Wage and Hour Defense Blog

Much has been made about the recent, hurried legislation to amend the Private Attorneys General Act (“PAGA”) in order to take the Fair Pay and Employer Accountability Act (“FPEAA”) off the California ballot this November.  

If passed by California voters, the FPEAA would have repealed PAGA and replaced it with a new statute and a new process that were more employer-friendly -- and more employee friendly. 

(The idea of a ballot initiative to repeal or create laws may sound very unusual to anyone outside of California.  But California permits this kind of mob rule, for better or worse, so long as enough signatures are gathered and verified to qualify to be placed on the ballot.)

For all of the celebration about how these PAGA amendments will benefit employers, the PAGA amendments remind me of nothing so much as New Coke. 

You don’t know about New Coke, do you? 

You see, back in 1985, Coca-Cola announced that it was changing the longtime formula for its soda and replacing it with a new formula that everyone would love even more. There was much excitement about it.  (Keep in mind that this was before the internet, smartphones, texting, streaming, etc.)  The launch of the new version of the soda was covered in the mainstream media, and people just couldn’t wait. They actually lined up outside stores to be the first to get their hands on it.

And then New Coke was launched.

As we have previously addressed, the U. S. Department of Labor (DOL) has issued its final rule raising salary thresholds for overtime exemptions under the federal Fair Labor Standards Act (FLSA) effective January 1, 2025.

While there are legal challenges to the final rule, the DOL is offering webinars about the final rule to employers on May 30, 2024 and June 3, 2024.

Those webinars could certainly provide employers with valuable insights into the DOL’s approach. 

While the DOL may well encourage employers to make modifications immediately to comply with the final rule, the legal ...

More than a decade ago, Epstein Becker Green (EBG) created its complimentary wage-hour app, putting federal, state, and local wage-hour laws at employers’ fingertips.

The app provides important information about overtime, overtime exemptions, minimum wages, meal periods, rest periods, on-call time, and travel time, as well as tips that employers can use to remain compliant with the law and, hopefully, avoid class action, representative action, and collective action lawsuits and government investigations. 

As the laws have changed over the years, so too has EBG’s free ...

Here’s a question you likely have never considered: Are hackers overseas infiltrating employers’ computer systems just to sign arbitration agreements with class action waivers for random employees?

While there is no evidence that this has ever happened anywhere, and no logical reason why it would, plaintiffs’ lawyers and even some courts seem to believe this could happen. And that is at the heart of the latest battleground over arbitration agreements with class actions waivers.

Since the United States Supreme Court’s decision in Epic Systems v. Lewis, more and more ...

On January 18, 2024, the California Supreme Court issued its much-anticipated decision in Estrada v. Royalty Carpet Mills, resolving a dispute among the appellate courts and concluding that Private Attorneys General Act (“PAGA”) claims may not be stricken as unmanageable. 

While some have read the decision as a resounding victory for the plaintiffs’ bar that will force every PAGA case to settle for large amounts, the decision does no such thing.

It may challenge employers and their lawyers to be more creative, but it does not mean that every PAGA action now warrants an outsized ...

There is a comedian by the name of Jeff Foxworthy who has been enormously popular for the past two decades or so. 

Perhaps you are familiar with him.  (And if you are, you probably thought that you stumbled upon the wrong blog just now.)

Remarkably, Mr. Foxworthy’s name comes up frequently when talking about whether workers have been properly classified as independent contractors.  Not because there is anything funny about that issue; there isn’t.  And not because Mr. Foxworthy was misclassified as an independent contractor.  Instead, his name pops up because Mr. Foxworthy has ...

For more than a few years -- at least since the United States Supreme Court’s seminal 2017 decision in Epic Systems v. Lewis -- employers across the country have weighed whether to have their employees sign arbitration agreements with class and collective action waivers. 

While many employers have chosen to do so, many have elected not to. 

For decades, many employers have rounded non-exempt employees’ work time when calculating their compensation.  Maybe they have rounded employee work time to the nearest 10 minutes, maybe to the nearest quarter hour, but they done it. And, generally, the courts have approved of the practice.

But as more and more lawsuits are filed challenging the practice, and as the courts begin to review time-rounding more frequently and more critically, the question employers with time-rounding policies should ask themselves today is this:  Why are we still rounding our employees’ time?

Employers with operations both large and small in California are all too familiar with California’s Private Attorneys General Act (“PAGA”), the controversial 2004 statute that permits a single employee to stand in the shoes of the state’s attorney general and file suit on behalf of other employees to seek to recover penalties for alleged Labor Code violations.

PAGA lawsuits are filed with great regularity by members of the plaintiffs’ bar.

And the in terrorem effect of PAGA lawsuits, in which a plaintiff need not satisfy class certification criteria to represent an entire workforce, has led many employers to pay large settlements just to avoid legal fees and the possibility of larger awards -- even when the evidence of unlawful conduct is spotty or entirely absent.

The California Supreme Court has issued its highly anticipated decision in Adolph v. Uber Technologies, Inc., concluding that plaintiffs who must arbitrate their “individual” PAGA claims are not deprived of standing to pursue “non-individual” PAGA claims in court on behalf of others.

More precisely, Justice Goodwin H. Liu wrote that “an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA.”

The Ninth Circuit has issued its long-awaited ruling in Chamber of Commerce v. Bonta, perhaps putting a nail in the coffin of the controversial California law known as AB 51, which would have made it criminal conduct to require an applicant or employee to sign an arbitration agreement.

The history of AB 51 and the case challenging it is a tortuous one, to say the least, but the issue has always remained the same: was the California legislature too clever in its attempt to circumvent the Federal Arbitration Act (“FAA”) and the Supreme Court’s landmark decision in Epic Systems?

