California Employee Rights Advocate : California Labor Attorney & Lawyer : Southern CA Employment Law : Los Angeles, Orange County : United Employees Law Group

Labor Code Section 515.5 dictates that certain software employees are exempt from overtime pay and Labor Code Section 510 sets forth the minimum that these exempt software employees shall be paid.

It’s Important to first identify who is considered exempt from over time. According to the California Department of Industrial Relations all of the following criteria must be met:

1. The employee is primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment.
2. The employee is primarily engaged in duties that consist of one or more of the following:

o The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
o The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to, user or system design specifications.
o The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.

Next, we can look at the rough road exempt software employees have had over the last decade. In 2000 the minimum salary for an exempt employee was equal to no less than $41.00 an hour. By 2007 it had climbed to equal not less than $49.77 an hour. Unfortunately in 2008 during our economic meltdown, this amount was reduced drastically to $36.00 an hour. There have been gradual annual increases. In fact, effective January 1, 2012 the increases will be no less than $38.89 an hour, or no less than $81,026.25 annually, or no less than$6752.19 monthly.

It’s important to note that although the minimum per hour has been effective since 2000, it was until the drastic decrease in 2008 that California labor laws also made sure that there would be a monthly and an annual minimum requirement. Thus ensuring that the while the employee may not be getting time and a half for all overtime hours worked they would be certain that their pay check would remain at or above the monthly and annual requirements while still meeting the minimum pay per hour.

California labor laws can be confusing and multifaceted if you are a software employee exempt or non exempt it is recommended you contact a California labor law attorney to be certain you are and have been paid properly over the last four years.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
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Wage Theft Prevention Act of 2011

According to Section 2810.5 of AB 469, at the time of hire all employer must now inform, in writing, employees of rate of pay and the of how wages will be calculated. In other words: hourly, daily, piece rate, salary, commission or by some other method. If applicable the employees must also be informed of their overtime rate, allowances, the regular pay date, the name of the business or any other names the business operates under as well as the physical mailing address for the business. AB 469 also requires that any changes made to this information be given to the employees in writing within 7 days of the change. Not only does the existing law require employers to pay penalties and back wages for violating minimum wages laws it now criminalizes certain wage violations by providing that any employer who willfully violates specified wage orders, willfully fails to pay wages due, if convicted is guilty of a misdemeanor. It important to note that, the statute of limitation for collecting penalties under the Division of Labor Standards Enforcement ("DLSE") has increased from one to three years.

Commission Contracts will be required by 2013

By January 1, 2013 AB1396 will amend the labor code to require employers to have written contracts with all employees who will receive wages from commissions. This contract must also define how these commissions will be calculated and when they will be paid. This does not include bonuses or short term incentives. This should alleviate the guess work and should allow the employees the ability to track and determine, in advance, what their commission pay will be. AB1396 will be particularly helpful to employees that are classified as inside sales or outside sales people.

Wage Garnishment : Medical Debts are now Exempt

Currently the law requires employers to garnish employee’s wages up to the portion of the earnings the debtor proves is necessary to support himself or his family, for things like Child support payments, back taxes, credit card debt, and other debts can all be subjected to wage garnishment. AB 1388 adds an exemption for debt that is incurred "for the common necessaries of life furnished to the judgment debtor" or his or her family, including, e.g., hospital services and other medical debts.

Even though most of these new laws will take effect January of 2012 it is recommended you speak with an experience California labor law attorney as soon as possible if you have any questions or concerns about your employment situation.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
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Both houses of the California Legislature recently passed S.B. 459 and sent it on to Governor Brown for signature. S.B. 459 prohibits and punishes the "willful misclassification" of employees as independent contractors; S.B. 459 would impose stiff civil penalties for each violation and even higher penalties if a "pattern" of violations is found.

At the same time the IRS has unveiled an employer forgiveness program, called the Voluntary Classification Settlement Program. Wherein if an employer voluntarily comes forward and reports that they have been misclassifying their employees as independent contractors the IRS would require that they only pay approximately 10 percent of the back taxes. The IRS also promises no audits and no penalties on unpaid taxes.

However the IRS has no control in courts as far as labor laws are concerned so the companies that do come forward will be opening themselves up for lawsuits for overtime back pay. With the new legislation S.B. 459 and its stiff civil penalties for each violation and even higher penalties if a "pattern" of violations is found, this could be very costly to employers.

S.B. 459 creates two new unlawful practices

1. "Willful misclassification" of an individual as an independent contractor.
2. Charging a willfully misclassified worker a fee, or making any deductions from compensation for any purpose that would have violated the law governing deductions from pay — Labor Code §§221 and 224 — had the worker properly been classified as an employee.

It’s important to also note the change in the definition of "Willful misclassification". Previously the definition of "willful" in earlier versions of the legislation was "voluntary and intentional" the new bill redefined “willful” as "avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.” Knowingly being the operative word. "Knowing" is interpreted by the courts as including constructive knowledge, which in turn incorporates what the employer allegedly should have known — an inexact and subjective standard applied post hoc by a finder of fact. In other words, even if the employer believed they were classifying the independent contractors according to law the employer is still expected to know otherwise.

If you are currently classified as an independent contractor you should have control over the following:

- Make your own schedule
- Use your own equipment, tools, vehicle
- Not required to wear a uniform or clothing with company logo
- Use/ purchase your own materials to complete work
- No constant supervision of tasks and performance

If any of these conditions are not met you should contact an experience California labor law attorney to review your situation. You may be entitled to overtime back pay as well as penalties for missed meal and rest breaks.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
San Diego – (619) 342-1242 or (619) 272-2193

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The Administrative Exemption is one of the most disputed exemptions under California law due to its ambiguity. The question is usually whether or not the employee should be compensated for overtime or if they are properly classified as exempt from overtime. California courts have examined the Administrative Exemption under the Federal Labor Standards Act (FLSA)

Bell v. Farmers Ins. Exchange (2001) is a noteworthy case in which the courts review whether or not the employees met the requirements to be considered exempt from overtime. First the minimum requirement rate of salary must be met. Then the administrative work must be

(1) non-manual
(2) related to management policies or general business operations of the employer or the employer's customers
(3) must involve the customary and regular exercise of discretion and independent judgment.

The stipulation "directly related to management policies and general operations of the employer or the employer's customers" is often the key requirement that is scrutinized most due to its expansive nature. But more often than not California courts reject the argument often made by employers that "management policies and general operations" must be interpreted broadly and it applies to any employee who exercises minimal discretion in his work. The California Courts interpretation of the language in this stipulation is much more focused.

The interpretation has been published in the decision in Bratt v. County of Los Angeles (1990) to mean directly related to management policies or general business operations, as in running of the business and not merely the day to day carrying out of its affairs. The Bratt Court considered whether the county probation officers are exempt from overtime under administrative exemption. The court concluded that although probation officers provide recommendations to the courts, these recommendations do not involve advice on the proper way to conduct the business of the court, but merely provide information which the court uses in the course of its daily production activities.  So it was decided that the tasks the employees preformed did not meet the requirement to be exempt from overtime under the Administrative Exemption

If you are concerned that you might be improperly classified as exempt from overtime you should contact and experienced California Labor law Attorney and have them examine your job duties. You could be owed a substantial sum of money in overtime back pay.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
San Diego – (619) 342-1242 or (619) 272-2193

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After the decision for Wal-Mart v Dukes was announced many believed that it was significantly change class action litigation, specifically what was needed to certify a class action. The case also alleged Sexual Discrimination and much of the language seemed to apply to other kinds of class actions, those outside of the employment context entirely.

Particularly; will Dukes apply to collective actions under FLSA section 16(b)? 16(b) is what allows wage and hour claims to be filed collectively if the class members are “similarly situated”. In the past, most courts find this to mean that the class members must be able to show that they were subject to "a common policy or plan that violated the law." The best example of this was written by district court judge Sonia Sotomayor , Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. 363, 367-68 (S.D.N.Y.1967).  However the Dukes Decision was related specifically to Rule 23(a)(2), which necessitates a commonality. In other words: Are the facts of the case common to the class?

In California Cruz v Dollar Tree, Case No. 3:07-04012-SC (N.D. Cal. July 8, 2011), demonstrates that Dukes will apply to wage and hour suits as well. Cruz represented all current and former Store managers of the Dollar Tree Stores in California. Cruz filled in Northern California courts alleging that they were misclassified as exempt from overtime but were in fact entitled to overtime pay as well as meal and rest breaks. The court certified the class in 2009.

In both of these cases the plaintiff won the first round, but this did not last. After the cases were certified the Ninth Circuit render it’s decision in Wells Fargo Home Mortgage Overtime Pay Litigation, 571 F.3d 953 (9th Cir. 2009), and Vinole v. Countrywide Home Loans, Inc.,571 F.3d 935 (9th Cir 2009), rendering the class partially decertified. Then later The Ninth Circuit decertified a class of truck loading dock supervisors it had previously certified in Marlo v UPS, Case No. 09-56196 (9th Cir. 2011).

After Cruz v Dollar tree and Marlo v UPS were decertified the court felt obligated to reexamine Dukes v Wal-Mart, stating, "a forceful affirmation of a class action plaintiff's obligation to produce common proof of class-wide liability in order to justify class certification." The court’s interpretation of this requirement was "common proof to serve as the 'glue' that would allow a class-wide determination of how class members spent their time on a weekly basis." The end result, decertification of the class.

The bottom line is that no matter what you think the current labor law says about your employment rights, the laws are always changing. It can never hurt to reach out to an experienced California labor law attorney to evaluate your current situation.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
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The nation has been anxiously awaiting the, the California Supreme Court opinion of California’s employment laws regarding non-resident employees who perform work in California. While the decision will likely force many employers to reevaluate their non exempt payment policies, specifically overtime. Presumably, a large number of lawsuits will follow, including class actions, demanding back pay of overtime.

