Wage & Hour Class Actions – 12 Danger Zones By: Joseph A Wage & Hour Class Actions – 12 Danger Zones By: Joseph A. Goldstein, Esq. THE GOLDSTEIN LAW FIRM josephgoldsteinesq@gmail.com (310) 553-4746 (310) 282-8070 FAX

Wage & Hour Class Action & PAGA Claims: A Brief Background Over 40,000 Wage and Hour Class Actions have been filed in the California Courts. There are two (2) parts to a wage and hour class action. Part I is for the Court or arbitrator to determine whether the claims should be certified for class action treatment, the class certification process.

Wage & Hour Class Action & PAGA Claims: A Brief Background Part II of the class action process, if the class is certified, is a determination on the merits of the case. Whether the plaintiff can prove that the defendant employer violated wage and hour laws causing damage to members of the class.

Understanding Wage & Hour Class Actions - The Elements Needed for Class Certification. Numerosity of the Potential Class. Common Questions of Law or Fact Over Questions of Individual Members of the Putative Class. – What this means in practice. A Proper Class Representative. Superiority and Manageability of Plaintiff Claims To Be Litigated as a Class Action. The elements needed to defeat Class Claims on the Merits. Some examples.

Understanding PAGA Claims: A Class Action without having to prove the elements. PAGA action can only be litigated in Court. PAGA action entitles the Plaintiff to 25% of the penalties collected with 75% going to the State of California. PAGA claims are decided on the merits. PAGA penalties can be mitigated by a judge.

Preventive Measures: Wage & Hour Audit Have a wage and hour audit done of your wage and hour practices by a competent employment lawyer who knows what to look for and whose findings are protect by law. The wage and hour audit done by a competent employment lawyer should examine key areas of wage and hour vulnerability and provide written recommendations on areas that need to be corrected, if any.

Preventive Measures: Employment Arbitration Agreements Employment Arbitration Agreements should be utilized by employers. Under the Federal Arbitration Act, for example, employers who engage in interstate commerce, can obtain wage and hour class action waivers, but not waivers of PAGA claims.

Wage & Hour Class Actions – 12 Danger Zones (1) Misclassification of employees: (a) Misclassification of employees as salaried exempt even though they do not meet the tough CA definition for exemption of executive/supervisory employees, professional employees, administrative employees. (b) Misclassification of employees as exempt outside sales employees.

Wage & Hour Class Actions – 12 Danger Zones (c) Misclassification of employees as independent contractors. Labor Code §2750.5; §2753; §226.8 (b) – penalty $5,000 to $15,000; (c) pattern or practice not less than $10,000 and not more than $25,000 for each violation. Liability of person who advises employer to treat employee as an independent contractor.

Wage & Hour Class Actions – 12 Danger Zones (2) Failure to pay overtime over 8 and over 40 hours. (3) Paying for overtime at straight time in cash or failing to calculate the regular rate of pay upon which overtime is based.

Wage & Hour Class Actions – 12 Danger Zones (4) Failing to keep accurate time and payroll records. (5) Failing to provide duty free meal periods and rest breaks. (6) Failing to reimburse employees for business related expenses under Labor Code§ 2802. (7) Failing to pay employees all monies due when they are fired and or when they resign. (8) Donning and doffing cases.

Wage & Hour Class Actions – 12 Danger Zones (9) Knowing that employees work off the clock without paying them. (10) Automatic deductions for meal periods. (11) Tight schedules for drivers and other employees that do not allow them to regularly take meal and rest periods. (12) Improperly making someone an independent contractor who as a matter of law is an employee.

Additional Areas of Potential Employer Vulnerability? Paying an employee a flat amount for expense reimbursement, regardless of the actual expenses incurred by employees in the performance of their work. Paying employee a daily flat rate that includes overtime. Failing to pay employees in a timely manner when they are fired or quit. Using improper rounding up and rounding down times in calculating work time to be paid to the employee.

Additional Areas of Potential Employer Vulnerability? Failing to properly calculate an employee’s hourly wage by including bonuses earned through productivity into the hourly wage. Using improper rounding up and rounding down times in calculating work time to be paid to the employee. Failing to make certain employees are permitted a meal period of at least 30 minutes without any work and two 10 minute rest periods on the clock in an 8 hour day.

The 10 Myths of Wage & Hour Law (1) If you receive a salary you are not entitled to be paid overtime.

The 10 Myths of Wage & Hour Law (2) If I do not approve the work you’ve performed, but you performed the work that I know, or should have known, you were performing, I don’t have to pay you for the work.

The 10 Myths of Wage & Hour Law (3) We are a national company that complies with the Fair Labor Standards Act and that preempts state law, including CA law.

The 10 Myths of Wage & Hour Law (4) The employees fill out their own time cards and the employee and their supervisor sign the time cards. This will protect my company from all wage and hour claims.

The 10 Myths of Wage & Hour Law (5) The employees decided to work four (4) 10 hour days years ago, so we don’t pay them for overtime after 8 hrs. a day occurring during the four (4) days.

The 10 Myths of Wage & Hour Law (6) We know employees who have home offices where they perform work for the company. However, because we have not approved employees working from home offices we don’t have to pay for their home offices. We do not have to reimburse them for the equipment the employee uses at their home office to perform work for the company.

The 10 Myths of Wage & Hour Law (7) We are a small company. The CA Wage & Hour Laws don’t apply to us. Our people take their lunches anytime during the day and rest periods when they want to take a break.

The 10 Myths of Wage & Hour Law (8) It doesn’t matter how much time you spend performing supervisory duties to be exempt from overtime, if you hire, fire or direct two or more employees you are exempt.

The 10 Myths of Wage & Hour Law (9) Employees are entitled to be reimbursed for all business expenses regardless of whether they were reasonable or a necessary choice.

The 10 Myths of Wage & Hour Law (10) We can wait to pay an employee who is fired until the next regular payday and not pay an employee who is fired on Saturday or Sunday, the day they were fired because the Accounting Office is closed and we can’t get a check issued.

Settlement Strategies The Consequences of Spending More on “Settling” Wage and Hour Class Actions and PAGA claims then on Defending Against Wage and Hour Class Actions and PAGA claims Can Adversely Affect an Employer for Years.

Questions & Answer Period Joseph A. Goldstein, Esq. THE GOLDSTEIN LAW FIRM josephgoldsteinesq@gmail.com (310) 553-4746 (310) 282-8070 FAX