Orange County Employment Lawyer Blog

My Orange County Law Firm receives a voluminous amount of calls regarding this issue. The answer is, It depends. If your employer is letting you go (regardless of the reason), your final paycheck must be given to you immediately (i.e., your last day of work). If you are quitting without giving notice, your final paycheck must be given to you within 72 hours. If you are quitting with at least 72 hours advance notice, your final paycheck must be given to you on your last day of work. If your employer claims you owe him/her money, he cannot refuse to pay your final wages and he/she cannot deduct the amount he/she claims you owe from your paycheck this is an unlawful deduction from pay. Your employer must go through the legal process for collecting money as he/she would with a non-employee. If your paycheck is late, you may collect Labor code penalties from your employer which amounts to one day's pay for each day your paycheck is late up to 30 days.

Your final paycheck should include generally, all wages owed through your last day of work. This includes all hourly wages or salary, a pro-rata share of any accrued and unused vacation pay or paid time-off, and any other leave which can be used unconditionally by the employee. This would also include tips. Your employer cannot compel you to sign away your legal rights in a release or waiver in exchange for earned wages.

It seems lately that my Orange County Employment Law Firm has had several calls about lunch break issues. Specifically, these California employees are being required to work through their lunch break due to the "nature of the job". This issue has come up several times recently as it relates to security officers. These employees are being told they cannot leave their post and as a result, cannot take a proper meal break.

As I discussed in a previous post about Labor Code Section 226.7 and lunch breaks, the law provides that an employee must get at least a 30 minute lunch break whenever they work for more than five hours in one workday. However, an employer may ask that an employee waive their right to a lunch break. This waiver must be in writing, and employees must be free to not sign the waiver. Similarly, if they do agree to sign it, they must be free to revoke the waiver at any time.

If you have not signed a waiver of your lunch break, your employer cannot require you to work through your lunch break. Such is often the case for security officers, who are told they cannot leave their post for lunch. If no relief security officer is provided, the security officer is still entitled to a lunch break (and by break, it needs to be duty free, not scarfing down a sandwich while sitting at your post working). If that lunch break is denied to you, you may be entitled to monetary penalties as result.

My Orange County Employment Law Firm has recently handled two rental offset cases, one in Orange County and one in Los Angeles County. Generally, rent may not be credited against minimum wage without a voluntary written agreement between the employee and the employer. Both clients were property managers, one at a Hotel and the other at a large apartment complex. They earned low hourly wages, and had their rent offset from their wages. This is legal, however, there are strict guidelines as to what the employer can deduct as a rental credit.

Regardless if there is a written agreement or not, the amount of the rental credit must not be more than the following: (1) $37.63 per week for rooms occupied alone; (2) $31.06 per week for shared rooms; (3) Two-thirds of the ordinary rental value but never more than $451.89 per month for apartments; (4) Where a couple are both employed by the employer, two-thirds of the ordinary value but never more than $668.46 per month. (All listed amounts effective as of January 1, 2008.)

Any employer who has failed to abide by these limitations or who has otherwise failed to implement a voluntary written agreement as required, may be liable to the affected employee for not only the amount of wages unpaid as a result of the unlawful offset, but also for penalties, interest, and reimbursement of reasonable attorney fees and costs.

RELATED RESOURCES

Industrial Welfare Commission Wage Order 5-2001, 10(c)

In California, vacation pay is not required. However, many employers have chosen to implement various vacation pay policies for their employees. Those that have must then comply with California law pertaining to vacation pay.

With the state of today's economy, more and more employees are suddenly out of work. My Orange County Employment Law Firm has received a large increase in calls regarding vacation pay, specifically that employees have either been let go or terminated without getting all their vacation pay. So, what is the law? In California accrued (already earned) vacation days are just like wages, meaning once they have been earned, they become the property of that employee.

