Wage Law

From what we've observed within the last five years:

In most cases, an employer must pay all of the wages earned, at the time of terminating an employee, or on aq resigning employee's last day. This time can be extended to 72 hours after resignation if an employee quits without notice. An employer who fails to do so may be required to pay penalty wages of up to 30 days pay (note: this included full pay on Saturday and Sunday, even if the employee doesn't normally work on those days). The final pay due at the end of employment includes vacation pay, which is frequently paid late. Often, these violations are systematic and can lead to costly liabilities to an entire class of workers.

In our experience, most salaried employees who are classified as "managers" are improperly classified as exempt. To be properly classified as an exempt employee, a manager must be paid a salary of no less than twice the minimum wage; and must supervise (which generally must include the power to hire and fire) two or more employees; and must customarily exercise independent discretion; and must spend more than 50% of the time performing those managerial tasks, rather than the same sort of work as their hourly underlings. Often, employers will simply add a small amount of managerial authority to a crew member, call that crew member the manager, and put them on a salary. While there is nothing wrong with do that, it does not excuse the employer from paying overtime if that salaried worker then works more than 8 hours per day or 40 hours per week. If those improperly classified employees work long hours, they may be entitled to overtime pay reaching back four years. If the hours are long enough, the liability can easily exceed a year's worth of ordinary salary. Since the Sav-On case last year, these misclassification cases have well suited for wage and hour class action lawsuits for which liability can be in the tens of millions of dollars companywide.

Employees working more than 5 hours per day must be provided 30-minute meal periods unless they work shifts of six hours or less and agree to waive the break for that day. If the shift lasts ten hours or more, a second meal period is required.  The employees must be relieved of all job duties and may not have their breaks interrupted with work. In addition, employers are required to permit and authorize employees to take ten minute breaks, with pay, for every four hours of work "or major fraction thereof." That means that the second break obligation applies if a shift exceeds six hours, and a third applies if the shift exceeds ten hours. Employers who do not provide the breaks required under California law must pay the affected employee an extra hour of pay at the employee's regular rate of pay for that day. Our firm has certified several class actions involving meal period and rest period violations. At an hour of pay per employee per day, the liability can be substantial.

Although tip pooling among non-management employees is permitted, no employer or supervisor may collect, take or receive tips left for by patrons for its employees. We most often see this in restaurants, salons and, surprisingly, car washes.

Employers must provide an itemized wage statement showing: the employer's name and address, the employee's name and social security number, the payperiod dates, gross/net wages, deductions, total hours worked, applicable hourly rates and hours worked at each rate. Many employers who misclassify employees get into added trouble by not documenting and reporting the actual hours worked on each paystub, resulting in additional penalties due.

Every once in a while, we sit back and laugh at ourselves for taking ourselves and this blog just a little too seriously. Then we read something like this: Handal & Associates today announced it is preparing for trial in a suit against the County of Orange for wrongful discrimination and termination of a county employee.

We don't have anything against Handal & Associates, and if their client is deserving, we hope they do well in their lawsuit, but sending out a press release to announce to the world that a law firm is now going to prepare a case for trial is a bit too myopic even for our tastes.

In related news, we had an overtime and meal period / rest period class action case in mediation yesterday, and the parties made great progress in concept, even though they are still about $28 million apart on the figures. As a result, we are about to begin preparing for a second session of mediation before a well-respected mediator. Press releases will be issued in the morning.

Last month, we discussed a controversial March 30, 2005 ruling by the Court of Appeal in Pioneer Electronics (USA), Inc. v. Superior Court (2005) 128 Cal.App.4th 246. Pioneer Electronics dealt with the requisite notice and opportunity to assert a consumer's privacy right accompanying a precertification communication to members of a putative class in a consumer case, and the Court of Appeal held that a trial court must take reasonable steps to assure that the consumer receives actual notice of his or her right to grant or withhold consent of the release of personal information, and that consent for such release be by the consumer's positive act, rather than by mere failure to respond. Trial courts were uniformly beginning to apply Pioneer Electronics (USA), Inc. v. Superior Court to consumer class actions, but its impact on employment class actions was less clear.

