Increase in minimum wage/salary
The statewide California minimum wage will increase to $10.50 per hour on January 1, 2017 for employers with 26 or more employees; the minimum wage for employers with 25 or fewer employees will remain $10.00 per hour. Almost thirty different counties and cities in California have adopted an accelerated schedule for increasing the minimum wage to eventually reaching $15.00 per hour and may have a minimum wage that is higher than the statewide standard. Please contact us if you are unsure whether your municipality has a higher minimum wage than the statewide standard.
The statewide California minimum salary for exempt employees will increase to $43,680 on January 1, 2017 for employers with 26 or more employees as the California minimum salary for exempt employees is directly tied to the minimum wage. The minimum salary for exempt employees will remain at $41,600 for employers with 25 or fewer employees. A municipality with a minimum wage higher than the statewide minimum wage will not affect the minimum salaries for exempt employees. Please contact our office for an analysis of whether your salaried employees are properly classified as exempt.
AB 1066 – Eliminates the overtime exemption for agricultural workers
A previous exemption allowed agricultural farm workers to work up to ten hours in a workday without overtime. AB 1066 has eliminated that exemption and requires all agricultural farm workers be paid overtime for all time worked in excess of eight hours in a workday.
AB 1676 & SB 1063 – Wage discrimination and application to race and ethnicity
Under the Fair Pay Act, which went into effect on January 1, 2016, existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. SB 1063 expands the requirements of the Fair Pay Act to include employees’ race or ethnicity and not just gender. AB 1676 provides that an employee’s past salary alone cannot justify a disparity in compensation and must be tied to other bona fide factors.
AB 1843 – Juvenile criminal history in employment applications
Ab 1843 prohibits employers from asking applicants to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to “an arrest, detention, process, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.” Employment applications that inquire as to an applicant’s criminal background must be modified to comply with this new law.
City of Los Angeles – Ban the Box Ordinance
Los Angeles’ new ‘Ban the Box’ ordinance forbids employers from asking job applicants whether the applicant has been convicted of a crime or has been arrested for a crime and is awaiting criminal proceedings. All employment applications used for employers in the City of Los Angeles must be revised to remove language that asks about a criminal history.
AB 2535 – Itemized wage statements clarification
AB 2535 clarifies that Labor Code Section 226 does not require employers to include in itemized wage statements the total number of work hours by an employee properly classified as exempt. Employers must continue to include the total hours worked by non-exempt employees in the itemized wage statements for each pay period.
SB 1001 – Immigration related unfair practices
Employers who are in the process of verifying that workers have the necessary documentation to work in the United States are prohibited from requesting of such workers more documents or different documents than are required under federal law, to refuse to honor documents tendered that on their face reasonably appear to be genuine, to refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work, or to reinvestigate or re-verify an incumbent employee’s authorization to work. Under this Bill, which adds Labor Code Section 1019.1, applicants and employees may file a complaint with the Division of Labor Standards Enforcement. Any person who is deemed in violation of this new law is subject to a penalty imposed by the Labor Commissioner of up to $10,000, among other relief available.
SB 1241 – Choice of law and forum in employment agreements
SB 1241 adds Labor Code Section 925 and prohibits employers from requiring California-based employees to enter into agreements (including arbitration agreements) requiring them to: (1) adjudicate claims arising in California in a non-California forum; or (2) litigate their claims under the law of another jurisdiction, unless the employee was represented by counsel. Any provision of a contract that violates this new law is voidable by the employee, any dispute arising thereunder shall be adjudicated in California under California law and the employee is entitled to recover reasonable attorneys’ fees.
AB 2883 – Director and officer exclusions on workers’ compensation policies
AB 2883 changes the definition of employee and the eligibility criteria to elect exclusion from workers’ compensation coverage. Only corporate officers or members of the company’s board of directors who own 15% or more of the company may elect to be excluded from coverage. Each officer or director who owns 15% or more of the company and wishes to be excluded from coverage must sign a new waiver form attesting to his or her eligibility. The requirement that 100% of the company be owned by officers and/or directors has been eliminated. If your officers or directors are currently excluded from coverage, please contact your workers’ compensation carrier, agent, or broker.