More than a decade ago, Epstein Becker Green (EBG) created its complimentary wage-hour app, putting federal, state, and local wage-hour laws at employers’ fingertips.

The app provides important information about overtime exemptions, minimum wages, overtime, meal periods, rest periods, on-call time, travel time, and tips that employers can use to remain compliant with the law—and, hopefully, to avoid class action, representative action, and collective action lawsuits and government investigations. 

We seem to say this every year -- December always seems to go by far too fast.  And with holidays and vacations, not to mention many employees still working remotely, it’s not unusual for matters to be put off until the new year — or for a project or two to fall through the cracks.

The U.S. Supreme Court’s June 15, 2022 decision in Viking River Cruises v. Moriana could have a tremendous impact upon pending and future litigation, as well as employment practices in the state.

For some California employers, it will impact pending Private Attorneys General Act (“PAGA”) litigation where the named plaintiff has an arbitration agreement with a class and representative action waiver.

In a recent post addressing the U.S. Supreme Court oral argument in Viking River Cruises v. Moriana, we mentioned that employers in California will want to consider the “pros and cons” of arbitration agreements should an employer-friendly decision be issued in that case, rather than rush to implement them.

In response, more than a few people have asked the same or similar questions -- What are the “cons” of arbitration agreements? Why wouldn’t an employer want to use arbitration agreements, particularly if they will foreclose Private Attorney General Act (“PAGA”) actions in California?

There are “cons” to these agreements -- and they are not insignificant.

Silence can be telling.

That is especially so in the legal industry.

In the context of a hearing or oral argument, if judges or justices don’t ask an attorney a question, it can be incredibly encouraging – or incredibly discouraging.  It often means that the judges or justices have already made up their minds after having read the parties’ briefs and simply don’t have any questions or don’t need to hear anything more.

Years ago, Epstein Becker Green (“EBG”) created its free wage-hour app, putting federal, state, and local wage-laws at employers’ fingertips.

The app provides important information about overtime exemptions, minimum wages, overtime, meal periods, rest periods, on-call time, travel time, and tips.

As the laws have changed, so, too, has EBG’s free wage-hour app, which is updated to reflect those developments.

A number of years ago, I received a kind note around the holidays from my opposing counsel in a wage-hour class action, thanking me and my firm for being their “partners” in addressing employment issues.

Maybe the word he used wasn’t “partners,” but it was something close to it.

At first, I must admit that I thought he was joking.

Then I realized that this attorney, for whom I have great respect, got it.

He got that employers are not looking to violate employment laws, and that the attorneys who represent them are not trying to help their clients violate the laws.

Employers with operations both large and small in California are all too familiar with California’s Private Attorneys General Act (“PAGA”), the controversial statute that permits a single employee to stand in the shoes of the state’s attorney general and file suit on behalf of other employees to seek to recover penalties for alleged Labor Code violations.

The in terrorem effect of PAGA lawsuits, in which a plaintiff need not satisfy class certification criteria to represent an entire workforce, has led many employers to pay large settlements just to avoid legal fees and the possibility of larger awards, even when the evidence of unlawful conduct is spotty or entirely absent.

Will 2022 be the year that PAGA is repealed?

December is not the shortest month of the year, but it always seems to go by the fastest.

And with holidays and vacations, not to mention employees working remotely, it’s not unusual for matters to be put off until the new year -- or for a project or two to fall through the cracks.

Often times, there are no real consequences if a project gets pushed off into the new year.

But that’s not the case with new state or local wage-hour laws.

As reflected in the charts below, minimum wages increased in dozens of states and localities when the new year rang in on January 1, 2022 – and exempt salary thresholds also increased in some states effective January 1, 2022.

Before ringing in the New Year, employers should carefully evaluate whether they need to adjust their current practices to ensure that they remain compliant with state and local laws, including those relating to minimum wage and salary thresholds for exempt employees.

As reflected in the charts below, in 2022, minimum wages will increase in more than two dozen states and localities, with many changes taking effect January 1st. Accordingly, employers with minimum wage workers should consult with counsel to ensure that their compensation practices are compliant with the laws in all jurisdictions in which they operate. Employers should pay particular attention to the effective date to ensure compliance by the appropriate date.

More than three years after its landmark decision in Epic Systems Corp. v. Lewis, the United States Supreme Court has granted certiorari in Viking River Cruises, Inc. v. Moriana to determine whether Epic Systems extends to arbitration agreements that include waivers of representative actions brought under the California Private Attorneys General Act (PAGA).

Employers with operations in California, who have been plagued by the filing of boilerplate PAGA actions, could be heard to breathe a sigh of relief.

Since the Supreme Court issued its seminal 2018 decision in Epic Systems Corp. v. Lewis, acknowledging that the Federal Arbitration Act (“FAA”) permits the use of arbitration agreements with class action waivers, many employers have implemented arbitration programs for their employees. Those arbitration programs have been aimed, in no small part, at avoiding the class and collective actions that have overwhelmed employers, particularly in California.

In response, California passed AB 51, which prohibits imposing “as a condition of employment, continued employment, or the receipt of any employment-related benefit” the requirement that an individual “waive any right, forum or procedure” available under the California Fair Employment and Housing Act (“FEHA”) and Labor Code.

It is no secret that the Private Attorneys General Act (“PAGA”) has been a cash cow for plaintiffs’ counsel in California.

PAGA allows a single employee (and their counsel) to file suit on behalf of other employees for alleged Labor Code violations, without having to go through the class action mechanism.  In other words, a PAGA plaintiff can file suit seeking penalties for hundreds or thousands of employees, yet never need to show that there are common issues susceptible to common proof – or even that their own claims are typical of those of other employees.