Many employers have a policy in place that states something to the effect of "Use it or Lose It", meaning that employees who have earned a certain amount of vacation days will lose those accrued vacation days if they are not used in a specific period of time. Such a policy is absolutely against the law! Employees are given two options with regard to accrued vacation:

1. They must be permitted to carry-over the accrued vacation days; or
2. The remaining accrued vacation days must be paid out to the employee at whatever rate the employee is earning at the time of the payout.

If an employee separates from an employer without receiving as pay all accrued vacation days, the employee may also then be entitled to waiting time penalties, which I detailed in a previous blog post, interest, and reimbursement of attorneys fees and costs from the employer.

However, having said all that, employers do have the right to determine the other criteria of their vacation policy, specifically which employees are entitled to receive paid vacation, at what rate or frequency vacation days accrue, and how much can be accrued at one time.

As I have detailed in previous blog posts about labor code penalties, California has by far the strictest labor laws in the nation. Consequently, employers need to take all steps necessary to insulate themselves from employee lawsuits. One of the most important ways to do that is to have a properly drafted Employee Handbook. Having a properly drafted Employee Handbook may reduce an employer's exposure and liability in a lawsuit filed by an employee against the employer.

My Orange County Employment Law Firm has defended many employers and businesses in lawsuits filed by employees. The severity of many of those lawsuits could have been minimized if that company had an effective Employee Handbook in place. Additionally, some of those lawsuits may not even have been filed if the employees had a handbook advising them of their rights and obligations.

At a minimum, employers in California are required to provide to its employees certain workplace policies in writing. However, a properly drafted Employee Handbook suited to a company's specific business needs may also include items such as vacation pay or lunch breaks, which, though not legally required, will lessen the employer's exposure to lawsuits concerning those topics.

Examples of Employee Handbooks or Manuals can be found everywhere. However, one size does not fit all. I cannot urge employers enough to retain legal counsel who are well versed in employment law to properly assist in the formation of a handbook suitable to the employer's specific company.

In California, tips are the sole property of the employee for whom it is left. However, tip-pools that share all the tips with non-supervisory employees is acceptable ONLY if those receiving a share of an employee's tips provided direct service to the customer. As an example, a lawful tip-pool at a restaurant could be for waiters/waitresses, hostesses, and bus boys. However, this pool could not include cooks or dishwashers, as they did not provide any direct service to the patron. Owners, managers, and supervisors can NEVER share in the tip pool.

Employees are entitled to recover all tips unlawfully pooled or taken from them, and also may be entitled to recover penalties. If an employee complains to their employer about an unlawful tip-pooling policy and is in turn treated adversely, the employee may also have a separate claim for retaliation.

Employers cannot require employees to waive their rights to tips. As such, any documents that employees have signed wherein they agreed or consented to sharing a portion of their tips with management or other supervisors, as well as employees who do not provide a direct service to the patron, is invalid.

RELATED LINKS

Division of Labor Standards Enforcement (DLSE)

I cursorily discussed Labor Code Penalties in a previous post. However, as it applies to lunch breaks and rest breaks, recent California case law has significantly impacted these issues. In this post I will discuss in greater detail the current state of lunch break penalties and rest break penalties.

Clients frequently contact my Orange County Employment Law Firm inquiring about lunch break issues. The law states that if lunch breaks or rest breaks are not provided as required by California law, claimants are entitled to more than just the unpaid wage for working through the lunch or rest break, they are also entitled to one hour or pay for each workday that a lawful meal break or rest break was not provided.

However, California Courts have recently directed its focus on the differences between ensure and provide. Previously, employers had a duty to ensure that its employees were taking a duty free lunch (duty free means just that, not working. So, sitting at your desk and eating lunch while answering the phone occasionally when it rings is not duty free). Thus, if employers did not ensure an employee was taking a duty free lunch, they were subject to the above described penalty if an employee failed to take a duty free lunch.

Recent case law has altered the definition, changing an employer's duty from ensure its employees were taking a lunch to simply that they provide the employees with the opportunity to take a duty free lunch. Thus, if an employer has a policy that all employees take a duty free lunch, and an employee does not do so, the employer is not liable for any of the above damages if the employer does not know the employee failed to take a lunch. So, recent case law has taken much of the bite of lunch break penalties away from employees.

