The number of federally filed wage and hour cases hit a new high in 2015, and, as Corporate Counsel reports, this trend is likely to continue in 2016. Similarly, California’s Division of Labor Standards Enforcement is increasingly cracking down on employer wage and hour law violations. As employment lawyers see wage and hour cases becoming an increasingly large part of their practices, others may be looking to get into the area. Here are some basics to know and tips for those who represent multistate employers.
California wage and hour laws operate under a two-part statutory and regulatory scheme:
- The California Labor Code provisions on payment of wages (Lab C §§200–272) and working hours (Lab C §§500–856, 1171–1206); and
- The Industrial Welfare Commission (IWC) wage orders (Wage Orders Nos. 1–2001—17–2001 (8 Cal Code Regs §§11010–11170)).
Then there’s restitution, injunctive relief, an extended statute of limitations under the Unfair Competition Law (UCL) (Bus & P C §§17200–17210), and an employee’s representative right to recover civil penalties for certain Labor Code violations under the Private Attorneys General Act (PAGA) (Lab C §§2698–2699.5), which complete the comprehensive scheme.
The relationship between California and federal law when it comes to wage and hour issues is very interesting: Federal law, including the Fair Labor Standards Act (FLSA) (29 USC §§201–219) and the correlative Code of Federal Regulations, also applies in the California workplace. But substantial differences exist between California and federal law with respect to the scope of application and the specific requirements imposed. If there’s a conflict between them, the law most protective to the employee governs. 29 USC §218(a); 29 CFR §778.5.
You don’t have to practice employment law to have noticed some of the new areas in which these cases are arising—your social media feeds and the news are filled with stories on minimum wage increases (e.g., Fight for 15) and independent contractor designation (e.g., Uber). The increasing trend in these types of cases is to “some extent a result of the complications involved in applying a law from 1938 to today’s working world,” explains Richard Alfred, chairman of Seyfarth’s wage and hour litigation practice.
But there is also the “bread and butter” wage and hour cases involving payroll violations and other relatively minor claims. The key to avoiding these types of claims is implementing a comprehensive set of wage and hour compliance policies and procedures, adopting only those policies that the employer can actually follow, and making sure that managers or human resources personnel know how to implement them.
Because many wage and hour issues are a matter of state law, remaining compliant can be a significant challenge for a multistate employer. An employer that chooses to implement different, state-specific policies nationwide needs to be sure that it takes steps to remain current on any changes in the wage and hour laws in the states in which it does business and must devise a process to implement timely changes to a state-specific policy when necessary.
Employers with multistate operations may want to avoid the problems inherent in maintaining many state-specific policies by adopting policies that give employees the benefit of the protections offered by whichever state has the law that is most advantageous to employees (among those where the company has a presence). Such a practice will eliminate the need to implement different, state-specific versions of policies but may entail an increased cost. For example, a policy that provides for the payment of daily overtime to all employees nationwide in deference to the fact that California employees would be entitled to such payments under state law, could result in a significant expense.
If your practice includes wage and hour law issues, you need CEB’s award-winning California Wage and Hour Law and Litigation, which includes chapters on state and federal law, as well as guidance on workplace policies and best practices and litigating wage and hour cases from both plaintiff and defense perspectives.
Other CEBblog™ posts on wage and hour issues:
- Mediation May Be the Right Tool for Wage and Hour Suits
- 10 Things to Include in an Employer Meal Break Policy
- Give Paid Time Off or Sick and Vacation Leave?
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