As a result, there has been little to prevent plaintiffs and their counsel from filing massive PAGA actions on behalf of all of an employer’s employees, even without having any basis to believe that many those employees suffered any violation at all.

In a decision that seems like to be reviewed by the California Supreme Court or rejected by other California Courts of Appeal, one of California’s appellate courts has issued a perplexing decision holding that even employees whose claims are time-barred can file representative actions under California’s Private Attorneys General Act (“PAGA”).

In Gina Johnson v. Maxim Healthcare Services, Inc., the Fourth Appellate District held that the plaintiff could pursue PAGA claims on behalf of other employees even though her own claims were barred by the statute of limitations.

California law generally requires employers to pay non-exempt employees a premium of one hour of pay for non-compliant meal and rest periods. Employers have typically paid such premiums by using the employees’ standard hourly rates. A new California Supreme Court decision requires employers to pay premiums at a higher rate when employees receive nondiscretionary compensation. This change in the law not only will require employers to adjust how they calculate meal and rest period premiums going forward, but it also exposes some of them to litigation for their past practices if ...

California law generally requires that non-exempt employees be paid 1.5 times their “regular rate of pay” for work performed beyond 40 hours in a week or 8 hours in a day – and twice their “regular rate of pay” for time worked in excess of 12 hours in day or beyond 8 hours on the seventh day of the workweek.

While “regular rate of pay” is not expressly defined in the California Labor Code, there should be few questions about what that rate is when an employee works at the same rate during the workweek.

But when an employee works at two (or more) different rates of pay during a single ...

For more than 80 years, federal law has provided a general right to premium pay for working overtime hours, originally just for covered employees, then later for employees of covered enterprises.  The laws of more than 30 states contain a comparable requirement, though in some instances differing in the particulars.

This presumptive right to the overtime premium is, of course, subject to the familiar exemption construct whereby individuals whose employment satisfies one or more of the dozens of exempted categories fall outside the premium pay requirement.  Many of the most ...

Years ago, Epstein Becker Green (“EBG”) created its free wage-hour app to put federal, state, and local wage-laws at employers’ fingertips.

The app provides important information about overtime exemptions, minimum wages, overtime, meal periods, rest periods, on-call time, travel time, and tips.

As the laws have changed, so, too, has EBG’s free wage-hour app, which is updated to reflect new developments.

No fewer than 46 states (or the localities within them) had changes to their overtime, minimum wage, or child labor laws effective January 1, 2021 – and EBG’s ...

On January 29, 2021, the U.S. Department of Labor announced the immediate termination of its Payroll Audit Independent Determination Program (PAID).  Launched in March 2018 by the Wage and Hour Division (WHD), PAID was intended to resolve wage and hour disputes with greater expediency and at lower cost to employers.  However, in the WHD’s press release, Principal Deputy Administrator Jessica Looman indicated that the program had not achieved the desired effect, stating that the PAID “program deprived workers of their rights and put employers that play by the rules at a ...

As we have previously written here, the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court dramatically changed the standard for determining whether workers in California were properly classified as independent contractors, creating a new “ABC” test that has subsequently been codified as AB 5. A significant question left open was whether Dynamex would apply retroactively.

In Vasquez v. Jan-Pro Franchising International, Inc., the California Supreme Court has concluded that Dynamex indeed applies retroactively ...

At the time we are posting this, we are just weeks away from the inauguration of President-Elect Joseph Biden. Although perhaps not at the very top of the list of questions about the forthcoming Biden administration, somewhere on the list has to be this question: “What changes will we see in wage-hour law?”

We don’t have the proverbial crystal ball, but there are a number of issues that the Biden administration may focus on at some point during the next four years, be it through legislation, new rules implemented by the Department of Labor (DOL) or even executive orders.  They may ...

As we have written here before, ride share and food delivery companies doing business in California had a lot at stake in the November 3, 2020 election. In fact, it was possible that those businesses might even cease doing business in California depending on the outcome of the election – or dramatically change their business models in the state.

Specifically, on November 3, 2020, California voters were asked to decide the fate of Proposition 22, the ballot initiative that would remove those companies from the scope of AB 5 and allow drivers to be treated as independent contractors. (As ...

November 3, 2020 has been circled on the calendars of app-based ride share and food delivery companies doing business in California for many months now.  After a new ruling by the California Court of Appeal, those companies have likely gone back and circled that date a few more times in thick red ink.

On November 3, 2020, California voters will decide the fate of Proposition 22, the ballot initiative that, if passed, will allow app-based ride share and food delivery companies to treat drivers as independent contractors rather than as employees, carving them out of California’s ...

We recently authored “Elections May Decide Fate of Gig Worker Classification Regs,” the first of a series of articles on wage and hour issues for Law360.  Subscribers can access the full version here - following is an excerpt:

As the gig economy has grown, so too have questions about it. One of the most consequential questions in the past several years has been whether workers in the gig economy are properly classified as independent contractors for purposes of various federal and state statutes, or whether they should be classified as employees of the businesses with which they ...

We have written frequently here about AB5, California’s controversial law that creates an “ABC” test that must be satisfied in order for a worker to be treated as an independent contractor.  As we explained here, AB5 codified and expanded the “ABC” test adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court for determining whether workers in California should be classified as employees or as independent contractors.

While the statute was unambiguously aimed at ride share and food delivery companies that treat drivers as ...

Given the ever-increasing number of wage-hour class and collective actions being filed against employers, it is no surprise that many employers have turned to arbitration agreements with class and collective action waivers as a first line of defense, particularly after the United States Supreme Court’s landmark 2018 Epic Systems v. Lewis decision.

If there is a common misconception about Epic Systems, however, it is that the Supreme Court concluded that all arbitration agreements with all employees are enforceable under all circumstances.  The Court reached no such ...

