Lunch break note on office clock

California Supreme Court Decides Non-Discretionary Payments Are To Be Included When Calculating Overtime Pay

In a published opinion, Ferra v. Loews Hollywood Hotel LLC, 11 Cal. 5th (2021), the California Supreme Court examined the issue of whether the state legislature intended the term "regular rate of compensation" as it is used under California Labor Code Section 226.7(c) has the same meaning as the term "regular rate of pay" pursuant to California Labor Code Section 510(a), so that an employer's calculation of overtime or premium pay owed to an employee must account for the employee's hourly wages and non-discretionary payments for work performed by the employee during missed meal or break and recovery periods. The Court determined that it does!

What are non-discretionary payments?

Non-discretionary payments are payments for an employee's work that are owed under a prior contract, agreement or promise between the employer and the employee. Non-discretionary payments are not determined at the sole discretion of the employer, meaning that an employee will have meaningful input when arriving at the agreement to receive non-discretionary payments from an employer. Examples of non-discretionary payments or wages include hiring bonuses, attendance bonuses, individual or group production bonuses, and incentive bonuses.

California Supreme Court rules Non-Discretionary Payments must be accounted for when calculating Overtime or Premium Pay for work performed by employee during missed meals, breaks, and recovery time. 

What happened in Ferra?

Non-discretionary payments were at the heart of the issue underlying the Ferra lawsuit filed before the California Supreme Court. Jessica Ferra, a bartender employed by Lowes Hollywood Hotel LLC, filed a lawsuit against Loews alleging that the company failed to include her non-discretionary payments - specifically quarterly incentive payments - when calculating her regular rate of pay for overtime or premium payments owed to her for work performed during missed meals, and rest break periods as required by the California Labor Code Section 510(a). Loews argued that under its interpretation of the law, Jessica was only to be compensated her hourly wage - or regular rate of compensation - under California Labor Code Section 226.7(c), meaning that the company should not have to include quarterly incentive payments in calculating overtime or premium payments that Jessica accrued while working through her meal and rest break time.

At trial and on appeal, Jessica Ferra lost both times, meaning the trial court and appeals court agreed with Loews that "regular rate of compensation" and "regular rate of pay" had two different definitions, despite being used interchangeably throughout the California Labor Code and by the Industrial Welfare Commission (IWC). However, the California Supreme Court granted review of Ferra's lawsuit and reversed the lower court decisions. Essentially, the California Supreme Court found Loews' interpretation of the law to be incorrect, and that "regular rate of compensation" and "regular rate of pay" have the same meaning under California wage and labor laws.

To arrive at the conclusion that "regular rate of compensation" under Labor Code Section 226.7(c) and "regular rate of pay" under Labor Code Section 510(a) are synonymous, the California Supreme Court unpacked in detail the lengthy legislative history behind the creation of the Industrial Welfare Commission (IWC); the Court reviewed the state legislature's adoption of California Labor Code Sections 226.7(c) and 510(a); and, it discussed how California's wage and labor policies are intended to mirror federal law where consistent, mainly, the Fair Labor and Standards Act (FLSA). The underlying goal of California and Federal wage and labor laws are meant to protect employees from meal and rest break violations by penalizing employers for non-compliance with meal and rest break laws.

Key Takeaways

One key takeaway from the Ferra lawsuit for employees is that regular rate of compensation and regular rate of pay are synonymous or have the same meaning. The California Supreme Court noted during its discussion of the legislative history that the Industrial Welfare Commission adopted an overtime or premium pay requirement for meal or rest break period violations using the term "regular rate of compensation", while at the same time the IWC issued an adopted wage order revising overtime policies that included use of the term "regular rate of pay". In short, Loews' interpretation was wrong as the Court outlined several instances in California's legislative history where "compensation" and "pay" along with "regular rate" were used interchangeably to describe how employees wages are to be calculated. Ultimately, Ferra determined that employees are entitled to receive non-discretionary wages or payments as part of the calculation for the employee's pay - or compensation - for overtime work performed during missed meal and rest break time.

The second key takeaway from the Ferra lawsuit for employees is that the California Supreme Court ruled that its decision would have retroactive application in workplaces throughout California. What this means is that employees in California may be owed additional overtime or premium pay for non-discretionary wages or payments accrued for work performed by the employee during missed meal and rest break periods that were not calculated in the employee's regular rate of compensation or regular rate of pay. Each case will depend on the specific facts, so it is important to consult with an experienced labor law attorney to assess the specifics of your case to determine if you are owed additional compensation and unpaid wages from your employer.

