Employment Law

Is Your Employer Failing to Take Your Per Diem Wages Into Account For the Purpose of Calculating Your Overtime Pay?

Per diem payments, sometimes also called a “daily allowance,” are made to workers in many industries. Per diem payments are supposed to cover for expenses incurred in furtherance of the employer’s business that would otherwise be reimbursable to the employee, and when used properly they can save workers the hassle of preparing expense reports for their employers. 

However, some employers may want to use “per diem” payments as a means of paying wages, which could lead to violations of state and federal overtime laws. Labor laws that set forth minimum wages require all eligible employers to pay employees overtime at “not less than one and one-half times” the employees’ regular rates of pay. True per diem payments are excluded from the regular rate of pay. But if a per diem benefit functions as compensation for work performed rather than as genuine reimbursement for expenses incurred, the per diem payments need to be calculated in the employees’ regular rate of pay because they are functionally “wages” for the purpose of overtime laws. 

If an employer wrongly treats wages as per diem payments, the employees’ overtime rate of pay would be unlawfully reduced. The employee might also be undercompensated for PTO under certain circumstances, such as where the employer’s policy provides for payment at the “regular rate of pay,” or when an employee receives a payout of earned-but-unused vacation pay at the end of employment.  

The question of whether a per diem payment is functionally a “wage” or truly a reimbursement for expenses can be difficult to answer. An accurate assessment ultimately depends on the facts and circumstances of the particular case, but courts resolving the issue have looked at some of the following factors:

  • The amount of per diem payments in relation to other compensation;
  • How the employer treats the per diem payments;
  • Whether the employer requires substantiation of any expenses incurred by the employee;
  • Whether employees receive per diem payments regardless of their working location and any need to cover expenses;
  • Whether the per diem payments do not reasonably approximate actual expenses; and
  • Whether the per diem payments vary with the hours worked.

If you are being paid per diem or a daily allowance and you suspect your employer may be using “per diem” payments to reduce your regular rate of pay for labor pay purposes, contact an experienced labor lawyer immediately because you could recover the unpaid wages in a civil lawsuit against your employer. 

California Workers: You May Be Able to Say “No” to Forced Arbitration

On September 15, 2021, the United States Court of Appeals for the Ninth Circuit lifted an injunction that had prevented enforcement of two California statutes: Labor Code section 432.6 and Government Code section 12953. The Labor Code statute prevents employers from requiring their employees, as a condition of employment, to give up their right to sue in court for violations of the Fair Employment and Housing Act (“FEHA”) or the Labor Code. The Government Code section makes it an “unlawful employment practice” for purposes of the FEHA if an employer violates the Labor Code section. 

Although the statutes are broadly written to protect the workers’ access to the courts, one common application would be in the context of forced arbitration agreements. Such agreements have become a fixture of the modern workplace, and employers frequently require employees, as a condition of employment, to waive their right to a court trial in the event of a legal dispute with the employer. Labor Code section 432.6 and Government Code section 12953 work together to protect a worker’s right to say “no” when an employer asks the employee to waive their right to a court trial as part of a forced arbitration agreement, at least for claims under the FEHA or the California Labor Code. If an employer discharges or refuses to hire a worker who properly exercise his or her right to say “no,” the anti-retaliation provision of the FEHA create an independent basis for a lawsuit against the employer. This gives the new statutes some “teeth” by empowering workers not only to assert their rights, but to hold companies accountable when those rights are denied.

Together, the FEHA and the Labor Code contain the majority of protections available to California workers. For example, the FEHA contains the principle anti-discrimination, anti-harassment, and anti-retaliation laws that protect California workers’ right to equal opportunity in the workplace. The Labor Code protects the rights to a minimum wage, and to overtime for many workers in California. Now, California workers have a right to say “no” when their employers want to force employees to give up their rights to have those claims heard in court. 