As we wrote here just several days ago, Californians were facing the seemingly unimaginable this week– the possibility of living without ride share services for the foreseeable future.

In short, a state court judge issue a temporary restraining order (“TRO”) requiring ride share companies to treat their drivers as employees in purported compliance with  AB 5, California’s controversial new law that only permits workers to be classified as independent contractors in most industries if they satisfy an “ABC” test.

After the same judge refused to stay the TRO during the ...

To some, it may feel like it was a lifetime ago when ride share companies did not even exist.  In those seemingly long-ago days, people relied upon friends to drive them to or from the airport, or assigned designated drivers for those nights when they attended events where alcohol would be served, or used other methods of transportation to travel the roadways to their various destinations.

Californians may soon be living like that again.

As we shared the other day, a California Superior Court has issued a temporary restraining order requiring ride share companies to treat their drivers as ...

We have written here frequently about California’s controversial AB 5 law, which permits companies to treat workers as independent contractors only if they satisfy a stringent “ABC” test.

The broad statute, unambiguously written to try to force companies to treat gig economy workers as employees, has been the subject of a great deal of debate and litigation, including a state court action filed by the State Attorney General trying to force ride share companies to treat their drivers as employees.

In the action filed by the State Attorney General, the Superior Court judge has ...

As we wrote here recently,  two federal courts in California rejected Postmates’ attempt to escape having to defend thousands of individual arbitrations filed by drivers contending they have been misclassified as independent contractors. Those decisions require Postmates to pay millions in arbitration fees alone.

A federal court in Illinois has now reached the same conclusion, holding that Postmates must proceed with more than 200 individual arbitrations that will cost Postmates $11 million in arbitration fees.

Arbitration agreements with class action waivers have become ...

As employers continue to deal with workplace issues related to COVID-19, you should be aware that the U.S. Department of Labor’s Wage and Hour Division (“WHD”) has indicated that it will be investigating allegations of wage and hour violations that have occurred as a result of the rapid workforce changes undertaken by many organizations earlier this year.   Unfortunately, as you may know, the WHD rarely announces those investigations in advance and, instead, employers typically learn of them when a letter arrives announcing 72 hours’ notice to produce payroll records, or a ...

As states across the country start to reopen their economies after COVID-19 shutdowns, many businesses are likewise preparing to have employees return to work.

However, before reopening, businesses will need to comply with numerous state and local protocols designed to ensure the health and safety of employees and consumers, including social distancing, maximum occupancy and one-way flow.

Even if not required, many employers are instituting employee temperature checks upon arrival at the workplace. While the U.S. Equal Employment Opportunity Commission recently endorsed ...

Let me be the millionth person to say that we are living in unprecedented times.

Well, unless you count the Spanish Flu, which few of us probably dealt with as that was more than a century ago.

And, not incidentally, few if any of the wage-hour laws employers deal with today were in place back then.

As employers navigate issues that they never imagined, there are more than a few myths circulating about wage-hour laws that are worth mentioning here – and worth debunking.

Myth No. 1: “Employees Won’t Sue Over Alleged Wage-Hour Violations Occurring During The COVID-19 Crisis”

The ...

For those of you who may have been wondering whether the California Attorney General’s office was still open during the statewide stay-at-home order triggered by the coronavirus, the answer is yes – as evidenced by a statewide misclassification lawsuit filed in San Francisco by the Attorney General, along with the city attorneys for Los Angeles, San Francisco and San Diego.

The lawsuit alleges that ride share companies have unlawfully misclassified drivers as independent contractors under AB 5, the controversial statute that went into effect on January 1, 2020.

As we previously wrote here, AB5 codified and expanded the “ABC” test adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court for determining whether workers in California should be classified as employees or as independent contractors.

To satisfy the “ABC” test, the hiring entity must demonstrate that:

• the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
• the worker performs work that is outside the usual course of the hiring entity’s business; and
• the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

We have written here about the efforts of several gig economy companies like DoorDash to avoid having to conduct – and pay for – thousands of individual arbitrations alleging that their workers had been misclassified.

As we have said before, companies that implement arbitration agreements with class action waivers must be careful what they ask for.  By using such agreements, they run the risk of dozens, hundreds or even thousands of individual arbitrations, the cost of which could threaten the companies’ very existence.  (In California, we estimate that the arbitration costs ...

It is no secret that independent contractor misclassification claims are being filed against employers with a great deal of frequency, often as class actions and often in California.  Many of those lawsuits have been filed against gig economy companies.  But, of course, they are not the only companies facing such claims.

As a result, many companies that classify workers as independent contractors are asking a basic question, “Are those workers properly classified?”

It sounds like such a simple question, one that should have a simple answer.

But there is no simple answer, at least ...

Be careful what you ask for.

We have used that expression frequently when writing about recent federal court orders requiring DoorDash and Postmates to conduct thousands of individual arbitrations in California pursuant to the terms of their arbitration agreements with their drivers.

Thousands of individual arbitrations for which DoorDash and Postmates would have to pay many millions of dollars in arbitration fees alone.

The risk of dozens, hundreds or even thousands of individual arbitrations attends any time an employer seeks the benefits of an arbitration agreement ...

In the coming days, weeks and perhaps months, many employers will have difficult decisions to make about their operations and their workforces.  With their operations shutting down or running at less than capacity, many employers will decide that they must lay off employees.

It’s a decision that no employer wishes for or enjoys.  And it is one that poses some risks.

Not only must employers take steps to ensure that layoff decisions are made in a manner that does not adversely impact protect groups, but employers need to be mindful of the various state laws governing when final wages must ...

Recently, we wrote here about a federal court order requiring DoorDash to conduct more than 5,000 individual arbitrations under the terms of its mandatory arbitration agreements, with each arbitration to address claims that it had misclassified its drivers as independent contractors.

