Wage Law

A regulation promulgated by the city agency in charge of implementing Los Angeles's Living Wage Ordinance (Los Angeles Admin. Code, § 10.37 et seq.) is invalid because it limits the reach of the LWO to exclude workers who are covered by the plain language of the LWO.  Aguiar v. Superior Court (Cintas) (2009) __ Cal.App.4th __.

Two years ago, in the same case, the Court of Appeal reversed and remanded an order denying class certification. Aguiar v. Cintas Corp. No. 2 (2006) 144 Cal.App.4th 121. However, that appeal dealt only with certification, and did not address the underlying validity of the so-called "20-hour rule" that spawned the litigation (“the validity of the 20-hour rule need not be resolved at this stage of the litigation and is not a bar to class certification because the putative class can be divided into subclasses of those employees who worked at least 20 hours per month on the DWP contracts and those who did not”). The dispute centered upon Regulation 5, which imposed limitations and exclusions to the LWO for certain workers.

Former Regulation No. 5, promulgated by the city agency entrusted with implementing the LWO, provided, prior to its rescission in 2006, if an employee of a private contractor works at least 20 hours during the month on a city service contract, he or she must be paid the appropriate wages mandated by the LWO for each hour worked on the subject agreement.  If, however, the employee works less than 20 hours per month on a city service contract, he or she is not eligible for any LWO wages. 

Pursuant to the parties’ stipulation, the trial court had vacated trial and scheduled a hearing to decide certain legal issues, including, most significantly, the threshold issue of Regulation 5’s validity. On May 21, 2008 the trial court held the hearing and found Regulation 5 valid, concluding it “appears to properly clarify the LWO.” The Second District reversed:

The plain language of the LWO, coupled with its legislative history, reflect an unmistakable intent to afford a living wage to employees of city service contractors who spend any time working on city service contracts, no matter how much or how little that participation may be.  By limiting LWO eligibility to those who work 20 hours a month or more on city contracts and the amount of LWO wages to the hours actually spent on the city contract, Regulation 5 directly conflicts with the LWO’s articulated remedial purpose of raising wages for low wage service workers and ameliorating the burden placed on city social services caused by payment of inadequate compensation.  Because the trial court erred in concluding Regulation 5 was a valid and enforceable clarification of the LWO, we grant the petition for writ of mandate ... and direct respondent Los Angeles Superior Court to vacate its order upholding Regulation 5 and to enter a new and different order invalidating Regulation 5 on the ground it conflicts with the LWO.

You can download the full text of the new opinion here in PDF or Word format.