AB 2330 – Minimum salary of private teachers
AB 2330 requires private primary and secondary schools to pay exempt teachers no less than the lowest salary offered by any school district anywhere in the State or the equivalent of no less than 70% of the lowest schedule salary offered by the school district or county in which the private elementary or secondary institution is located. Private teachers’ minimum salaries will no longer be tied to the State’s minimum wage.
AB 1311 – Temporary security guard services employees
AB 1311 requires that security guards employed by private patrol operators that are temporary services employers be paid weekly similar to other temporary services employees.
San Jose Initiative
San Jose voters passed an initiative in November that requires employers to offer hours to existing employees before hiring new employees.
U.S. D.O.L. Regulation on minimum overtime for exempt employers
The U.S. Department of Labor has adopted a regulation that sought to increase the federal minimum salary for exempt employees to $47,476 per year. On November 22, 2016, a federal court district judge granted an injunction that stopped this increase from going into effect. Until a final determination or appeal is made next year, employers do not need to comply with this increase. Many employers have, however, already begun to make anticipatory changes based on this increase. For a determination on whether certain changes can be reversed, please contact our office.
On December 14, 2015, the US Supreme Court issued its opinion in DirectTV v. Imburgia, reversing a California Court of Appeal’s refusal to enforce a consumer arbitration agreement containing a class action waiver. The DirectTV case is yet another favorable Supreme Court case supporting the enforceability of arbitration agreements and class action waivers, despite California courts’ repeated attempts to find ways to invalidate the enforceability of these agreements on their terms.
In Prue v. Brady Company, the California court held that a plaintiff who suffered a work-related injury and subsequently was fired stated a valid legal claim against the employer for wrongful termination in violation of public policy. The employer argued that the plaintiff’s claim was invalid because it effectively was a Labor Code section 132a retaliation claim that could only be brought before the Workers’ Compensation Appeals Board, not in court. The court disagreed, reasoning that the plaintiff adequately alleged that he was wrongfully terminated for having a disability, in violation of the public policy of the Fair Employment and Housing Act, and therefore the claim was not barred by the doctrine of workers’ compensation exclusivity. The court also held that a wrongful termination in violation of public policy claim is governed by a two-year statute of limitations and not by the statute of limitations applicable to FEHA claims. This decision confirms that employees who claim they have been fired for reasons relating to a work compensation injury can sue their employer in court and seek punitive damages and are not limited to filing Labor Code 132a claims before the Workers’ Compensation Appeals Board.
If you are in industries with cheerleaders, grocery workers or truck drivers there are additional new laws you should contact us about.
This is also your reminder that your employee handbook should be reviewed and revised for any changes in the law or your company policies this last year. Contact the attorneys at Merhab Robinson, Jackson & Clarkson to revise and update company handbooks and agreements to ensure compliance with these new laws.
The California Legislature enacted a number of new bills that become effective in 2015. Most notable of the legislation passed is California’s new paid sick leave law. Eligibility for the paid sick leave commences July 1, 2015, while the posting and notice requirements are effective January 1, 2015. Under the new law, all employees who have worked 30 hours or more accrue paid sick leave at a rate of one hour of leave for every 30 hours worked. This includes temporary, part-time, and seasonal employees who work 30 or more days within a year from the date they are first hired. Paid sick day must accrue at a rate of no less than one hour for every 30 hours worked. An employer can limit an employee’s use of paid sick days to 3 days (24 work hours) per year. An employee is entitled to use accrued sick days beginning on the 90th day of employment. Employers are prohibited from discriminating or retaliating against an employee who requests paid sick days. Additionally, employers must satisfy specified posting and notice and recordkeeping requirements, and must keep sick pay records for 3 years.
AB 1660 expands the definition of national origin discrimination in California’s Fair Employment and Housing Act (FEHA). It makes it a violation of FEHA for an employer to discriminate against an individual because he/she holds or presents a driver’s license issued to undocumented persons who can submit satisfactory proof of identity and California residency. Under the new law, an employer violates FEHA by requiring a person to present a driver’s license, unless possessing a driver’s license (a) is required by law or (b) is required by the employer and the employer’s requirement is otherwise permitted by law.
AB 2617 addresses the current arbitration laws. The new law prohibits the waiver of afforded under California civil rights laws in arbitration agreements or pre-litigation settlement agreements as a condition of entering into a contract for the provision of goods or services, including the right to file and pursue a civil action or complaint with, or otherwise notify, the Attorney General or any other public prosecutor, or law enforcement agency, the Department of Fair Employment and Housing, or any court or other governmental entity. The law also prohibits businesses from refusing to contract with individuals who refused to waive such legal rights.