Free Consultation

Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including wage, labor, meal and rest break violations in the workplace, and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.

If you or someone you know suffered employment violations, you may have certain employee rights under state and federal law, and may be entitled to compensation as a part of a class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.


Scanning parcel barcode before shipment

California Protects Warehouse Employees Against Unfair Labor Practices

California issues new legislation for warehouse distribution centers.

The on-going feud between state governments and big tech companies intensified on September 22, 2021 when California Governor Gavin Newsom signed California Assembly Bill 701 (A.B. 701), making California the first state to impose regulations on companies that require warehouse distribution center employees to meet unfair productivity quotas. A.B. 701 - the Warehouse Distribution Centers Bill - amends the California Labor Code to include new provisions taking aim at companies like Amazon that implement unfair labor practices that exploit employees in order to fulfill delivery orders. A.B. 701 also prevents job seekers from being discriminated against when applying for or pursuing a different job if the job applicant filed to receive worker’s comp benefits during prior employment.

What is A.B. 701?

Generally, the purpose of California Assembly Bill 701 (A.B. 701) is to protect warehouse distribution center employees against impending job loss for failing to meet employer established productivity quotas. The author of the new law, California Assemblywoman Lorena Gonzalez states, “worker’s aren’t machines. We’re not going to allow a corporation that puts profits over worker’s bodies to set labor standards back decades just for same-day delivery.” The new law will protect both current and former workers employed at a warehouse distribution center.

What is a productivity quota?

A.B. 701 defines quota as a work standard under which an employee is assigned or required to perform at the specified productivity speed or perform a quantified number of tasks, or to handle or produce a quantified amount of material, within a defined time period and under which the employee may suffer an adverse employment action if they fail to complete the performance standard.

Essentially, a quota is created by the employer or company of which the employee is responsible to meet. The quota consists of the number of tasks the employee is expected to complete within a certain amount of time. The problem arises when the quota is unfair, yet employees are still expected to perform tasks to complete the quota, and if the employee cannot do so, then the employee may experience an adverse employment action.

What is an adverse employment action?

In California, an adverse employment action is viewed as any type of retaliatory action taken by an employer that is reasonably likely to have a negative effect on an employee’s job performance, opportunities for a promotion, or ability to seek employment elsewhere. The most common examples of an adverse employment action are job loss or termination, reduced wages, and demotion to a lower employment position or job title.

What changes will happen because of A.B. 701?

Currently, companies like Amazon are not held accountable for providing employees with adequate notice of their productivity quotas and the adverse employment actions that may occur for failing to meet those quotas. A.B. 701 requires companies to provide more transparency to warehouse distribution center employees. For example, the bill provides greater protections to warehouse distribution center employees in the following ways:

  • Employers must provide adequate notice to every existing and new employee in writing describing each quota the employee is responsible to meet;
  • Employers must provide notice to all employees in writing of any adverse employment actions that may result from failing to meet a quota;
  • Employees will not be required to meet a quota that violates the employee’s right to meal and rest or break time, including using the bathroom;
  • Employers are prohibited from taking any adverse employment action against an employee for not meeting a quota if the quota violates the employee’s right to meal and rest or break time, including using the bathroom;
  • Employees must receive productive time credit towards any quota for actions taken by the employee to comply with California’s health and safety laws for the workplace;
  • Employees may receive productive time credit towards any quota during meals and rest or break time if the employee is required to be on call during those times;
  • Current and former employees have the right to request a written description of each quota and a copy of the most recent 90 days of the employee’s performance towards meeting the quota if the employee believes the company created a quota that violates the employee’s right to meals and rest or break time.

Another key component of the new law is that employees will have the ability to file a lawsuit for injunctive relief to obtain court ordered compliance with the law against employers and companies. Employees that are successful in the lawsuit for injunctive relief may be awarded suspension of the unfair quota, the court may reverse an unlawful termination of the employee for not meeting a quota that violated the employee’s labor rights, the employer and company may be ordered to cover the employee’s costs and attorney’s fees for filing the lawsuit. Each case will depend on the specific facts, so it is important to consult with an experienced labor law attorney to assess the specifics of your case.

A.B. 701 is scheduled to take effect in California on January 1, 2022.

Free Consultation

Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including Warehouse Employee related health and safety violations in the workplace, and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.

If you or someone you know suffered employment violations, you may have certain employee rights under state and federal law, and may be entitled to compensation as a part of a class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.

