On September 27, 2021, California Governor Gavin Newsom signed Assemblywoman Lorena Gonzalez’s Assembly Bill 1003 into law.  This new legislation establishes that intentional theft of wages or tips by employers is punishable as grand theft.  The law takes effect on January 1, 2022.

Continue Reading New California Law Imposes Harsh Penalties for Employers Committing Intentional Wage Theft

On July 15, 2021, the California Supreme Court issued a decision in Ferra v. Loews Hollywood Hotel, LLC which was long-awaited but was ultimately highly disappointing to employers.

Continue Reading California Supreme Court Announces New Standard That Meal and Rest Period Premiums Must Be Paid at Same “Regular Rate of Pay” Used to Calculate Overtime Payments

A former Wal-Mart employee had his $102 million dollar verdict overturned in a recent win for California employers.  Roderick Magadia, the former employee, brought a class action and Labor Code Private Attorneys General Act (“PAGA”) complaint against Wal-Mart alleging, in part, that Wal-Mart issued deficient wage statements in violation of Labor Code Section 226.  The alleged defect was prompted by a “Myshare” bonus, a quarterly bonus based on non-discretionary metrics.  Because the bonus was non-discretionary, the law required Wal-Mart to factor the bonus into the “regular rate” of pay used to calculate the overtime premium.  But, since the bonus was earned and paid quarterly while the overtime premium on hourly pay is paid during every two-week pay period, the premium must be recalculated and adjusted with a supplemental payment each quarter.

Continue Reading Sheppard Mullin Helps Overturn $102 Million Dollar Verdict

In Alfredo Sanchez v. Miguel Martinez, the Court of Appeal, Third Appellate District, held that although an employee who is not authorized and permitted to take a paid 10-minute rest break in compliance with California law may assert a claim for either unpaid wages or seek one additional hour of pay (i.e., a rest break premium) under Labor Code Section 226.7, the employee cannot recover damages under both theories.  All California employers will find this case instructive, as it may also provide a basis to argue against similar “double recovery” and/or “stacking” of penalties predicated on other Labor Code violations.

Continue Reading Employees Cannot Obtain “Double Recovery” of Unpaid Wages and Premiums for Non-Compliant Rest Breaks

Effective February 10, 2020, the top ten members of an out-of-state limited liability company (“LLC”) can be held personally liable for violations of New York’s wage and hour laws. The bill, signed on December 12 by Governor Andrew Cuomo, amends New York’s LLC Law which previously only extended individual liability for unpaid wages to owners of domestic LLCs (text available here).
Continue Reading New York Targets Members of Out-of-State LLCs in New Wage Theft Bill

On September 18 2019, Governor Gavin Newsom signed into law AB-5, which codified the California Supreme Court’s Dynamex v. Superior Court decision.  In Dynamex, the California Supreme Court adopted the so-called “ABC” test to determine coverage under the Industrial Welfare Commission (“IWC”) Wage Orders.  AB-5 expands the application of the ABC test to the entire California Labor Code and will take effect on January 1, 2020.
Continue Reading It’s Official: Newsom Expands The Definition of “Employee” Under California Law

Following the launch of the so-called “MeToo” movement, the California Legislature (controlled by a Democratic supermajority) has aggressively churned out new bills that further strengthen the ability for workers to sue their employers and increase the already-significant regulatory burden on these companies. This fall, the California Legislature is geared to send three significant bills to Governor Gavin Newsom that all California employers should carefully follow.
Continue Reading Three Major Workplace Bills to Land on Gov. Gavin Newsom’s Desk

In Jesus Cuitlahuac Garcia v. Border Transportation Group, LLC, et al, the California Court of Appeal, Fourth Appellate District has held that the ABC test set forth in Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018) applies only to causes of action brought under wage orders.

Plaintiff Garcia was a taxicab driver for several years with Border Transportation Group (“BTG”). In 2015, a year after ceasing work for BTG, he sued BTG and two individual defendants for various wage and hour violations.
Continue Reading California Court of Appeal Affirms That Dynamex’s ABC Independent Contract Test Is Limited To Claims Arising Under Wage Orders

On May 21, 2018, the United States Supreme Court upheld the legality of arbitration agreements containing class action waivers. In a 5-4 decision written by Justice Gorsuch, the Court held that arbitration agreements providing for individualized proceedings were valid, and neither the Federal Arbitration Act’s (“FAA”) savings clause, nor the National Labor Relations Act (“NLRA”) suggest otherwise.
Continue Reading U.S. Supreme Court Upholds Enforceability of Mandatory Employment Class Action Waivers