Category: Unpaid Overtime


Obama “Time Card” overtime rule faces new challenges

A new bill was introduced on September 29th by Republican senators, which would make changes to the overtime bill introduced by the Obama administration back in July. The Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (or H.R. 6094) passed in the House of Representatives 246 to 177 and will delay the Department of Labor final rule until July 2017. The changes to current overtime laws were supposed to go into effect on December 1st , but the updated bill seeks to spread out these changes over the next 5 years, rather than everything going into effect all at one time. Not only would the bill raise the overtime threshold gradually from $23,600 to $47,476 through the 5 years, it would also require an “independent government watchdog study” of the rule after it’s first year in effect. If the rule is found to negatively impact “American workers and our economy, non-profits—including colleges and universities—along with state and local governments and many Medicaid- and Medicare-eligible facilities such as nursing homes or facilities serving individuals with disabilities will be exempt from any further increases under the rule.” Additionally, it would prevent a possible threshold raise in 2017, as well as the automatic increases that were supposed to occur every 3 years.

Senators Lamar Alexander (R-TN), Susan Collins (R-ME), James Lankford (R-OK), Tim Scott (R-SC), and Jeff Flake (R-AZ) introduced the legislation in fear that the sudden doubling of the salary threshold would be too extreme, and therefore detrimental to various employers. Senate Labor Committee Chairman Alexander states, “the Overtime Reform and Review Act makes urgently needed modifications to the administration’s rule, which will otherwise on December 1 force changes in overtime pay that are too high, too fast and will result in employers, non-profits, colleges and others cutting workers’ hours, limiting their workplace benefits and flexibility, as well as costing students more in tuition….This is a moderate, bipartisan approach that should be able to pass both Houses before December.” Senator Collins adds, “The Department of Labor’s overtime rule will be extremely damaging to small businesses, universities, nonprofit organizations, and service industries, particularly in rural states like Maine…While it is time for a reasonable update in the threshold, doubling the threshold overnight will hurt workers and employers alike and limit the services provided by nonprofits and educational institutions. Our legislation takes a common-sense, bipartisan approach that would phase-in an increase to the overtime threshold over five years, providing businesses with additional time to prepare for this major federal rule change.” Similarly, Senator Lankford states, “This federal overtime rule is devastating for small businesses, colleges and nonprofits all across America, but particularly in states with a low cost-of-living…The economic realities and regional cost of living differences that exist throughout the country were completely ignored in favor of yet another one-size-fits-all approach by this administration. I have been told from small business owners, colleges and nonprofits that this federal overtime rule will quickly lead to job loss, increased tuition, and the reduction of charitable services. I think this rule should be pulled entirely, but at least its implementation should be delayed or slowed.”

A copy of the Overtime Review and Reform Act has not yet been made available to read, but proponents of the bill (i.e. employees) will surely be disappointed by its terms. Meanwhile, letters of support for the revised bill and its originators have been pouring in. The White House issued a Statement of Administration Policy on September 27th, strongly opposing H.R. 6094. The statement gives facts supporting the necessity of the December 1st implementation. Additionally, the statement clearly and in no uncertain terms indicates that if the bill reaches President Obama’s desk, he will veto it. Perhaps the most powerful text in the statement reads, “While this bill seeks to delay implementation, the real goal is clear—delay and then deny overtime pay to workers. With a strong economy and labor market, now is a good time for employers to provide these essential protections for workers, who cannot afford to wait.”





Overtime Pay for Farm Workers in California

Last week marked the end of the “80-year-old practice of applying separate labor rules to agricultural laborers” in California, after Governor Jerry Brown passed a law implementing updated overtime wage pay changes for farmworkers. The bill passed with a vote of 44-32 in the State Assembly, which brought an uproarious applause by farm workers present at the time. This is a groundbreaking new law for California, a state which leads the way in efforts to protect the rights of farmworkers. California has the highest number of farmworkers in the country (totaling over 800,000) many of whom work over 60 hours per week. We discuss the issues around the new laws and the impact it will have in relation to overtime for farmworkers in California.