The order would fall in the category of “Be Careful What You Wish For.”  In seeking to avoid class or collective actions by having employees sign arbitration agreements with class action waivers, employers face the possibility of hundreds or thousands of individual arbitration for which they ...

It is not unusual for businesses at risk of employee theft to implement security screenings for employees as they exit the employer’s facilities.  Such screenings are especially common in industries where small, costly items could easily be slipped into a pocket or handbag – jewelry, smartphones, computer chips, etc.

In light of the California Supreme Court’s decision in Frlekin v. Apple, Inc., those security screenings now seem likely to lead to even more litigation wherein employees claim that they were not paid for their time spent waiting to be screened, at least in ...

It’s no secret that many employers have employees sign arbitration agreements with class and collective action waivers in the hopes of avoiding the massive wage-hour lawsuits that have become so prevalent in the past two decades.

Nor is it any secret that, following the U.S. Supreme Court’s decision in Epic Systems affirming that such agreements can be valid, even more employers have chosen to use them with their workforces.

But, in discussing with clients whether to implement such agreements, lawyers worth their salt have always told their clients this: “Be careful what you ...

As we wrote here, United States District Court Judge Kimberly J. Mueller of the Eastern District of California wrote a brief “minute order” explaining that she was issuing a preliminary injunction to halt enforcement of California’s controversial anti-arbitration law, known as AB 51.

The new law, which was set to go into effect on January 1, 2020, would outlaw mandatory arbitration agreements with employees. AB 51 would also prohibit arbitration agreements that would require individuals to take affirmative action to be excluded from arbitration, such as opting out.  ...

The California Legislature’s attempt to circumvent both the Federal Arbitration Act (“FAA”) and the Supreme Court’s landmark decision in Epic Systems by crafting a new law prohibiting California employers from requiring employees to enter into arbitration agreements is off to a rocky start in the courts, to say the least.

As discussed below, a federal court has issued a preliminary injunction enjoining enforcement of California’s controversial new anti-arbitration statute known as AB 51.  Barring some new development, it now appears clear that the statute cannot be ...

As we have written here, the day before California’s controversial AB 5 was set to go into effect, U.S. District Court Judge Roger Benitez issued a temporary restraining order to block enforcement of the law as to approximately 70,000 independent truckers.

Subsequently, Judge Benitez granted a preliminary injunction to prevent enforcement of the statute to those truckers.

In reaching his decision, Judge Benitez concluded that, as to independent truckers, the Federal Aviation Administration Authorization Act preempts AB 5.

The preliminary injunction is a significant ...

As we recently wrote here, just hours before California’s controversial AB 5 went into effect, a federal court in San Diego issued a temporary restraining order (“TRO”) to enjoin enforcement of the independent contractor statute as to approximately 70,000 independent truckers, many of whom have invested substantial sums of money to purchase their own trucks and to work as “owner-operators.”

Now, days after a state court judge ruled that the statute does not apply to independent truckers, the federal court has extended the TRO while it decides whether to enter a ...

As we recently wrote here, on December 29, 2019, just days before California’s new arbitration statute known as AB 51 was to go into effect, a federal judge in the United States District Court of the Eastern District of California granted a temporary restraining order (“TRO”) to enjoin enforcement of AB 51.

The new law, which was set to go into effect on January 1, 2020, would outlaw mandatory arbitration agreements with employees.

AB 51 would also prohibit arbitration agreements that would require individuals to take affirmative action to be excluded from arbitration, such ...

Following the challenges to AB 5, California’s controversial new independent contractor law, can be a difficult endeavor.  Every day seems to bring a new development.

We have written before about the hasty passage of the statute, about a ballot initiative to escape the scope of the law by ride-share and delivery companies, and challenges by independent truckers, freelance journalists and photographers, and ride-share and delivery companies.

While many were focused on whether a federal judge, who had already issued a temporary restraining order to enjoin enforcement of the new ...

As we wrote here recently, organizations representing freelance journalists and photographers filed suit seeking to enjoin enforcement of California’s controversial independent contractor statute, AB 5, as to them.

While they are not the only ones challenging the new law, their suit is not off to a promising start.

While a federal judge issued a temporary restraining order (“TRO”) to enjoin AB 5 as it applies to independent truckers,  U.S. District Court Judge Philip Gutierrez in Los Angeles denied the freelance journalists and photographers’ request for a TRO on January ...

On January 1, 2020, California’s new independent contractor statute, known as AB 5, went into effect.  The law codifies the use of an “ABC” test to determine if an individual may be classified as an independent contractor.

The hastily passed and controversial statute has been challenged by a number of groups as being unconstitutional and/or preempted by federal law, including ride-share and delivery companies and freelance writers.

Just hours before AB 5 went into effect, a California federal court in San Diego enjoined enforcement of the statute as to some individuals – ...

AB 5, California’s hastily passed and controversial independent contractor statute, which codifies the use of an “ABC test,” is set to go into effect on January 1, 2020.

Already, the California Trucking Association has filed suit challenging the statute.

As have freelance writers and photographers.

Now, it’s ride-share and delivery companies’ turn to file suit.

Those companies have already commenced the process to create a ballot initiative that would allow voters to decide whether to exempt ride-share and delivery drivers from the “ABC test.”

Now, on December ...

We recently wrote about a new California law set to go into effect on January 1, 2020 that would outlaw mandatory arbitration agreements with employees.

The new law, known as AB 51, would also prohibit arbitration agreements that would require individuals to take affirmative action to be excluded from arbitration, such as opting out.  The law would also appear to extend to jury waivers and class action waivers. And it would include criminal penalties.

An eleventh-hour court order will keep that statute from being enforced, at least for a few days.