AB 2074 amends Labor Code section 1194.2, in that it now allows an employee who alleges state minimum wage violations to recover liquidated damages in an amount equal to the wages unlawfully unpaid with interest at any time before the expiration of the statute of limitations on the underlying wage claim(s).
AB 1723 expands the penalties, restitution and liquidated damages available for the Labor Commissioner to pursue on an employee’s behalf. It authorizes the Labor Commissioner in administrative actions to seek waiting time penalties against employers pursuant to Labor Code section 203. They must investigate in order to prove that the failure to pay wages of a resigned or discharged employee was willful. Prior to this new law, this right was only available to employees in civil actions.
AB 2074 states that a lawsuit seeking to recover liquidated damages for minimum wage violations can be filed any time before the expiration of the statute of limitations that applies to the underlying wage claim, which is three years.
AB expands the laws surrounding immigration-related retaliation. An employer is prohibited from discharging or discriminating, retaliating, or taking adverse action against an employee because the employee updates or attempts to update personal information based on a lawful change of name, social security number, or federal employment authorization document. The civil penalty for such unlawful immigration-related retaliation is up to $10,000, which would be awarded to the employee who suffered from the violation. Employers are also prohibited from and penalized for filing (or threatening to file) a false complaint under any state or federal agency.
AB 1443 amends Government Code section 12940 to extend all the FEHA anti-harassment and anti-discrimination protections to unpaid interns.
The new “Child Labor Protection Act of 2014” allows for an award of treble damages if a minor is discriminated against in the terms or conditions of his/her employment because he/she filed a claim or civil action alleging a Labor Code violation that arose during minority. The statute of limitations for child labor violations is tolled until the child reaches 18 years of age. Additionally, civil penalties for a violation involving a minor 12 years of age or younger are increased to between $25,000 and $50,000 for each violation. As child labor law rules vary upon the particular age of the minor and the particular job involved, employers should always double-check the applicable restrictions when hiring any individual younger than 18 years of age.
AB 2053 requires employers that are subject to the mandatory sexual harassment prevention training requirement for supervisors (employers with at least 50 employees) to include a component on the prevention of “abusive conduct,” beginning January 1, 2015. The law defines “abusive conduct” as “conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests. [It] may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.” This new law does not mean that an employee can sue for abusive conduct in the workplace unless, of course, the conduct becomes discrimination or harassment against a protected class. The law only requires training on prevention of abusive conduct.
A new measure increases employer responsibilities in the event of a data breach. AB 1710 requires a business that owns, licenses, or maintains personal information about a California resident to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the personal information from unauthorized access, destruction, use, modification, or disclosure. If the person or business providing the notification of a data breach was the source of the breach, it requires that the person or business offer to provide appropriate identity theft prevention and mitigation services to the affected person at no cost for not less than 12 months if the breach exposed or may have exposed specified personal information.
AB 1897 creates a new law that requires that client employers and labor contractors share all civil liability and civil legal responsibility for payment of wages and workers’ compensation obligations to workers supplied by a labor contractor. Client employers are prohibited from shifting legal duties or liabilities under workplace safety provisions to labor contractors. Now, because of this new section, a company will be deemed jointly liable for certain violations along with its third-party labor contractor, regardless of the amount of actual control that the company exerts over contracted, leased or temp workers assigned to it. The new statute provides exemptions for specified nonprofit, labor, and motion picture payroll services organizations, and third parties engaged in an employee leasing arrangement. The new requirements do not apply to employers who have fewer than 25 employees or who hire fewer than 5 employees from the labor contractor.
SB 1360 amends section 226.7 of the Labor Code to confirm that recovery periods are counted as “hours worked” for which there shall be no deduction from an employee’s wages.
Important Case Laws:
In Cochran v. Schwan’s Home Serv., Inc., Labor Code Sec. 2802 (which requires employers to reimburse employees for expenses incurred at work), is interpreted to include a “reasonable percentage” of the employee’s cell phone bill. To show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and that he or she was not reimbursed. The case does not explain how to calculate a reasonable percentage, and it does not specify whether it extends to a portion of the cost of the phone itself.