Currently, California law mandates that farmworkers are entitled to overtime pay after their tenth hour work of work per day, whereas other hourly employees are paid an overtime rate after their eighth hour of work. The last time a change was executed to the law governing wages for farmworkers was in 2002. Though the last set of additions were helpful, they still fell short, as farmworkers were kept as an exempt group of employees whose hourly pay rate was different than that of most other hourly employees in California. Surely, “equal pay for equal work” is a right which should be inherent. The current California Assembly bill supports this idea, stating that “the function of the Department of Industrial Relations is to, among other things, foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment”.

Even though the law will not go into effect until 2019, it gives hope to many of the farmworkers within the state that there will be a shift in the way they are compensated and treated for their rigorous and back-breaking work. Law AB 1066 states that farmworkers will be entitled to receive overtime pay after working an eight hour shift, just like any other hourly worker within the state. Per the assembly bill, the law will be phased in from 2019-2022 for farms with more than twenty-five workers, those who employ less than twenty-five workers will have an additional three years to make the adjustment. These four and seven year phasing periods are meant to ease the burden on farm owners, while allowing employees to start getting some of the compensation they deserve. The bill does include a possible exception, which states that if an economic problem were to arise, the governor can suspend the overtime changes. This shows the degree of separation in the way that farmworkers are perceived amongst all other hourly workers.

Without even adding the possibility of the suspension, not all farm workers are happy about these new changes. Some farm owners claim the law will not be helpful for the workers, as they believe they will not be able to afford the changes. Instead, they will have to make decisions that will negatively affect the farmworkers income, rather than boost it. They anticipate that they will need to hire more workers and reduce the hours of the current workers, or else they will be faced with the decision of having to close down their farms. They claim that they will not only have to adapt to these changes, but also the new minimum wage changes happening within the next few years. It is hard to anticipate how the economy will change and how farmers will have to adapt to the constant changes, but farms now have to adhere to these stricter guidelines about how they should compensate their workers who are essential to the agricultural economy within the country and who should be paid accordingly for the work they do.

California was the first state to give farmworkers collective bargaining rights, workers compensation and unemployment service. The state also requires that employers provide rest breaks and access to water and shade. These requirements have improved the lives of countless farmworkers. Only time will tell, but hopefully these changes will bring a step-up in the way that farm laborers within the state, and perhaps around the country, are compensated for the hard work they do. What do you think this new law for overtime for farmworkers will do to the Californian economy?







Are you an employee taking legal action for the first time?

So you are a victim of your employer and wish to take legal action. You have just fallen into the category of an employee taking legal action for the first time! This can be very overwhelming, scary and stressful. This blog has been written to give you some idea on what to expect when you call us.

You must understand that being a lawyer is tough because in an ideal world, the job wouldn’t exist. On the flip side, it’s just as difficult being a prospective client or in need of legal services. No one WANTS to be in that position. But, the need does arise and so the legal services industry continues.

Something we hear all the time from prospective clients who are employees taking legal action for the first time, is that they were very nervous about calling us in the first place. This completely understandable! From the stereotype of the ruthless attorney to how legal action is portrayed in popular culture, there are tons of misconceptions about the process. We’re here to set the record straight, and help to put your mind at ease about what to expect.