Businesses may yet appeal this issue to the United States Supreme Court, which would then have the final say on whether to invalidate these statutes as a matter of federal law. For now, California workers are free to protect their access to the courts. Workers should say “no” if current or prospective employers try to make them sign forced arbitration agreements, and they should contact an experienced labor and employment attorney if they experience any discrimination or retaliation for asserting their rights. 

Is Your Employer Paying Employees Unequally?

The California Equal Pay Act is a law intended to protect employees from receiving unequal pay. The Act prohibits employers from paying their employees less for substantially similar work because of their sex, race, or ethnicity.

It is also illegal for employers to retaliate against employees who file complaints under the California Equal Pay Act. If you believe that your employer has violated your rights or engaged in any unequal pay practices, you may be eligible to file a complaint or lawsuit against your employer.

What is Illegal Under the California Equal Pay Act?

While the California Equal Pay Act passed back in 1949, the Act is regularly strengthened by amendments. One of the most notable amendments was the California Fair Pay Act in 2015, which included extensive changes to the Act.

Amendments in recent years brought some of the most significant changes to the California Equal Pay Act, including:

  1. The requirement to provide equal pay for employees who perform “substantially similar work” (you can find the definition of the term below);
  2. Employees are no longer required to compare work at the same establishment to prove that an employer engaged in unequal pay;
  3. Employers may no longer justify any pay difference between employees because of different sex, race, or ethnicity or based on an employee’s prior salary;
  4. Employers are prohibited from retaliating against employees who file complaints under the Act; and
  5. Employers are required to maintain employment and wage records for three years.

California legislators introduce additional protections for employees through amendments to the California Equal Pay Act almost every year. A skilled employment lawyer will keep you up to date with the latest changes to the Act.

How Does the Law Define Substantially Similar Work?

You have probably noticed that the California Equal Pay Act uses the term “substantially similar work” when prohibiting employers from paying an employee less than other employees of different sex, race, or ethnicity if the employees perform substantially similar work.

The California Equal Pay Act views the term substantially similar work as a similar level of skill, effort, and responsibility used by employees when performing work under similar working conditions:

  • Working conditions refer to the physical surroundings where an employee performs their duties, including the employee’s exposure to such conditions as temperature, heat, fume, and other hazards.
  • Skills refer to the level of education, training, and experience required to perform work.
  • Effort refers to the amount of mental and physical exertion necessary to perform work.
  • Responsibility refers to the degree of accountability and discretion required in performing the job duties.

When an employee files an unequal pay claim, California’s Department of Fair Employment and Housing (DFEH) will determine whether the work performed by two or more employees whose job titles and salary is being compared is “substantially similar.”

What Do You Need to Prove When Filing an Unequal Pay Claim?

When you file a complaint with the DFEH alleging unequal pay, you will have to prove that you are paid less than an employee of the opposite sex or a different race or ethnicity even though you perform substantially similar work.

Then, your employer will have the opportunity to provide a legitimate reason, if any, to explain the difference in pay. It is advisable to seek the legal counsel of an attorney to help you strengthen your complaint and prevail on your unequal pay in California.

Keep in mind that California law imposes a time limit on unequal pay claims. Under California Labor Code § 1197.5(i), employees have two years from the date of the last violation to bring a claim to recover lost wages. The only exception to the time limit under the California Equal Pay Act is if the employer engaged in willful conduct. In that case, you have three years to file a claim.

Note: To determine the deadline to bring an unequal pay claim, each paycheck is considered a violation.

Can Your Employer Ask You About Your Past Salary?

In 2018, California legislators amended the California Equal Pay Act to make it illegal for employers to ask job candidates about their salary history. Thus, your prospective employer cannot ask you about your current or past salary at any point during a job interview. However, if an employee decides to volunteer information about their past salary, the employer will not commit a violation.

Can Your Employer Prohibit You From Discussing Your Salary With Coworkers?

No, it is illegal for employers to prohibit their employees from discussing how much they make with their coworkers. Your employer may not implement pay secrecy policies or retaliate against employees who discuss their salary with coworkers.

