2. Need to know...
● Specific wage Order for
industry
● Daily & Weekly OT rates
● Exempt vs. Nonexempt
● Vacation Pay, PTO - wages
● Ensure employees are paid
in an authorized manner
and proper itemized wage
statements
3. California Supreme
Court Cases
● Peabody v. Time Warner
● Mendiola v. CPS Security
● Brinker Restaurant Corporation v.
Superior Court
4. Peabody vs. Time Warner, Inc
Susan Peabody - Account executive
Bi-weekly $769.23 or $9.61/hour
Time Warner paid commissions monthly in the last bi-weekly check of each
calendar month
Peabody worked 45 hours or more
Time Warner did not pay OT because they classified her and others as exempt
under California’s “commissioned sales” exemption
5. Commissioned Sales -
I.W.C. Wage Order 4-2001
Employee's earnings must exceed 1 ½
times CA min wage
More than half of employee’s
compensation must consist of
commissions rather than other
forms of pay
All earned wages, including
commissions, must be paid no less
frequently than semimonthly
6. Conclusion
Court rejected Time Warner’s allegation that their pay system was supported by
federal law (FLSA) which does not require employees be paid twice a month
Court ruled Time Warner could rely on commission exemption for pay period in
which paychecks included a commission payment with base pay
Court was in favor for Peabody’s minimum wage in that her paychecks included
only base pay of $384.61 per week ($20,000 annual) which was not enough
to compensate her at $8 an hour in any week for hours over 48.1
If your company pays commissions and or other compensation plans, please
review your practices
7. Mendiola v CPS Security Solutions, Inc.
CPS security solutions - provides security services at construction sites
Trailer guards who spend the night at the assigned job site in residential trailers.
Tim Mendiola signed on-call agreement
8 hours per day generally 9 PM - 5 AM as on-call hours
Weekends - 24 hour shifts; 16 hours of active patrol and 8 hours on-call
Allowed to leave job site only if they notified dispatcher, provide information regarding his or her whereabouts
with a cell phone and maintain a 30 mile radius.
Could engage in personal activities in the trailers
No children, alcohol, or pets
Adult visitors were permitted, but only if they were authorized by the company’s clients
8. Plaintiff sues for unpaid wages & overtime
Industrial Wage Order 4 - “the time during which an employee is subject to the
control of an employer, and includes all the time the employee is suffered or
permitted to work, whether or not required to do so”
Does not provide any exclusion for sleep time from hours worked
Wage Order 5 & 9 have specific sleep-time exclusions
CPS urged Supreme Court to include sleep time into Wage Order 4
Court decision: on-call time constituted compensable hours worked because
CPS exercised significant control. Mendiola was subject to minimum wage
and overtime provisions.
9. Brinker Restaurant Corporation v. Superior Court
Resulted after the DLSE’s investigation on Brinker.
Complying with its obligations to provide rest & meal breaks to its employees.
Maintaining proper records
Investigation was settled with a $10 million payment from Brinker
In 2004 Employees filed suit against Brinker.
Employees alleged they were forced to work through their rest and meal breaks.
Central issue in the case was whether the employer must ensure that employees take meal and
10. Court Ruling
Employers have the obligation to provide employees with a meal break.
Obligation is satisfied if:
Break is at least 30 minutes uninterrupted.
The employee is relieved of all duty for the whole period.
Is allowed to leave the premise.
The employee is not discouraged from taking the break.
Employers have the obligation to authorize and provide rest periods.
10 minutes in the middle of workday.
On the clock
10 min for 3.5 - 6 hrs, 20 min for 6 - 10 hrs, 30 min for 10 - 14 hrs.
12. Regarding to wage and hour, what is the most frequent violation
committed by employers?
“Wage theft and it’s one of the costliest crimes in America.. According to a 2014
study by the Economic Policy Institute, wage theft is an epidemic and costs
workers across the nation 50 billion dollars a year. As a comparison, in 2012, the
combined total of all robberies, burglaries, larcenies, and motor vehicle thefts
nationwide cost victims 14 billion dollars. The California legislature has passed
several laws protecting workers, including the Wage Theft Protection Act.
California Labor Law says employers must provide their workers with the required
rest and meal periods, overtime pay, and pay stubs. If not, workers can file wage
claims at their local Labor Commissioner’s office.”
13. With new wage laws being implemented every year, as an employer what is
the best procedure to take to make sure you’re in compliance?
“Pay attention and know your responsibilities as an employer. If an employer has a
question regarding news laws, they are invited to visit the DIR website at
www.dir.ca.gov. Employers can also call 1-866-LABOR-DIR, DIR’s call center with
any questions they might have regarding labor laws and their responsibilities as
employers or they can call directly to their nearest Labor Commissioner’s office,
here’s the list of the offices statewide and they can also visit the
WAGETHEFTISACRIME.COM website to find out more about worker rights and
employer responsibilities. It’s also important for employers to know that as cities
and counties raise the minimum wage faster than the state, the local ordinance
takes precedence over the state law, it’s the wage the benefits the employee
most. This is happening in the Bay Area and in Los Angeles County.”
14. What is the biggest recommendation for an H.R. professional who is soon
to enter the workforce?
“Be aware of California’s labor laws. Know what the employer’s responsibilities
are when hiring, firing or laying off employees. Although you may be working for a
company and trying to tow its line, California’s labor law needs to be followed.”
15. With the minimum wage increase over the next several years, do you think
there will be an increase in wage and hour violations?
Unable to comment
