Category: Wage & Hour Rights

Are You Receiving At Least Minimum Wage in California?

New Minimum Wage Rate/Non-Exempt Employees:

On January 1st, 2016, California’s minimum wage per hour was raised from $9.00 per hour to $10.00 per hour. Although there are some exceptions, almost all employees in California must be paid the minimum wage as required by state law, this means that all non-exempt employees working in California are entitled to at least $10.00 per hour.

Some cities like San Francisco and Los Angeles (applicable to Orange County, CA), for example, have passed local city ordinances that command higher minimum wage to account for the higher cost of living in those areas. California employment law mandates that an employer must follow the minimum wage order that is most beneficial to the employee, that is, the highest minimum wage amount.  As a non-exempt employee, you are entitled to overtime compensation at the rate of one and one/half your hourly rate, (if you make $10.00 per hour, your overtime rate would be $15.00), for all hours worked in excess of eight hours  a day.

Interestingly, Federal Minimum wage is still $7.25 per hours, which translates to $15,080 for a full-time, year-round worker.  Federal minimum wage has not been raised since 2009.

What This Means To You If You Are Being Compensated With Tips Or Commission?

Tipped Employee:

An employer must still pay you a minimum of $10.00 per hour for all hours worked, before any tips. An employer may NOT use an employee’s tips as credit towards its requirement to pay you the minimum wage of $10.00 per hour. Essentially, you must be paid for all hours worked at the minimum wage rate, and tips earned are to be paid on top of the minimum wage. An employer cannot include your tips to show that you are making at least $10.00 per hour.

Employees Earning Commission:

California employment law requires that employees entering into employment agreements which involve compensation, even in part, on a “commission” basis must be provided a written contract which sets forth the method by which the commission is computed and paid.  Employers must provide the employee with a signed copy of the commission agreement and obtain a signed acknowledgment of receipt of the copy.

The agreement must include:

  1. First, the method of computing the commission must be described completely.  The employer must define the commissionable basis, whether the commission is based on revenue or a margin of revenue, profit, or another basis
  2. Second, the agreement must be clear as to when the commission is “earned,” so that the employee’s entitlement to commissions upon termination of employment is clear. For example, some employees may not “earn” their commission until after a certain event occurs, after an item is paid for and delivered to the customer, or after a certain time period, like after thirty days.
  3. Third, the agreement should explain how draws will be applied to commissions. For example, if the schedule for reconciliation or settlement of commissions is less frequent than the employee’s regular pay period, you may be required to pay a draw so that minimum compensation requirements are satisfied. If there is a formula for calculating the draw, it should be disclosed; otherwise, the amount of the draw, if fixed, should be specified.
  4. The agreement also should state the period for which commissions will be calculated (e.g., monthly), when draws are paid (e.g., weekly, semi-monthly, etc., if applicable), and when commissions will be reconciled and paid.
  5. An employee should make sure the employment contract is clear as to when commissions are paid in the event of termination of resignation.

Essentially, an employer will need to compensate for all hours worked at the minimum wage rate of $10.00 per hour on a regular basis, which is referred to as a “draw.” If your earned commission that is more than the minimum wage amount and/or draw amount, then the draw is covered and you will be paid any excess commission amounts. However, if your commissions do not cover the draw, then the employer cannot deduct your make you pay back the minimum wage amount.

Exempt Employees:

If you are an “exempt” employee as defined in California Wage Orders, then you can be “exempt” from being paid for overtime compensation, but you must earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.”

This means when the minimum wage increases so will the minimum salary required for exemption. Beginning January 1, 2016 the new minimum salary required will be $41,600.   It is imperative to understand and remember that paying the minimum salary alone itself will not qualify a position for exempt status, there are also duties and time spent tests that must be met. In addition, all tests must be met in order to qualify for exempt status. This means if a company has positions that currently meet all the tests for exempt status but do not raise salaries to reflect the appropriate minimum salary required for exemption outlined previously those positions will revert to non-exempt status making them overtime eligible.

 

Please see http://www.dir.ca.gov/dlse/FAQ_MinimumWage.htm for more information and please contact Aegis Law at (949) 379-6250 with any questions!

Employment Law

Olsen Twins’ The Row, Gearing up for a Legal Row

Child stars turned producers turned fashion gurus won’t be turning into labor attorneys anytime soon. The Olson Twins have been served a class action lawsuit of forty current and previous interns for unpaid wages. The suit was filed in Manhattan Supreme Court and names Dualstar Entertainment, the umbrella company for the Olsen fashion labels, the Row and Elizabeth and James.

The interns allege they were unpaid, and while some interns received college or vocational credit, those who were not students did not. They worked over 50 hour week weeks, “running personal errands for paid employees, photocopying, sewing, making spreadsheets.” The head plaintiff, Shahista Lalani, alleges the working conditions were horrendous—she was even hospitalized for dehydration at one point while running errands in 100 degree weather and carrying excessive weight.

According to Lalani, the head technical designer was demanding and hostile. “I was doing the work of three interns. I was talking to her all day, all night. Emails at nighttime for the next day, like 10pm at night.” The class members allege that the interns were doing the same kind of work as paid, entry level employees, but the company used them as interns to skirt minimum wage laws.

