Wage & Hour Class Actions

The following are examples of the types of employees and clients we represent in wage and hour class actions.

Types of Wage & Hour Clients

• Types of Wage & Hour Clients
• Restaurant and Hotel Employees
• Computer/High-Tech Employees
• Home Loan and Bank Employees
• Telecommunications Sales/Administrative Employees
• Retail and Other Hourly Employees
• Piece-Rate Employees
• Commission Sales Employees

Types of Violations

• Types of Violations
• Rest and Meal Periods
• Expense Reimbursement
• Independent Contractors Entitled to Overtime Pay
• Overtime Violations under California Labor Law
  • Potential "Exemptions" to Overtime Violations
    • Executive Exemption
    • Administrative Exemption
    • Professional Exemption
    • Outside Sales Exemption

Top of Page

Types of Wage & Hour Clients

Restaurant and Hotel Employees

In the restaurant industry, clients include kitchen staff, wait staff, bus boys and dishwashers. Typical clients in the hotel industry include housekeeping, kitchen and banquet staff, security, clerical, room service, and other hourly employees.

Some of the typical violations include:

• Not allowing employees to receive minimum 30-minute meal periods within the first five hours of work. These employees must be free to leave the premises, relieved of all duties and not required to be available to work in any way.
• Employers must clearly communicate that employees are authorized and permitted to take paid ten minute rest periods for every four hours or major fraction worked. (Employees are entitled to one hour’s pay for every day they have not received a proper meal or rest period, up to two hours per day.)
• Forcing employees to work over eight hours per day or forty hours per week.
• Forcing employees to perform any tasks before clocking in or clocking out (including getting in or out of uniform, running errands, etc.)
• Forcing employees to report to work without providing at least half their regular shift. These employees may not be sent home without being paid for at least a half day’s shift of not less than two nor more than four hours.

  Top of Page

Computer/High-Tech Employees

The computer and high tech industry employs workers whose level of technical skill and expertise often subjects them to misclassification by employers as exempt from overtime. These employees are often called upon to work over eight hours per day, forty hours per week, and seven consecutive workdays without being compensated for their overtime.

The duties of clients who qualify in this area typically involve systems analysis, programming, software engineering; 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; documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems; or the employees are highly skilled and are proficient in the theoretical and practical application of highly specialized information to computer.

Related Information and Employment Issues for Computer & Hi-Tech Professionals

• California Computer Professional Exemption
• Hourly Computer Professionals
• Salaried Computer Professionals
• California Salaried Worker Overtime Exemptions
• Federal Computer Professional Exemption
• Wage Violations: Computer Professionals

Top of Page

Home Loan and Bank Employees

All employees are entitled to be reimbursed for expenses, such as automotive and cell phone costs, incurred in performing their job duties. Commissioned bank home loan sales employees and others in both retail and wholesale groups are often not permitted as part of their compensation package to submit for reimbursement some or all of their expenses incurred in connection with their employment. Generally, in California, employees must be reimbursed for all expenses incurred in connection with their work. This cannot be altered by contract - that is, the employer cannot require employees to agree to pay for expenses incurred in discharging job duties. Employees are entitled to recover un-reimbursed expenses dating back up to four years, with interest.

Top of Page

Telecommunications Sales/Administrative Employees

Wireless telephone equipment sales employees have been the target of improper "charge backs" of commissions when subscribers cancel. In some cases, this is a violation of labor law proscriptions against deducting an employees’ earned wages. In addition, these employees are often incorrectly classified as exempt from overtime under the administrative exemption and are owed substantial wages for unpaid overtime wages.

Top of Page

Retail and Other Hourly Employees

Hourly employees in the retail, service, and many other industries are entitled to minimum statutory protections governing minimum wages, overtime, minimum reporting pay, split-shift premiums, rest and meal periods, waiting time penalties for wages due at the end of employment, and more.

Top of Page

Piece-Rate Employees

Employees are entitled to overtime, regardless of whether they work for hourly wages, commissions, or on a "piece-rate" basis. Piece-rate employees are paid a specified amount for each task performed. An example is installers of high-speed modems, cable television, or other technical equipment.

Top of Page

Commission Sales Employees

Under California law, inside sales employees who earn commissions are entitled to premium overtime pay unless they are paid at least one and one-half times minimum wage and earn more than 50% of their income from bona fide commissions. Regardless of entitlement to overtime, commissioned inside sales employees are entitled to rest and meal periods and back pay compensation of one hour's pay at their regular rate of pay for all days on which they were not provided one or more rest or meal periods.

Top of Page

Types of Violations

The following are examples of the typical employment violations.

Rest and Meal Periods

Hourly employees working shifts of at least five hours must receive an unpaid 30-minute meal period in which they are completely relieved of all duties and free to leave the work premises. The meal period can be waived by the employee for shifts that do not exceed six hours. A second such meal period is required for shifts that exceed ten hours. The employer is responsible for ensuring that employees take their meal period within the first five hours of work. An employee may not leave work a half hour early instead of taking a meal period. Employees must clock-out for the meal period, unless all operations cease and all employees take their break at the same time.

Employees are entitled to one hour's wages at their regular rate of pay for every day the employer fails to provide a meal period. If employees are required to remain at the job site in order to be available to wait on customers or perform other work but must still clock out for their meal periods, they are entitled to payment at their regular rate of pay for the meal period plus the premium of one hour's pay.

