Author Archives: BraniganRobertson

Since becoming a lawyer, I’ve had many casual conversations with family, friends and colleagues about the work I do. I’m asked (more often that I’d like to admit) whether or not things like wage theft are actually a significant problem in today’s modern workforce. Depending on where I’m asked this question, and who’s asking it, I’m often inclined to pinch the bridge of my nose, squint my eyes and let out an audible sigh. Sadly, I do find myself explaining to folks that, yes, in fact wage theft is alive and well in America, and definitely in the Golden State.

Here is a Simple Wage Theft Example

For evidence of this unfortunate business practice, one need look no farther back in history than June 2017, when reports surfaced that Los Angeles City Attorney Mike Feuer intended to take legal action against fast food behemoth Carl’s Jr.

The reason? The company stands accused of failing to pay 37 workers the legal minimum wage of $10.50 an hour at seven Los Angeles locations. According to KCET.com, the city alleged the company engaged in the wage theft between July and December of 2016.

Under the city’s action against the company, Carl’s Jr. is facing a total of $1.45 million in restitution and penalties. The alleged lost wages totaled more than $5,000.

While it might shock some folks that a company with such a high profile as Carl’s Jr. would potentially engage in such shady employment practices, keep in mind that Andrew Puzder, former CEO of Carl’s Jr.’s parent company CKE Restaurants was tapped as President Trump’s first pick for U.S. Labor Secretary. Puzder served as CEO from September 2000 until March of 2017.

Although his nomination was derailed after old allegations of domestic abuse surfaced, it raised unsettling questions about how powerful business interests view workers.

In December of 2016, OC Weekly examined a 2009 interview with Puzder archived by Cal State Fullerton’s Center for Oral and Public History. In the interview, Puzder reportedly lamented the state of the law in California. “I think the big change in California, it’s really become a kind of socialist state,” he said proceeding to disparage business practices such as mandatory breaks for minimum wage employees. “Have you ever been to a fast food restaurant and the employees are sitting and you’re wondering, ‘Why are they sitting?” Puzder asked. “They are on what is called a mandatory break.”

Sadly, and unsurprisingly, Carl’s Jr. isn’t the only company in California to have accusations labor of labor violations leveled at them.

Here is more information on meal breaks and rest breaks. Here is the basics of California overtime law.

Wage Theft from an Economic Point of View

A May 18, article published by the San Jose Mercury News highlighted recent figures compiled by the Economic Policy Institute. The statistics showed California’s low-wage workers losing close to $2 billion a year in minimum wage violations.

The Institute’s report argued that wage theft hurts low-income workers in every demographic category, but particularly young people, women, people of color and immigrant workers. The study’s authors estimated that if California’s numbers were representative of the rest of the country, American workers could be getting cheated out of more that $15 billion a year — enough to build Trump’s border wall.

The above-mentioned examples highlight just some of the more recent examples of wage theft in the Golden State.  Depending on whom you ask, an argument could be made that the problem has been a systemic issue for many years.

In 1988, the Los Angeles Times reported on a contractor in Costa Mesa who allegedly refused to pay three immigrant workers a combined total of $1,800 in back wages. After the workers notified police, the case was referred to the district attorney’s office. A warrant was issued and the contractor was charged with grand theft of labor wages. At the time, a spokesman for the Costa Mesa Police Department said it was the first arrest of its kind in city history.  I can’t help but wonder how many times similar situations had happened before, and have happened since.

Conclusion on Wages

Long story short, I believe wage theft is a big problem in California — probably bigger than even most employment lawyers and other labor experts realize. I personally see the effects this crime can have on my clients, effects that often go unnoticed by media reports. These include stress-related illness, depression and difficulty paying basic bills such as rent and groceries.

If there’s any bit of good news for people who feel they’ve been denied their rightful payment for their hard work, it’s that employment lawyers typically take cases on a contingency basis. Usually there is no fee for consultation. In addition, there are laws to protect workers from retaliation from employers, should they report wage theft. While the decision to go to a lawyer and blow the whistle on an unethical employer isn’t always easy, the option is there, and is something to be considered when the going gets rough.