If your employer fired, demoted, denied benefits, refused to promote you, decreased your salary, or in any other way retaliated against you for asking your coworkers about their pay, you might be able to pursue a retaliation lawsuit. Consult with a retaliation lawyer to discuss your legal options.

How Do You Know That You Have an Unequal Pay Claim Against Your Employer?

Each case is unique, which is why it is best to consult with an attorney to discuss your particular situation and determine if you have a valid claim against your employer. If you believe that you are paid less than another employee who performs substantially similar work because of your sex, race, or ethnicity, do not hesitate to speak with an attorney.

An employment attorney will review your particular situation and determine if your employer is engaging in unequal pay. If you can prevail on your claim, you may be able to recover the difference in wages, attorney’s fees, legal costs, interests, as well as liquidated damages.

Many people are hesitant to file a claim against their employers, so they live with unlawful and unfair conditions at work for far too long. However, the law is in place for a reason, and employees should never accept unlawful employment actions. Stand up for your rights with the help of the right legal team.

Proyecto de Ley en California Protégé a Trabajadores de Almacén de Cuotas Inseguras

El 8 de Septiembre 2021, el Senado de California paso AB 701, un proyecto de ley dirigido hacia proporcionar limitaciones a las empresas que les imponen cuotas de velocidad a los trabajadores de almacén en centros de distribución de almacén. 

El proposito del proyecto de ley es asegurarse que los empleados no sean requeridos a cumplir las cuotas que previenen el cumplimiento de períodos de comida o descanso, uso de baños o leyes de salud y seguridad ocupacional.

Si se firma como ley, ¿qué protecciones se requerirán?

El proyecto de ley requiere que los empleadores proporcionen una descripción por escrito de cada cuota a la que están sujetos los empleados, incluida la cantidad cuantificada de proyectos que se realizarán o materiales que se producirán o manipularán, y cualquier acción laboral adversa potencial que pudiera resultar de no cumplir con la cuota dentro de 30 días después de la contratación o dentro de los 30 días posteriores a la entrada en vigencia de la ley.

El proyecto de ley proporciona transparencia entre la empresa y el empleado en cuanto a los niveles de productividad esperada de cada empleado. Tambien évitara que las empresas despidan a sus empleados por no cumplir con cuotas poco realisticas que forzan a los empleados a comprometer su salud y seguridad para cumplir con las demandas de las empresas.

Empleados Tienen El Derecho a Solicitar y Revisar Cuotas

Bajo AB 701, si un empleado actual o anterior cree que cumplir con una cuota causó una violación de su derecho a una comida o un período de descanso o requirió que violaran cualquier ley o norma de salud y seguridad ocupacional, el empleado tiene el derecho de solicitar, y el empleador es requerido a proporcionar, una descripción por escrito de cada cuota a la que el empleado esta sujeto, al igual que una copia de los últimos 90 días de los datos personales de velocidad de trabajo del empleado.

Adémas, hay una presunción refutable de represalia si un empleador de cualquier manera discrimina, toma represalias, o toma alguna acción adversa contra cualquier empleado dentro de los 90 días de la empleado: 

(a) Solicitar al empleador que proporcione información sobre una cuota o datos personales de velocidad de trabajo; o

(b) Presentar una queja relacionada con una cuota alegando cualquier violación de la ley, ante el empleador, el comisionado, la división o la agencia gubernamental local o estatal.

Honorarios de Abogados

En particular, el proyecto de ley prevé los honorarios de los abogados para aquellos que busquen acciones legales de conformidad con AB 701, que crea acceso a la justicia para los empleados afectados.

Publicación de datos por el Comisionado Laboral 

Para el 1 de enero de 2023, el Comisionado Laboral debe reportar:

(1) el número de reclamos presentados ante el comisionado bajo este proyecto de ley,

(2) datos sobre cuotas de producción de almacén en almacenes donde las tasas anuales de lesiones de los empleados están por encima del promedio de la industria, y

(3) el número de investigaciones y acciones de ejecución iniciadas.