Sullivan v. Oracle has been settled and appealed several times. The premise of the case was that several Arizona and Colorado residents were employed by Oracle as instructors; they argued that they were entitled to overtime under California law when they had preformed work in California. However, Oracle had classified the instructors as exempt employees and as such they were not paid overtime. This case required the interpretation of two labor laws principals; first whether or not the nonresidents were covered under California labor laws and second if they were classified properly as exempt employees. The federal Ninth Circuit Court of Appeal certified these issues for the California State Supreme Court to decide.

Most companies in California are aware that California law has several striking differences from the federal Fair Labor Standards Act (“FLSA”). Specifically exemptions from overtime under California labor law are examined differently than under the FLSA, specifically focusing on not what an individual’s “primary” duties are, but on the duties in which they are “primarily” engaged. Furthermore, California labor law requires that overtime be paid at time and half for hours 8-12 in a day and for double time for work performed beyond 12 hours in a day. Meal and rest breaks to non-exempt employees are also a requirement under California labor laws.

The California Supreme Court found that California’s overtime laws do apply to non-resident employees who perform work in California. The Court went a step further to conclude that the state overtime laws did not make a distinction between residents and non-residents, and clarified that it would defeat the purpose of those laws if employers could simply “import unprotected workers from other states.”

While the decision is limited to “California-based” employers; the court did not provide a definition for this term. As such, employers based outside California should not ignore Sullivan. There is every reason to believe that non-resident workers of employers based outside California will contend that they, too, should be covered by California’s wage-hour laws when working in the state. And, based on the broad language in Sullivan, there is every reason to believe the California Supreme Court might agree.

What Employee Should Do now when traveling to California to work

• Keep accurate records of your work hours and all breaks.
• Make a list of all the job duties you are expected to perform while in California.
• Keep accurate records of your travel time and all travel expenses, including mileage.

If you are not paid for all hours worked or have been classified as exempt from overtime contact an experienced California labor law attorney to examine your records. You might be owed back pay for your overtime, meal and rest breaks as well as travel time and expenses.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
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San Francisco – (415) 200-0012 or (415) 230-2755
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California Ninth Circuit's courts have issued another recent decision regarding the California Learned Professional Exemption. The appellate court establish a law clerk as exempt from state and federal overtime. This law clerk graduated from law school but had not passed the California Bar Exam. Zelasko-Barrett v. Brayton-Purcell, LLP, 2011 Cal. App. LEXIS 1080 (Cal. App. 1st Dist. Aug. 17, 2011).

On June 15, 2011, the Ninth Circuit revisited the California Learned Professional Exemption when it determined Campbell v. PricewaterhouseCoopers LLP, 9th Cir., No. 09-16370, 6/15/11. See blog entry, "Licensed or Unlicensed? Exempt from Overtime or Not?”

Generally in past cases, the use of the Learned Professional Exemption has typically revolved around employment positions, such as engineering or more recently accounting. More recently, on August 17, 2011, the First Appellate District reviewed and denied the dispute to the use of the California Labor Code’s Learned Professional Exemption in the legal industry. Zelasko-Barrett v. Brayton-Purcell, LLP, 2011 Cal. App. LEXIS 1080 (Cal. App. 1st Dist. Aug. 17, 2011).

In Zelasko, Brayton-Purcell, LLP hired law students and law graduates who had not yet passed the bar exam as “Law Clerk I” and “Law Clerk II”, respectively. The plaintiff had the Law Clerk II position before to his entrance to the bar for roughly 2 years, then was promoted to Associate Attorney. The Marin County Superior Court found that the plaintiff was correctly classified as exempt when he held the position of Law Clerk II.

The court held:
“Federal regulations after which [the California learned professional exemption] was explicitly patterned . . . condition the learned professions exemption under federal law upon completion of an advanced course of education, not upon licensure,”

Ultimately the court ruled that possession of the degree, along with Defendant’s undisputed evidence that a Law Clerk II was required to perform all the same duties as a junior attorney, satisfied the exemption’s requirements.

The Zelasko case may not have been a success for the plaintiff and certainly lends doubt to how similar proceedings will fair. But since there are still California courts now applying the principals set forth in the Ninth Circuit's decision in Campbell v. Pricewaterhouse Coopers LLP, it is likely employers will take a second look at how they classify their employees.

If you have been classified as a salary or exempt employee it can never hurt to have a California Employment Attorney examine your job duties to be certain you have been classified properly. If you haven’t been paid properly you are likely owed a substantial amount in overtime and possibly even meal and rest break violation.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
San Diego – (619) 342-1242 or (619) 272-2193

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Most people are not paid to drive to work they are paid once they arrive and begin their work. Mike Ritti sued Lojack for his commute time and originally lost. However, Rutti v Lojack, March of 2010, the 9th circuit court of appeal found that Rutti and all other technicians at Lojack were owed their commute time from home to their first stop.

Mike Rutti worked for Lojack as an installation technician. As such he would drive a company vehicle from his home to the client’s location each morning to in install alarm systems. Lojack had several company policies regarding the work vehicle. Rutti was not allowed to: run personal errands in the vehicle, have any passengers other than co workers, use his cell phone while driving and he was required to go directly to the job in the morning and directly home at the end of his last appointment.

Rutti Sued Lojack on behalf of himself and all other technician for his commute time and for the time he spent performing “preliminary” activities, such as, mapping, receiving, prioritizing tasks/jobs, routing before leaving his home every morning. As well as the time he spent at the end of his day when he returned home to wrap up all of the necessary documentation from that day’s work.

Originally the court found that Rutti’s commute time and pre/post work activities were not compensable under the Employee Commuting Flexibility Act (ECFA). Then new case law presented its self: Morillion v Royal Packing Company, where the California Supreme Court found that employees must be compensated during time when an employee is subject to the control of the employer. Rutti filed an appeal and will receive back pay for the time he spend working off the clock during his commute. However, the court determined that the time he spent at home before and after his commute was not compensable based on the language found in the ECFA.

The ECFA states that employers are not required to compensate employees for activities which are preliminary to or postliminary to the employees principal activities. It further designates that even if the activities are related to the employees principal activity the time is still not compensable if it is de minimis.

In determining if an activity is de minimis the court considered:

• The practical administrative difficulty of recording the additional time
• The aggregate amount of compensable time
• The regularity of the additional work

The court found that Rutti’s pre and post activities were not integral to his principal activities and so they are not compensable.

In conclusion, if you have any restrictions placed on you by your employer during your commute to and from work you should have an experience California employment attorney review your case.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
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ADT fired two commissioned salespeople because they filed a complaint with the Maryland Department of Labor claiming that they were owed overtime. In Randolph v. ADT Security Services, Inc., Judge Chasanow from the District Court of Maryland granted the plaintiffs and former ADT Security employees’ Motion for Summary Judgment as to liability against their former employer.

The complaint alleged a violation of the Fair Labor Standards Act (FLSA). During the DLLR proceedings the DLLR requested that the ADT employees produce alleged employer and client confidential information. ADT argued that the employees were lawfully terminated because they were not allowed to give out confidential information. And as such, the plaintiffs should not receive protection under the FLSA on the theory that confidential documents were included in the FLSA complaints.

To punish employees for complying with the DLLR’s instructions doesn’t seem fair. The court granted Summary Judgment in favor of the Plaintiffs, stating:

Perversely, ADT’s position would result in a situation wherein employees with the most supporting evidence would also face the greatest risk of dismissal. As a result, enforcement agencies would be less able to undertake early assessments of employees’ claims, as employees could not be expected to provide much evidence on their own (for fear of exposing themselves to termination). Employers would then have to face greater government intrusions into their business while the complaint was investigated; because of the lack of early information, these investigations would likely last longer. Meanwhile, employers would have an incentive to cull through every document attached to an FLSA complaint, looking for any violation of company policy in an effort to forestall expensive litigation.

More problematically, they could simply choose to impair the ability of employees to make claims at all by dubbing all possible supporting documentation “confidential.” Such a situation would grossly undermine enforcement of the FLSA, which hinges upon “information and complaints received from employees” (citation omitted). The FLSA anti-retaliation is about the free sharing of information

The court referred back to the definition of “complaint” and its use in standard civil litigation “embraces attached supporting documentation.” The court further ruled that cases in which the employees participate in an investigation, permits employees to disclose confidential information to investigators even when done unreasonably.

Finally the conclusion of the court:

ADT’s explicit admissions that Plaintiffs lost their jobs because of the filings with the DLLR mandate only one conclusion: ADT retaliated against Plaintiffs because they engaged in a protected activity. Summary judgment must therefore be granted for the Plaintiffs on count one of the complaint on the issue of liability.

There are three things you can take way for this case. One that retaliation laws would likely apply if you are fired for filing a complaint with the labor board or in the courts and two any information you have, proprietary or not may be used to prove your case. It’s important to save information that supports your claim for labor violations you may have suffered. If you are concerned that you may be owed unpaid wages for overtime it is advisable to contact a California labor law attorney to help you evaluate your rights.

If you have any questions about this article or our blog, feel free to call us at:
          Long Beach – (562) 256-1047
          Los Angeles – (213) 261-0229
          San Francisco – (415) 200-0012 or (415) 230-2755
          San Diego – (619) 342-1242 or (619) 272-2193 

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Answer: Department of Labor, the Internal Revenue Service, and Congress

Our budget deficit has all three of these entities working towards a common goal: tax revenue. They are putting pressure on employers, big and small, to make sure they are properly classifying their workers. As an independent contractor you would be responsible for paying your own taxes and you wouldn’t be covered under the company’s worker compensation insurance or unemployment insurance; making it near impossible to get worker compensation if you are hurt or unemployment benefits if you are fired. Essentially all of the financial responsibility is on the independent contractor. The employer is relieved of a substantial amount of taxes and insurance costs by hiring independent contractors. The issue is that companies can’t just decide that you will be an independent contractor. There are specific laws dictating who can and cannot be classified as such. An independent contractor should be independent enough from the company to have control over the following:

• Scheduling; the freedom to create and maintain their own schedule so long as major deadlines are met.
• Equipment; should be able to chose what type of their own equipment they will use to complete the work including vehicles.
• Uniforms; should not be forced to wear the hiring company’s logo/ uniforms as if they are an employee.
• How the task is completed; should not be told in detail how to perform the work. End goals are really all the hiring company should be imposing.