In Peabody v. Time Warner Cable , the Court held that an employer may not attribute commission wages paid in one pay period to other pay periods to satisfy California’s compensation requirements. Each pay period alone must satisfy all of California’s compensation rules, including minimum wage, and the overtime exemption requirements.
In December 2014, the NLRB issued its Purple Communications, Inc . decision in protecting employees’ right to engage in “concerted activity” using an employer’s email system. The case stands for the rule that an employer cannot ban all “nonwork-related” use of email and considers email the new “water cooler” conversations. During non-work hours, employees must have the right to engage in “concerted activity” using their work e-mail address.
In Busk v. Integrity Staffing Solutions, Inc. , the U.S. Supreme Court overruled Ninth Circuit Court of Appeals and ruled that hourly employees who were required to undergo an anti-theft security check at the end of their warehouse shift should do not need to be compensated for their time spent waiting in line.
Employers should have their employment policies and practices reviewed to make sure personnel policies and handbooks are up to date and in compliance with the 2015 labor laws in California. Contact the attorneys at Merhab Robinson, Jackson & Clarkson to revise and update company handbooks and agreements to ensure compliance with these new laws.
In Cochran v. Schwan’s Home Service, Inc., the California appellate court recently held that employers are always required to reimburse employees for mandatory use of their personal cell phones, even if they do not incur any additional expense for doing so. Whether the employees have cell phone plans with unlimited minutes or limited minutes, the reimbursement owed is a reasonable percentage of their cell phone bills.
Therefore, under this new holding, employers now face liability for failure to reimburse employees for a “reasonable percentage” of their personal cell phone bills if they need to use them for work. The court did not provide any guidance as to what a “reasonable percentage” means.
Based on this holding, employers are encouraged to review their cell phone policies to assess this emerging issue. Employers should consider providing their employees with cell phones and voice/texting plans. Alternatively, employers should consider implementing written policies requiring their employees to track and submit expense reports regarding their work-related cell phone usage so that employees can be reimbursed for the actual cost of such usage. If the actual cost cannot be determined (i.e. employee already has an unlimited minutes/texting personal plan), then the employer will be required to reimburse the employee for a “reasonable percentage” of the personal cell phone bill. Another option that employers may consider is to make clear that cell phones are not needed and should not be used for work.
On September 10, 2014, Governor Jerry Brown joined legislators and workers in Los Angeles to sign the Healthy Workplaces, Healthy Families Act of 2014 (AB 1522), which now mandates at least 3 paid sick days per year to California’s workforce. With the Governor’s signature, California became only the second state (after Connecticut) in the nation to require paid sick leave.
The law takes effect on July 1, 2015, and applies to employees (including part time and temporary employees) who have worked 30 or more days in California within a year of their employment. Under the law, for every 30 hours worked, employees will accrue one hour of paid sick leave, which can be used to care for themselves or a family member. Unlike other California leave laws, there is no exception for smaller employers.
Paid sick days may be used for the diagnosis, care, or treatment of an existing health condition for, or the preventive care of an employee, or an employee’s immediate family member. Family members are defined to include spouses, registered domestic partners, children, parents (including step-parents and parents-in-law), grandparents, and siblings. Paid sick days are also available for employees who are the victims of domestic violence, sexual assault, or stalking.
Employers may limit employees to using 24 hours (or three 8-hour work days) of paid sick leave per year, and employers may cap total accrual of paid sick days at 48 hours (or six 8-hour work days). Employees are entitled to use the accrued sick days on the 90th day of their employment. The employees may decide the amount of leave they need to use. However, employers may set a reasonable minimum increment, not to exceed 2 hours, for the use of the paid leave. Accrued, but unused, sick days must carry over into the following year. However, employers may limit this to the 48 hour/six-day accrual cap. Unlike vacation laws, employees are not entitled to be paid for accrued but unused sick days upon resignation or termination of employment. However, the law requires that if an employee is rehired within a year of their separation, any unused sick leave that was previously accrued must be reinstated.
At the time of hiring, employers must provide new employees notice of their entitlement to paid sick leave and their right to file a complaint with the Labor Commissioner where retaliation occurs by the employer for an employee’s use of, or request for the use of, accrued paid sick leave.
Employers will also be required to post a workplace notice created by the Labor Commissioner containing all the information related to these laws.