Lalani worked for a five month period, “you’re like an employee, except you’re not getting paid.” While the plaintiff concedes that the Olsen Twins themselves were “never mean to anyone,” she alleges that Dualstar owes the interns at least minimum wage, back pay, and penalties.

manicurists

Manicurists Unite! The Truth About Your Nail Salon

It is a luxury for most women and a regular routine for many women (and men) to get their manicures and pedicures done. We pay the bill and tip the manicurists and go on with our day. However, what’s the real cost of those acrylics or that gel manicure?

In Little Saigon, members of the California Health Nail Salon Collaborative hosted a community forum for both workers and owners to listen and speak about the growing national spotlight on the treatment of manicurists in the industry. In the status quo, many owners don’t know what the proper regulations for business are; they merely follow the model and example that owners before them followed.

There are often no paper records for the manicurists working in salons; they are paid cash and work whatever hours the owners need them to—even if it’s after closing and they’ve hit all sorts of overtime hours. If the owner does have some sort of tax record for their manicurists, it’s usually a 1099. Salon workers are consistently misclassified as independent contractors though they are under the full control of the salon and are treated as employees.

Last year, average manicurists made $22,500. Often, these employees are working 60 hour work weeks, but not getting paid proper overtime rates of pay or meal/rest breaks. Representatives from the U.S. Department of Labor, Tony Pham and Lydia Nguyen, spoke to the largely Vietnamese forum. They explained when investigators inspect salons, the first document they will ask for are time cards.

Both manicurists and owners at the forum talked about the “customer is first” mentality of nail salons. Saying no to a customer who walks in right at closing is difficult, so the manicurists stay to work. Those hours add up, but not at a rate favorable to the employee.

Source: LA Times

One-Two-Three Strikes You’re Out!

Major League Baseball is not batting a good game. Players in minor league affiliate teams filed a suit for wage and hour allegations. The lawsuit contends that these players were paid less than minimum wage, not paid for overtime, and not paid for all work duties.

Strike One-While salary information for minor league players is not readily available, the suit contends that players typically were compensated approximately $1,100 to $2,150 per month. While their major league counterparts are making millions, minor league players were expected to “pay their dues” getting to the next echelon of play.

The MLB defends their actions by saying the minor league players fall into a seasonal employee exemption, which excludes such employees from minimum wage or overtime. Seasonal exemptions apply to occupations that provide seasonal “amusement or recreational” services. These services operate for less than 7 months in a year.

Strike Two– Minor league players are paid on a salary and not on an hourly basis, which means, no matter how long that game lasts or how many hours are spent in practice, none of it is compensated at a rate of one and a half times or two times the regular rate.

During the season, players were required to attend team work outs, batting practice/drills, and work for 6 or 7 days straight for over 8 hours in a day.

Strike Three When not in season, minor leaguers see no pay, but are expected to attend practices anyway. Spring training and post-season instructional leagues are mandatory but not compensated.

Minor league players sign over an exclusive right to the MLB for 7 years’ worth of management. The player cannot sever this contract nor leave to play for another team, even if it is outside of the league or outside of the States.

The MLB has attempted to get this suit dismissed, but failed to do so. Most recently, earlier this month, a judge ruled that objections from the MLB over the standing of Class Members is stayed until class certification is reached.

Source: Topclassactions.com; Fordhamsportslawforum.com; Department of Labor

3 Cheers…For Fair Wages!

We have been closely following the story of the Oakland Raiderettes in their battle for fair pay since a suit was initially filed last year. Following the Raiderettes’ suit, cheerleaders around the nation filed their own legal actions against their respective teams and the NFL—the Cincinnati BenGals, the New York Jets Flight Crew, the Buffalo Jills, and the Tampa Bay Bucs to name a few.

The Raiderettes settled their lawsuit last fall for over a million dollars. The cheerleaders alleged that the Bay Area team only compensated each cheerleader the equivalent of $5 per hour. Additionally, the cheerleaders paid for all expenses, including travel and appearance, out of pocket and were even docked when an “infraction” occurred (i.e. coming into practice with the wrong poms, dying their hair an unauthorized color, etc.).

Last week, Governor Jerry Brown just added the icing to the cake. He signed a new bill into law that classifies professional cheerleaders as employees of the sports teams they cheer for. They must be paid at least minimum wage for all hours worked, including practices and promotional appearances.

State Representative Lorena Sanchez, the main sponsor for the bill, regarded the law as “an important step toward ensuring that multi-billion dollar sports teams treat cheerleaders with the same dignity and respect as every other employee who makes the game-day experience special.”

In response to the law, the NFL advised teams to follow applicable labor laws but clarified that the cheerleaders would be employees of their respective teams, and not of the NFL. This may come as a response to one of the earlier labor lawsuits that named the NFL as a co-defendant.

While the three professional football teams in the state need to rethink their cheerleader pay pyramids, the NBA announced that their teams already treated their cheerleaders as employees, therefore, they are compliant with the law.

Source: CNN Money