 


A gavel and a name plate with the engraving COVID-19

Update on COVID-19 Related Legal Issues

COVID-19 related lawsuits are increasing as the pandemic continues.

The scope of COVID-19 related lawsuits continues to expand as workers across the country are filing lawsuits seeking protection and damages from unfair labor practices. Moreover, there is a sense that more cases will be filed as more employees are impacted by the pandemic and businesses close, sometimes with little or no notice to soon-to-be unemployed workers.

Congress enacts the Families First Coronavirus Response Act

In March 2020, when Congress realized that a shut-down was imminent, Congress passed the Families First Coronavirus Response Act (FFCRA) which requires certain employers to offer employees paid sick leave or expanded family and medical leave for COVID-19 related reasons. Employees must have been employed for at least 30 days to benefit from FFCRA.

In general, the FFCRA provides for two weeks (up to 80 hours) of paid sick leave with regular pay if the employee is unable to work due to quarantine, or experiencing COVID-19 symptoms. Also, under the FFCRA, if an employee is unable to work due to the need to provide care for another individual under quarantine, or if their child’s school or child care provider closes due to COVID-19, the employee is allowed two weeks (up to 80 hours) of paid sick leave at two-thirds regular pay.

When an employee is unable to work in order to provide child care due to schools or child care being closed, employees are eligible for an additional 10 weeks of paid expanded family and medical leave at two-thirds regular pay.

Shortly after the FFCRA was enacted, a federal lawsuit was filed by an Eastern Airlines executive alleging she was fired after she requested time off under the FFCRA. According to the plaintiff, a single mother, she requested two hours of paid time off each day in order to care for her son, whose school was closed due to the pandemic. On the surface, it appears that the FFCRA was enacted to provide assistance to working parents such as the plaintiff in the midst of the pandemic. In this case, however, Eastern Airlines contends that the former employee was terminated on March 27, 2020, prior to the FFCRA taking effect on April 1, 2020.

COVID-19 and the ADA

Since 1990, the Americans with Disabilities Act (ADA) has provided significant protection to persons with disabilities in the workplace as well as society in general. One key aspect of the ADA is the requirement that employers provide reasonable accommodations to qualified employees with disabilities unless the accommodation would result in undue hardship to the employer. This requirement is quite broad and, for example, protects potential employees during the hiring and training process.

What constitutes a reasonable accommodation depends on the nature of the employee’s disability, the necessary duties of the job, the physical workplace and hardship (if any) to the employer. As a result of COVID-19, however, courts have been asked to consider how COVID-19 impacts established law and perhaps the need to re-interpret the meaning of reasonable accommodation under the ADA.

In June 2020, an engineer filed a lawsuit against his employer alleging discrimination in violation of the Massachusetts state ADA. In March, the employee was allowed to work from home in light of a state “stay at home” order. In April, his employer requested that he return to the office for work, but the employee requested he be allowed to continue to work remotely. The employee, who has high blood pressure and cares for his elderly mother, argues that he is at high risk of serious illness if he contracts COVID-19. He also fears transmitting the disease to his elderly mother who suffers from multiple medical conditions that place her at high risk. When his request for a reasonable accommodation, specifically to work remotely, was denied, he refused to return to the office, and was terminated.

Prior to the pandemic, courts did not consider a request to work remotely to be a reasonable accommodation. However, with increased health risks due to COVID-19, courts will be asked to re-consider whether a request to work remotely due to a heightened health risk of contracting or spreading the virus is a reasonable accommodation under the ADA.

More broadly, attorneys are using novel legal arguments in lawsuits based on the unique circumstances due to COVID-19 and the need to protect employees when current labor laws may be insufficient or simply never considered the challenges posed by the pandemic.

Lawsuits Filed after Employees Die From COVID-19

Sadly, some employees have died from COVID-19, and their families have filed lawsuits claiming that the workplace was not safe and employers failed to protect employees from the deadly virus. The key issue is whether employers followed federal and state safety guidelines, and if the employer failed to ensure proper protocols at work, they may be held liable for the death of an employee who contracted COVID-19 as a result of an unsafe workplace. Employers, however, claim that it is very difficult to prove how or where someone contracts the disease.