"We Can Help" - The Department of Labor:

Independent contractors are not protected under the Fair Labor Standards Act protections for issues like minimum wage and overtime or other benefits, so often wrongly classified independent contractors do not receive legal protections they are entitled to. The "We Can Help" campaign encourages employees to seek aid from the DOL if they believe they are not being paid correctly or are misclassified. The DOL intends to further focus on fixing worker-classification issues in 2011 by adding 90 new enforcement personnel and an additional $12 million to the Wage and Hour Division's budget.

Even More "Help"- The Internal Revenue Service:

Employee-classification is a front runner with the IRS because employers are not required to pay social security, Medicaid, unemployment, or other payroll taxes on independent contractors. In an attempt to rectify these improper misclassifications the IRS will be adding 100 new enforcement agents and allocating $25 million to investigating misclassification of employees as independent contractors. IRS audits may also impose penalties and require payment of back pay and taxes for workers previously misclassified. The Treasury Department estimates an increase of by $7 billion over the next ten years.

Congress: Proposed Legislation Affects Even Small Employers

Congress offered up new legislation regarding worker classification; The Fair Playing Field Act of 2010. This bill is intended to amend Section 530 of the Revenue Act of 1978, which currently provides a safe harbor for Companies to treat employees as independent contractors for tax purposes if the company has a logical basis for treating them as independent contractors and has consistently reported their income on Form 1099s. If passed this bill would eliminate that safe harbor and employers would be open to larger penalties for worker misclassification, even good faith mistakes.

Employee Misclassification Prevention Act, is another bill that has recently been proposed. It focuses on classification for purposes of compliance with the Fair Labor Standards Act. That Act was introduced in April 2010 and would create a new FLSA violation: misclassification of an employee as an independent contractor. The Act would also:

• Impose notice and record-keeping requirements on businesses with independent contractors,
• Impose fines on businesses for each employee misclassification,
• Expand FLSA's anti-retaliation provisions to cover independent contractors, and
• Award triple damages for violations of minimum wage or overtime laws for employees wrongfully    classified.

The Fair Playing Field Act and the Employee Misclassification Prevention Act are both intended to correct perceived abuse of the independent contractor label, the acts contain different tests for determining who is an independent contractor and who is an employee, which may lead to even more confusion surrounding the issue.

To be safe you should contact a California labor Law attorney to examine your job duties and work conditions to determine your worker classification status. If you have been improperly classified as an independent contractor a California employment attorney could help you recover back pay for minimum wage, overtime, and benefits.

If you have any questions about this article or our blog, feel free to call us at:
          Long Beach – (562) 256-1047
          Los Angeles – (213) 261-0229
          San Francisco – (415) 200-0012 or (415) 230-2755
          San Diego – (619) 342-1242 or (619) 272-2193 

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If you are an IT or computer worker in California, getting your overtime pay has become harder and harder- yet not impossible, if you know the rules of the game.

As of September of 2008 if you are a computer programer or computer designer, if you make more than $75,000 per year, you may not be entitled to overtime pay in California.

In addition, the the restriction above, computer software companies are becoming more and more savvy by creating hundreds and hundreds of job titles in order to make a possible class action seem very small when it comes to numerosity.   In addition, job descriptions in many cases are not reflective of what the actual worker does, and therefore causes additonal problems in litigating for overtime pay.

What are the solutions and how can a worker navigate these issues?

The first solution is to obtain an experienced California labor law attorney. A strong labor attorney can foresee and navigate through many of these pitfalls. Morever, it should be understood that many other non programming type positions such as installers, help desk, and technicians are likely non exempt and entitled to overtime pay and the $75,000 salary does not exempt such workers. Furthermore, when it comes to job descriptions that do not match duties, in most cases, the labor lawyer can access the performance evaluations which indicate what the worker actually did, versus what the job description states they were “supposed to be doing.” This is important in determining whether an employee is exempt or not and therefore entitled California overtime pay or not.

Many computer companies such as IBM, Sun Microsystems, Cisco and Intel, among others, have successfully been sued by California labor attorneys, netting millions of dollars for workers who were misclassified as not entitled to overtime pay.

It is not uncommon for employees in California who are recently laid off to complain of wrongful termination, or discrimination only to find out that their real claim is improper classification and they are in fact entitled to back overtime pay for up to four years pursuant to California labor law. Also, in investigating such violations it is important to also look at past employers, since again, the statute for recovery of overtime pay is up to four years previous to the date the lawsuit is filed.

If you have been working more than 8 hours in a day or more than 40 hours in a week and feel that you may be misclassified as “exempt” and not entitled to overtime pay, it is critical that you talk to a California labor law attorney to review your possible claims.

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Cisco Systems has plans on the drawing board to cut 15 percent of its workforce and place for sale a factory as part of its strategy reduce expenses by $1 billion as an attempt to improve its bottom line.

The numbers to be laid off shake out like this. It appears that 11,500 jobs, will be cut in contrast to just several thousand that analysts had surmised.

Many Cisco employees may come to realize that they were wrongly classified as exempt from California overtime pay laws. If this is the case, such employees are entitled to go back and collect up to four years of overtime pay under California labor laws.

“It is not unusual for employees to realize in the most desperate of times, that they were in fact, entitled to overtime pay all along due to the misclassification error made by their employer. Many employees do not realize that it is the job duties you perform and the amount of independent discretion you have that determines whether you are entitled to overtime pay- not your job title or the amount of salary you earn,” says Walter Haines, class action attorney. Attorney Haines has successfully litigated Cisco Systems in the past for similar violations.

Another areas of abuse in recent months among corporate giants, has been pension fraud. When long term employees are laid off or retire, in many instances they realize that their pension balance is not what they thought it would be. In many cases, changes to the pension plan were not properly disclosed to employees and as such, these same employees incurred significant losses. Pension fraud is becoming more and more common in the corporate arena. Employees who are curious as to whether the proper disclosures were made in regard to their pension should compile their pension documents and speak to a labor attorney as soon as possible.

In addition, if you work or have worked for Cisco Systems and were deprived of your overtime pay it is important to talk to a California labor law attorney at once to investigate your options.

If it is determined that you have been misclassified and are entitled to California overtime pay, you may also be entitled payment of penalties and interest as well as your attorney fees. It is as simple as putting together your job description and any performance evaluations you might have and submitting them for attorney review.

In difficult times of lay offs and downsizing, employees must become informed as to what their rights are and investigating your employer for possible misclassification of your job and pension wrongdoing is a prudent step in protecting your rights.
 

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Since 2009 companies that were classifying all unlicensed accountants and engineers have been hit hard with lawsuits challenging the “Learned Professional Exemption” because a federal District court had ruled that these unlicensed professionals did not fall under any exemption. See Campbell v. PricewaterhouseCoopers, LLP, 602 F. Supp. 2d 1163, 1185 (E.D. Cal. 2009).

Just last month, the Ninth Circuit reversed, in part, and remanded the lower court’s controversial decision. See Campbell v. PricewaterhouseCoopers LLP, 9th Cir., No. 09-16370, 6/15/11. PricewaterhouseCoopers LLP employs thousands of unlicensed accountants and in this reversal the court found that they were not all banned from being classified as part of the Learned Professional Exemption. In this particular case the court allowed the defendants, PricewaterhouseCoopers LLP, to present evidence to a jury in order to prove the exemption.

A second question regarding Administrative Exemption was remanded to the jury. The jury was instructed to review if the audit work performed by the unlicensed accountants could be classified as of “substantial importance” to the management of the clients’ operations. This was important because under the Administrative exemption if an employee demonstrates they are of “substantial importance” to the management of the clients’ operations, then it could be induced that they are managing or shaping the operations of the company. For clarification purposes the court noted:

While we recognize Plaintiffs are on the low end of PwC’s hierarchy, we see no authority that would bar their audit work from meeting this test as a matter of law. The former federal regulations incorporated by the administrative exemption include several examples of administratively exempt white collar employees, including tax consultants, wage-rate analysts, analytical statisticians, claim agents, and “many others.” Id. § 541.205(c)(3), (5). In contrast, the examples of nonexempt employees are predominately clerical—bookkeepers, secretaries, messengers, and other “clerks of various kinds.” Id. § 541.205(c)(1)-(2). Whether Plaintiffs are more comparable to the former category or the latter will depend on how the jury resolves the numerous factual disputes discussed above . . .

While this case may have reversed the earlier notion that only licensed accountants and engineers can be considered exempt from overtime; it’s important to note that, just because it is possible to now classify unlicensed accountants and engineers as exempt does not mean that any and all unlicensed employees are properly classified. If you are unlicensed it is still a good idea to contact a California labor law attorney to evaluate your exemption status. You could be owed a substantial amount in back pay for overtime and meal and rest break violations.

If you have any questions about this article or our blog, feel free to call us at:
            Long Beach – (562) 256-1047
            Los Angeles – (213) 261-0229
            San Francisco – (415) 200-0012 or (415) 230-2755
            San Diego – (619) 342-1242 or (619) 272-2193
 

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California labor law attorneys have recently received an extended explanation of “commission wages” from the opinion given by the California Second Appellate District court. This explanation related directly to employees that are classified as exempt from overtime under the commissioned salesperson exemption. In the case Areso v. CarMax, Inc., it was decided that CarMax’s commission plan of a flat rate per sale would be considered commission wages.

Essentially the plaintiff Areso was unsuccessful in the class action in which he was claiming misclassification as exempt from overtime under the commissioned salesperson exemption and owed overtime. California labor law attorneys for Areso argued that overtime was owed because CarMax’s commission plan did not meet the requirements as “commission wages” under Labor Code Section 204.1, which necessitates commissions to be “based proportionately on the amount or value” of the sale of the employer’s property or services.