Employers are now also required to provide employees with written notice that sets for the amount of paid sick leave available or the amount of PTO leave provided in lieu of sick leave. This notice must be either on the employee’s itemized wage statement or in a separate writing provided on the employee’s pay date with the employee’s payment of wages.
Records documenting employee sick leave usage and accrual must be retained for at least three years. These records must be made available for employee inspection within 21 days of a written or oral request. If an employer fails to keep adequate records, it will be presumed that the affected employee is entitled to the maximum number of accruable hours under the law, unless the employer can show otherwise by clear and convincing evidence.
Importantly, this law creates a rebuttable presumption of unlawful retaliation for any adverse employment action occurring within 30 days of an employee engaging in certain protected activity, such as the filing of a complaint with the Labor Commissioner, or opposing a policy practice or act of the Company.
If a violation of this law is found to have occurred, the Labor Commissioner may order “any appropriate relief” including reinstatement, backpay, payment of unlawfully withheld sick days, administrative penalties, and enforcement fines payable to the state. If paid sick days are found to have been unlawfully withheld, the employer will be penalized in the dollar amount of paid sick days withheld multiplied by 3 or $250, which is greater (with a maximum of $4,000.00). Further, if the violation of this law has resulted in additional harm to the employee (such as discharge), employers will also be subject to an administrative penalty of $50 for each day that the violation occurred. The law also authorizes the Labor Commissioner or the Attorney General to institute a civil action, on behalf of aggrieved employees, to seek as reinstatement, backpay, administrative penalties, liquidated damages, and reasonable attorney’s fees.
Employers are encouraged to update their sick leave and record-retention policies, as well as their employee handbook to ensure compliance with these new laws. Employers must also ensure that they comply with the new notice and posting requirements, and that the employee itemized wage include the newly required written notice setting forth the available sick leave for PTO.
If you are one of the hundreds of millions of people using social networks, there is a good chance that the information you share through social networking is exposed to more people thank you think. With the growing use of social networks we should all be aware of how this lack of privacy in social networking can affect us.
With so few decisions addressing the privacy protections in social media, the issue was recently addressed in the Federal District Court in New Jersey, which issued a decision holding that private wall posts placed on Facebook fall within the protection of Stored Communications Act (“SCA”). The SCA was passed in 1986 so as to provide privacy protections with regard to electronic communications. While the SCA was passed in 1986, prior to the start of the internet era, courts have held that it applies to: 1) an electronic communication, 2) transmitted via an electronic communication service, 3) that is in an electronic storage medium, and 4) is not public.
In the recent decision in Ehling v. Monmouth-Ocean Hospital Services Corp., 2013 WL 4436539 (D.N.J. Aug. 20, 2013), the Federal District Court in New Jersey held that Facebook wall posts, with privacy settings not allowing public disclosure, meet all four of the criteria enumerated in the SCA, allowing for a private cause of action under the SCA. The Court held that private Facebook postings clearly fall within the SCA’s protections, because Facebook “allows users to select privacy settings for their Facebook walls.” Id. The Federal District Court held that “when users make their Facebook wall posts inaccessible to the general public,” those posts are deemed to be private communications, transmitted and stored electronically at Facebook for purposes of the SCA. Nonetheless, the District Court held that although plaintiff’s private Facebook posts are in fact covered under the SCA, the plaintiff failed to prove a viable claim because the defendant’s access to the Facebook posts was authorized, and therefore, fell within the “authorized user” exception under the Act.
A recent decision by California Court of Appeal in Gonzales v. Downtown LA Motors, LP, unless overruled, will affect the future of “piece-rate” compensation of employees. The Court held that automobile mechanics, who earned at least minimum wage for every hour worked based on their “piece-meal” compensation plan, were entitled to separate hourly compensation for any time not spent performing auto repairs. This decision, which awarded over $1.5M to the class, will likely be appealed to the Supreme Court.
DTLA had a compensation system where service technicians were paid on a “piece-rate basis”. DTLA’s mechanics were compensated based on a piece rate known as “flag hours,” which pays a set number of hours for a particular repair, regardless of the actual time the mechanic takes to complete the repair. DTLA also kept track of all the time a technician spends at the work site, whether or not the technician was working on a repair order. At the end of each pay period, DTLA calculated how much each technician would earn if paid an amount equal to his total recorded hours “on the clock” multiplied by the minimum wage. By doing so, DTLA guaranteed the mechanics the minimum wage for every hour worked (not just time spent making repairs).