Today, the California Supreme Court granted review of  Pioneer Electronics (USA), Inc. v. Superior Court. All six of the current members of the Supreme Court voted for review (Janice Rogers Brown was recently appointed to the DC Circuit Court of Appeals) Pursuant to California Rules of Court, Rule 977, the opinion can no longer be cited as authority in any court papers.

A decision on the merits could come any time in the next six months to three years. In the meantime, the appropriate precertification notice protocol shall remain an undecided issue, accompanying the issues of retroactivity of Business and Professions Code 17200 and the characterization of meal period and rest period violations as penalties or wages, as issues which the California Supreme Court needs to decide to settle uncertainty in the wage and hour class action law.

Washington D.C. employment lawyers Joseph M. Sellers and Julie Reiser recently published an excellent article in the Legal Times entitled:

Companies in the Crosshairs
When plaintiffs lawyers choose their targets, they look for these employment practices

Their list of seven employment practices that lead to lawsuits included:

1. A repeated pattern of individual complaints.
2. Failure to afford employees equal opportunity to compete for job openings.
3. Failure to guide managers in the exercise of discretionary employment decisions. Inevitably, managers require discretion in the discharge of many of their duties.
4. Failure to ensure that the factors on which employment decisions are based are job-related.
5. Failure to monitor individual manager decisions and failure to audit work-force data to detect patterns of discrimination.
6. Failure to respond promptly and effectively to employee complaints.
7. Epithets and bigoted humor in the workplace.

We would add the following three to make it a round 10:

8. A practice of overworking managers and assistant managers by having them perform non-exempt work.
9. Permitting or requiring employees to work through mandatory meal or rest periods.
10.  Forcing employees to purchase clothing/uniforms.

There is a decent chance that, if you are reading this post, you are someone who wants to learn more about California wage and hour law, and perhaps California employment class action law, in particular. But although we frequently offer some timely and useful information, we tend to discuss what we like discussing at the time of the discussion. Hey, you get what you pay for.

If you are willing to pay a bit to get more of the information and education you want, we've seen the list of speakers for a couple of upcoming seminars by Bridgeport Continuing Education, including a one day seminar on class action and UCL litigation on August 12, 2005 in Sacramento, and a two day conference (more like a day and a half) on labor and employment litigation on September 14 and 15, 2005, in Los Angeles, and we're impressed. [thanks to the UCL Practitioner for half of the tip].

Blogs:

Example No. 1: California Appellate Report discussing Tellis v. Alaska Airlines in July 15, 2005, three days after it was published.

Example No. 2: Jottings by an Employer's Lawyer bringing you commentary on the Miller v. Department of Corrections case by 6:34 p.m. on the date of the decision.

Example No. 3: Or yours truly, discussing (on June 28, 2005) the June 27, 2005 Supreme Court decision in Discover Bank.

Recent Development Web Pages:

Example No. 1: Cohen & Goldfield's Recent Developments in Employment Law, bringing you a May 2002 recap of 2001 development in employment law.

Example No. 2: Davis Graham & Stubbs LLP's News Flash page, featuring a February 2005 newsletter.

Example No. 3: And O'Melveny & Meyers offers this Labor & Employment Alert informing you that there is a split in the Courts of Appeal regarding retroactivity of Prop 64 to pending litigation as of February 10, 2005. Say, do you think the Supreme Court will be taking any of those cases up? For the answer, look to the blogs.

There are exceptions, of course, such as Sheppard Mullin's laboremploymentlawblog, or Jackson Lewis, LLP's blog-like Recent Updates. But for the most part, most law firm "recent developments" pages are nothing recent.