California labor law attorneys for CarMax were pleased to hear the court found CarMax’s commission structure is a “performance-based incentive system and thus fairly understood to be a commission structure” due to the language that commissions can be founded on the “amount” rather than “value” of cars sold, interpreting “amount” to mean the number of cars sold. Furthermore, the court agreed with labor law attorneys for CarMax’s argument that prior decisions necessitate commissions to be base on “a percentage of the price of the product or service” (as first articulated in Keyes Motors, Inc. v. DLSE, 197 Cal.App.3d 557, 563 (1987)) as dicta as it related only to the part of the statutory language in Labor Code § 204.1 interpreting the “value” of the product or service.

In order for someone to be considered exempt under the commissioned salesperson exemption, Labor Code Section 204.1, the employee:
• must be involved principally in selling a product or service (not making a product or rendering a service)
• The amount of their compensation must be based proportionately on the amount or value of the product or service.

The Court opinion also interpret the word “amount” in the statute, and found that a flat payment for each car sold satisfies the statutory stipulation because the commissions are compensated based on the “amount” or number of cars sold. Further, paying a flat amount for each car is “proportionate” because it is a one-to-one proportion where the “compensation will rise and fall in direct proportion to the number of vehicles sold.”

Flat fees and proportionate percentages can be a little confusing if you are unsure whether or not you are classified as exempt correctly you should contact a California labor law attorney to examine your exemption status and determine if you are entitled to any back pay for overtime you may have worked.
 

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The Department of Labor recently released a Smartphone application called DOL-Timesheet to help employees hold their employers accountable for proper payment of overtime wages. This app allows employees calculate regular work hours, break time and overtime pay to generate their own wage records. Department officials say the information could prove valuable in a dispute over pay or during a government investigation when an employer has not kept an accurate account of hours worked. The Labor Department is already planning future updates for the app that will include support for other smartphone platforms, such as Android and BlackBerry. New features being considered for future versions will have the ability to input forms of pay other than hourly, such as tips, commissions, bonuses, and holiday pay.

Labor Secretary Hilda Solis said."This app will help empower workers to understand and stand up for their rights when employers have denied their hard-earned pay,"

According to the Department of Labor, suits filed by employees have increased dramatically. About 6,800 such suits were filed in 2010, about 700 more than the previous year. Most were collective or class actions. Totaling $176 million in back pay and in the last five years, they gave 1.2 million employees more than $925 million in back pay and overtime.

The Wage and Hour Division of the Department of Labor receives more than 35,000 inquires a year for assistance and is not always able to handle every claim. For those they are unable help, they now refer them to the toll-free hot line, where they can get a referral to an attorney who specializes in wage and hour disputes.

Nancy Leppink, acting Wage and Hour Administrator, says the department is just doing what it is supposed to do, which is going after employers who take advantage of employees by shorting them of their hard-earned wages. Leppink said."To the extent we have employers who are not complying with the law, we have an obligation to look for all of the opportunities we can to change that behavior,"

If you are experiencing issues with your employer regarding overtime pay, improper time keeping, reimbursable expenses you should contact a California labor law attorney to seek assistance in claiming all of your back pay and any other penalties you may be entitled to.
 

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California labor law attorneys fought to prove that it should be illegal to change the beginning and end days of the work week in order to evade 7th day payment of overtime. The California Supreme Court upheld this reasoning and the court also found that all on-call time where employees were required to sleep aboard the employment vessel will be paid as hours worked.

In Seymore v. Metson Marine, Inc., the employees were scheduled to work 14days on then 14 days off. Their primary job function was to attend to marine oil spills. However the Metson Marine designed the work week to begin and end in such a way that they would not have to pay the 7th day overtime pay on the second week (day 14). In other words the employees would be paid for overtime on the 7th consecutive day of work but they would not get paid for the last day of their 14 days. While the court recognized that employers do have the ability to choose the work week for payroll purposes the court noted that Metson Marine designed their work week simply to avoid payment of overtime on the 14th day, due to Metson’s lack of evidence proving anything to the contrary.

California labor law attorneys for the plaintiff were also successful in proving that the employees were not properly compensated for being on call or off duty stand by. Metson Marine would allow the employees to sometimes leave the ship, unpaid, for personal reasons however they required that the employees carry a phone, be within 45 minutes of the ship and they were not to drink alcohol. The court found that Metson Marine should have paid the employees during the on-call times as hours worked because of the restrictions that were placed on the employees during this time.

The California labor law attorneys for the plaintiff asked for payment of the 8 hours during which the employees were sleeping on the ship. Metson Marine did have one victory in this suit; the court held that the sleep time of the employees was subject to payment as time worked.
If you are concerned that you have not been paid properly for being placed on call or standby and or overtime, please contact an experienced California labor law attorney to review your situation.

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Recently in San Francisco’s 9th Circuit Court of Appeals Oral arguments were heard on Campbell v PricewaterhouseCoopers. This a is a wage and hour case in which the employees, unlicensed audit associates, are claiming that they have been misclassified as exempt and are owed overtime. If the plaintiffs are successful at recovering their overtime it will open the door for more class actions brought by similarly situated employees.

The counsel for the plaintiffs presented their argument to a panel of three judges. The briefs read as follows:

“PwC argues that Attest Associates satisfy the Professional Exemption because—notwithstanding the routine and nondiscretionary nature of their work—PwC claims that they are functionally indistinguishable from fully licensed accountants, doctors, lawyers, and engineers. As a matter of law, however, the text, structure, and drafting history of the Professional Exemption limit its application to licensed accountants, and Associates are not licensed. Second, PwC argues that Attest Associates satisfy the Wage Order’s Administrative Exemption because they work “under only general supervision” despite up to six layers of managers who are responsible for Associates’ work. That argument fails, however, because PwC has not pointed to sufficient evidence to create a triable issue of fact that Associates “work along specialized or technical lines”—much less that they do so “under only general supervision”—as required by the Administrative Exemption.”

PricewaterhouseCoopers counsel argument was as follows:

“Put simply, nothing in the Wage Order precludes unlicensed accountants from being shown to be exempt under subsection (b) of the Professional Exemption. Plaintiffs’ argument that the “drafting history” of the wage order at issue shows an intention on the part of the [Industrial Welfare Commission] to prohibit unlicensed accountants from being professionally exempt should be rejected, because the language and structure of the Professional Exemption are not ambiguous, and contain no such prohibition. Even the District Court did not accept Plaintiffs’ tortured reading of the text of the Professional Exemption, or claim to find unambiguous intent on the part of the [Industrial Welfare Commission] to exclude from eligibility for the Professional Exemption all unlicensed members of the accounting profession — and inevitably by extension, all unlicensed lawyers, doctors, dentists, optometrists, architects, engineers, and teachers. Doing so is flatly contrary to the overriding principle governing application of exemptions from overtime provisions, which is to consider individual employees’ work duties.”

The employees’ position essentially is that they are not exempt under either the professional exemption or administrative exemption because they argue that they are neither working in a specialized or technical role nor are they given the requisite discretion over how they may carry out their work to qualify as exempt from overtime.

PricewaterhouseCoopers argues that the tasks that auditors perform are not that different from the tasks a licensed accountant performs. Licensed accountants do fall under the professional exemption therefore auditors should as well. They further argue that the exemption status should be based on the job duties or tasks that the employees perform and not on whether or not they are licensed.

The court has not given its ruling but clearly has a lot to consider.

If you hold a position in accounting and are currently being paid a salary you may be owed overtime. If you have any questions it is advisable to contact a California labor law attorney to discuss your situation.

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The Myth of Salary

There are myths regarding California overtime that suggest employees that are compensated with a salary are not entitled to overtime. This myth comes from the requirement of certain California overtime exemptions that the employee be paid a salary. That requirement is just one of many -- and it is the easiest to meet. The fact remains that there are many people who are paid a salary that are entitled to overtime, and there are many people who are paid hourly that don’t get any overtime. Suffice to say that if someone told you that you are not entitled to overtime just because you are paid a salary, that is just plain wrong.

If you are paid a salary, you are still entitled to overtime unless you meet all of the requirements for one of the California overtime exemptions. These added requirements are not easy to meet and many people simply do not meet them. If you have questions about whether your particular job would be entitled to overtime, you can contact a California labor law attorney to assist you in evaluating your claim.

The “Supervise Two People” Myth

Another California overtime myth is that if you supervise two or more people, you are exempt. This one has a little more factual basis than the one above, but is still far from accurate. One of the requirements for the Executive Exemption is that you must supervise at least 2 people. However, this requirement is only one of many. In addition, the law has regularly been interpreted to find that supervising only 2 people would rarely require sufficient supervisory time to satisfy the exemption since you must spend over one half of your time performing supervisory duties. As you can read in the Executive Exemption section, the exemption is very hard to meet and only true executives of the company will qualify for it.

If you are a “team lead”, “project manager”, or “development manager,” you can still be entitled to overtime. Of course, job titles do not control whether or not you are entitled to overtime, and your actual right to overtime will depend on what actually do for your job.

California also has history of requiring overtime for managers who spend more than 50% of their time doing the same work as their subordinates.

Comp Time Given For Overtime Hours Worked

A common practice for some employers is to give “comp time” in exchange for overtime hours worked. That is, if you work 48 hours one week, you can take a day off the next week. There are many problems with such a policy. An important one is that if you worked 48 hours in one week, then 8 hours would be paid at the overtime rate of 1.5x. Thus, you really have 12 hours of pay at the regular rate and giving you 8 hours as “comp time” shorts you 4 hours. In any case, California labor code 204.3 requires that employers are not allowed to use any “comp time” programs that take overtime from one week and give time off in another week.

If you have experienced any of these issues you should immediately seek counsel from an experience California labor law attorney.

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California Labor Laws require that all Non-exempt hourly employees must be compensated at an overtime rate of pay for overtime hours. The overtime rate is determined by applying a multiplier of 1.5 or 2.0 to the employees' "regular rate of pay." The regular rate of pay is often the employees' straight time rate of pay, but not always. Many employers fail to include other types of compensation when calculating the regular rate of pay, which may result in considerable liability for unpaid wages. Recent class action cases highlight the employer’s risk arising out of these miscalculations.

