PASCO 2012 Wage & Hour Update

Agendag

A Warning, Then AnotherA Warning, Then AnotherWage Theft Prevention ActBrinker & Other StuffBrinker & Other StuffFrom The Governor’s Desk

A Warningg

Another Warningg

Wage Theft Prevention Act (1)g ( )

Labor Code §2810.5

Provides employees notice of basic employment information

Notice must be given to all new non-exempt hires in private sectorUnnecessary if CBAUnnecessary if CBANotice of change must be within 7 days (wage statement is ok)

Wage Theft Prevention Act (2)g ( )

Labor Commissioner Guidancehttp://www.dir.ca.gov/dlse/Governor_signs_Wage_Theft_Protection_Act_of_2011.html

Template (revised 5/4/12)

FAQ l FAQ examples: #6 Don’t have to use DLSE’s template

#7 Must be a stand alone document

#8 Can’t be waived

#9 All hourly and piece rates must be on notice

#10 Employee signature not required, but note it#10 Employee signature not required, but note it

#18 “Pay” = wages on notice & must include all compensation

including commissions

#25 N l i#25 No annual requirement

Wage Theft Prevention Act (3)g ( )

Brinker – Meal

Provide unpaid 30-minute meal break to employees who work more Provide unpaid 30 minute meal break to employees who work more than five hours in a day

Duty-free (no work expected)

F t l i Free to leave premises

Must start before the end of the 5th hour of workE.g., 8:00 am – 4:00 pm shift

Must start lunch by 12:59 pm

Early lunch ok, late lunch not ok

W k h h l h? Work through lunch? Employer choice = penalty

Employee choice = straight pay

Brinker – Rest

Authorize and permit paid 10-minute rest period for every four (4) hours worked or major fraction thereofmajor fraction thereof

3.5 hrs – 6 hrs = one 10-minute break

6 hrs – 10 hrs = two 10-minute breaks

10 hrs – 14 hrs = three 10-minute breaks

Take in the middle of each work period to the Take in the middle of each work period to the extent practicable to do so

Deleon v. Verizon Wireless, LLC,

Advanced commissionsAdvanced commissionsVesting process/ chargeback periodSensible, explicit planSe s b e, e p c p a“Can you hear me now?”

Aleman v. Airtouch

Reporting-Time Pay Split-Shift Compensation

Christopher v. Smithkline Beechamp

Ph ti l l / d t ilPharmaceutical sales reps / detailersOutside sales exemptionSelling v. promotingCA v. DOL

Nicholas Laboratories v. Chen

Reimbursement for Legal Fees under Labor Code §2802

Nicholas sued its former employee Chen for among other things breach of contract and conversion

Chen cross complained for indemnity under Chen cross-complained for indemnity under

Labor Code §2802 for the costs of defending

the suit

Court found in favor of Chen on complaint

and Nicholas on cross-complaint

Legislature did not intend to provide indemnification for first party disputes between employer and employee

“American Rule” applies – each party to a lawsuit must ordinarily pay his own attorney fees

From the Governor’s Desk

AB 2103 – Explicit Mutual Wage Agreements Labor Code §515 (Amended)Labor Code §515 (Amended)

This law is intended to overturn the case of Archiga v. Dolores Press (2011) 192 Cal App 4th 567Cal.App.4th 567Employer and employee can agree on a set salary per week for non-exempt employees but it cannot encompass overtimeencompass overtimeOvertime must be paid and tracked separately

SB 1255 – Injury “Presumed” For Wage Statement Violations Labor Code §226(e)(2) (Amended)Labor Code §226(e)(2) (Amended)

Employees can recover Employees can recover damages if they suffer an injury for wage statement violations

“Injury” is presumed for most failures to comply

ith th t t twith the statute

But, a “knowing and intentional” failure does intentional failure does not include an isolated and unintentional payroll error due to a clerical or http://www.dir.ca.gov/dlse/PayStub.pdf

inadvertent mistake

Labor Code §2751W itt C i i A t J 1 2013Written Commission Agreements – January 1, 2013

All commission agreements must be in writingg gSigned copy must be given to the employeeEmployer must obtain a receipt indicating employee has copyIf employee continues to work under the terms of an expired contract, the contract will continue until a new agreement is signed or the employment is terminatedg p y

“Commission” Defined:

Commission wages are compensation paid to any Commission wages are compensation paid to any person for services rendered in the sale of such employer’s property or services and based p y p p yproportionately upon the amount or value thereof

“Commission” Does Not Include:AB 2675 L b C d §2751( )AB 2675 – Labor Code §2751(c)

Short term productivity bonuses such as are paid to retail Short term productivity bonuses such as are paid to retail clerksTemporary, variable incentive payments that increase, b t d t d t d th itt t tbut do not decrease, payment under the written contractBonus or profit-sharing plans unless there has been an offer by the employer to pay a fixed percentage of sales y p y p y p gor profits as compensation for work to be performedThe law is not intended to change California’s view on bonuses which is defined by DLSE as “Money promised to bonuses, which is defined by DLSE as Money promised to an employee in addition to the monthly salary, hourly wage, commission or piece rate usually due as

ti ”compensation”

Here Is What Should Be In Your C i i A tCommission Agreements

The object of the law is to make it crystal clear what the employee will be earning and when it will be paidAgreements should include:

The term of the agreement and expiration date, if anyHow base pay, if any, is calculated (annual salary, hourly wage, advance draw, etc.)The method of calculating the employee’s commissionWhen that commission is earned and when it is paid to the employeeWhat conditions must be met to earn the commission What happens to unpaid and/or unearned commissions when the What happens to unpaid and/or unearned commissions when the employment is terminatedWhat else?

You should review with your legal counsel before implementingYou should review with your legal counsel before implementing

Consequences For Not Having Written C i i A t?Commission Agreement?

There are no penalties for noncompliance, but p p ,employers could face potential claims under the following statutes:

PAGA (Private Attorney General Act)Unfair competition claims under Business and Professions C d §17200Code §17200

AB 2674 – Right To Inspect Employment RecordsLabor Code §226 (Amended)Labor Code §226 (Amended)

Wage StatementsWage Statements

Employers required to keep copies of itemized wage copies of itemized wage statements for 3 yearsCopy can be a duplicate or Copy can be a duplicate or computer-generated record that shows all of the information that existing law requires to be in the itemized statement

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j li O i l

About Your Presenter

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Rooted in the wine regions of Napa and Sonoma, DP&Fprovides full service legal representation to all manner ofbusinesses and individuals throughout California, the UnitedStates and abroad. The Firm’s major practice areas includealcohol beverage law business and corporate dealings land

g g p , p gcourt proceedings.

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EMAIL MR. WALSH at: gwalsh@dpf-law.comGreg received his B.S. while double-majoring in Journalismand Sociology at the University of Oregon. He earned his lawdegree from University of California, Hastings College of theLaw, where he served as Senior Executive Editor of theCommunications And Entertainment Law Journal. Greg is

fNAPA COUNTY SONOMA COUNTY admitted to practice in California, Massachusetts, and severalfederal jurisdictions.

Greg is an avid fan of the Rose Bowl Champion OregonDucks. He and his family live in Sebastopol.

NAPA COUNTY

1455 First Street, Suite 301

Napa, CA 94559T: 707.252.7122F 707 255 6876

SONOMA COUNTY

50 Old Courthouse Square, Suite 200

Santa Rosa, CA 95404T: 707.524.7000F 707 546 6800F: 707.255.6876 F: 707.546.6800

THANK YOU!THANK YOU!

PASCO 2012 Wage & Hour Update