I previously discussed California's more common wage and hour penalties and their respective remedies in a previous Labor Code Penalties post. In this post, I will discuss in greater detail what is commonly referred to as an "Itemized Wage Statement Penalty" or IWS penalty.

While working for any employer, every employee must receive wage statements that are properly itemized, which means the pay stub must contain certain specific items of information, consisting of the following nine items:

• gross wages earned,


• total hours worked by the employee,


• the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis,


• all deductions,


• net wages earned,


• the inclusive dates of the period for which the employee is paid,


• the name of the employee and the last four digits of his or her social security number,


• the name and address of the legal entity that is the employer, and


• all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

An employer's failure to provide pay check with stubs containing this information may be liable for an itemized wage statement penalty. Such a penalty results in a penalty of $50 for the first violation, $100 for each subsequent violation - up to $4000 per employee.

I summarily discussed Labor Code Penalties in a previous post describing several of California's more common wage and hour penalties and their respective remedies. Here, I will discuss in greater detail what is commonly referred to as a "waiting time penalty."

When potential clients contact my Orange County Employment Law Firm, they usually just want what they are owed (in the form of unpaid wages, unpaid overtime, etc.) However, most clients never knew that when an employee separates from an employer, whether by termination or resignation, he/she must be paid all wages that are owed at the time of separation. This is true both in the case of termination or resignation, but the time frame for each to be paid in full is slightly different.

If being fired, the employee is entitled to all wages owed at the time of his or her termination. If the employee is resigning, he or she must be paid all wages due within 72 hours of resigning. If all wages are not paid within these time constraints, the employee, in addition to being able to recover all wages he or she is owed, is also entitled to a waiting time penalty. California's waiting time penalty entitles the employee to receive up to 30 days of wages, which means just that - thirty days of wages, not one month's pay!

Most wage and hour matters in California provide remedies in addition to the actual unpaid wage or damage in the form of Labor Code penalties. I will describe some of the more common penalties below.

WAITING TIME PENALTY

When an employee separates from an employer, whether by termination or resignation, he/she must be paid all wages that are owed at the time of separation. If fired, the employee is entitled to all wages owed at the time of his or her termination. If resigning, he or she must be paid all wages due within 72 hours of resigning. If all wages are not paid within these time constraints, the employee, in addition to being able to recover all wages he or she is owed, is also entitled to a waiting time penalty. California's waiting time penalty entitles the employee to receive up to 30 days of wages, which means just that - thirty days of wages, not just one month's pay.

ITEMIZED WAGE STATEMENT PENALTY

While working for any employer, every employee must receive wage statements that are properly itemized, which means the pay stub must contain certain specific items of information, most commonly the employee's gross wages, net wages, total hours worked, commission rate, piece-rate, pay periods covered by the check, and all deductions withheld, among other items. An employer's failure to provide pay checks with stubs containing this information may be liable for an itemized wage statement penalty. Such a penalty results in a penalty of $50 for the first violation, $100 for each subsequent violation - up to $4000 per employee.

MEAL AND REST BREAKS

If lunch breaks or rest breaks are not provided as required by California law, claimants are entitled to more than just the unpaid wage for working through the lunch or rest break, they are also entitled to one hour of pay for each workday that a lawful meal break or rest break was not provided.

MINIMUM WAGE PENALTIES

If an employer fails to pay an employee the California mandated minimum wage rate (currently $8 per hour), the penalty is $100 to each underpaid employee for the first violation, $250 to each employee for each pay period thereafter when there is a violation or underpayment.

UNLAWFUL DEDUCTIONS

When an employer unlawfully collects or deducts monies from an employee's wages, either in the form of a penalty or other such deduction, the unlawful deduction penalty is $100 to each underpaid employee for the first violation and $200 to each employee for each pay period thereafter where this is such a deduction, plus 25% of the amount underpaid.

There are of course other Labor Code penalties, but I have found these to be among the most common.