On December 29, 2019, just days before ...

As we wrote here in September 27, the new “white collar” salary thresholds under the federal Fair Labor Standards Act (“FLSA”)  are set to go into effect on January 1, 2020.

That deadline is sneaking up fast.

And, like waiting until the last minute to start holiday shopping, waiting until the last minute to make important decisions regarding the new thresholds may not be wise.

The New Salary Thresholds

Effective January 1, 2020, the salary threshold for the executive, administrative, and professional exemptions under the FLSA will increase from $23,660 ($455 per week) to ...

As employers with operations in California had feared, Governor Gavin Newsom has signed AB 51, which effectively outlaws mandatory arbitration agreements with employees – a new version of a bill that prior Governor Jerry Brown had vetoed repeatedly while he was in office.

The bill not only prohibits mandatory arbitration agreements, but it also outlaws arbitration agreements in which employees must take an affirmative action to escape arbitration, such as opting out.

And as the statute is written in broad terms that extend to waivers of statutory “procedures,” it appears to ...

In the fall of 2016, before the Obama administration increases to the minimum salary were set to go into effect (spoiler alert – they didn’t!), we wrote in this space about the challenges facing employers in addressing those expected changes: “Compliance with the New DOL Overtime Exemption Rule May Create Unexpected Challenges for Employers.”

As we wrote earlier this week, the current administration’s changes are set to go into effect on January 1, 2020: “U.S. Department of Labor Issues Long-Awaited Final Rule Updating the Compensation Requirements for the FLSA’s ...

There may soon be a fair number of big rig trucks for sale in California, as well as computers, desks and other material investments of persons who determine that they may no longer offer their services as independent contractors and must shut down their small businesses, a potential repercussion of new legislation intended to restrict the use of independent contractor status in the state.

Whether those and other practical consequences of the hurried passage of the new law were considered by the California legislature is unclear.

But the eleventh-hour exemptions that were extended ...

A number of years ago – 20 perhaps – someone shared with me a study that was conducted by a major university where participants were asked which professions they most distrust.

My recollection is that it was conducted at Duke University, but I could be wrong.  (I do remember distinctly that there were 998 participants in the survey, which still seems like a peculiar number to me.  They couldn’t find two more people?)

In any event, one spot from the top of the list of most distrusted professions (or the bottom, depending on your perspective) was used car salespersons.  Yes, I know, a ...

For decades, employers have rounded non-exempt employees’ work time when calculating their compensation.  Maybe they have rounded employee work time to the nearest 10 minutes, maybe to the nearest quarter hour, but they done it and, generally, the courts have approved of it.

But the question employers with time-rounding policies should ask themselves today is this:  Why are we still rounding our employees’ time?

If your answer to that question is Because we have always done it, or Because someone told us it is lawful, it might be time to rethink the issue.

(And if your answer is ...

While it may be true that employees rarely even look at their wage statements, there is one group of persons who certainly do – plaintiffs’ lawyers.  Or, more precisely, California plaintiffs’ lawyers.

And after a stunning $102 million award against Wal-Mart for wage statements that the court concluded did not fully comply with California’s onerous wage statement laws, California plaintiffs’ lawyers are likely to look at their clients’ wage statements even more closely – and to file even more class action lawsuits alleging that employers’ wage statements failed ...

In April 2018, the California Supreme Court issued its long-awaited opinion in Dynamex Operations West, Inc. v. Superior Court, dramatically changing the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”). In so doing, the Court held that there is a presumption that individuals are employees, and that an entity classifying an individual as an independent contractor bears the burden of ...

As we wrote in this space just last week, the U.S. Department of Labor (“DOL”) has proposed a new salary threshold for most “white collar” exemptions.  The new rule would increase the minimum salary to $35,308 per year ($679 per week) – nearly the exact midpoint between the longtime $23,600 salary threshold and the $47,476 threshold that had been proposed by the Obama Administration.  The threshold for “highly compensated” employees would also increase -- from $100,000 to $147,414 per year.

Should the proposed rule go into effect – and there is every reason to believe it ...

For years, EBG’s free wage-hour app has put federal, state and local wage-laws at your fingertips.

One of the most significant developments in wage-hour law in recent years has been the implementation of new state and local minimum wages, many of which just went into effect on January 1, 2019.

EBG’s free wage-hour app includes those new 2019 minimum wages.

Downloading the app couldn’t be easier.

Available without charge for iPhone, iPad, and Android devices.

On July 26, 2018, the California Supreme Court issued its long-awaited opinion in Troester v. Starbucks Corporation, ostensibly clarifying the application of the widely adopted de minimis doctrine to California’s wage-hour laws. But while the Court rejected the application of the de minimis rule under the facts presented to it, the Court did not reject the doctrine outright. Instead, it left many questions unanswered.

And even while it rejected the application of the rule under the facts presented, it did not address a much larger question – whether the highly individualized ...

On July 18, 2018, the Ninth Circuit issued a published opinion in Rodriguez v. Taco Bell Corp., approving Taco Bell’s on-premises meal periods for employees who choose to purchase discounted food.

Like many food services employers, Taco Bell offers discounts on its food to its employees. And it requires that employees consume such food on premises.

In Rodriguez, employees contended that requiring employees to consume discounted meals on premises results in a meal period or unpaid wage violation, arguing that employees must be relieved of all duty and must be permitted to leave the ...

More than 7 months after hearing oral argument on an issue that will affect countless employers across the country – whether employers may implement arbitration agreements with class action waivers -- the United States Supreme Court has issued what is bound to be considered a landmark decision in Epic Systems Corp. v. Lewis (a companion case to National Labor Relations Board v. Murphy Oil USA and Ernst & Young LLP v. Morris), approving the use of such agreements.