California Labor Laws require that the regular rate of pay must include all types of remuneration earned by the employee. Take for example, restaurant employees whose compensation includes a lunch and dinner provided during their shifts. If their rate of pay is $10 per hour, in an eight hour shift they will be paid $80. However, their regular rate of pay must be calculated by including the value of the meals (figured as the lesser of their actual cost to the employer or the fair market value). If each meal costs the employer $7, that is the equivalent of an extra $14 per day in compensation. The employees are therefore receiving a total of $94 per day in compensation, or a "regular rate of pay" of $11.75 per hour. Accordingly, the employees' overtime rate would be $17.63, not the $15 that might be calculated for a $10 per hour employee.

In this illustration, failure to properly calculate the regular rate of pay would result in a shortfall of $2.63 for every overtime hour worked, leading to potential liability for penalties under PAGA and Labor Code Section 203, liquidated damages under the FLSA, interest, and attorneys' fees. These shortfalls are more common than is often realized and can result from payment of many kinds of bonuses or incentives, mandatory gratuities (such as a mandatory 15% tip for groups of 5 or more at a restaurant), free or subsidized lodging, or winning a free trip or prize for hitting a sales target. If you offer discounts, bonuses, incentives, rewards, or anything of value to your hourly employees beyond their base wages, the labor code requires that these additional forms of compensation be included in an employees regular rate of pay to calculate his or her overtime rate unless an exception applies. Although exceptions do exist for certain categories, the exceptions are limited and highly fact-specific.

If you suspect you have not been paid overtime properly you should consult a California labor law attorney to evaluate your situation.

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California Labor Laws dictate that, non-exempt employees are typically entitled to time and a half for hours worked over eight in a workday, and the first eight hours on the seventh consecutive day of work. Labor Code Section 510 also requires payment of twice the employee's regular rate for work in excess of 12 hours in one day and “any work in excess of eight hours on any seventh day of a workweek.”

A common question that arises is, whether this provision requires employers to pay double time for hours worked on the seventh day of the workweek or the seventh consecutive day of work. The Industrial Welfare Commission's draft interim-wage order states that employers are required to pay premium wages for the seventh consecutive day of work.

For example: if the employee works seven days in a work week (regardless of total hours worked), on the seventh day the employee will be paid 1.5 times their regular wage for hours 1-7. Starting on the 8th hour the employee will be paid twice their regular rate.

It’s important to also note that the seven consecutive days must fall within the same workweek. Thus, if an employee works four consecutive days (e.g., Thursday to Sunday) and then works the first three days of the following workweek (Monday to Wednesday), he or she would not be entitled to seventh-day premium pay for work performed on Wednesday.
 

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California labor laws are rather specific in regards to how employers should pay employees on a “piece rate” basis; employers are obligated to pay overtime when the employees work over 40 hours in a workweek. A recently filed class action overtime suit illustrates the dangers of making the assumption that overtime is not owed to piece rate workers. The suit, Case No. 6:10-cv-00346, N.D. New York, alleges that Wave Comm, an Arizona-based cable company, failed to pay overtime to its cable installation technicians.

Piece rate or piecework is defined as work paid for according to a set rate per unit. Webster’s Collegiate Dictionary. A piece rate must be based upon an ascertainable figure paid for completing a particular task or making a particular piece of goods. The piece rate earned must equal or exceed the State’s minimum wage rate for all hours worked. (See appropriate IWC Order and Minimum Wage Order and DEPARTMENT OF INDUSTRIAL RELATIONS DIVISION OF LABOR STANDARDS ENFORCEMENT document DLSE-2005-W-1 Revised 6/2005)

The technicians were paid a fixed amount of money for different types of installation-related tasks, but did not receive overtime compensation for the numerous weeks in which they worked overtime hours.This is not the first suit such filed by these types of technicians against the cable industry.

Even though paying employees on a piece rate basis is permissible under both the FLSA and state law, employees should be aware not only of their entitlement to be paid overtime, but the specific formula for used to calculate the amount of overtime pay. In general, when an employee is paid solely on a piece rate basis and works overtime hours, the employer determines the employee’s regular rate by dividing the employee’s total weekly earnings by the amount of hours worked in that workweek. The employee is then entitled to one-half of the regular rate for each hour worked above 40, in addition to their regular piece rate compensation.

For instance, if an employee paid on a piece rate basis works 45 hours and earns $360.00 in that workweek, the employee’s regular rate for that workweek would be $8.00 per hour. The employee would then be entitled to an additional $20.00 in overtime (half the regular rate, or $4.00, multiplied by five overtime hours). In that workweek, the employee would receive $380.00 in total compensation.

It is also acceptable to pay piece rate employees one and a half times the piece rate for each “piece” produced during the overtime hours, provided that this is agreed to in advance and that the piece rate exceeds minimum wage and is paid for all hours worked up to 40 in the workweek.

If you believe that you may have received your all amounts you earned as a piece rate employee it is recommended that contact a California Employment Attorney to make sure your rights are protected.
 

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The battle lines have been drawn over the question of how the term "EMPLOYER" should be defined. Should the term "EMPLOYER" simply mean only the company that hired the employee which is the old common law definition or should the term "EMPLOYER" take into account broader principles of California Labor Law.

A major case was just decided by the California Supreme Court that established who can be held liable for failure to pay wages. A number of cases were previously herd in which only the company who was the direct employer could be held responsible for any unpaid wages.

There were a number of cases including Reynolds v. Bement (2005) 36 Cal.4th 1075, in which the Court “looked to the common law rather than the applicable wage order to define employment in an action under section 1194 seeking to hold a corporation's directors and officers personally liable for its employees' unpaid overtime compensation.” Labor Code section 1194 gives employees the right to recover “the legal minimum wage or the legal overtime compensation.”

The California Supreme Court has ruled on one of the most important wage and hour cases and that is Martinez v. Combs 49 Cal.4th 35 (2010). This case explains who is and who is not an "EMPLOYER" under California wage law and it includes a number of important rulings that will shape California wage and hour practice for years to come as well as California Labor Law in general.

By way of background, the question of who must pay minimum wage or overtime under section 1194 has been addressed only once since 1913, when California passed its minimum wage law. That one decision was Reynolds v. Bement (2005) 36 Cal.4th 1075, in which the Court “looked to the common law rather than the applicable wage order to define employment in an action under section 1194 seeking to hold a corporation's directors and officers personally liable for its employees' unpaid overtime compensation.”

The main argument that was put forth in Martinez v. Combs was that the history of section 1194 showed that the legislature intended to give the Industrial Welfare Commission (IWC) the power to define various terms used in the regulations that the IWC had the power promulgate. Within the definition of employer the regulation under Wage Order No. 14, Cal. Code Regs., tit. 8, § 11140, subd. 2(C) use the term defining employer as one who “suffered or permitted an individual to work”. Wage Order No. 14, Cal. Code Regs., tit. 8, § 11140, subd. 2(F) describes employer as one who “exercises control over wages, hours, or working conditions”.

The power of the Industrial Welfare Commission (IWC) to define employment is not expressly granted in the act creating the IWC but merely implied, and thus extends only so far as necessary to permit the IWC effectively to exercise its expressly granted powers to regulate wages, hours, and working conditions. West's Ann.Cal.Labor Code § 1173 et seq. Therefore regulations issued by an administrative agency such as the Industrial Welfare Commission (IWC) under a delegation of legislative power must be reasonably necessary to effectuate the purposes of the statute. West's Ann.Cal.Labor Code § 1173 et seq. and therefore has the force and effect of law.

The California Supreme Court stated that in actions under section 1194 to recover unpaid minimum wages, the IWC’s wage orders do generally define the employment relationship, and thus who may be liable. An examination of the wage orders’ language, history and place in the context of California wage law, moreover, makes clear that those orders do not incorporate the federal definition of employment. Applying these conclusions to the facts of the case, the Supreme Court affirmed the Court of Appeal’s judgment.

As set forth in the Supreme Court’s ruling it stated that the Wage Orders set forth a multi-pronged, disjunctive definition of employment: an employer is one who, directly or indirectly, or through an agent or any other person, engages, suffers, or permits any person to work, or exercises control over the wages, hours, or working conditions of any person. The “engage, suffer, or permit” component of the definition does not require a common law “master and servant” relationship, but is broad enough to cover “irregular working arrangements the proprietor of a business might otherwise disavow with impunity.” Phrased as it is in the alternative (i.e., “wages, hours, or working conditions”), the language of the IWC's 'employer' definition has the obvious utility of reaching situations in which multiple entities control different aspects of the employment relationship, as when one entity, which hires and pays workers, places them with other entities that supervise the work. Finally, the IWC’s “employer” definition is intended to distinguish state law from the federal FLSA and is therefore controlling.

This case becomes extraordinarily significant in light of the fact that individual company owners cannot hide behind their corporations to shield them from personal liability. The law clearly states that anyone who directly or indirectly permits a person to work or exercises control over that person's wages, hours or working conditions shall be held personally responsible for the payment of all wages due. This helps to stop those who abuse the labor laws and attempt to deny wages that have been earned. The California Supreme Court has spoken and has upheld the rulings By the California Industrial Welfare Commission which broadly defines who shall be treated as the employer.

If you have any questions with regard to your rights is important that you seek the help of a California Labor Law Attorney so that your rights will be fully protected.

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In this day and age of a computer driven society a substantial amount of technical expertise is required to handle these complex systems which weave hardware and software together in order to maintain computer systems. Those employees working on the front lines whose primary duty is to respond to breakdowns that occur in the systems must diagnose, troubleshoot and resolve complex problems. The fact that this work can require extensive training is not the key criteria for classifying such an employee as "exempt" from the payment of overtime. According to California Labor Law Attorneys the key interpretation is set forth under federal law under the Fair Labor Standards Act (FLSA). In opinion letter (FLSA 2006-42, dated October 26, 2006) published by the Department of Labor (DOL) this issue is discussed with regards to the job of an IT Support Specialist.

Two possible exemptions are discussed, the administrative exemption and the computer employee exemptions.

