the cost of the use of the vehicle.
Tools and Equipment
California Labor Law is very clear regarding the reimbursement of tools. The Industrial Welfare Commission’s wage orders call for employers to furnish all equipment and tools that are required to do the job.
There are some exemptions to this, but the employer needs to proceed with caution here. Employers may require an employee to bring their own tools if the employer pays the employee double minimum wage.
If an employer requires employees to wear a uniform, it is the employer’s responsibility to purchase the uniform as well as pay for any maintenance, such as the cleaning of the uniform.
The term uniform is given a very wide berth and includes wearing clothes that have a distinctive design or even color. The term distinctive can mean any of the following:
- Traditional uniforms like those worn by law enforcement.
- Rugby Shirts
- Floral Hawaiian- type shirts
- The need to be a certain color even if the shirts do not have a company logo or design
All of the above has come to be defined as a uniform.
Employer are required to reimburse employees for mileage, and these reimbursements must be done at the time that the employees’ wages are paid, or at the very least once a month at a time that can be determined by the employer. However, the employee must be reimbursed no later than the end of the calendar month that follows the month that the expenses were incurred.
If the employer chooses to reimburse employees on the employee’s regular payday, all reimbursements must be list on the employee’s check stub separately. And, employers are not allowed to take any deductions on the amount of the reimbursement.
The employee’s repayment needs to consist of a detailed account of the calculation of the mileage repayment, comprising the start and end of the repayment time period, the amount of repayment, and the sum of miles being compensated. Employers can, as an alternative, provide copies of the repayment requests that categorize any changes in the requested repayment.
Employers who are offering or providing employees automobiles for business-related purposes need to compensate the employees for all business-related expenditures sustained by the vehicles. Gas, oil, lease or purchase payments, garage rent, repairs, tires, vehicle depreciation and other, mandatory insurances are amid the expenditures to be repaid. Employers must keep all records in association with employee’s requests for expense repayments for a period of up to three years.
Business Related Travel
Employers must repay any employee for the purchase of meals, lodging, and other related expenditures when the employer necessitates the employee to travel away from home on business. For meals and lodging, the employer has the choice of refunding the real costs or providing the employee with a per diem rate equal to the standard IRS Per Diem rate for the location of travel. If the employer selects to use the IRS Per Diem rate, the company must make the employee aware of this procedure before the business trip is taken. Failing to do so will end in the employer being required to refund the employee for the actual costs, even if greater than the IRS per Diem rate. Tips and other related travel expenditures need to be reimbursed.
Failure to Pay All Wages Owed
One would think that this would never happen, but that is not the case. There are surprisingly many times that an employee will find themselves faced with this dilemma.
Given this, there are a couple of questions that quickly come to mind.
- When are wages owed?
- What are the penalties to the employer when full wages are not paid timely?
When employees must be paid
According to the Labor Code Section 204, employees need to be paid at least twice a month. All employees need to know when the paydays are. Paydays should be preset, and not often changed if ever.
What are the penalties if the employer fails to pay you when you are owed wages?
Yes, there are penalties. The first time that an employer fails to pay the wages owed the penalty is $100.00. If this happens again, the penalty rises to $200.00 each time after that.
Along with the penalty, the employer also may be hit with an additional 25% of the amount that was owed and unlawfully withheld.
What if I no longer work for the company?
If you are no longer employed by the company, then different rules apply. If you no longer work for the company because you resigned or quit, then based on Labor Code section 202, wages are due within 72 hours. If your employer fired you, then your wages are due immediately under Labor Code section 201.
If the employer, willfully fails to pay you either within the required 72 hours or immediately, the employer has exposed the company to owing you an additional 30-day pay as a penalty (plus the wages and interest).
Rest Breaks and California Employment Law
The overall rule is that the employee is entitled to a 10-minute rest break on the clock for every 4 hours of work. The failure to provide the rest break exposes the employer to paying the employee an additional hour of pay.
Since the Brinker case meal breaks here in California, have become much clearer.
The law provides essentially the following: If you work a shift of 6 hours or more, the law requires that after 5 hours that all employee must be provided with a 30 minute, meal period that allows the employee to come and go as needed.
Employers should have all employees clock out for the meal break, unlike the rest periods. If there is no written documentation of employees clocking out, the burden is on the employer to prove that the employee did get their meal break.
Should employees be shorted on their 30 minute meal period that are penalties that could be enforced? Again during this 30 minutes, all employees should be able to come and go as they wish.
I am aware that since the Brinker decision employees can decline their meal periods and even work through them but making a practice of this is not wise and could be considered to be an abuse of the law.
Alternative Workweek Requirements
Today, many companies would like to implement an Alternative Workweek. What this means is that the employees will work four days at 10 hours per day. While many times this is something that both the employer and the employees would like today, there are also many times when the employer will try to just do this without following the proper procedures.
For employers who feel that they can just do this, that is not correct. There are several steps that must be taken for this work schedule change to be considered legal. For those employers who feel that since unemployment is so high that all employees should just be thankful for a job thus enabling you to do whatever you want you need to understand there may be legal consequences, like failing to pay overtime, and back wages.
- What are the steps to make the alternative workweek schedule legal?
A.Even though there may be exceptions, the general rule is the employer must present the alternative workweek as a choice to the employees of a specific unit, and the employees must vote on the plan in a secret ballot election. A two-thirds majority vote is required to pass the plan.
Once the plan passes, the employer cannot decrease the regular base rate wage of the employee. Also, the employer must inform the Labor Workforce and Development Agency, of the employee vote of approval; after that, it is posted for the public to see.
It may be true that when it comes to employment law and California the days of wine and roses are over for employers. The good news is there is someone who can help you. We have been helping employers since 1997. We love what we do and we do it well give us a call and we will be happy to show you just how easy compliance can be.