In one case, the family of a Safeway employee allege that the work environment was not safe because sick employees were still coming to work. Moreover, according to the lawsuit, on March 20, a memo was posted that stated, “If you are healthy, a mask will not protect you from the respiratory drops an infected person coughs out. Open areas of the mask can let those drops in.” The family filed a lawsuit after the employee tested positive for COVID-19 on April 4 and died eight days later. According to the family, Safeway failed to follow guidelines of the Occupational Safety and Health Administration (OSHA) issued on March 9 that required sick employees to be isolated.

Similar lawsuits have been filed against Walmart. In one case against a Walmart in Illinois, an employee was allegedly told to continue to work despite having symptoms, and was eventually sent home two days later when his symptoms worsened. He died two days later. Another Walmart employee in Dallas has filed a lawsuit that alleges she contracted COVID-19 because Walmart failed to provide personal protection equipment (PPE) and failed to follow health guidelines issued by health agencies including the Centers for Disease Control (CDC) and OSHA. As a result, she claims she contracted COVID-19 from the unsafe work environment at Walmart.

FREE CONSULTATION

Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including COVID-19 related health and safety violations in the workplace, and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.

If you or someone you know suffered employment violations due to COVID-19 related health and safety violations, you may have certain employee rights under state and federal law, and may be entitled to compensation as a part of a class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.


Know The Law

Know the Law. Know your Rights.

Know the Law. Know your Rights.

Generally, employees in California are entitled to a rest break and/or meal break when they work more than three and a half hours a day. Specifically, state law mandates a 10-minute rest break for every four hours worked in a day; and a 30-minute meal break if a shift is more than five hours. An additional 30-minute meal break is required by law if an employee works ten hours in a day.

There are some exceptions depending on the type of employee or industry, such as construction, commercial drivers, or utility workers. The vast majority of employees, however, are protected by state law and employers are violating your rights if you are not provided breaks according to the statute. If your employer is not providing you with mandated meal or rest breaks, you have the right to file a lawsuit and seek compensation.

California Labor Code 512(1)(a)

An employer shall not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee. An employer shall not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.

Employees may voluntarily waive meal breaks in certain circumstances. For example, if the shift is no more than six hours, the employee may waive the required meal break. An employee, however, may generally not waive the second mandated meal break required for a 10-hour shift if they waived the first meal break. The laws are often complicated, so employees should ask for clarification from a supervisor or human resources; as well as consult with an experienced employment attorney if there appears to be a pattern of violations.

Rest breaks are required by law for any shift lasting more than three and a half hours, and employees must be given a paid rest break every four hours or major fraction thereof. Employees may also voluntarily work during a rest break, but under no circumstances may the employer require you to work during your mandated breaks.

FREE CONSULTATION

Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including failure to provide meal or rest breaks and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.

If you or someone you know suffered employment violations as an employee such as being denied meal and rest breaks in California, you may have certain employee rights under state and federal law and may be entitled to unpaid wages, interest, attorneys’ fees and costs, and/or be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our experienced lawyers for a free consultation.


Srourian Law Firm Files Class Action Lawsuit Against Ruth's Chris Restaurant

Srourian Law Firm has filed a class action lawsuit on behalf of former and current workers of Ruth's Chris Steak House workers. The lawsuit includes both front of house and back of house workers, including waiters, hosts, barbacks, runners, and kitchen staff for all restaurant locations in the State of California. The lawsuit alleges that Ruth's Chris violated various provisions of the California Labor Code, including failure to pay minimum wage, failure to pay overtime, failure to authorize meal breaks, failure to authorize rest breaks, failure to timely pay final paychecks, failure to provide proper paystubs, and violation of California Private Attorney General Act, among several other violations.

The lawsuit further alleges unlawful restaurant policies of denying and discouraging breaks based on providing team meals to be eaten quickly, lack of adequate resting facilities, and a requirement to keep inaccurate records of meals breaks. The lawsuit further alleges the requirement for workers to take on-duty meal breaks in violation of California leave.

SROURIAN LAW FIRM’S CLASS ACTION LAWSUIT

The class action lawsuit, titled Adrian Quiroz v. Ruth's Chris Hospitality Group, Inc., is currently pending in Riverside Superior Court Case No. RIC1804127. If you worked for any Ruth's Chris location in California at any time from February 26, 2014, until the present and would like more information about this case, please call us at (310) 601-3131 or send an email to contact@slfla.com. Be sure to give your name, telephone number, and the best time to reach you, and an attorney will get back to you soon.

FREE CONSULTATION

Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is aggressively pursuing claims against MedMen, and other California cannabis dispensaries in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra. If you or someone you know suffered violations of the California Labor Code in relation to their employment with a cannabis dispensary, you may be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.