WAGE AND HOUR

Mower & Carreon, LLP has successfully represented tens of thousands of employees who have not been properly paid for all hours worked.  Many times employers misclassify workers as “exempt” from overtime laws and fail to provide legally required breaks and lunch periods.  A complex scheme of overlapping statutes, regulations and precedent governs the compensation of employees in California.

More Protective Law Governs

Federal law is codified in the Fair Labor Standards Act (“FLSA”) and the regulations that interpret the Act.  On the other hand, California law is codified in the Labor Code and in Wage Orders that are promulgated by the Industrial Welfare Commission.  Significant overlap in coverage exists between these two standards.  However, an employer must comply with whichever standard provides greater protection to the employees - this is a significant benefit for employees who work in California.

Moreover, even where state and federal standards are similar, there are significant procedural differences in suing under the FLSA or California’s wage and hour laws.  For example, the statute of limitations under the FLSA is 2-years, or 3-years for “willful” violations.  California’s laws provide for 4-years of back-pay.  California law is also more generous than federal in calculating the amount of overtime due.  On the other hand, the FLSA can be utilized for nationwide violations and is broader than California state law when imposing individual liability against corporate officers who participate in the violations. 

Many employers and their counsel - for example - are under the impression that commissioned employees engaged in inside sales are exempt from overtime.  This is not only wrong but has led to devastating consequences - ranging from settlements of a few minor claims to full-blown class action litigation.  In fact, while there is an exemption under state law for such employees who receive more than half their compensation in commissions and whose regular rates of pay exceed one and one-half times the minimum wage, federal law requires more.  Under § 7(i) of the Fair Labor Standards Act, the exemption is only available to employees of “retail or service establishments.”  Mitchell v. Kentucky Finance Corporation, 359 U.S. 209 (1959) (holding that finance companies, banks, insurance companies, loan associations and credit companies do not qualify).  The FLSA actually provides a laundry list of companies that are excluded from this exemption.  See 29 C.F.R. §§ 779.717.

The “Independent Contractor” Problem

A fairly new problem has emerged as employers label their workers as “independent contractors” to avoid a host of taxes and labor laws.  According to news reports, the numbers of state audits of businesses has climbed to over 5,700 in the fiscal year ending in June 2008, up 54% over the last three-years.  Some employers knowingly classify workers as independent contractors to avoid paying payroll taxes, workers’ compensation and, most important for the employee, overtime wages.  In fact, the Employment Development Department (“EDD”) maintains an information sheet on its website that spell out the specific requirements to maintain true “independent contractor” status.  www.edd.ca.gov.  Generally speaking, however, if employers maintain “control” over how their workers perform their jobs, they are likely in violation.

Meal and Rest Breaks

Employees who work more than five hours in a day are entitled to a meal period of at least 30 minutes; and a second meal period of at least 30 minutes if they work more than 10 hours.  The meal time, itself, does not count as part of the hours worked as long as the employee is completely relieved of all duty during the meal period.  Thus, a so-called “working lunch” is prohibited under California law.  Periodical rest breaks are also mandated by the California Wage Orders and Labor Code.

An employer who fails to provide meal or rest period as required must pay the employee one additional hour of pay at the employee’s regular rate of pay for each day that the meal or rest break was not provided.  Recent case law confirm that the right to meal and rest breaks applies to all workers, even those covered by a Collective Bargaining Agreement (“CBA”).

How to “Level the Playing Field” Against Employers

Mower & Carreon, LLP file class and collective actions to enable workers to level the field against their employers.  “A fair day’s pay for a fair day’s work.”  These were the words of President Franklin D. Roosevelt urging enactment of the FLSA some 70 years ago.  That sentiment has certainly permeated into the California legislature:  “[T]he Legislature reaffirms the importance of the eight-hour workday, declares that it should be protected, and reaffirms the state’s unwavering commitment to upholding the eight-hour workday as a fundamental protection for working people.”  The courts have likewise noted that strict enforcement of overtime pay obligations is required by law and fundamental public policy.

We have prosecuted statewide and national class actions against First Plus Financial, MJM Investigations, Inc., Tuesday Morning, Inc., City National Bank of West Virginia, Platinum Capital, Eastwood Insurance Services, Inc. Centerpoint Mortgage, GMAC Mortgage, Ditech Funding Corporation, Pacific Mercantile Association and Pacific Coast Funding.

Currently, Mower & Carreon, LLP maintains overtime actions various retail stores, mortgage lending, insurance and pharmaceutical companies throughout the nation.  Simply put, we know the landscape and can navigate through the complicated web of statutes, regulations and opinion letters to achieve success.