In a partially published opinion, the First District Court of Appeal for the State of California has ruled that deductions from a salaried employee's vacation bank for partial day absences does not render the employee non-exempt from overtime pay. In Conley v. Pacific Gas and Electric Company, the court addressed this issue of first impression by holding that "nothing in California law precludes an employer from following the established federal policy permitting employers to deduct from exempt employees’ vacation leave, when available, on account of partial-day absences from work." This ruling is contrary to a long-held DLSE position, just recently reversed, that asserted that salaried employees could not be docked pay or benefits for any partial day absences. Curiously, that part of the opinion would likely not have been part of the court's analysis but for both parties expressly asking the court to ruling on the issue as a matter of "pure law."

The case involves a class action brought on behalf of a number of PG&E employees who dispute PG&E’s classification of them as exempt. One subclass of claimants included "all PG&E employees who have been classified as exempt," but who were docked vacation time for partial day absences, while other, smaller subclasses were asserted on behalf of workers who were allegedly misclassified under a job duties test.

The trial court denied the plaintiffs' motion for class certification in its entirety, ruling that, with respect to PG&E’s policy of charging its exempt employees’ vacation leave banks for partial-day absences from work, the class members did not share a "plausible cause of action," and accordingly certification of the proposed class would be inappropriate. The trial court ruled that there was “an overriding common factual and legal question presented"as to the salary basis class, but denied certification based upon the rule in American Suzuki Motor Corp. v. Superior Court (1995) 37 Cal.App.4th 129, that “[f]or a class to be considered ascertainable, its members must have a plausible cause of action against the defendant." The plaintiffs argued that American Suzuki was disapproved by the Supreme Court in Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 442-443 (Linder). And they were absolutely right, and the court agreed. "[T]he holding in American Suzuki on which the trial court relied has been placed in serious question, if not overruled, by Linder’s holding that class certification generally should not be “conditioned upon a showing that class claims for relief are likely to prevail.” (Linder, supra, 23 Cal.4th at p. 443.)

However, the plaintiffs asked the appellate court to address the merits of the claim they have asserted on behalf of the proposed salary basis class. Therefore, the court addressed the merits of the claim both because the parties asked for such review, and because the issue raised is one of continuing importance in wage and hour litigation in California. The court noted: "We are also influenced by the Linder court’s observation that there is nothing to prevent a court from considering the legal sufficiency of claims when ruling on certification where both sides jointly request such action."

The court's analysis was as follows:

Accordingly, we turn to the question whether appellants have a viable legal theory to support the claims of their proposed salary basis class. Appellants’ argument on that point relies primarily on a 1982 decision by the California Supreme Court, Suastez v. Plastic Dress-Up Co. (1982) 31 Cal.3d 774 (Suastez). Because Suastez is so central to appellants’ position, we will describe its rationale and holding in some detail.

Suastez, supra, 31 Cal.3d 774, involved the interpretation of Labor Code section 227.3 (section 227.3), which provides that “whenever a contract of employment or employer policy provides for paid vacations, and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him as wages . . .” and that “an employment contract or employer policy shall not provide for forfeiture of vested vacation time upon termination.” The opinion in Suastez expressly noted that “[t]he only issue raised by this appeal is when vacation time becomes ‘vested’ under section 227.3.” (Id. at p. 778.) The employer in Suastez, Plastic Dress-Up, had declined to pay any vacation pay to an employee who was terminated prior to the anniversary date of his employment. Plastic Dress-Up contended that this action did not violate section 227.3 because under its vacation policy, its employees’ right to vacation pay did not vest until the end of the year in which the vacation was accrued, or in other words, that completing a year of service was a condition precedent to the vesting of the right to vacation pay. (Suastez, supra, 31 Cal.3d at pp. 778, 781-782.)

In rejecting this argument, our Supreme Court began with the principle that “vacation pay is not a gratuity or a gift, but is, in effect, additional wages for services performed. [Citations.]” (Suastez, supra, 31 Cal.3d at p. 779.) Analogizing vacation pay to pension benefits, the court held that “[t]he right to some share of vacation pay vests, like pension rights, on acceptance of employment. Nonperformance of a condition subsequent, such as Plastic Dress-Up’s requirement that employees remain until their anniversary, can, at most, result in a forfeiture of the right to a vacation; it cannot prevent that right from vesting.” (Id. at p. 781.)

