Category Archives: Wage & Hour

Before delving into the meat of this post, a heads up: there will be some math-related concepts discussed. If you’re good at math, congratulations — you may be visiting this page because you’ve concluded your boss has incorrectly figured your hourly, bonus and overtime pay. If you’re not good at math, some of the calculations discussed in this post may be a little confusing. But take heart—you don’t have to be Einstein to suspect your employer of creative or shady accounting.

A Court Ruling Changes the Way Some Wages are Calculated

In defense of payroll accountants, there are times when calculating an hourly employee’s wages at the end of the work week can be deceptively difficult. This is particularly true when bonuses and overtime pay are involved and questions remain unclear as how to calculate the employee’s regular rate of pay. If an employee isn’t careful in double checking company arithmetic, it can be easy for the paycheck to come up short. And when checks come up short over a long period of time, the amount of back pay can add up.

This article discusses a recent state Supreme Court ruling, which examined differing guidelines (federal and state) regarding the calculation of hourly, bonus and overtime pay.

Happily, the California Supreme Court weighed in on this topic and issued a ruling slightly favoring non-exempt hourly employees. The court’s decision may even entitle some workers to back pay.

Continue reading to learn about the case in question: Alvarado v. Dart Container Corporation. If you believe you’re owed back pay in light of the ruling, or if you believe your employer has erred in some other way, contact our office for more information.

Alvarado v. Dart Container Corporation

The California Supreme Court ruled on this case on March 5, 2018. The case was filed by an hourly wage employee named Hector Alvarado, who worked in a factory producing food service products. A full-time employee, Alvarado, and other workers were offered a flat-sum $15 ”attendance” bonus (in addition to their hourly rate and overtime rate) as an incentive to work Saturday or Sunday shifts. The bonus was given when employees worked a full shift on Saturday or Sunday and was given regardless of whether the employee worked in excess of the normal work shift.

Two Different Formulas, One Preferred by the Company, The Other by Employees

Alvarado claimed that the company improperly computed his overtime pay under California Labor Codes §510 and 1194.

The company had one calculation preference, Alvarado had another. The difference between the two calculations came down to whether or not the bonus was applied to all hours worked (overtime and regular), or only to non-overtime hours. The court explained the situation as follows:

“The attendance bonus must be factored into an employee’s regular rate of pay so that the employee’s overtime pay rate (generally, 1.5 times the regular rate of pay) reflects all the forms of regular compensation that the employee earned.”

The company preferred the following formula for calculating the employee base rate of pay:

• The company would multiply the number of overtime hours the employee worked in the pay period by the employee’s normal hourly rate.
• The employer would add the total hourly pay for non-overtime work as well as the non-hourly attendance bonus. (This calculation results in a figure the company considers to be the base rate of pay).
• The Employer would then multiply the regular rate of pay by the total number of overtime hours, and then divide the amount in half. (This results in the overtime premium).
• Employer would add base hourly pay to the overtime premium.

Alvarado, preferred a different calculation. His method involved the following:

• Calculating overtime compensation in relation to the hourly wages.
• Calculating the overtime compensation in relation to the bonus’s per hour rate, then multiplying that value by 1.5 and adding the number of overtime hours worked.
• Combining the overtime amounts to obtain the total overtime compensation.

Alvarado’s calculation was slightly more favorable to workers than the company calculation.

How the Court Ruled

When arguing its case in front of the court, Dart Corporation maintained the court should look to a precedent-setting federal case which stated:

“Where a bonus payment is considered a part of the regular rate at which an employee is employed, it must be included in computing his regular hourly rate of pay and overtime compensation.”

Alvarado argued that a state case, relying on the California Division of Labor Standards Enforcement (DLSE) should guide the court’s opinion. The DLSE method factored “a flat sum bonus into overtime compensation.”

The Supreme Court, ultimately ruled in favor of Alvarado, and deemed the DLSE method of factoring the flat sum into overtime compensation to be appropriate. The court ruling was applied retroactively, which means employers could be on the hook for back pay.

Confused? Contact an Employment Attorney

If you’ve been confused by the calculations and legalese thrown around in this post, don’t despair. Even employment attorneys must focus intently while reading supreme court decisions to keep from going cross eyed. It’s important that you pay attention to your instincts, particularly if you have concerns about how your employer figures your rate of pay. If your employer has paid you hourly, overtime and bonus pay in the past, it could be worth your effort to discuss your case with a qualified attorney and find out if you might be eligible for back pay.

As an added incentive, many employment attorneys (including those at our office) don’t charge for an initial consultation. Often, cases are taken on a contingency basis, which means the client doesn’t pay out-of-pocket legal fees. Rather, the employment attorney is paid with a portion of the settlement or judgment at the conclusion of your case.