The decision will certainly have a tremendous impact upon pending wage-hour class and collective actions, many of which ...

On April 30, 2018, the California Supreme Court issued its long-awaited opinion in Dynamex Operations West, Inc. v. Superior Court, clarifying the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”). In so doing, the Court held that there is a presumption that individuals are employees, and that an entity classifying an individual as an independent contractor bears the burden of establishing that such a ...

In 2012, we were proud to introduce our free wage and hour app.  Over the years, thousands of clients and potential clients have downloaded the app on their mobile phones and tablets.

For 2018, we are pleased to introduce a brand-new version of the app, available without charge for iPhone, iPad, and Android devices. See our press release here.

Importantly, the 2012 and 2014 versions of the app have been retired.  If you had downloaded them, you will need to download the new version.

The new version of the app includes wage-hour summaries for all 50 states, as well as D.C. and Puerto ...

In a case of first impression that may have a significant impact upon wage-hour class actions in California, the California Court of Appeal has held that “joint employers” are not vicariously liable for each other’s alleged meal period violations.

In reaching this conclusion, the Court of Appeal affirmed an award of summary judgment in favor of a temporary staffing company in a class action where the plaintiffs sought to hold the staffing company liable for alleged meal period violations they alleged they suffered while working for its client.

The decision provides something ...

On October 14, 2017, California Governor Jerry Brown signed Assembly Bill 1701, which will make general contractors liable for their subcontractors’ employees’ unpaid wages if the subcontractor fails to pay wages due.  The new law will go into effect on January 1, 2018.

Specifically, section 218.7 has been added to the Labor Code. Subdivision (a)(1) provides the following:

For contracts entered into on or after January 1, 2018, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other ...

Because of concerns about employee theft, many employers have implemented practices whereby employees are screened before leaving work to ensure they are not taking merchandise with them.  While these practices are often implemented in retail stores, other employers use them as well when employees have access to items that could be slipped into a bag or a purse.

Over the last several years, the plaintiffs’ bar has brought a great many class actions and collective actions against employers across the country, alleging that hourly employees are entitled to be paid for the time they ...

As courts continue to address whether and when employers can compel employees to arbitrate their wage-hour claims, the California Court of Appeal has issued a decision in Cortez v. Doty Bros. Equipment Company, No. B275255, ___ Cal. App. 5th ___ (2017), that should be of great help to many California employers with collective bargaining agreements (“CBAs”) that include arbitration provisions.

The United States Supreme Court and multiple California courts have held that a CBA may require arbitration of an employee’s statutory claims only if the CBA includes a “clear and ...

Earlier today, the Ninth Circuit issued its opinion in cases involving the Department of Labor’s (“DOL”) “80/20 Rule” regarding what is commonly referred to as “sidework” in the restaurant industry.  Agreeing with the arguments made by our new colleague Paul DeCamp, among others, the Ninth Circuit issued a decidedly employer-friendly decision.  In so doing, it disagreed with the Eighth Circuit, potentially setting the issue up for resolution by the United States Supreme Court.

As those in the restaurant industry are aware, restaurant workers and other tipped ...

Not all new laws go into effect on the first of the year. On July 1, 2017, new minimum wage laws went into effect in several locales in California. Specifically:

• Emeryville: $15.20/hour for businesses with 56 or more employees; $14/hour for businesses with 55 or fewer employees.
• City of Los Angeles: $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
• Los Angeles County (unincorporated areas only): $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
• Malibu: $12/hour for ...

It is no secret that California’s wage-hour laws are complex and often raise questions that employers, employees and the courts struggle with. As we wrote here more than a year ago, faced with questions regarding California’s ambiguous “day of rest” laws, the Ninth Circuit Court of Appeals threw up its hands and asked the California Supreme Court to clarify those laws.

Among the questions to be answered was one that impacts a great many employers, particularly those in the retail and hospitality industries – does the requirement that an employee be provided a “day of ...

A new “comp time” bill that would dramatically change when and how overtime is paid to private sector employees in many, if not most, jurisdictions has passed the House of Representatives.  And unlike similar bills that have been considered over the years, this one might actually have a chance of passing. If it can get past an expected Democratic filibuster in the Senate, that is.

“Comp time” – short for “compensatory time” – is generally defined as paid time off that is earned and accrued by an employee instead of immediate cash payment for working overtime hours.

Persons who live and work outside of California, including employment attorneys and the most seasoned of human resources personnel, are often confounded when they first learn about California’s Private Attorneys General Act (“PAGA”).  And, for many, the first they learn about PAGA is when a PAGA lawsuit has been filed against their company.

The same series of questions and answers often follow:

A single individual can file a lawsuit against an employer alleging that all employees were subjected to certain violations of the California Labor Code?

Yes.

Even if there are ...

On January 13, 2017, the United States Supreme Court granted certiorari to hear three cases involving the enforceability of arbitration agreements that contain class action waivers.

Whether such agreements are enforceable has been a hotly contested issue for several years now, particularly in cases involving wage-hour disputes.

The Fifth Circuit has held that such waivers can be enforceable (NLRB v. Murphy Oil, Inc.), joining the Second and Eighth Circuits in that conclusion. The Seventh (Epic Systems, Inc. v. Lewis) and Ninth Circuits (Ernst & Young LLP v. Morris) have held that ...

We have written more than a few times here about the new Fair Labor Standards Act (“FLSA”) overtime rules that were scheduled to go into effect on December 1, 2016, dramatically increasing the salary threshold for white collar exemptions.

Most recently, we wrote about the November 22, 2016 nationwide injunction entered by a federal judge in Texas, enjoining the Department of Labor (“DOL”) from enforcing those new rules on the grounds that the DOL had overstepped its bounds.