The court went on to hold, however, that a forfeiture of the right to vacation upon an employee’s termination was barred by the clear mandate of section 227.3. (Id. at pp. 781-782.) As already noted, PG&E concedes that compliance with the federal salary basis test requires PG&E to allow exempt employees who have exhausted their vacation leave to take partial-day absences without a corresponding loss in pay.

But appellants argue by extension that employers who require their employees who have not exhausted their vacation leave to apply that leave to partial-day absences violates the employees’ vested right to vacation pay under Suastez. This argument reads the holding of Suastez far too broadly.

Even if we construe Suastez to require pro rata vesting and preclude forfeitures of earned vacation pay under circumstances other than termination, we still would not accept appellants’ contention that PG&E’s vacation leave policy violates the principle announced in that case. Although the federal salary basis test may require PG&E to give exempt employees additional time off for partial-day absences after they exhaust their vacation leave banks, under PG&E’s vacation leave policy, PG&E’s exempt employees do in fact receive all of the paid time off they have earned—they must simply use that accrued vacation time to make up for partial-day absences. In other words, because the deductions made from vacation leave banks of exempt employees represent days on which those employees have, in fact, taken at least four hours off work, PG&E’s vacation leave policy neither imposes a forfeiture nor operates to prevent vacation pay from vesting as it is earned. All it does do is regulate the timing of exempt employees’ use of their vacation time, by requiring them to use it when they want or need to be absent from work for four or more hours in a single day. This is entirely consistent with Suastez, in which the Supreme Court expressly noted that “[s]ection 227.3 . . . does not purport to limit an employer’s right to control the scheduling of its employees’ vacations. [Citations.]” (Id. at pp. 778-779, fn. 7, italics added.) Clearly, therefore, Suastez does not preclude PG&E from requiring its exempt employees to use their vacation leave, if available, when they want or need to take a partial-day absence.

The court also added a brief discussion about the weight of DLSE opinion letters, and, in a footnote, distinguished between absences of four or more hours and those of less than four hours. In the unpublished portion of the opinion, the court addressed developments in case law since the trial court ruling (most notably, Sav-On Drugstores, Inc. v. Superior Court (2004) 34 Cal.4th 319) and remanded the case so that the trial court could reevaluate the certification issues pertaining to the job duties classes in light of those recent developments in case law.

In a nutshell, this opinion, if it remains unreviewed and is not depublished, stands for the proposition that salaried employees in California who have accrued, unused vacation time on the books, can have that vacation time docked if they work less than four hours on any particular workday; and such docking of vacation time does not render them non-exempt and eligible to overtime compensation, in and of itself.

The full opinion in Conley v. Pacific Gas and Electric Company can be downloaded in pdf or word format.

After reviewing eight Circuit Court decisions and a few cases Roberts tried as a litigator, Donald Caster, who writes All Deliberate Speed, says

"Overall, Judge Roberts's record should be cause for concern for those who make their living representing employees. As a judge, he has consistently ruled against employees. As a litigator in private practice, he consistently represented employers. If Judge Roberts position were this one-sided on abortion, he would likely be filibustered."

Michael Fox, of Jottings by an Employer's Lawyer, sees Roberts as more even-handed.

"Judge Roberts has certainly not been one sided. In fact what is more notable is the number of times Judge Roberts sided with the employee's position in reversing a lower court or agency. Most, although not all, of his rulings that favored employers were in agreement with the court or agency below."

If you would like to read every word he has written (or signed off on) for the DC Circuit, you can downlaod a 40MB pdf file here. Not that any of this matters. Democrats will be focused, if anything, on abortion. Nobody's nomination rises or falls based upon his or her view of employment issues.

President Bush has announced that his nominee for the Supreme Court vacancy left by Justice O'Connor's retirement is D.C. Circuit Justice John G. Roberts, Jr. Before serving on the the U.S. Court of Appeals for the D.C. Circuit, Roberts was a partner at D.C.'s prestigious Hogan & Hartson, where he honed his reputation as one of the best litigators in the nation.