Lots of people call our law firm and say, “My boss just switched me from hourly to salary. Is this legal?” What are the implications of being switched? Is it legal? Most importantly, how is that going to affect your pay going forward? This article tries to clear up some of the confusion over this common employment problem. Employment lawyers like us commonly get these questions so we thought we’d write a blog on the subject.

Overtime is the Still the Main Issue in 2017

One of the first things that everyone is concerned about is overtime. Companies often change an employees’ classification in an effort to pay their employees less money for the same amount of work. For example, lots of hourly employees work an hour of overtime work per day. But if they were paid a salary, they wouldn’t get paid that extra hour of OT. So sometimes this change is made for illegal reasons.

It would be helpful to talk about salary versus hourly payment structures. The presumption for California employees is that they are owed some basic employment rights. Along with meal and rest breaks, they are supposed to receive overtime compensation for all hours worked over eight in a day and/or forty in a week. They are also supposed to be paid double-time if they work more than twelve hours in a day. But CA employment law has built several exemptions to these rules. If you are properly classified as an exempt employee, the employer does not have to pay you overtime and can pay you a salary. Generally, employers want to do this because it makes their payroll much more stable and predictable.

Salary, Overtime, and Misclassification

It might be surprising to note that not every employee who is paid a salary is “exempt.” If the employee is misclassified the employer still has an obligation to pay overtime. Or if the employee is considered as non-exempt by the employer, they can still pay the employee a salary, but the employee is still entitled to overtime payments if they work more than 8 hours a day or 40 in a week.

Another common scenario is when an employer classifies an employee as exempt because the employee performs some job duties that constitute exempt duties. BUT, if the employee spends more than 50% of his or her time performing non-exempt duties, then the employee is misclassified and may be owed overtime pay.

Calculating the Overtime Rate in a 2017 Salary Misclassification Case

To figure this out you’ve got to do some basic math. You need to first figure out the employee’s pay rate. You take the employee’s annual salary, divide it by 52 (weeks in a year) to find the weekly salary, and then divide by 40 (the maximum straight-time hours worked). For example, Joe’s annual salary is, conveniently, $52,000/yr. His weekly rate is $1,000/week, and his “regular rate” comes out to be $25/hr.

Now you multiply that pay rate times 1.5. So if your pay rate came out to be $25/hr, your overtime rate would be $37.50/hr. Then you would multiple this overtime rate times the number of overtime hours worked (more than 8 in a day and/or 40 in a week).

Mr. Robertson has handled several misclassification cases where salaried employees have worked for two or three years without overtime compensation. When someone is working 2 OT hours per day that adds up to a large amount.

Statute of Limitations in Misclassification Overtime Cases

California overtime laws allow you to collect back wages for four years if you include an unfair competition cause of action. BUT, this rule is very deceptive and many good people are unable to collect a substantial portion of their lost wages because they delay taking action. Basically, it plays out something like the hypothetical below.

Hypothetical Recovery in Misclassification Case – Two Scenarios:

Scenario #1:

You worked for a company for four years as a misclassified salaried employee. You were getting paid a salary of $41,600 per year. You worked nine hours a day as opposed to the standard eight. But because you were misclassified and was paid a salary, you didn’t get paid for that extra hour each day.

Under this scenario, if you filed your case on your last day of work, you would be owed $31,200 (a total of $7,800 per year at $30 per overtime hour). This does not include penalties, interests, or attorney’s fees. That is just the overtime amount that you’re owed.

Scenario #2:

Under the same set of facts, if you quit and wait three years to file your lawsuit, you would only be owed $7,800. Therefore, the statute of limitations ate away at your damages substantially.

Don’t Wait – Call an Employment Lawyer ASAP

Please keep in mind that both of the situations above are more complicated than what is presented and have various exceptions for each. But due to the statutes of limitations, it is wise to call an overtime attorney immediately if you think you’ve been misclassified. If you feel as though you should be receiving overtime, contact Mr. Robertson so that we may give you a free consultation.