Gonzales claims that DTLA violated California law by failing to pay technicians a minimum wage during their waiting time — periods of time they were on the clock, but waiting for repair orders or performing other non-repair tasks. The Court agreed. However, the Court clarified that its holding was limited to the facts before it, and that it was not making any ruling regarding how the same pay structure would apply in a commission setting.
If you currently have a piece-rate compensation program for your employees, please call us to discuss the associated risks arising out of this decision.
On September 27, 2012 California became one of three states in the nation, after Maryland and Illinois, to increase privacy protections for social media users by limiting an employer’s ability to demand employees’ social media usernames, passwords and other information related to their personal social media accounts.
Essentially, Assembly Bill 1844 “prohibit[s] an employer from requiring or requesting an employee or applicant for employment to disclose a username or password for the purpose of accessing personal social media, to access personal social media in the presence of the employer, or to divulge any personal social media.” The new law also prohibits an employer from discharging, disciplining, threatening to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates the provisions of the law. AB 1844 describes “social media” as including videos, photographs, blogs, podcasts, text messages, e-mail, online accounts, and website profiles.
However, AB 1844 does not apply to information used to access employer-issued electronic devices.The bill specifically states that it shall not be construed to preclude an employer from requiring an employee to disclose passwords or usernames for such devices. Similarly, employers are specifically permitted to require employees to divulge social media passwords for the purposes of investigating allegations of employee misconduct.
Govern Brown commented in a Facebook post, “California pioneered the social media revolution. These laws protect Californians from unwarranted invasions of their social media accounts.”
The Bill will add the following text to the Labor Code as Section 980:
980. (a) As used in this chapter, “social media” means an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.
(b) An employer shall not require or request an employee or applicant for employment to do any of the following:
(1) Disclose a username or password for the purpose of accessing personal social media.
(2) Access personal social media in the presence of the employer.
(3) Divulge any personal social media, except as provided in subdivision (c).
(c) Nothing in this section shall affect an employer’s existing rights and obligations to request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding.
(d) Nothing in this section precludes an employer from requiring or requesting an employee to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.
(e) An employer shall not discharge, discipline, threaten to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates this section. However, this section does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law.
SEC. 2. Notwithstanding any other provision of law, the Labor Commissioner, who is Chief of the Division of Labor Standards Enforcement, is not required to investigate or determine any violation of this act.
Nicely following up the California Supreme Court’s recent decision on meal/rest periods under Brinker, on April 30, 2012, the Court in Kirby v. Imoos Fire (SC S185827 4/30/12) held that the California Labor Code does not authorize the award of attorney’s fees to a party that prevails on claims related to meal/rest period violations brought under Labor Code §226.7.
As a general rule, a prevailing party may only recover his/her attorney’s fees when authorized by statute or pursuant to an agreement between the parties. In Kirby, the Court examined two attorney’s fee provisions of the California Labor Code (‘Code’) in relation to claims for meal/rest period violations under Code §226.7. First, Code §218.5 allows for two-way attorney’s fee-shifting (in favor of the employer or the employee), awarding attorney’s fees to a prevailing party in any action ‘brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.’ However, this section does not apply to actions under Code §1194, which provides for the awarding of attorney’s fees only to employees who prevail in an action for unpaid minimum wages or overtime pay.
In Kirby, plaintiff’s sixth cause of action against Imoos Fire was for failure to provide rest periods under Code §226.7. The question the Court addressed is whether a Code §226.7 meal/rest period violation claim also fell under either Code § 218.5 or §1194 and thus allowed for the awarding of attorney’s fees.
The Court concluded that §1194 does not authorize an award of attorney’s fees to employees who prevail on an action related to meal/rest period violations because §1194 covers nonpayment of minimum wage and overtime compensation only. Further, the Court determined that §226.7 relates to meal/rest period violations and, therefore, nonpayment of wages as contemplated by §218.5 is not the focus of the protections offered in the section. Therefore, since meal and rest period violation claims are not claims brought for nonpayment of wages within the meaning of §218.5, the Court held that neither party to the action under §226.7 is entitled to attorney’s fees.