He is a fairly conservative while male, but he isn't entirely pro-business. As a partner at Hogan & Hartson, he represented the states that joined in the federal government's lawsuit against Microsoft. However, in employment matters, he was typically representing the defense. For example, he represented Toyota in Toyota Motor Manufacturing Inc. v. Williams, a case that limited workers' rights under theADA.

In one of his best known cases, Roberts represented a coal company that required by an arbitrator to reinstate a discharged truck driver found to have used illegal drugs. Employers tend to love arbitration, but when an arbitrator makes a crazy ruling against them, they suddenly become aficionados of judicial review. In the coal company case, when an arbitrator found that repeated drug use was not good cause to terminate the truck driver (twice), Roberts sought to reverse the arbitrator’s decision as a violation of public policy, arguing that a contractual agreement that is used to permit violations of public policy (i.e., by letting a drug-using truck driver back onto the highways) must not be enforced.

We would actually have loved to have seen him win that argument. "Go to arbitration? That could result in a criminal violation of the wage law being excused by an arbitrator! Thus, the arbitration agreement violates public policy. See Eastern Associated Coal Corp. v. United Mine Workers, District 17." Unfortunately, he lost the argument. Perhaps, however, the experience shaped his views on arbitration and he will recall that arbitrators do not necessarily do the right or just thing, and when that happens, right or not, the law lets it stick. Regardless, we aren't going to hold our breaths looking forward to any great employee-favoring majority opinions being authored by Justice Roberts.

Of course, it is possible he'll get Borked, having argued a case in 1990, as a deputy solicitor general in George HW Bush's administration, in which he asserted that Roe v. Wade "was wrongly decided and should be overruled." We don't think the Democrats have enough political power to Bork anyone, but if Roberts does end up on the SCOTUS and participates in a decision that reverses or severely limits Roe v. Wade, it could spark a revival of left wing political success the likes of which have not been seen since the 1960s. And if that helps the employees' rights movement in the long run, maybe it's a good thing.

Internet communications between potential clients and a law firm is privileged, even if the online questionnaire specifies that it does not create an attorney-client relationship, said the 9th U.S. Circuit Court of Appeals. Thus, plaintiffs need not disclose the questionnaires they filled out to inquire about legal representation.

The case, Barton v. U.S. District Court for the Central District of California, involved plaintiffs who sued GlaxoSmithKline in a product liability case. Thousands of product users found legal representation after filling out an online questionnaire form maintained by the L.A. law firm of Baum Hedlund. The form said:

The purpose of this questionnaire is to gather information about potential class members who have suffered withdrawal symptoms as a result of stopping the use of Paxil or decreasing the dose of Paxil in an effort to stop taking it. … I agree that the above does not constitute a request for legal advice and that I am not forming an attorney-client relationship by submitting this information.

The defense attorneys sought the plaintiffs’ forms to see if their initial complaints matched the claims they asserted in the lawsuit. The plaintiffs asserted the attorney-client privilege, but the district court ordered the forms disclosed. The 9th Circuit reversed, calling the district court’s ruling "clearly erroneous as a matter of law."

Prospective clients’ communications with a view to obtaining legal services are plainly covered by the attorney-client privilege under California law, regardless of whether they have retained the lawyer, and regardless of whether they ever retain the lawyer.

Without the privilege, "people could not safely bring their problems to lawyers unless the lawyers had already been retained."

We have consistently received the same results in several of our wage and hour class actions, most recently in the T.G.I. Friday's case. Putative class members are not actually our clients until and unless we are retained, or the class is certified. However, every single time a class member contacts us, they are looking for legal advice and they are expecting confidentiality. If those expectations are not met, no one can ever feel comfortable seeking legal advice and representation from an attorney. Wage and hour class action attorneys can take comfort in continuing to use modern technology to communicate with prospective clients and putative class members.

