A June 26th California Supreme Court decision holds that an undocumented worker who was wrongfully terminated in violation of the California Fair Employment and Housing Act (FEHA) may be awarded lost pay damages, even if the employee was ineligible for employment to begin with under federal law.
The plaintiff, Vicente Salas, was a seasonal production line employee with Sierra Chemical, a company that manufactures, packages, and distributes chemicals for treating water, including water in swimming pools. He injured his back while stacking crates on the production line and claimed he needed to change his work routine while he was recovering. Salas filed a workers’ compensation claim for his injury, but his employer told him that he could only return to work after he obtained a doctor’s release.
New EEOC Guidance Clarifies Protections for Pregnant Employees and Fathers
- Pregnancy Discrimination
The updated enforcement guidance begins by restating statutory requirements under the Pregnancy Discrimination Act (PDA)–that an employer cannot discriminate against an employee on the basis of pregnancy, childbirth, or related medical conditions; and that female employees affected by pregnancy, childbirth or related medical conditions must be treated the same as other employees who are similarly situated in their ability or inability to work. Following an overview of the PDA, the U.S. Equal Employment Opportunity Commission’s (EEOC) Enforcement Guidance on Pregnancy Discrimination and Related Issues is divided into four parts:
A recent case that restricts how employers pay commissioned workers could trigger more wage-and-hour class actions. Coverage of the case is discussed on Law360, Time Waner Ruling Limits Employee Compensation. The following is an excerpt and a link to the full article:
Law360, San Diego (July 14, 2014, 11:02 PM ET) — Rejecting Time Warner Cable Inc.’s defense in a proposed overtime class action, the California Supreme Court held Monday that employers can’t satisfy the state’s compensation requirements by carrying over commission wages from one pay period to other pay periods, a ruling that restricts how employers pay commissioned workers and could trigger more wage-and-hour class actions, lawyers say.
Time Warner argued that a former account executive’s commissions, which were always paid on the final biweekly payday of each month, could be attributed to the weeks of the preceding month to meet the commissioned employee exemption’s minimum wage prong, but the California Supreme Court disagreed that the employer could treat commissions in this way.
Appellate Court Affirms Judgment in the Case of Kim v. Konrad USA Distribution
Following a bench trial in 2013, the court awarded plaintiff Esther Kim $60,000 against her former employer, defendant Konad USA Distribution, Inc. (Konad), and her former boss, defendant Dong Whang. The defendants appealed, citing the alleged failure of plaintiff to meet certain “jurisdictional” prerequisites (e.g., exhaustion of administrative remedies, proving Konad had five employees) in her sexual harassment and wrongful termination claims. The Appellate Court of the Fourth District affirmed the trial court’s judgment. (CA4/3 G048443 6/12/14)
The plaintiff, Esther Kim, started working for Konad in 2006 as an account manager. Her main duties were to process orders by phone and emails. Konad’s small business involved the distribution and sales of nail art kits and grossed about two million dollars in 2012. Mr. and Mrs. Whang were actively involved in the operation of the business and Dong Whang was the CEO and sole shareholder.
Today the minimum wage increase passed last year went into effect. All workers in California must earn at least $9 per hour. Another increase to $10 per hour is currently scheduled under the law to take place on January 1, 2016. What is especially important to understand and often overlooked by employers is the fact that salaried employees wages and commissioned employees wages are tied to the minimum wage if they are to be classified as exempt from overtime. An exempt administrative, executive or professional employee must be paid a weekly salary of at least $720 per week to be classified as exempt. If the salary paid excluding bonuses or commissions is less than $720, which must be a guaranteed amount, then overtime exemption will be lost.
In addition a commissioned employee must earn at least $13.50 per hour (1 1/2 times the minimum) for ALL hours worked in order to be exempt from overtime. Commissioned employees must be provided meal and rest breaks even if they are exempt from overtime. Additionally, even if paid $13.50 per hour for all hours worked, in addition, 1/2 of the compensation must come from commissions. If less than 1/2 the compensation comes from commissions then the overtime exemption will be lost.
The California Supreme Court ruled on June 23, 2014 that PAGA claims are not preempted by the FAA. Eric Kingsley wrote a column in Daily Journal on June 27, 2014 describing the impact of the decision. In the article he described the reasons why PAGA is so effective. It all comes down to the 4 “uns.”
- PAGA is unarbitable. (Plaintiffs can’t be forced in arbitration)
- PAGA is unremovable. (Defendants can not remove the case to Federal Court)
- PAGA is unpickoffable. (Settlement must be approved by the court)
- PAGA is uncertifiable. (Certification is optional, Trial is therefore inevitable)
These four attributes make PAGA an effective vehicle for plaintiffs and a concern for defendants.
California employers must comply with several new employment laws taking effect July 1, 2014
California Employment Laws – Minimum Wage Increase
In 2013, California Governor Jerry Brown signed into law AB 10, which amended the California Labor Code to increase the minimum wage. The first phase of the new employment laws includes a minimum wage increase that takes effect July 1, 2014, and increases the mandated minimum wage from $8.00 to $9.00 per hour. The second phase of the minimum wage increase takes effect on January 1, 2016, and increases the mandated minimum wage from $9.00 to $10.00 per hour.
The minimum wage increase also affects
In case you missed it, the California Supreme Court will issue its opinion in Iskanian v. CLS on Monday. This case concerns issues of arbitration under federal law and how California law that existed prior to AT&T v. Concepcion will be affected. Here are some predictions. Gentry dies. PAGA lives. Justice Lui writes the opinion for a unanimous court. The NLRB issues are punted and not addressed. Finally, the opinion runs 45 pages. Let’s all keep our fingers crossed.
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