An employee in California has two primary options to pursue a claim for the enforcement of minimum wage and overtime pay rights. The employee may seek judicial relief by filing an ordinary civil action. Alternatively, the employee can initiate an administrative action with the Division of Labor Standards Enforcement (DLSE). In Elsie Seviour-Iloff v. LaPaille, the California Court of Appeal set forth multiple important holdings expanding the scope and potential liability available to employees pursuing administrative relief for wage claims with the DLSE.
On September 27, 2021, California Governor Gavin Newsom signed SB 62, also known as the Garment Worker Protection Act, into law. SB 62 makes California the first state to require an hourly minimum wage for garment workers by banning piece rate pay. SB 62 expands the definition of a garment manufacturer and extends the scope of liability for wage and hour violations to clothing brands—and likely some retailers. Under SB 62, “any person contracting for the performance of garment manufacturing” is joint and severally liable with any of their manufacturers and contractors, thus creating upstream responsibility for unpaid wages, attorney’s fees, and civil penalties arising from Labor Code violations. Although the new law does not become effective until January 1, 2022, companies that contract or subcontract for garment manufacturing, or have employees who perform garment manufacturing functions in California, should begin familiarizing themselves with SB 62 and determining whether/how it affects their business.
Continue Reading California Passes Law Establishing New Wage and Hour Requirements for Employers in the Garment Industry
On Monday, the Ninth Circuit vacated a judgment for Grubhub, Inc. and against a former food delivery driver, Raef Lawson, who claimed that he was misclassified as an independent contractor when he performed food delivery services. Lawson had asserted claims for minimum wage, overtime, and expense reimbursement.
Continue Reading Ninth Circuit Reversed Grubhub’s Victory on Independent Contractor Classification in Light of the Retroactive Application of Dynamex
On January 1, 2021, various new and amended employment laws will go into effect in California. Below is a summary of some of these laws that employers should make themselves aware of heading into the new year. All laws discussed in this post go into effect on January 1, 2021, unless otherwise noted.
Continue Reading New Employment Laws to Look Out for in 2021
As reported here and here, California recently enacted new legislation – Assembly Bill 5 – that expanded the scope of an “employee” under state law. Beginning January 1, 2020, the answer to whether a person providing services in California is an independent contractor (as opposed to an employee) under the California Labor Code, the Industrial Welfare Commission (“IWC”) Wage Orders, and the California Unemployment Insurance Code, will generally depend on whether they satisfy all three prongs of the so-called ABC Test:
- The worker must be free from the control and direction of the hirer in connection with the performance of the work.
- The worker must perform work outside the “usual course” of the hirer’s business.
- The worker must be customarily engaged in an independent established trade, occupation, or business of the same nature as the work performed.
There are a myriad of occupational and industry exemptions to the application of the ABC Test, many of which are highlighted here.
Having tightened independent contractor classification standards, the next big target for the state legislature may be joint employer liability.…
To close out the 2019 legislative season, Governor Gavin Newsom signed dozens of bills into law, which will have lasting impacts for California employers. In addition to the summaries and clarifications from prior blog posts, below is an overview of key new employment laws.
Continue Reading 2020 Vision: California’s New Employment Laws
On September 5, 2019, the Washington Supreme Court issued a huge win for all non-agricultural employers who pay commission or piece-rate pay to their employees in Washington state. In a 6-3 decision, the Washington Supreme Court held in Sampson v. Knight Transportation (No. 96264-2) that a non-agricultural piece-rate employer complies with the Washington Minimum Wage Act when an employee’s total earnings in given workweek divided by the employee’s total hours worked in the same workweek exceeds the applicable minimum wage rate. While this conclusion may seem obvious, the Washington Supreme Court in 2018 rejected the same workweek averaging method for agricultural workers. Carranza v. Dovex Fruit Co., 190 Wn. 2d 612 (2018) held that the Washington Minimum Wage Act (“MWA”) requires agricultural workers earning piece-rate pay to be separately compensated on an hourly basis for all “activities outside of piece-rate  work.” The question in Sampson was whether the holding in Carranza should be extended to non-agricultural piece-rate employers. Relying on a regulation promulgated over 40 years ago by the Washington Department of Labor & Industries (“DLI”), the Washington Supreme Court held that Carranza’s separate compensation rule is confined to the narrow context of agricultural employment.
Continue Reading Peace for Piece-Rate Employers in Washington
Many California employees received a raise on January 1, 2019 when the state increased the minimum wage to $12 per hour for large employers (26 employees or more) and $11 per hour for small employers (25 employees or fewer). Effective July 1, 2019, several counties and municipalities in California are adding to these minimum wage increases. The amount of the increase varies by city and county, and some local governments make a distinction between large and small employers. Hotel workers in places like Long Beach, the County and City of Los Angeles, and Oakland are entitled to wages significantly higher than the minimum wage for other types of employees. The following chart summarizes these changes.
Continue Reading July 1, 2019 Minimum Wage Increases in California Counties and Municipalities
Last week, the California State Supreme Court struck a decisive victory in favor of payroll companies, issuing a unanimous opinion that an employee is not a third-party beneficiary of the contract between her employer and its payroll service provider. The court held that an employee-plaintiff has no standing to sue her employer’s payroll company for an alleged failure to pay wages under California’s employee-friendly labor laws.
Continue Reading California Supreme Court Announces a Win for Payroll Outsourcing Industry
On February 4, 2019, New Jersey Governor Phil Murphy signed into law legislation, available here, which gradually raises the minimum wage in New Jersey to $15 per hour by the year 2024 for many workers in New Jersey. Under this law, for employers with more than six employees, the current New Jersey statewide minimum wage of $8.85 will incrementally rise to $15 per hour as follows:
|Date of Increase||Minimum Wage Amount|
|July 1, 2019||$10 per hour|
|January 1, 2020||$11 per hour|
|January 1, 2021||$12 per hour|
|January 1, 2022||$13 per hour|
|January 1, 2023||$14 per hour|
|January 1, 2024||$15 per hour|
After two years, California courts are finally putting California’s “A Fair Day’s Pay Act” (the “Act”) to the test. While intended to help employees collect judgments against employers that are judgment proof, the Act created potential personal liability for an employer’s owners, directors, officers, and managing agents. Indeed, the Act added Labor Code Section 558.1, which imposes personal liability for certain wage and hour violations. Specifically, Section 558.1 states that “[a]ny employer or person acting on behalf of an employer, who violates, or causes to be violated,” provisions regulating wages or hours, may be held personally liable “as the employer.” Section 558.1 expressly defines “employer or other person acting on behalf of an employer” to include a “natural person who is an owner, director, officer, or managing agent of the employer.” Accordingly, potentially any managing agent who “causes” a wage and hour Labor Code provision to be violated could be held personally liable. While the passing of Section 558.1 caused uproar over the imposition of personal liability for wage and hour violations, the California Court of Appeal recently clarified that even in the absence of this new section, the labor code imposes personal liability.
Continue Reading Managers Beware: Can you be held personally liable for wage and hour violations?