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California Wage

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California Wage & Hour Law: feel the pain now, or later? Jeanine DeBacker McPharlin, Sprinkles & Thomas LLP 408.293.1900 jdebacker_at_mstpartners.com – PowerPoint PPT presentation

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Title: California Wage


1
California Wage Hour Law feel the pain now,
or later?
  • Jeanine DeBacker
  • McPharlin, Sprinkles Thomas LLP
  • 408.293.1900
  • jdebacker_at_mstpartners.com

2
Feel the Pain Later?
  • overtime pay for past 3, maybe 4 years
  • meal and rest break premiums for 3-4 years
  • waiting time penalties
  • interest
  • attorneys fees
  • employees attorneys fees
  • EDD and IRS payroll taxes and penalties
  • valuable time away from making
  • claims by more employees
  • class actions
  • Private Attorney General Act (PAGA)

3
USDOL Helping
  • public awareness campaign to educate workers
    under Fair Labor Standards Act (FLSA)
  • Plan/Prevent/Protect launched in 2010 to
    promote a safe, secure and equitable workplace
    for all employees
  • DOL-Timesheet App launched to record hours,
    breaks, OT

4
California v. Federal Law
  • overtime
  • exemptions
  • duties
  • highly compensated

5
CA v. FLSA
  • where California statutory, regulatory or case
    law are more employee-favorable than FLSA,
    California rules apply
  • out of state employees working in the state are
    covered by Californias wage and hour rules
  • Sullivan v. Oracle Corporation

6
Californias Rules
  • Wage and Hour Law is
  • Californias Labor Code
  • IWC Wage Orders
  • FLSA
  • sources of guidance and interpretation for wage
    and hour law
  • California courts
  • Division of Labor Standards Enforcement (DLSE)
  • Federal courts
  • USDOL Wage and Hour Division

7
Exempt v. Non-Exempt
8
Pay for hours worked
  • Hours worked means the time during which an
    employee is subject to the control of the
    employer, including all time the employee is
    suffered or permitted to work, whether or not the
    employee is required to do so.
  • (DLSE Manual, 46.1)

9
Paycycles
  • Pay days at least twice a month
  • - by the 26th for work performed from the 1st
    through the 15th
  • - by the 10th of the next month for work
    performed from the 16th through the end of the
    month
  • Exempt at least once a month
  • - by the 26th for work performed the entire
    month

10
Overtime Pay
  • Hours worked in excess of 8 hours in a day, 40
    hours in a workweek, or any time worked on a 7th
    consecutive day in workweek
  • 1 ½ x regular hourly rate any work over 8
    hours, up to 12 hours and for first 8 hours on
    7th workday in workweek
  • 2x regular hourly rate any work in excess of 12
    hours and for any work in excess of 8 hours on
    7th workday in a workweek
  • OT only available for actual hours worked except
    for rest breaks

11
Meal and Rest Breaks
  • Meal Breaks
  • Provide 30 minutes or more, duty-free, unpaid, if
    employee works more than 5 hours (can be waived
    if employee works no more than 6 hours)
  • Another 30 minutes if work more than 10 hours
  • Rest Breaks
  • 10 minutes for every 4 hours worked, paid
  • Additional time to express breast milk, unpaid

12
Exempt Employees
  • Paid for their work, not for their time
  • Full weekly salary must be paid for any workweek
    in which any work is performed (with limited
    exceptions)
  • The amount of time they put in can be evaluated
    as a performance issue, but you cannot condition
    pay on keeping an 8-hour schedule requiring a
    set schedule can jeopardize the exemption

13
Exempt? What does the employee actually do?
  • duties test employees may be classified as
    exempt if they spend more than 50 of their time
    performing job duties that fall within the
    exemption
  • salary test most exemptions require employees be
    paid at least a certain amount

14
Executive Exemption
  • management of the enterprise or a division and
  • supervise 2 employees and
  • authority to hire and fire, or suggest and be
    taken seriously and
  • customarily and regularly exercise discretion and
    independent judgment and
  • more than 50 of time doing above and
  • salary at least twice minimum wage for forty hour
    workweek, i.e., 2,774 per month or 33,280 per
    year.

15
Administrative Exemption
  • office or non-manual work that relates to
    management policies or business operations and
  • customarily and regularly exercise discretion and
    independent judgment and
  • operates under only general supervision or
    directly assists proprietor or other exempt
    employee and
  • more than 50 of time doing above and
  • salary is at least 2 times minimum wage.

16
Professional Exemption
  • licensed or certified by California AND primarily
    engaged in the practice of a Recognized
    Profession, OR
  • primarily engaged in an occupation recognized as
    a learned or artistic profession
  • customarily and regularly exercise discretion and
    independent judgment and
  • salary is at least 2 times minimum wage.

17
Who is a Professional?
  • Licensed by California
  • law
  • medicine
  • dentistry
  • optometry
  • architecture
  • engineering
  • teaching
  • accounting
  • But not
  • paralegals
  • insurance brokers
  • photographers
  • social workers
  • nurses
  • physician assistants
  • teachers (other than state certified)

18
Other Exemptions
  • computer software
  • outside sales
  • inside sales commissioned
  • industry-specific exemptions

19
Common Mistakes
  • relying upon what others in industry do
  • relying on job titles
  • relying on parties intent or agreement
  • allowing exempt employees to perform primarily
    production work
  • treating exempt employees as non-exempt

20
Avoiding Pitfalls
  • Perform internal audit of employee
    classifications
  • Prepare accurate job descriptions
  • Review employee handbooks
  • Performance appraisals / discipline
  • Watch out for minimum wage increases

21
Deductions from Exempt Salaries
  • Use extreme caution in making any deductions!
  • Partial day deductions from vacation or sick-day
    bank, BUT not from salary
  • Full day deductions okay under limited
    circumstances

22
Separation Anxiety
  • Final pay
  • Resign / Quit Must pay within 72 hours
  • Involuntary termination NOW!
  • Reporting time pay
  • Waiting Time Penalty
  • Failure to pay all wages due
  • Owe daily wage rate for up to 30 days

23
Thank you!
  • Jeanine DeBacker
  • McPharlin, Sprinkles Thomas LLP
  • 408.293.1900
  • jdebacker_at_mstpartners.com
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