If you have questions about any of the topics discussed in this post, or any other employment- related issue, contact the office of Branigan Robertson for more information.

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For years, drivers in the trucking industry have had to contend with government regulators as well as powerful corporate interests who have no compunction about making rules that largely favor companies. Anyone who works in the trucking industry has at one time or another, dealt with a less than ethical employer, or at least knows another driver who has. Unfortunately, these rules not only affect driver’s wallets, but also driver safety—as well as the safety of other drivers on the road. Namely, here we’re talking about the break laws being changed.

New Federal Legislation on Breaks?

An article published Thursday in the Mercury News took a closer look at federal legislation, currently under consideration, that could have wide-ranging effects on the breaks truck drivers statewide would be entitled to. Under current state law, California’s truck drivers are entitled to 30-minute breaks for every five hours of work, as well as a 10-minute break for every four hours of work. It’s worth noting that California truckers are entitled to more breaks than other drivers in most other states. I’ve written about trucker meal & rest breaks in the past.

However, legislation written by U.S. Congressman Jeff Denham, a Republican representing California’s 10^th Congressional District, currently making its way through Congress, seeks to prevent states from setting their own rules for truck drivers’ hours. Instead, a federal standard would be applied. The federal regulation would allow drivers only a 30-minute rest break after eight hours of driving.

The People Behind the Federal Regulation

Not surprisingly, some of the interests vocally supporting the rule are those that either work for the benefit the trucking companies, or the companies themselves.

Speaking to the Mercury News, Joe Rajkovacz, an executive with the Western States Trucking Association bemoaned the California laws that offer more benefits to drivers than other states. “It is beyond belief that we can live in a country where every state you cross can decide when a driver has to take a break, “Rajkovacz said, adding that this legislation change is among the top priorities for the trucking industry.

So much for states’ rights.

While not all California truck drivers may oppose this proposed rule change, it isn’t the only issue facing truckers that should be a cause for concern.

Lawsuits, Lawyers & Frustration

A recent year-long investigation by USA Today, found that 1,150 short haul truckers, many of whom are classified as independent contractors operating near the ports of Long Beach and Los Angeles, have filed suits against trucking companies in civil court or with the California Labor Commission.

The investigation found that many short-haul truckers lease their rigs from employers, and as a result are leveraged into what can best be described as indentured servitude. Such treatment included forcing drivers to work up to 20 hours per day, withholding payment, and requiring drivers to falsify inspection reports tracking the hours they spent on the road.

Some drivers, exhausted and unable to continue with the work, saw their trucks repossessed by the companies when they sought to drive elsewhere. While these disturbing incidents certainly aren’t representative of the experiences of all drivers statewide, there’s no denying that there are a lot of bad actors in positions of power the trucking industry.

While drivers who are classified as independent contractors may be subject to different rules regarding payment, they still have rights — as do full time drivers.

Unfortunately, a driver who believes he or she has experienced discrimination, been denied rightful rest breaks or pay, or is forced to violate safety regulations, will often hesitate to discuss their situation with a lawyer out of fear of retaliation. But it’s important to remember that employers are not privy to conversations between attorneys and clients.

A good attorney should be able to listen to the circumstances of a driver’s work situation, and quickly determine whether or not a case can be filed. In some cases drivers may be entitled to back pay, as well as lost wages, and occasionally, punitive damages are sought.

If you are employed as a truck driver and believe your employer has violated your rights as a worker, consult a qualified attorney to consider your options.

All too often, when stories of employers who fail to pay overtime pop up in the media, the victims end up being workers in convalescent homes. It’s a sad state of affairs for the people who have chosen to work so hard toward the care of society’s elderly and vulnerable citizens. Stories abound of convalescent and other care workers being forced by employers to log long hours, being denied lawful rest breaks, and having overtime wages withheld or denied altogether.

Nursing Home Overtime Abuse Example

For an example of the issues workers face regarding overtime, one need look no further than last week’s superior court ruling involving five caregivers in a Northern California convalescent home.

In that case, the five workers went to the California Labor Commissioner with complaints that they had been withheld wages for overtime work.  The workers argued they virtually worked 24-hours a day while covering evening shifts. The home’s owner, Lynn Ventura, who spoke to the Daily Republic, said the caregivers were free to do what they wanted during the time they were required to be on site and presumably not technically working. She argued that the workers held personal birthday parties and invited guests to the homes they were working in, presumably a justification for withholding overtime wages.