A series of recent U.S. Circuit Court decisions may highlight the first in a long lines of class action or other large scale lawsuits against companies that pay substandard wages to undocumented immigrants. In the latest, Williams v. Mohawk Industries, Inc., (the original district court decision can be found at 314 F.Supp.2d 1333), the 11th Circuit joined the Second, Sixth and Ninth Circuits in holding that RICO, the Racketeer Influenced and Corrupt Organizations Act, can be applied to an employer who engages in ongoing criminal conduct such as knowingly hiring illegal aliens to suppress wages and to conceal wage and hour law violations. The prior cases included Trollinger v. Tyson Foods (6th Cir. 2004) 370 F.3d 602 (former employees alleging employer used illegal immigrants in order to depress wages); Medoza v. Zirkle Fruit Co. (9th Cir. 2002) 301 F.3d 1163 (legally documented workers alleging that employers leveraged hiring of undocumented workers to depress wages); Commercial Cleaning Servs., L.L.C. v. Colin Services Sys., Inc. (2nd Cir. 2001) 271 F.3d 374 (company alleging competitor hired undocumented workers in order to underbid competing firms).

Plaintiffs can include not only the employees of the defendant, but also their competitors (who suffer by incurring the higher cost of lawful hiring and wage practice) and their competitors' employees (who suffer as a result of the artificial suppression of wages).

The RICO Act, most widely known for its criminal penalties used to bring down mob crime families, also includes severe civil sanctions, including treble damages and attorney’s fees, payable to plaintiffs who can prove three elements: (i) that the defendant violated RICO by participating in a pattern of racketeering activity with an enterprise that affects interstate commerce; (ii) injury to the plaintiff's business or property; and (iii) a causal link between the violation and the injury.

What constitutes "racketeering activity?" Under 18 U.S.C. § 1961(1), such activity can consist of any number of crimes, including various immigration crimes under the Immigration Reform and Control Act of 1986, such as knowingly hiring undocumented workers. Under section 274 of the INA, it is a felony to encourage a noncitizen to enter or reside the U.S. if one knows the entry or residence violates U.S. law; it is also a felony to harbor or conceal such persons if one knows the entry or residence violates U.S. law. An employer who knowingly hires 10 or more undocumented workers per year falls within that rule.

What constitutes a "pattern?" Generally, if only takes two or more racketeering acts, the most recent of which occurred within ten years after one or more earlier acts, so long as the acts are related and involve a threat of continuing criminal activity.

What constitutes an "enterprise?" In Mohawk, it was the employer's association with two different recruiters; but it is not at all clear that such additional affiliations would be necessary to make the venture one of an "enterprise." However, one court has held that the employer acting unilaterally, in and of itself, is not an "enterprise" within the meaning of the statute.

What affect upon interstate commerce must be shown? Arguably, the aliens' travel from a foreign nation to the American workplace would be enough, but adding the depressing of wages and its effect on lawful wage earners is nearly always sufficient. It is not hard to find evidence that illegal workers suppress wages below those expected if the labor pool consists only of legal workers.

A Littler Mendelson article on the subject posed the question in its title: New Wave or Flash Flood: 11th Circuit Allows RICO/Immigration Lawsuit to Proceed. We can answer that somewhat rhetorical question. It will be a wave.

The American Arbitration Association has published its California Code of Civil Procedure § 1281.96 Data Collection Requirements report for 2003-2004. I've noticed a distinct trend favoring certain repeat customers. Wage and hour law practitioners should use this as a resource to show certain facts to trial courts, including the strong trend favoring defendants, and, in our case, the trend showing that employers do not initiate arbitrations against employees.

For example, we had one employer whose arbitration agreement we managed to invalidate at the trial court level by showing, among other things, that the employer didn't even let employees know about the arbitration scheme, had Spanish-speaking employees sign an English language arbitration agreement, and then used the same as an arbitration option agreement.

In other words, the employees didn't know they had signed an arbitration agreement and when the employer was sued by the employee, the arbitration agreement was procured and used as a shield, BUT, when the employer had a beef with its workers, it sued the employees in court.