In looking at this analysis it is important to keep in mind that both the federal labor laws and state of California Labor Laws require employers to pay nonexempt employees a minimum wage for all hours worked and an overtime premium equal to at least one and one half times the employee's regular rate of pay for all hours worked in excess of forty hours in one week.

ADMINISTRATIVE EXEMPTION

The "white collar" exemptions provide overtime pay exemptions for any individual employed in a bona fide executive, administrative or professional capacity as those terms are defined in 29 C.F.R. Part 541. In order for this exemption to apply not only must the employee devote a majority of his or her time to analyzing, troubleshooting, and resolving complex problems with business applications, networking, and hardware but the employee must be compensated at the rate of at least $455 per week and has, as his or her primary duty, the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers. Additionally, the employee's primary duty must include the exercise of discretion and independent judgment with regard to matters of significance.

In meeting all these requirements most employees are not found to "exercise discretion and independent judgment with regards to matters of significance" because that term requires the making of decisions that have significant impact on the running of the company that the employee works for. As this term is applied it relates in most instances to upper management who set the course of operations and the overall direction of the company.

The fact that the work is complex or highly specialized along technical lines or that the employer will suffer significant consequences or losses if the employee does not perform the job properly does not automatically mean the work is significant to the management or general business operation of an employer. If the employee meets some but not all of these requirements this exemption will not apply and the employee must be paid overtime unless a different exemption applies.

COMPUTER EMPLOYEE EXEMPTION

There is an alternative exemption Under Sections 13(a)(1) and13(a)(17) of the FLSA, in which a computer systems analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field who meet certain tests regarding their job duties are eligible for exemption from both minimum wage and overtime pay as professionals. In order to qualify for this exemption, the employee must be paid on either a salary or fee basis of not less than $455 per week or, if paid on an hourly basis, not less than $27.63 per hour.

Furthermore, this exemption will only apply to employees whose primary duties consist of the application of systems analysis techniques and procedures, including consulting with users to determine hardware, software or system functional specifications; the design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or a combination of these duties. Examples of employees who qualify for these duties include computer systems analysts, computer programmers, software engineers, and other similarly skilled workers.

It should be noted that job title alone does not determine the employee's exempt status.

SUMMARY

The rules relating to the various criteria that the employer must meet in order to classify an employee as exempt from receiving overtime. It is important to seek the advice of a California Labor Law Attorney. In many instances initial advice may be given without charge. If there is any doubt the chances are that the position is not exempt from overtime.
 

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United Employees Law Group through this blog, its website and direct discussions by phone, provides information on a multitude of employment issues to those seeking help with California Labor Law issues.

The laws and rules dealing with employment are extensive and complicated. Although there maybe "quick answers" those answers may only scratch the surface and may not provide adequate guidance without a more thorough review. In many instances there is substantial money at stake not to mention other important rights that should be protected.

When someone calls us looking for help, we understand that they are trying to navigate an unfamiliar area where the stakes are high.

This firm has prosecuted well over 1000 cases. Some of which include class action cases against some of the largest Fortune 500 companies. Each of these cases requires an investment of substantial economic resources. This requires that we selectively choose those cases we believe have the greatest chance of success.

To better understand the process the following is an overview of how we proceed when someone seeking help contacts us.

POTENTIAL CLIENTS ARE SCREENED

United Employees Law Group prescreens all clients before their case is accepted. Potential clients are taken through an in-depth analysis to determine the strength and value of their claim.

ANALYSIS OF PRELIMINARY DOCUMENTS

Potential clients are required to send in initial documents for preliminary review. Documents may include pay stubs, job descriptions, along with an employee handbook and evaluations.

FINAL REVIEW

All information provided by the potential client then goes through a final review to determine if the case can be accepted.

CLIENT FEE AGREEMENT

If the case is accepted, a fee agreement is sent to the client, this agreement sets out the scope of services, the clients’ responsibilities and the fees charged. All expenses are advanced by the law firm. No fee or costs advanced are collected, except out of monies recovered by the client. In other words, all work is done and expenses are incurred at the sole risk of the law firm.

INITIAL SCHEDULING OF ALL ACTIONS ON CASE

The first step is to record all information in a specialized computer program that coordinates calendared deadlines, phone calls, meetings and to do's. This information is continually being updated as the case progresses. This same program cross-references all documents and contact information of all parties. For example, the initial steps scheduled include the preparation of various letters along with the entry of a follow-up date.

INITIAL COMMUNICATIONS AND ANALYSIS

A notice is sent to the California Labor and Workforce Development Agency as well as a letter to the employer explaining the nature of the claim and an offer of early resolution.

An investigation of the employer is conducted and a detailed computation is made of unpaid wages, interest and penalties.

DISCUSSIONS WITH CLIENT

Numerous contacts and discussions are made with client in order to refine the information necessary to evaluate the value of the claim and to answer questions that the client may have and to discuss the client’s settlement objectives.

PREPARING FOR LITIGATION

An old and true military motto from Flavius Vegetius, Renatus circa 375 AD: says “If you want peace, prepare for war.” 

This is also good advice when it comes to fighting for the rights of our clients. It is for this reason that we prepare for the possibility that our resolve will be tested and we therefore work closely with our clients to gather facts, documents and witnesses. Although this requires work from both our client and our firm the results are well worth the effort.

SETTLEMENT OR TRIAL

Because this is an unfamiliar process most clients are naturally apprehensive about the prospect that this matter may go all the way to trial. Although a substantial amount of work is done in anticipation of a possible trial, it is much more likely that a settlement will be reached and a trial will not be required. As a matter of fact over 95% of all cases are successfully resolved by settlement between the parties.

INFORMATION IS POWER

Because California Labor Law is complex and could involve substantial sums of money it is important that you seek advice from a California Labor Law Attorney. In most instances this service is provided without charge so you have nothing to lose and everything to gain.

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You have just made a major decision in your life by selecting a California Labor Attorney to represent you in your claim for unpaid wages.  A substantial amount of money is at stake and you hope that you made the right decision. You find yourself being bombarded with questions to answer and forms to fill out. The process takes on a somewhat mysterious quality and you are trying to steer a successful course. You begin to ask yourself, how can I help to achieve the best outcome and the answer to that question is not all that clear to you.

As in any major undertaking it is important to establish a clear idea of what you hope to achieve. In order to realistically evaluate an answer to that question you must first take into account that you are engaged in a situation that is complex with many moving parts. So let's take a look at the various things that come into play in effecting the outcome of your claim.

• An initial calculation of the claim, interest, penalties and legal fees.
• Review of the evidence provided by the client.
• A determination of who is legally responsible for payment of any unpaid wages.
• An initial evaluation of the financial strength of the company or individuals.
• A discovery plan to secure evidence from the defendants and witnesses.
• An evaluation of the clients’ ability to handle the legal process.
• An estimate of the legal resources and funds necessary to prosecute the case.
• A strategy to prosecute the case taking into account all the elements of the case.

Both the client and the attorney are now bound together by a partnership in which the attorney has the duty to advise his client as to what can realistically be achieved and the steps necessary. In the initial stages it is more difficult to evaluate the outcome that one may expect. As the case progresses and the evidential documents have been obtained, this evaluation process becomes more accurate, although the outcome is never a sure thing.

Through a dialogue between the client and the attorney it is important for the client to share his or her expectations. At first this may seem rather straightforward but in fact there are many elements that need to be weighed which can and does change one's expectations.

It has been my experience in representing clients that they normally take a very realistic approach with regard to what can reasonably be achieved and they work closely with the attorney throughout the process.

Eventually there will be a point in time or possibly various points in time, when a decision will need to be made as to whether or not a proposed settlement should be accepted or rejected. The main factor that will affect the decision to accept or reject an offer can be stated in one word "Predictability". In other words, does it make more sense to accept the offer that is on the table and know the outcome of your case, or is the value of an offer below the amount that you believe makes the risk of going forward the better choice?

At some point an assessment is made by the client that the certainty of receiving a given amount outweighs the risk of a trial, which may or may not result in a better outcome, as well as the possibility that everything could be lost notwithstanding the fact that a settlement results in receiving payment now rather than later. This is the same decision that the defendant must weigh in deciding to make an offer of settlement. In making this decision you have to ask yourself should I go to trial and put my fate in the hands of another.

This reminds me of the television show "Deal or No Deal" (©2010 NBC Universal). In this game show the contestant must guess which case holds the main prize of $1 million. There are 26 cases and in each round of the game he or she selects one case and before opening the case the contestant may either accept an offer of cash to terminate the game or continue playing. The amounts held in each case range from 1 penny to $1 million. As the game progresses the contestant is offered an amount of money to stop the game which statistically takes into account the odds of the contestant picking the right case from the remaining group. The contestant has to decide whether or not to continue taking further chances or to take the amount being offered. If the contestant continues to play the game and fails to pick the case with $1 million before using up all of his or her chances he or she can lose everything. That is why the game is called "Deal or No Deal".

The fact is that over 95% of cases are resolved by a negotiated settlement after a substantial amount of work has been put into the matter by both parties. Although it is expensive to bring a case to settlement it is substantially more expensive not to settle because although the outcome may be better, a loss could be devastating and as the old saying goes "A bird in the hand is worth two in the bush".

This is why it is important to have California Labor Attorneys who are experienced and who can guide you to a successful resolution of your claim.
 

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California Labor Law is an ever changing body of law. It is not uncommon for California employers to accept myth as fact when it comes to dealing with employees and their compensation.

While we have found these violations most common in small to medium employers who do not have the benefit of large HR departments or California labor law attorneys, large employers are surprisingly guilty of some of the same infractions. As such, a slew of California class action cases have been filed in the past 10 years or so making California a hotbed of class action litigation with the extensive protections available to California employees in the workplace.

The four most common mistakes employers make are:

1. Misclassifying an employee as exempt from overtime. This typically means paying the employee a salary and having the employee work in excess of 8 hours in day or 40 hours in a week without paying overtime. Also, it is typical in this scenario to not permit the employee to take a 30 minute uninterrupted lunch break. Both of these examples represent a violation of California labor laws and provide the impetus for a wage claim.

