Wage and hour claims arise when employers fail to pay employees for all hours worked. When the violations are company-wide and affect numerous employees, a wage and hour class action may be appropriate.
Some common causes of wage and hour violations include the following:
• Misclassifying employees as “exempt” so that employees do not receive overtime pay.
• Failing to provide required rest and meal breaks.
• Failing to pay minimum wage.
The Fair Labor Standards Act (FLSA) is the primary source of federal wage and hour law. The FLSA sets the national minimum wage and guarantees overtime pay of at least one and a half times the regular rate of pay for all hours over 40 in a workweek.
California labor laws also set standards concerning payment of wages, overtime, maximum work hours, vacation pay, enforcement procedures and record-keeping requirements for employees in California.
Under California law, an employer generally must pay employees:
• One and a half times their regular rate of pay for all hours worked beyond 40 a week.
• One and a half times their regular rate of pay for all hours worked beyond 8 hours a day, up to and including 12 hours.
• One and a half times their regular rate of pay for all hours on the seventh consecutive day of work, up to and including 8 hours.
• Double their regular rate of pay for all hours worked in excess of 12 hours a day.
• Double their regular rate of pay for all hours worked in excess of 8 hours a day on the seventh consecutive day of work.
Employers must pay their employees overtime and minimum wages unless an employee is legally considered “exempt.” Exempt employees include professionals, executives, and administrators who meet certain specific requirements. In California, an “exempt” employee must generally be:
• Paid a monthly salary equivalent to not less than two times the California minimum wage for full-time employment; and
• Engaged in work which is primarily intellectual, managerial, or creative, and which requires exercise of discretion and independent judgment.
Some employer may misclassify employee as “exempt” to avoid paying for overtime. Employees who are misclassified as “exempt” may be entitled to back-wages for overtime pay and other benefits.
Federal and state laws require employers to pay at least the minimum wage. If an employee is covered by both federal and state minumum wage law, he or she is entitled to the higher minimum wage.
• Federal Minimum Wage – Effective July 24, 2009, federal law requires employers to pay their employees a minimum hourly wage of at least $7.25.
• State Minimum Wage – Many states have their own minimum wage, which may be higher than the federal minimum wage. As of January 1, 2008, the California minimum hourly wage is $8.00 an hour.
Examples of minimum wage violations include the following:
• Paying employees less than the minimum wage;
• Forcing employees to work for tips or commission alone; and
• Deducting expenses from an employee’s paycheck so that their wages are less than the minimum wage.
Industries where minimum wage violations commonly occur include: restaurants, health care, agriculture, day care, hotels, and garment manufacturing.
Rest & Meal Breaks
California labor law requires that employees be given meal breaks (unpaid) and paid rest periods. The number of breaks or rest periods depends on the number of hours worked in a given day. Employers who fail to provide rest breaks and meal periods in violation of the law may be required to pay one additional hour of pay at the employee’s regular rate of pay for each workday that the rest breaks or meal period is not provided.
In California, employees are generally entitled to a ten-minute rest break for every four hours worked. An employee who works at least five hours in a day is generally entitled to a thirty-minute meal period. Employees who work six hours or less may waive their meal period if both the employee and the employer agree. Employees who work more than ten hours a day should receive a second meal period of at least thirty minutes. The second meal break may also be waived if an employee works no more than 12 hours in a work day and both the employee and the employer agree.
During the meal period, an employee must be relieved of all duty; otherwise the meal period will be counted as hours worked and paid at the employee’s regular rate of pay.
An employer does not have to provide for vacation time (paid or unpaid) under California labor laws. However, if an employer provides vacation benefits, it is considered to be a wage. Once earned, vacation time cannot be taken away, and any unused vacation days must be paid out in an employee’s final paycheck.
Use it or Lost It Policies –
“Use It or Lose It” policies state that employees must use their vacation benefits within a certain amount of time (typically a year) or else lose the earned vacation. “Use It or Lose It” policies are illegal under California employment law.
When a person works outside his/her scheduled work time without pay, this is generally known as working “off-the-clock.” Failure to pay employees for off-the-clock work is one of the more common violations of federal and state wage and hour laws.
Examples of possible violations of the off-the-clock work laws include:
• Being required to attend pre-shift meetings without pay.
• Starting up computers or other equipment before the start of your shift without pay.
• Being required to check or respond to voicemails and emails when you are not on the clock.
• Clocking out to lock up or do other store closing work.
• Being required to clock out for rest breaks.
• Being required to clock out to run work related errands (such as picking up supplies or equipment).
• Being required to change in and out of uniforms at work (“donning and doffing”).
• Uploading and downloading information to a company website or server.
Both Federal and California tip law state that tips are the sole property of the tipped employee, and employers and supervisors are prohibited from taking any portion of their employees’ tips. An exception to this provision is the practice of “tip-pooling” in which tipped employees combine and share their tips. Both California and federal law permit tip pooling, but restrict the types of employees that can participate in the pool. California law allows only employees that provide “direct table service”, such as waiters/waitresses, busboys, and hosts/hostesses to participate in the tip pooling arrangement. Owners, supervisors, and managers are not allowed to participate in the pool. Federal law prohibits employees who have not customarily participated in tip-pooling arrangements such as dishwashers, cooks, chefs, and janitors from taking part in tip pools.