The injunction threw the new rules into a state of limbo, as employers and employees alike were left to ...

We have written often in the past several months about the new FLSA overtime rules that were scheduled to go into effect in little more than a week, dramatically increasing the salary thresholds for "white collar" exemptions and also providing for automatic increases for those thresholds.

In our most recent piece about the important decisions employers had to make by the effective date of December 1, 2016, careful readers noticed a couple of peculiar words -- "barring ... a last-minute injunction."

On November 22, 2016, a federal judge in the Eastern District of Texas entered just such ...

Barring some unexpected development or a last-minute injunction in one of the lawsuits challenging the new Department of Labor overtime rules, the new salary thresholds for white collar exemptions will go into effect on December 1, 2016.

That, of course, is now less than two weeks away.

We have written at length about those new rules, as well as the critical decisions that employers will need to make to comply with them:

• Whether to increase employees’ salaries to meet the new thresholds;
• Whether to reclassify employees as non-exempt and begin to pay them hourly rates, plus overtime;

In May of this year, the U.S. Department of Labor (“DOL”) announced its final rule to increase the minimum salary for white-collar exemptions, effective December 1, 2016. With less than two months to go before that new rule takes effect, employers still have time to decide how to address those otherwise exempt employees whose current salaries would not satisfy the new rule, by either increasing their salaries or converting them to non-exempt status.

The New Salary Thresholds

Effective December 1, 2016, the salary threshold for the executive, administrative, and professional ...

In May, the Department of Labor (“DOL”) announced its final rule to increase the minimum salary for white collar exemptions.  With little more than two months to go before that new rule takes effect on December 1, 2016, employers still have time to decide how to address those otherwise exempt employees whose current salaries would not satisfy the new rule by either increasing their salaries or converting them to non-exempt status.

But some of those decisions may not be easy ones.  And they may create some unexpected challenges, both financially and operationally.

New Salary ...

Nearly a year after the Department of Labor (“DOL”) issued its Notice of Proposed Rulemaking to address an increase in the minimum salary for white collar exemptions, the DOL has announced its final rule, to take effect on December 1, 2016.

While the earlier notice had indicated that the salary threshold for the executive, administrative, and professional exemption would be increased from $23,660 ($455 per week) to $50,440 ($970 per week), the final rule will not raise the threshold that far.  Instead, it will raise it to $47,476 ($913 per week).

According to the DOL’s Fact Sheet,

On May 2, 2016, the Ninth Circuit issued a published opinion in Corbin v. Time Warner Entertainment-Advance/Newhouse Partnership. The Corbin Court best summarized the action in its opening sentence: “This case turns on $15.02 and one minute.” The “$15.02” represented the wages the plaintiff claimed he lost over a period of time as a result of the company’s neutral time-rounding policy. And the “one minute” represented the amount of off-the-clock time that the plaintiff worked, which the Court held was de minimis and, therefore, not compensable.

Federal and ...

We have written previously about California’s obscure wage rule pertaining to “suitable seating,” which requires that some employers provide some employees with “suitable seating” in some circumstances if the “nature of the work reasonably permits it” – and exposes employers to significant penalties if they do not do so.

Faced with a dearth of guidance on the obscure rule and with a wave of class actions following the discovery of the rule by the plaintiffs’ bar, the Ninth Circuit Court of Appeals threw up its hands last year and asked the California Supreme Court ...

On March 22, 2016, the United States Supreme Court issued its much anticipated decision in Tyson Foods, Inc. v. Bouaphakeo, a donning and doffing case in which a class of employees had been awarded $2.9 million following a 2011 jury trial that relied on statistical evidence. (A subsequent liquidated damages award brought the total to $5.8 million.)

In a 6-2 opinion, the Supreme Court affirmed that award.  While the Supreme Court’s decision may not have been the outcome many were expecting, the Court did not issue a broad ruling regarding the use of statistical evidence in class ...

It is often said that no employer is immune from a wage-hour lawsuit. That no matter how diligent an employer is about complying with wage-hour laws, there is nothing to prevent an employee from alleging that it did not comply in full with the law, leaving it to the attorneys and the court to sort things out. Perhaps the best evidence that no employer is immune from a wage-hour lawsuit came on Thursday, March 17, 2016. That is the date that history will always reflect that a wage-hour lawsuit was filed against Betty White.

Yes, that Betty White. Ninety-four year old Betty White. Sue Ann ...

[caption id="attachment_2607" align="alignright" width="300"] Infographic by DOL Wage and Hour Division.[/caption]

The Department of Labor’s Wage and Hour Division, which is charged with enforcing federal wage laws, has just issued its latest newsletter.

Included in the newsletter is the Division’s presentation of a variety of statistics relating to its efforts.

Among the statistics reported by the Division:

• It has assisted more than 1.7 million workers since 2009.
• It has recovered approximately $1.6 billion for workers since 2009.
• It recovered more than $246 million ...

More than a few media sources have reported on the March 10, 2016 wage-hour “victory” by a class of Taco Bell employees on meal period claims in a jury trial in the Eastern District of California.  A closer review of the case and the jury verdict suggests that those employees may not be celebrating after all -- and that Taco Bell may well be the victor in the case.

The trial involved claims that Taco Bell had not complied with California’s meal and rest period laws. The employees sought meal and rest period premiums and associated penalties for a class of employees that reportedly ...

In recent years, employers across the country have faced a great many class action and collective action lawsuits in which employees have alleged they are entitled to be paid for the time spent in security screenings before they leave their employers’ premises – but after they have already clocked out for the day.  Retailers have been particularly susceptible to these claims as many require employees to undergo “bag checks” before they depart their stores to ensure that employees are not attempting to carry merchandise out in their bags or coats.

In late 2014, in Integrity ...