2. Another common scenario is employers having their employees pay some or all of their own expenses related to their employment. It is not uncommon for employees to use their own car for work related errands. In actuality, unless employee related expenses are clearly allocated as part of the compensation of the employee, they must be reimbursed. Use of cell or home phones is another abused area. If an employer is requesting an employee to make calls outside of work hours using their own cell phone or home phone, such charges should be reimbursed.

3. Having a policy of ‘Comp time.” Generally, Comp time means having an employee come in early or stay late, not paying overtime, but instead giving that employee the allowance of coming in late or leaving early on a subsequent day.

4. Vacation Forfeiture is another common problem. When an employee is separated from work, that employee must be paid all accumulated vacation along with their final wages. In addition, a “use it or lose it policy” is also illegal under California labor laws. It is lawful for vacation to be paid out under company policy as wages if not used, however, vacation time does not expire nor can it be taken away once accrued in California.

Our Attorneys have handled over 700 individual cases, and prosecuted over 150 class action cases related to California employment matters.

If you have experienced any of the above violations, it is important to talk to a California labor law attorney immediately.

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Once you are on the job and under the control of your employer your workday starts and at days end when you leave your workday stops. Does your workday actually start and stop when you clock in or out? Not necessarily.

This is a story that shows there is more to this issue than one might think.

An employee arrives at work in the morning, has a quick meeting with her supervisor and then she starts up her computer. The employee then logs onto the computer by typing her user ID and password and hitting "Enter". Once that process is complete, the employee logs into the System. She then opens any programs or applications she needs to perform her job. At the end of the day, the employees are required to follow the process in reverse logging off and closing down her computer.

Until that employee is logged in and on line she is not able to enter her start time. At the end of the 

day she is required to first sign out and then completes the log off procedure.

This system does not allow an employee to be paid for the time spent at work before she is able to log on by starting up her computer as well as being required to sign out and then closing down her computer. This time adds up to more than 25 minutes each day.

There are other examples of work time that must be compensated for under the law that could be overlooked,

including changing into uniforms or work and safety clothing. Also included is the afterhours preparation of paperwork and the scheduling of appointments for the next day.

Over the years the amount that is owed to an employee could and does add up into the tens of thousands of dollars including penalties and interest.

An example of the penalties that may be relevant and that would add substantially to the amount owed by the employer is as follows:

1) Unpaid Overtime in Violation of California Labor Code Section 510 and Wage Orders No. 4-2001;
2) Unpaid Overtime (Fair Labor Standards Act);
3) Knowing and Intentional Failure to Comply with Itemized Employee Wage Statement 

Provisions (Labor Code § 226(a));
4) Failure to Pay Minimum Wage (Labor Code §§ 1182.12, 1197);
5) Failure to Pay Minimum Wage (Fair Labor Standards Act);
6) Violation of Labor Code § 2699; and
7) Unfair Competition in Violation of et. seq.

All of these claims are premised upon the employee’s right to be paid for the time spent at work.

California law defines the term "hours worked" as "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." That does not mean that the mere fact that an employer required an employee to do something renders the time spent doing the activity at issue qualifies as "hours worked". For example, the California Supreme Court has acknowledged that an employee's commute is not compensable simply because "the employees would not commute to work unless the employer required their presence at the work site." The level of the employer's control over its employees, rather than the mere fact that the employer requires the employees' activity, is determinative.

Generally, if you believe you may be owed any back compensation you may make a claim going back up to four years.

It is not difficult to request a free preliminary opinion that helps you understand your rights and if you should consider filing a claim for any unpaid wages.

Being informed could be worth tens of thousands of dollars in your pocket.

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In California Quality Assurance (QA) Engineers, often work long hours and are often misclassified as exempt from overtime. Nevertheless, they might be entitled to California QA Engineer Overtime, because the employer has improperly classified employees as exempt when in fact they employee should be classified as non-exempt (hourly), and thus has failed to pay overtime. And In some instances, QA engineers have been classified as independent contractors, meaning the company is not even paying benefits.

More and more, overtime lawsuits are being filed against companies and some have been settled. For instance, Siebel Systems has settled to pay $27.5 million to about 800 software engineers, and IBM is settling $65 million to technical and customer support workers.

A quick Google of quality assurance engineer jobs posted on the Internet found the following tagged onto the job descriptions:

• You will work long hours (possibly some over time up to 10:00 PM);
• Must be willing to work overtime (Aerotek);
• Ability to work overtime as necessary on evenings and weekends (a mobile game company);
• Must be able to work overtime (Net Temps);
• Must be able to work overtime often (Interplace); and
• Willing to work overtime when requested.

Most of these positions are salaried. And chances are, these positions should be non-exempt according to California labor Laws, which means you are entitled to overtime. (Conversely, exempt means you are not entitled to overtime.)

According to the California Labor Code §515.5 (below), the following--a typical QA engineer job description posted by Yahoo--should be non-exempt and it will only be exempt if it meets the salary requirement of $37.94 hourly rate or salary ( based on a 40-80 hour work week) of the minimum monthly and annual exemptions at $6,587.50 and $79,050.00, respectively:

"You will contribute to the design and implementation of test plans, test cases and validation, by creating and using test tools of complex, multi-tier software. You will also interface with other QA engineers, developers, and product managers and operations teams to complete projects. You should possess skills in testing and implementing tests on components written in C++/Perl as well as testing API-based web applications. The ideal candidate should have a proven history and dedication to SQA processes, particularly Agile / Scrum testing and implementation."

If this job description sounds familiar, you are likely entitled to overtime. You should contact a California labor law attorney to find out if you have been misclassified as exempt; if so, you may be entitled to considerable overtime depending on your quality assurance engineer pay and how many hours you worked.

California Labor Code §515.5

(a) Except as provided in subdivision (b), an employee in the computer software field shall be exempt from the requirement that an overtime rate of compensation be paid pursuant to Section 510 if all of the following apply:
(1) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment, and the employee is primarily engaged in duties that consist of one or more of the following:
(A) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
(B) The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to, user or system design specifications.
(C) The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
(2) The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title shall not be determinative of the applicability of this exemption.
(3) The employee's hourly rate of pay is not less than forty-one dollars ($41.00) thirty-six dollars ($36.00), or the annualized full-time salary equivalent of that rate, provided that all other requirements of this section are met and that in each workweek the employee receives not less than thirty-six dollars ($36.00) per hour worked. The Division of Labor Statistics and Research shall adjust this pay rate on October 1 of each year to be effective on January 1 of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.[The strike out text refers to pre-2008 law]
(b) The exemption provided in subdivision (a) does not apply to an employee if any of the following apply:
(1) The employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.
(2) The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.
(3) The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.
(4) The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming occupation.
(5) The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for onscreen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-Roms.
(6) The employee is engaged in any of the activities set forth in subdivision (a) for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry.

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If California labor law’s dictate you should be classified as a non-exempt employee,  in which you are entitled to overtime pay at 1 ½ to 2 times your straight time rate. And you are promised bonuses for reaching certain goals or you are entitled to commissions, then according to California labor law’s a special calculation must be made that increases your regular hourly overtime rate.   California wage law provides that when a non-exempt employee works hours in excess of eight in any workday or 40 in any workweek, employers must compensate the employee at 1 ½ to 2 times the employee’s regular rate of pay depending on the total number of hours worked. The “regular rate of pay” comprises more than just the employee’s hourly rate of pay it includes many different kinds of monetary remuneration an employee earns for his labor, including commissions and bonuses. 29 U.S.C. 207(e). 

When calculating the regular rate of pay, employers must follow specific rules depending on the type of income in question. Where an employee earns commissions or bonuses, the Department of Labor Standards Enforcement (“DLSE”)  uses the following rule to incorporate the additional compensation into the employee’s regular rate of pay:

“Compute the regular rate by dividing the total earnings for the week, including earnings during overtime hours, by the total hours worked during the week, including the overtime hours. For each overtime hour worked, the employee is entitled to an additional one-half the regular rate for hours requiring time and one-half and to an additional full rate for hours requiring double time.” DLSE Manual, Section 49.2.1.2 

For example, one type of incentive compensation may provide additional compensation if the store performs at a certain level. A company’s bonus plan could provide that a bonus will be paid to employees for increasing sales of specified products, increase profitability, improve customer handling and enhance quality of service. It could be referred to as an Incentive Program that requires employees to reach attendance goals to be eligible. The plan may also specify the payout schedule: eligible employees receive both quarterly and year end payouts. Another type of incentive may also pay certain hourly employees additional compensation, or a commission, for the sale of various products.

Employers must include these nondiscretionary bonuses along with other earnings to determine an employee’s regular rate on which overtime pay is computed. A bonus is “nondiscretionary” if the employer makes a promise to pay it based on the requirements being met. This includes bonuses designed to induce the employees to work more steadily, more rapidly or more efficiently, to remain with the employer, to meet attendance goals, individual or group production bonuses and bonuses for quality and accuracy of work. 29 C.F.R. 778.211(c). 

In any pay period in which a bonus has been earned the employer must recalculate the rate of pay upon which overtime for that pay period is calculated. The employer must add together all compensation earned for the workweek and then divide the compensation by the number of hours worked.


These Bonuses and Commissions Must be Timely Paid

Generally speaking, commissions and bonuses are due and payable after the employee did what was required and the amounts could reasonably be computed. Commissions are considered earned only after the happening of that event designated in the agreement with the employee so long as the event is reasonably tied to the calculation. DLSE Opinion Letter, 2002.12.09-2. 

If for example a commission is earned when the sale is made then that is the date from which all calculations are made.

Labor Code section 204 designates the time frame in which an employer must pay its employees. Wages earned by any person in any employment are due and payable twice during each calendar month, on days designated in advance by the employer as the regular paydays.

Section 204(b)(1) allows an employer additional time to pay commissions in the next pay period but only if it also itemizes the subsequent wage statement by including detailed information regarding the wages that it could not pay on time. Each wage component must be separately listed and specifically list the dates for which it is applicable.