But a hearing officer at the Labor Commissioner’s office disagreed, and in February of 2017 ordered Ventura to pay the employees a total of $483,495. Ventura appealed the commissioner’s decision, which led to last week’s dismissal by a Solano Superior Court judge. The workers are now in a position to collect their lost wages.

Sadly however, the worker’s attorney Richard Taguinod, suggested the road to recovering the money could still be a difficult one. The process will involve going to the county sheriff and filing a writ of execution for levy of future income. That is not a fun process.

“The sheriff, in turn, will ask for her bank accounts of the care homes, and by law, we can only get 25 percent of the monthly income of the care homes until the caregivers all are paid the full amount of award due each of them,” Taguinod said.

Why Does This Happen So Often in Convalescent Homes?

Why this type of employment issue seems to be so prevalent in the nursing home care industry is a broad question, no doubt with several complex reasons. However, Taguinod noted that part of the reason could stem from the fact that so many immigrants seek employment in this particular industry. It’s no secret that immigrant communities are often targeted for financial and other crimes.

“Those most prone to abuse are the undocumented caregivers who do not have close friends or relatives they can seek shelter with if they decide to sue their employers,” Taguinod said.

He also suggested that many convalescent homeowners know what they’re doing when they deny their employees rightful wages.

“I almost want to believe that their mindset is that when they settle their cases with the caregivers, they can do so with a smaller amount than what they would have properly compensated them,” Taguinod said.

While Taguinod makes some good points about the sad state of employment in the care industry, rather than discourage workers, it should be a call to those who have been denied their rightful wages to fight back.

How to Get Unpaid Overtime

It’s important to remember that employment lawyers like Mr. Robertson in California typically take cases on contingency. This means they will usually examine a client’s case for free, and if a decision to file a lawsuit is made, the attorney won’t usually be paid until a settlement is reached. It is also totally free to contact the Labor Commissioner (commonly known as the “labor board”).

If you are an employee of a convalescent home or other health care facility, and have been denied proper overtime compensation, or have encountered some other workplace violation (denied rest breaks, patient safety, whistleblower retaliation, etc.) it might be well worth your time to contact a qualified employment attorney and determine whether or not you have a strong case.

A worker who wins a judgment against an employer could be eligible to recover back pay in addition to lost wages. In some rare cases, punitive damages, which are designed to prevent employers from engaging in certain behaviors in the future, may also be awarded.

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.

The purpose of the overtime pay is obvious. First, overtime encourages an employer to reduce amount of hours worked or hire more employees. Second, overtime ensures that employees are compensated fairly for the burden of working long hours. Unfortunately, California employers fail to pay overtime quite frequently. Rather than hiring an extra helping hand or simply paying the employee what he or she is owed, some employers would rather violate law in order to save a few bucks. That’s why employment lawyers spend a lot of time litigating overtime cases.

California Overtime Law

Under California law, employees are generally entitled to overtime pay if they work more than 40 hours per week or more than eight hours in one day. This is unlike federal law, where employees are entitled to overtime pay only if they work more than 40 hours per week, regardless of the amount of hours worked on any given single day.

Under both federal and California law, if an employee works overtime, then the employer must pay the employee one and a half times an employee’s regular rate. For example, if Mark the Mechanic is paid $12.00 per hour, but works 42 hours in a given week, then his rate of pay for those 2 overtime hours is $18.00 per hour instead of $12.00 per hour. If he has not been paid the correct amount, he can hire a wage & hour lawyer.

Overtime Case Example – Atempa v. Pama

Atempa is a 2015 case out of the Superior Court of San Diego County and Judge Joel Wohlfeil’s courtroom. Plaintiffs, Marco Atempa and Keilyn Reyes, were employees of defendant, an Italian restaurant. During their employment, Defendant would alter the employees’ time sheets and essentially cut the hours its employees worked every pay period. In doing this, Defendant would avoid compensating its employees for overtime pay and thus save money. Eventually, employees began to notice the time being cut from their paychecks. Plaintiffs, a cook and a dishwasher, sued Defendant on behalf of over 70 harmed employees. After an eight day bench trial, the court ruled in favor of the Plaintiffs. The amount awarded was just under $300,000.

Wage and Hour Attorney Help Recover Unpaid Overtime

Unfortunately, what happened to the Plaintiffs in Atempa is fairly common. Our firm receives calls almost every week of employers who fail to compensate their employees properly for overtime hours worked. Sadly, employers all too often try to take advantage of their employees in an effort to save money. But at the end of the day, the employer risks significant legal liability by doing this, and if brought to court will end up paying out more than if they just simply paid their employees properly to begin with. If you feel your employer is not compensating you properly, call an attorney immediately.