Paid rest periods of ten minutes for every four hours or fraction thereof are available to hourly employees who wish to take them. The employer must clearly communicate to hourly employees that they are authorized and permitted to take rest breaks, which must come as near as practicable to the middle of the four-hour period. Rest periods may not be grouped together nor taken at the end of the day in order to leave early, unless the employee elects without coercion to waive one or more rest periods. Unless there is a clear waiver, an employer must make arrangements to freely allow employees to "break" themselves or provide relief employees. Employees are also entitled to one hour's premium pay at their regular rate of pay for every day on which they were not provided one or more paid rest periods they did not waive.

Top of Page

Expense Reimbursement

An employer who fails to reimburse employees for expenses incurred in carrying out their employment is liable to the employee for the amount of all necessary expenses, interest, attorney's fees and costs. For example, employees who use their automobiles in carrying out job functions must be provided a mileage or other reimbursement to cover all driving expenses, including gas and insurance. This requirement covers all expenses incurred in the scope of employment. The purpose of the statute is to protect employees from suffering any expense as a direct consequence of the performance of the employee's duties.

Top of Page

Independent Contractors Entitled to Overtime Pay

Some employers attempt to evade the overtime laws by calling certain workers "independent contractors" as opposed to employees. The employer's choice of terminology, however, is irrelevant. An "independent contractor" may be entitled to overtime if one or more of the following factors are present:

• Exclusivity: the worker works exclusively for the employer
• Importance: the worker's services are an important part of the employer's business
• Control: the employer controls the worker's work hours and place and manner of work
• Equipment: the employer pays for the worker's equipment, tools, and facilities necessary to complete the work

Under California law, there is a rebuttable presumption that any worker is an employee and specific proof must be provided of independent contractor status.

The most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. Additional factors that may be considered depending on the issue involved are:

• Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
• Whether or not the work is a part of the regular business of the principal or alleged employer;
• Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
• The alleged employee's investment in the equipment or materials required by his or her task or his or her employment of helpers;
• Whether the service rendered requires a special skill;
• The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
• The alleged employee's opportunity for profit or loss depending on his or her managerial skill;
• The length of time for which the services are to be performed;
• The degree of permanence of the working relationship; and
• The method of payment, whether by time or by the job.

Top of Page

Overtime Violations under California Labor Law

Hourly employees are entitled to a premium for working overtime. They are generally entitled to one and one half times their regular rate of pay for working over eight hours a day or forty hours per week. They receive double pay for working over twelve hours a day or working a seventh consecutive day.

Only salaried employees qualifying under the "white-collar" overtime exemptions are exempt from receiving the overtime premium. Executive (managers), administrative, professional, and outside sales employees are exempt from overtime requirements in California, provided they meet certain tests regarding job duties and responsibilities and are compensated "on a salary basis" at not less than stated amounts.

Subject to certain exceptions set forth in the regulations, in order to be considered "salaried," employees must receive their full salary for any workweek in which they perform any work without regard to the number of days or hours worked. They may not be required to make up partial day absences by working extra hours or having their vacation accounts docked. The special requirements which apply to each category of employees are summarized below.

Damages or Penalties that are Typically Recoverable in Overtime Violation Cases

While the primary recovery sought in overtime cases is payment of the overtime wages themselves, California law also allows for various forms of penalties as well as the recovery of costs and attorneys' fees. The provisions allowing recovery of costs and attorneys' fees are of significant benefit to workers considering bringing wage and hour claims since the legal work involved in prosecuting such cases through trial and/or any necessary appeals can be substantial.

Temporary Employees Who are Denied Benefits

Many high tech professionals are employees of temporary employment agencies who contract them out to client companies as consultants. These temporary agencies receive a portion of the hourly rate of pay/wages that the client company pays for the computer and/ hi-tech professional's services.

As such, these professionals do not receive the additional amounts paid for time-and-a-half (or double time) for overtime compensation without a deduction for the agency commission. Further, these professionals are treated as independent contractors by the temp agency's client company, but, in actuality, do not have the freedom of independent contractors, nor are they able to deduct the full range of business expenses. For example, they do not receive the benefits and stock options that other employees receive, nor can they qualify for the benefits supposedly offered by the agencies.

Top of Page

Potential "Exemptions" to Overtime Violations

Executive Exemption

The executive exemption is commonly used to classify managers as exempt from overtime. It is applicable to employees who have management as their primary duty (more than 50% of their duties), who direct the work of two or more full-time employees, who have the authority to hire and fire or make recommendations regarding decisions affecting the employment status of others, who regularly exercise a high degree of independent judgment in their work, and who receive a salary of not less than two times the state minimum wage for full-time employment.

Top of Page

Administrative Exemption

The administrative exemption applies to employees who perform office or non-manual work which is directly related to the management policies or general business operations of their employer or their employer's customers. They must regularly exercise discretion and judgment in their work and perform under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge or execute under only general supervision special assignments and tasks. Employees primarily engaged in producing the employer's product or service are not properly classified as administrative employees. They must receive a salary of not less than two times the state minimum wage for full-time employment.

Top of Page

Professional Exemption

The professional exemption pertains to employees who perform work requiring advanced knowledge and education, licensed or certified by the State of California in law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting, or primarily engaged in work requiring specialized knowledge gained through an advanced course of study, generally beyond a bachelor's degree, or who work in an artistic field which is original and creative, work as a teacher, and who regularly exercise discretion and judgment. They must receive a salary of not less than two times the state minimum wage for full-time employment.

Top of Page

Outside Sales Exemption

Employees who engage in making sales or obtaining orders away from their employer's place of business and who devote more than 50% of their time to such duties are exempt from overtime. Commissioned inside sales persons who earn at least one and one half times the minimum wage and more than half of their income from bona fide commissions are also exempt from overtime pay under California law, though they are entitled to rest and meal periods or premium compensation in lieu thereof.

Top of Page