The amount that an employee is short changed may not sound like a lot of money at first, when just looking at just a couple of pay periods. But the amount increases well into the tens of thousands of dollars when a claim includes up to four years of back wages plus interest and plus penalties.

Now you know.

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On July 6, 2010, the Second U.S. Circuit Court of Appeals held that sales representatives for Novartis Pharmaceuticals Corporation  are entitled to overtime pay under the Fair Labor Standards Act (FLSA).  Many California employees of Novartis claimed that they were wrongfully denied overtime pay between March 23, 2000 and April 7, 2007. The representatives, who worked nine-hour days, made routine calls and visits to physicians inquiring as to whether they would prescribe the company’s products to patients. Under the FLSA, employees must be paid overtime for more than 40 hours worked per week, but there are exemptions for “outside” salespersons  and “administrative” personnel.

The Court ruled that neither exemption applies to pharmaceutical reps because

(1) representatives only promote a product and do not make “sales”
(2) their activities are so tightly controlled by the company that they are not allowed to exercise independent judgment.

According to Secretary of Labor Hilda L. Solis,  an employee who can merely promote a drug and provide samples, has not in fact made a “sale.” Judge Kearse  agreed, stating that an employee who cannot “even obtain from the physician a binding agreement to prescribe it” has not made a sale.  
Novartis contended that its representatives are exempt from overtime under the “administrative” exemption, because they are free to determine when they will visit a particular doctor and how best to earn their support, whether it be dinner, a sporting event, or some other activity. The Court rejected this argument because it failed to establish a freedom of discretion. It particularly noted that Novartis representatives have no control over the company’s marketing strategy. Furthermore, the company determines the physicians to be visited, the drugs to be recommended, and the promotional events to be held. 

The ruling in this case is important because it is the first federal appellate decision addressing the outside sales and administrative exemptions as it applies to the pharmaceutical industry.  
It also underlines the main purpose of California overtime law, which is to evenly divide work among employees. 
If you are a pharmaceutical representative and have questions regarding your entitlement to California overtime pay, take action and call a knowledgeable California labor law attorney.

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California underwriters may indeed be owed overtime pay. This job title and the duties of underwriters, at least at one bank, have been examined in a recently decided case called Davis v. J.P. Morgan. In this case the court in the second circuit decided that underwriters approved loans under established company guidelines and their duties are for the most part non exempt duties and therefore these employees are entitled to overtime pay.

Under Federal regulations, if an underwriter works in a bona fide administrative capacity, if they perform work "directly related to management policies or general business operations" and "customarily and regularly exercises discretion and independent judgment, then they are likely classified as an exempt employee." This is different than an employee who may work in a "'production' or, in a retail or service establishment, 'sales' work." 

In Davis v. J.P. Morgan, underwriters at Chase were primarily responsible for selling loan products under management's guidelines. As the Second Circuit put it, "Underwriters were given a loan application and followed procedures specified in the Credit Guide in order to produce a yes or no decision."

California Underwriters being misclassified as exempt employees might be common issue for all underwriters in this profession in California. If the California courts follow this ruling and others like it, thousands of California underwriters could be entitled to overtime pay. Some of the largest institutions employing underwriters in California are Citigroup (NYSE: C), J.P. Morgan (NYSE:JPM)   Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC)

Underwriters in California, if owed overtime pay, may collect up to 4 years of back pay under the liberal California overtime pay laws.

If you are a California underwriter and would like to find out if you are entitled to overtime pay, it is wise to contact a California labor law attorney.
 

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Despite a wave of class action lawsuits, California employers continue to find ways to deny their workers overtime pay. Under California law, all employees are entitled to overtime pay unless they are considered “exempt.” Exempt employees are typically professionals, administrators, or executives whose jobs require among other things, a high degree of independent judgment. They must earn at least two times the minimum wage (approximately $28,000 per year) and more than fifty percent of their work must consist of non-exempt duties such as clerical duties, customer service, or working along specialized technical lines. A common strategy for employers is to misclassify employees as managers or assistant managers in order to avoid paying overtime; however, it is the employee’s activity and not their job title that determines whether overtime is due. Unlike federal law that focuses on the “primary duty” an employee is expected to perform, California law is based on what work the employee “engages in” or actually performs. For example, if a “manager” in an automobile company spends more than half of their time working on the line – the same activities performed by non-exempt employees – that manager may be entitled to overtime pay for all time in excess of 8 hours per day or 40 hours per week.

Many times, an effective way to combat such tactics by employers is for an employee to file a class action lawsuit. If one individual files a lawsuit and prevails, the amount the employer pays will likely not be enough to change the employer’s wrongful practices. Most employers conduct a cost-benefit analysis. Typically, it is cheaper for them to account for paying one or two employees in a lawsuit than paying all employees overtime pay. On the other hand, if one worker brings a lawsuit on behalf of all similarly situated workers, the amount potentially owed by the employer will be significantly more substantial and thus give them an incentive to comply with the law. Furthermore, an employee who takes the initiative to file a class action will typically be awarded more money than those workers who sat idly by and did nothing. Many class actions for overtime pay are successful because employers do not keep a record of exempt employees’ hours or the activities they engage in on a daily basis. Even better, in California, a single class representative may initiate a California class action lawsuit.

In addition to “misclassification,” some employers will pay overtime but not at the required one and a half times the employee’s regular rate of pay. Other typical class action lawsuits include claims for missed meal breaks and rest breaks, failure to pay for business miles or travel time to/from different business locations, paying bonuses but not paying overtime, making employees pay for their uniforms, paying employees with a check that requires a fee to cash, and not paying for mandatory company meetings.

If you believe you are owed overtime or other pay, you could be awarded damages in a class action lawsuit. Contact a knowledgeable California labor law attorney to learn about your rights and receive a complete evaluation of your situation.
 

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As heavy unemployment takes it toll on California workers, what many employees may not realize is that they may be entitled to substantial sums of unclaimed overtime plus interest from past employers.

This is essentially money an employee worked long hours to earn but through error or oversight was never paid and is still collectable.

The labor laws in California are the most advanced in the country and are frequently misunderstood and misapplied by both large and small companies. It is fair to say that California law is much more protective than other State and Federal labor laws.

For this reason most employees have no idea that they have been grossly underpaid and can recover these lost wages.

It’s not too late to file a claim for back pay or unpaid reimbursable expenses if it occurred anytime during the last 3 years and likely in the last 4 years for claims which are likely covered under the California Business and Professions Code 17200.

This is very good news for employees who have been deprived of overtime pay from employers and should provide welcome financial relief in these challenging economic times.

Here are a few simple rules for you to consider as a first step in determining if you may be entitled to overtime pay:

It is not an employee’s title that determines if overtime must be paid. It is the type of work actually done as well as the amount of time spent on the various tasks.

It is the employer who must keep detailed records and who must prove that the employee was paid according to law. If the employer has failed to keep these records then the employee is entitled to be paid his overtime based on reasonable estimates.

There are also numerous special rules that apply such as for sales persons and brokers as well as highly trained employees. For example, engineers with advanced degrees or skilled investigators are more than likely not entitled to be paid overtime.

You definitely should not assume that you are not entitled to overtime pay because your employer told you that your job is exempt. It pays to get a professional opinion.

Strategy:

1. List all of the jobs you worked at for the past 4 years. Remember you may be barred from filing a claim if you do not file your case timely.
2. Assemble a pay stub and job description for each job and performance evaluations, if any.
3. Talk to a California labor law attorney to find out if you are entitled to overtime pay.
 

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 It is not uncommon for employees to become discouraged or even hopeless when it comes to proving that overtime pay is due. Since in many cases, employers do not keep time records or the employee is misclassified; i.e. told they are salaried (exempt) and not entitled to overtime pay.

First, the employee must understand that pursuant to Nordquist v. McGraw-Hill Broadcasting Company (1995) 32 Cal.App.4th 555, 562, EVERY EMPLOYEE  IS ENTITLED TO CALIFORNIA OVERTIME PAY unless they fall under an exemption; ie. administrative exemption, executive exemption, professional exemption, salesperson exemption,  or computer software exemption, or another wage order preventing them from receiving overtime pay. The employer bears the burden of proof and it is the employer’s responsibility to prove the employee is not entitled to overtime pay.

The second important principle to understand is that California employers, not employees, must carry the burden of time keeping for all non exempt (employees entitled to overtime pay). For example, Anderson v. Mt. Clemens Pottery Co., (1945) 328 U.S. 680,  supports this assertion. In the event the employer did not keep time records, the courts will rely on the reasonable testimony of the employee.

 That said, should the employer produce a witness or other documentation that refutes the employee’s testimony, the burden of proving overtime, reverts back to the employee. This is where execution of the “Smoking Gun” strategy below is critical.

STRATEGY:

It is critical to immediately begin gathering information if you have an overtime pay claim.

1. Witnesses. Gather witnesses that can testify to the duties you performed and the hours you worked. Your California labor law attorney may wish to get them to sign a declaration if possible.

2. Electronic footprints. Time clock punch ins and outs, if accurate are the easiest to show time worked. When unavailable, obtain computer logins that show work start and stop times.  Also, a garage pass, suite key, register key, on site security camera tape may show time worked. Your California labor law attorney can subpoena all of this information.

3. Phone and electronic communications. Your phone bill, cell phone bill, home computer, pda or office computer, are invaluable sources of showing time worked outside of normal working hours.

4. Vendors and outside associates. When all else fails, get declarations from security personnel, and vendors who witnessed you working early or staying late.

5. Memos, handbooks and performance evaluations. Assemble memos or check in the employee handbook to see if it reveals an employer's attitude towards overtime work; i.e. Memos that make statements such as: "Stay until all work is done" or "do whatever it takes." While this may not be enough to prove your overtime case, this information can help paint a picture of the employer's attitude towards overtime to a judge or jury. Also, performance evaluations sometimes praise an employee for working excessive hours.

In addition to proving your case in court, if necessary, in many instances the gathering of these “smoking guns” may help to bring your case to a faster settlement without going to trial.

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