How did we know? Because we had a 512 page list of AAA arbitrations and only three cases -- all employee-initiated claims -- involved this employer. The employer, however, had filed two actions against employees or former employees since 2002. Thus, when the employer argued that the agreement was bilateral, we responded by proving that the withholding of the agreement until a dispute arises left the agreement to be unilateral in practice, even if not expressly providing for unilaterality within the four corners of the agreement.

Incidentally, if you think the system does not benefit repeat users of the system, check out the data on some of the more frequently appearing parties, e.g., Tenet Healthcare.

While perusing a site published by The Building and Construction Trades Department, we just found this informative article on the Davis Bacon Act -- the federal prevailing wage statute. It's worth reading, even if you think you know the prevailing wage law well.

In an unsurprising move, President Bush has nominated Peter C. Schaumber to serve a second five-year term as a Board Member for the NLRB. The Labor Law Blog has a good post, with very specific examples, discussing how consistently pro-employer Schaumber has been in prior Board decisions. Not long ago, it had a similar post discussing the nomination of Dennis P. Walsh (no relation to us), a Democrat and another prior Board member, to fill the other vacancy on the board.

The NLRB does not directly affect wage and hour law, particularly in a state like California, but its effects upon union issues, particularly of note in the construction industry, can powerfully affect public policy that indirectly shapes the wage and hour law nationwide.

Yet another set of revisions to the proposed DLSE meal and rest period regulations was posted on Thursday. There is yet another 15-day comment period. I would post the redlined version available from the DLSE website, but the hmtl code is be too complicated to duplicate without much more effort than I intend to invest in this post. And I tried to cut and paste without success. So, to view the full regulations in their latest iteration, download the pdf here or the Word version here.

The modified text is available for public inspection at the Division of Labor Standards Enforcement’s headquarters office at 455 Golden Gate Avenue, 9th Floor West, San Francisco, CA 94102 from July 8, 2005 to July 25, 2005, between the hours of 8:00 a.m. and 5:00 p.m.

If you have any comments regarding the proposed changes, the Division of Labor Standards Enforcement will accept written comments sent by mail, fax, or e-mail, or personally delivered to the DLSE at the above address between July 8, 2005 and July 25, 2005.

All written comments must be submitted to the Division of Labor Standards Enforcement and received no later than 5:00 p.m. on July 25, 2005, and addressed to:

Char Grafil
Special Assistant Division of Labor Standards Enforcement
9th Floor West
Post Office Box 420603
San Francisco, CA 94142
Email: [email protected]
Fax: (415) 703-4807

The House agreed last week that members of Congress should earn an extra $3,100 more next year, bringing their new salaries to $165,200. By a vote of 263 to 152, the House blocked a bid, by Democrat Jim Matheson of Utah, to vote on the increase, paving the way for the automatic raise available under a 1989 law that provided for an annual cost of living adjustment. Unfortunately, Congress does not index the wages of minimum wage earners as it does for itself.

The current federal minimum of $5.15 per hour has less than 60% of the buying power it had in the 1960s.

Since the last minimum wage hike in 1997, Congressional pay has gone up 24% from $133,600.

Had the 1997 minimum wage levels been maintained with an inflation index, it would currently be about $6.37 per hour.

Fortunately for local workers, the minimum wage in California is $6.75, and it's likely to increase.

HCA will pay $4.75 million to settle a collective action (Abasi v. HCA, the Healthcare Co. Inc., C.D. Cal., No. CV 03-7606) for unpaid overtime and rest and meal break violations. Approximately 1100 employees will share in the settlement, based on a formula that applies their pay rate to their length of service. The settlement was approved on May 9, 2005 by U.S. District Court Judge George King.

The workers claimed various violations of the federal Fair Labor Standards Act and California wage and hour laws, including claims for pay under Labor Code § 226.7 and claims that workers were undercompensated for working 12-hour shifts violated the federal FLSA. The terms of the deal require HCA subsidiary Los Robles Hospital & Medical Center to pay an average of slightly more than $3,000 per employee, after attorney's fees and other costs.