  • Call (don’t drop in) the law firm to speak with someone about getting started.
    • Law firms are busy places. People are working hard on upwards of hundreds of cases at a time, depending on the size of the firm. All firms operate differently, but many places do not accept walk in clients for attorney consultation. Instead, you would want to call the firm ahead of time, and let them know you are a potential client. From there someone can assist you, usually with a short, confidential intake process over the phone. This is necessary to get all of the important details which the attorney will be using to evaluate your potential case. This information will then be passed on to an attorney for evaluation, and if they think your case is something the firm can assist you with, you will be scheduled for an in-person consultation with the attorney.*Tip: Be sure to ask ahead of time if there will be a consultation fee involved. Here at Aegis Law Firm, your initial consultation with the attorney is free!
  • A good attorney cares about customer service.
    • It’s one thing to be great at public speaking, convincing juries, or quoting the law off the top of your head. But another crucial part of what makes a great attorney is their ability to connect with the client. When it comes down to it, we are working for you! A lot of people think it’s the other way around. We are proud to serve you, and grateful that you chose our firm for assistance. For this reason, most attorneys are very approachable and want to make the process as easy for you as possible. So don’t sweat that initial meeting – we don’t bite!*Tip: Check out a firm’s web presence to get a sense of their customer service rating. Their website probably includes bios to let you know who you may be working with.
  • How the firm gets paid – hourly or contingency?
    • Typically, firms receive payment from one of two structures: hourly billing, or contingency. Hourly billing is pretty self-explanatory – the firm sets an amount to charge per hour and depending on how much time is spent on a matter that is how much the client pays. Contingency is when the firm does not take any money up front, and payment comes from a settlement obtained at the end. Either way, the amount is mutually agreed upon at the beginning of services, and included in a retainer document that both parties sign.
  • Will I have to go to court?
    • Each case is different, so unfortunately there’s no blanket answer to this question. Many people want to stand up for themselves, but are scared of having to participate in a trial or other court proceedings, especially employees taking legal action for the first time. What can be said, is that going to trial is usually the very last option. Most cases are settled before the lawsuit is even filed with the courts, which is beneficial to both sides. There are several avenues that attorneys may take in order to settle your case with the best result. However, in the event that you do need to go to court, your attorney will work closely with you to prepare you for any appearances you would need to make or address any concerns you have.

So there you have it! Nothing to be scared of, right? If you are an employee taking legal action for the first time, or perhaps you may have an employment issue that you wish to take action on, give our office a call today and we would be more than happy to help you get started!

Are you eligible for overtime pay?

The Obama Administration will be raising the eligibility threshold of salaried workers qualifying for overtime. Currently, salaried workers can make as little as $23,660 per year and still be exempt from overtime pay. This translates to the portion of California law which states properly classified salaried employees can make no less than twice the minimum wage (which in California is currently set at ten dollars per hour). The new rule will raise the threshold to $47,476 per year, and will take effect on December 1st 2016. This means that any salaried employee who makes less than $47,476 per year will be eligible for overtime pay when they work more than 40 hours per week. This number will also adjust every three years to keep up with the rate of inflation. The rate will be determined by calculating the worker’s hourly rate, and multiplying it by the appropriate rate factor (either 1.5 times normal rate of pay or double time). The new threshold was not chosen arbitrarily. Administration states that the number was chosen because it represents the 40th percentile of salaries in the Southeast, which is the lowest-paying region in the United States.

This change is estimated to impact about 4.2 million workers, who did not previously receive overtime pay. It will not affect non-exempt or “hourly” employees (people that were already eligible). However, critics (namely employers) are raising concerns about the new law, questioning whether or not this will actually benefit workers or will a negative outcome. The opposition to the rule are citing such possible outcomes as salaried employees being re-classified as hourly, base wages being lowered in order to compensate for overtime pay, or mass layoffs. Truthfully, there are an equal number of positive outcomes despite these hypotheses.

Employers will have a few options when it comes to making adjustments to wages or work hours:

  • They can raise base wages above $47,476 annually if they truly wish to avoid paying overtime, which would make a large difference in the compensation for underpaid salaried employees.
  • They can enact protocol changes to make sure their employees do not work more than 40 hours per week, which would in turn give the employee more free time for leisure, family, and health benefits. This would also encourage job creation, as employers will need to fill the excess hours previously worked by the exempt employees.
  • They can keep base wages where they are but pay employees overtime when necessary, which most likely would still be a welcomed change in the eyes of the eligible salaried employees.

Logically, employers will not want to make changes that would hurt their employees. Morale comes into question when employees realize they are being treated poorly and are not valued by the company they work for. Employers will not be required to convert their salaried employees to hourly if they do not meet the threshold, and while it may seem more convenient to do so, in reality it wouldn’t be. Realizing that employees will not want to feel “demoted” simply because they are being compensated fairly, it would be a far more efficient (and more likely) move for employers to track the hours being worked. This wouldn’t be difficult change to make, seeing as how a majority of companies already utilize some form of electronic tracking for hours worked or projects being completed. This information can easily be sent via laptops or mobile devices when employees are not in the office or otherwise completing “overtime” work.