Si se convierte en ley, la AB 701 expondrá las cuotas de trabajo inseguras establecidas por empresas como Amazon y dará poder a los empleados que dependen de estos trabajos para mantener a sus familias y hasta ahora no han tenido otra alternativa que priorizar el cumplimiento de las cuotas sobre su propia seguridad.

California Bill Protects Warehouse Workers from Unsafe Quotas

On September 8, 2021, the California Senate passed AB 701, a bill aimed at providing limitations on companies that enforce speed quotas on warehouse workers in warehouse distribution centers. 

The purpose of the bill is to ensure that employees not be required to meet quotas that prevent compliance with meal or rest periods, use of bathroom facilities, or occupational health and safety laws. 

If Signed Into Law, What Protections Will Be Required?

The bill requires employers to provide a written description of each quota employees are subject to, including the quantified number of tasks to be performed or materials to be produced or handled, and any potential adverse employment action that could result from failure to meet the quota within 30 days of hiring or within 30 days after the law comes into effect. 

The bill provides transparency between the company and the employee as to the productivity levels expected of each employee. It will also prevent companies from terminating employees for failing to meet unrealistic quotas that force employees to compromise their health and safety to meet a company’s bottom line.

Employees Have the Right to Request and Review Quotas

Under AB 701, if a current or former employee believes that meeting a quota caused a violation of their right to a meal or rest period or required them to violate any occupational health and safety law or standard, they have the right to request, and the employer is required to provide, a written description of each quota to which the employee is subject, as well as a copy of the most recent 90 days of the employee’s personal work speed data.

In addition, there is a rebuttable presumption of retaliation if an employer in any manner discriminates, retaliates, or takes any adverse action against any employee within 90 days of the employee:

(a) Requesting the employer provide information about a quota or personal work speed data; or

(b) Making a complaint related to a quota alleging any violation the law, to the employer, commissioner, the division, or local or state governmental agency.

Attorney’s Fees 

Notably, the bill provides for attorneys’ fees for those who seek legal action pursuant to AB 701 which creates access to justice for affected employees. 

Publication of Data by the Labor Commissioner

By January 1, 2023, the Labor Commissioner is required to report: (1) the number of claims filed with the commissioner under this bill; (2) data on warehouse production quotas in warehouses where annual employee injury rates are above the industry average, and (3) the number of investigations and enforcement actions initiated.

If passed into law, AB 701 will expose unsafe work quotas set by companies like Amazon and give power to employees who depend on these jobs to provide for their families and until now have had no alternative but to prioritize quota compliance over their own safety.

California Judge Rules Ballot Initiative Classifying App-Based Drivers As Independent Contractors Is Unconstitutional

Proposition 22, the controversial California ballot measure classifying app-based drivers as independent contractors, hit another roadblock on Friday after a judge ruled the law was unconstitutional.  

In its decision, Alameda County Superior Court Judge Frank Roesch determined the law unconstitutionally limited the “power of a future legislature to define app-based drivers as workers subject to workers’ compensation law” – a power reserved solely for the legislature under the state constitution.  Further, the law violated the constitutional provision requiring laws and initiatives be limited to a single subject, as it added language preventing app-drivers from unionizing.  The bar on Californians’ right to collective bargaining “appears only to protect the economic interests of the network companies in having a divided, un-unionized workforce, which is not a stated goal of the legislation.”  As the unconstitutional provisions could not be severed from the initiative, the entire proposition was found to be unconstitutional.  

What does this mean now?  The ride-sharing companies will assuredly appeal, as Uber spokesperson Noah Edwardsen has already vowed, “we will appeal and we expect to win.”  In the meantime, the ride-sharing companies will pursue a stay on the judge’s ruling, which would essentially freeze the court order until the state court of appeals has weighed in.   Given the interests at stake, this issue could be litigated up to the California Supreme Court. 

A link to the Court’s order can be found here:  https://www.documentcloud.org/documents/21046905-prop-22-unconstitutional

Translate »