1. Top 5 Mistakes Charter Schools Make In Paying Their EMployees
March 21, 2017
24th Annual California Charter Schools Conference
Wendy L. Tucker, Esq.
Procopio, Cory, Hargreaves and Savitch LLP
525 B Street, Suite 2200, San Diego, California 92101

2. Why is Wage and Hour A Concern?
Change In Labor Commissioner’s Position on Charter Schools
New Court Decision
Huge Financial Impact

3. Error # 1 - Misclassifying Employees
Exempt v. Non-Exempt
Two Part Test
Wages
Monthly salary of $3,640/$3,466.67
Duties
JOB TITLE DOESN’T MATTER!
California Wage Order
Professional – credentialed, engaged in teaching.
Executive – true management, supervising at least 2 employees, hires/fires, etc.
Administrative – works on management policies, or administration of school or department/subdivision thereof.

4. Most Common Misclassifications
Non-credentialed teachers
Credentialed employees performing non-credentialed duties
Highly paid employees

5. Hypothetical
Mr. Johnson is a gym teacher at a charter school who also coaches a school sports team at night and on the weekends. He does not have a credential. He is paid a salary of $5,000 per month. The School fires Mr. Johnson because he’s continually late or absent. Angry over being fired, Mr. Johnson files a wage claim.

6. Exposure Unpaid Overtime - 5 hours week $12,980,77
($28.85 x 1.5 x 5 hours x 20 weeks for 3 years)
Penalties for Failure to Pay Overtime $4,000.00
Penalty for missed meal and rest breaks ($28.85 x 2 hours per day x 3 days a week x 30 weeks x 3 years) $15,579.00

7. Exposure Penalties for Inaccurate Wage Statements $4,000.00
Waiting Time Penalties $6,924.00
School’s Attorney’s Fees $50,000.00
Employee’s Attorney’s Fees $50,000.00
GRAND TOTAL: $143,483.77

8. Error #2 - Calculation of Daily or Hourly Rate For Exempt Employees
Payment of Partial Weeks
Payment for use of Sick Leave or Vacation
Calculation of Final Pay

9. Education Code Does Not Apply!
Cannot divide contract salary by number of work days
Formula: Annual salary divided by 52 weeks = weekly rate divided by 40 hours per week = hourly rate
To get annualized salary, multiply monthly salary by twelve
Daily rate” in charter schools is not the same as in school districts.
School districts - Education Code Section 45041; 29 CFR §
Charter schools - DLSE Enforcement Manual; Labor Code § 515(d).

10. Error # 3 - Most Common Pay Errors For Hourly Employees
Timekeeping
Meal and Rest breaks
Stipends
Meetings
Travel
One employee with two jobs
Split Shift

11. Error # 4 – Improper Pay-Related Timing Requirements
Monthly v. Semi-Monthly Payroll
Timing of Pay Periods
Date of Payday
Date of Final Paycheck
Non-Exempt Employees – Twice monthly, generally. May also choose to pay weekly, biweekly or semimonthly by designating paydays in advance but payment must nevertheless be made within seven (7) calendar days of the end of the pay period. Education Code authorizes school districts (not charter schools) to provide once monthly pay for classified employees.
Exempt Employees – One monthly pay authorized by Labor Code and Education Code.

12. Hypothetical
Charter School pays its teachers on an twelve month basis from August through July. Charter School decides not to renew the contracts of nine teachers. Charter school pays them their last paycheck in July per the twelve-month schedule. Problem?

13. Gateway Community Charters v. Heidi Spiess
Charter School violated requirement to pay all wages due and owing upon termination. Spiess was awarded: $640 Wages $128 Liquidated Damages $ Interest $8,538 Waiting Time Penalties Total: $9,411.20

14. Error # 5 – Improper Deductions and Offsets
Mistakes in pay
Lost or unreturned equipment
Employee loans
Advances on Sick Leave or Vacation Pay
Deductions from Final Pay
Withholding of Final Pay

15. Questions? Please feel free to contact me.
Thank you!
Questions? Please feel free to contact me.
Wendy L. Tucker, Esq. Partner