The California legislature may be ready to pass a minimum wage increase in steps from $6.75 to $7.75 in July 2007, with inflation index increases thereafter. Management, chamber of commerce types and our least favorite group, restauranteur advocates, are fighting tooth and nail against the increase. Their latest argument:

The increase will cause the minimum wage of salaried, exempt managers to increase from about $28,080 per year to about $32,240 per year.

Well, yes, but why is that bad?

According to the Employment Development Department, the median income of low-level supervisors of personnel services workers is $34,552; supervisors of  housekeepers and janitors make $39,584; managers of retail sales workers make $41,812; office managers make $48,638; production manager ,make $50,169; and supervisors of mechanicsmake $58,099.

This means that an employee making $28,000 or so is so grossly underpaid in relation to the market that it is extremely unlikely that this person is a bona fide manager, instilled with a level of discretion and management authority sufficient to justify working them an unlimited number of hours for a fixed salary. We seriously doubt that an employee who is only worth $30,000 per year is a properly classified exempt management employee.

Besides, employers still have the right to pay a lower wage to managers. They just have to pay them that lower wage for every hour of work, plus overtime pay for hours in excess of eight per day or 40 per week.

When the last series of wage increases went into effect in 1999, the minimum wage was $5.75, which translated into a wage floor for salaried workers of about $24,000 per year. If the rate increases to $7.75 per hour by July 2007, the requisite salary increases would have averaged just four percent annually.

With housing, medical expenses and worker's compensation insurance increasing so dramatically over the same time period, a four percent annual increase in the wages of exempt managerial employees is actually quite modest.

The text of the latest version of the bill, AB 48, can be read here. The bill is currently in the Senate and is likely to pass.

Teresa Lindeman's article on wardrobing in the women's apparel industry was published about two weeks ago in the Pittsburgh Post-Gazette. I was quoted three times in the article.

The story must have struck a chord, because it's better picked up by more than two dozen newspapers (that I know about) across the country. So far, I've found my wardrobing comments in the Kane County Chronicle, the Evansville Business Journal, the Casper Star Tribune, the Knoxville News Sentinel, the Fort Wayne Journal-Gazette, the Pittsburgh Post-Gazette, the Abilene Reporter-News, the Arizona Daily Star, the Kitsap Sun, the Boulder Daily Camera, the Redding Record Searchlight, the Treasure Coast Palm, the Wichita Times Record News, Inside Bay Area.com, The Albuquerque Tribune National, NBC Action News, Kansas City, ABC 15 in Phoenix, and, today, in my hometown paper, the Orange County Register.

Last month, the 1st District Court of Appeal enforced a consumer arbitration clause with a class action ban, finding that it was neither "unduly one-sided" nor "in violation of public policy" to permit a classwide arbitration ban in a published opinion in Parrish v. Cingular Wireless, LLC. The case concerned early termination fees charged to wireless telephone customers. The ruling means that all but the public policy UCL injunctive relief claims would be ordered to arbitration, and would be arbitrated as an individual claim. In so ruling, the court declined to follow Szetela v. Discover Bank (2002) 97 Cal.App.4th 1094, perhaps in anticipation of a pro-business ruling in Discover Bank v. Superior Court.

If so, the First District anticipated incorrectly. Now that the Supreme Court has confirmed, in its opinion in Discover Bank v. Superior Court, that public policy in California generally does bar enforcement of agreements to waive class action claims in a consumer contract, Parrish will likely be reversed or depublished.

We haven't seen the papers yet, but the online docket for Parrish (case no. A105518) shows that a rehearing petition was denied just ten days before the Discover Bank opinion was issued, leaving the plaintiff with no choice but to file a petition for review with the Supreme Court. That petition was filed on Wednesday. It will be interesting to see how the Supreme Court deals with the case. At a minimum, it would appear that Parrish will be depublished, since its holding is clearly overruled by Discover Bank.