A final thought to consider, is just how rampant employment status misclassification is in today’s workforce. People are often misclassified as salaried employees or independent contractors when they should in fact be W-2 or hourly employees. Perhaps, if employers do make the decision to re-classify some of their employees, this change will bring justice to those who have been working long arduous hours without the proper overtime compensation.

If you you are owing overtime pay and have a difficult time getting paid for overtime, please consult with one of our attorneys at Aegis Law Firm, Irvine, CA. For more information contact us HERE

Read our previous blog post on unpaid overtime HERE

Where Commissioned Employees Fit in to California’s Overtime Law Requirements


In California, an employer is required to pay its employees overtime if the employee works in excess of eight hours a day or more than forty (40) hours a week. Overtime is compensated at the rate of no less than one and one-half times (1 ½) the regular rate of pay for an employee. However, there are certain employees whom are exempt from this general overtime requirement, depending on their profession and/or compensation structure. One these exemptions apply to employees whose compensation is based upon commissions. The Industrial Welfare Commission Wage Orders provide that, “employees (except minors) whose earnings: (1) exceed one and one-half times the minimum wage; and (2) more than half of their compensation represents commissions,” are exempt from the general overtime provision. This is the California Overtime Law.

As such, it is important to note that just because an employee earns some commissions, the exemption does not automatically apply. The exemption only applies to the employee if both prongs are met.

A relatively recent and important case that touched upon this issue was the case of Peabody v. Time Warner Cable, Inc., 59 Cal.4th 662, 663 (2014) (“Peabody”) which resulted in a published 2014 decision by the California Supreme Court. There, Ms. Peabody, the employee who worked for Time Warner Cable, Inc. (“Time Warner”), received paychecks that encompassed both hourly wages and commission wages. After leaving her employment with Time Warner, she sued for overtime wages, among things, based upon the claim that she regularly worked 45 hours per week and occasionally 48 hours per week. Although Time Warner did not dispute the fact that Ms. Peabody worked 45 hours per week and was paid no overtime, it argued that she fell within California’s “commissioned employee” exemption and thus was not entitled to overtime compensation. At the time of the lawsuit, the minimum wage in California was $8.00 per hour. As such, in order for the “commissioned employee” exemption to apply, Ms. Peabody’s compensation must have amounted to no less than $12.00 per hour. Time Warner reasoned that even though most of Ms. Peabody’s checks included only hourly wages and were for less than $12.00 per hour based upon the hours she worked, the commissions should be attributed to the “monthly pay period for which they were earned,” and that attributing the commission wages in this manner would satisfy the exemption’s minimum earnings prong. The district court bought this argument and dismissed the case. Upon appeal, the Ninth Circuit struggled with the issue of whether the employee’s commissions must only be counted toward the pay period in which the commissions were paid or where they can be allocated over the course of a month.” Due to the absence of controlling precedent, the Court of Appeal affirmed the district court’s ruling with respect to the overtime claims.

The California Supreme Court ultimately held, however, that Time Warner cannot attribute wages paid in one pay period to a prior pay period to cure a shortfall with respect to the minimum earnings prong and whether the minimum earnings prong is satisfied depends on the amount of wage actually paid in a pay period. This decision was definitely a win for commissioned employees as it serves to deter employers from deferring the payout of commissions to weeks or months later in order to satisfy the minimum earnings prong — a practice that is relatively common amongst California employers.

Based on the above, employees whom are not receiving overtime compensation and whose earnings are entirely commissioned-based, or is comprised of both commissions and hourly wages, need to be wary of how much they are being paid in light of the number of hours they are actually working to ensure that their compensation for each pay period meets the minimum earnings prong. If you suspect that your employer is improperly relying on this “commissioned employee” exemption to avoid paying you overtime compensation, contact an attorney immediately to discuss your rights.

For more information on California Overtime Law and your personal situation involving unpaid overtime, make an appointment with one of our attorneys at or call and ask for Kashif or Sam at (949) 379-6250.