California Truckers Win Battle in Bid for Overtime Pay

Several California truckers filed a suit to recover overtime pay and expenses.  But the trucking company argued that the truckers had signed a form contract designating themselves as independent contractors.  Independent contractors are not entitled to overtime pay. 

The truckers lost at first and appealed their case.  The Court of Appeal handed the drivers a victory by holding that the form contract did not matter.  The case is Narayan v. EGL, Inc. and the Labor & Employment Blog has a nice post on the case. 

Genuine independent contractors are not entitled to overtime pay so the key question was whether the drivers were employees or independent contractors.  This is where the form contract came into play.   When the drivers were hired, they each signed a contract that said they were independent contractors and that the laws of Texas would apply to any dispute.   So EGL said that the drivers already agreed that they were not employees and told the California court that the laws of Texas should apply.   

But the California appellate court held that the form contract did not govern these issues.  First, the court held that the laws of California would apply because the drivers worked in California and their claim for benefits did not arise under the contract. 

Second, the court held that the truck drivers were  not necessarily independent contractors just because the form contract said so.  The California Labor Code has a test to determine if a worker is an employee or an independent contractor. The court held that the acknowledgment in the form contract of independent contractor status is "simply not significant under California's test of employment."  Therefore the California test must be applied to determine the drivers status. 

This is a win for employee rights because this decision shows that an employee cannot be forced to waive certain rights in a form contract.  Importantly, employees should not assume that they are independent contractors just because a contract says so.  These employement contracts do not determine an employees real status.  Instead, the California Labor Code governs. 

Paycheck Fairness Act promotes Equal Pay for Women

The Obama administration is trying to pass the Paycheck Fairness Act.  The goal is to make it easier for woman to sue for equal pay.  Senior White House Advisor Valereie Jarrett says that woman currently earn 77 cents for every dollar men earn. 

The Ohio Employer's Blog has a nice summary of the key changes contemplated by the Paycheck Fairness Act.   Here they are:

1.  Modified defense. Paycheck Fairness would impede the ability of employers to defend against sex discrimination wage payment claims. An employer can currently defend against an Equal Pay Act claim by showing that the pay difference between men and women was caused by “any factor other than sex.” Paycheck Fairness would alter this standard by requiring employers to show “a bona fide factor other than sex, such as education, training, or experience,” that is not sex-based, but is job-related to the position and consistent with business necessity. Moreover, even if an employer makes this showing, the employee could still prevail by showing that the employer refused to adopt an alternative employment practice that would serve the same business purpose without producing the same wage differential.

2.  Enhanced damages. The current Equal Pay Act’s remedies include back pay and liquidated damages that are capped at the amount of the back pay. Paycheck Fairness would steepen the remedies for sex discrimination in wage payments by allowing for uncapped punitive and compensatory damages.

3.  Non-retaliation. Paycheck Fairness would prohibit an employer from retaliating an employee who inquired about, discussed or disclosed the wages of the employee or another employee, unless discussing wages is part of an employee’s essential job function. While the National Labor Relations Act already covers this conduct, Paycheck Fairness’s enhanced remedies are much more extensive than those available under the NLRA.

4.  Class actions. Paycheck Fairness would change sex discrimination wage payment class actions from “opt in” classes to “opt out” classes, making classes in these cases larger and easier for employees to join.

5.  Reporting. Paycheck Fairness would require the EEOC to issue regulations on the collection of pay information from employers. It would also require the Office of Federal Contract Compliance Programs to use its “full range of investigatory tools” for investigation, compliance, and enforcement.

If this law passes, it will certainly make it easier for woman to obtain equal pay but lets see what the law looks like when, and if, it is ever passed into law. 

New Employee Rights Law Pending in Congress

A new employee rights law was recently submitted to Congress by Senator Sherrod Brown from Ohio.  The Employee Misclassification Prevention Act is intended to protect workers who are misclassified as independent contractors.   It is estimated that tens of thousands of employers routinely misclassify their employees as independent contractors.  

Employees who are misclassified as independent contractors lose critical workplace protections and employee benefits such as overtime pay, minumum wage, unemployment insurance, health and saftey protections and workers compensation.  

The EMPA would reduce the number of misclassification violations by:

•    Ensuring that employers keep records that reflect the accurate status of each worker as an employee or non-employee and clarifying that employers violate the Fair Labor Standards Act when they misclassify workers.
•    Increasing penalties on employers who misclassify their employees and are found to have violated employees' overtime or minimum wage rights.
•    Requiring employers to notify workers of their classification as an employee or non-employee
•    Creating an "employee rights web site" to inform workers about their federal and state wage and hour rights.
•    Providing protections to workers who are discriminated against because they have sought to be accurately classified.

For more information on the EMPA, please the post by the Overtime Advisor

Interns and the Entertainment Business - Is it Slavery?

An internship program is meant to provide the intern with supervised training in a profession or occupation such as a medical student working in a hospital assisting and learning from experienced doctors. 

 

However, many companies, and especially those in the Entertainment field, have turned internship programs into free labor camps.  Instead of providing supervised training in a specific area, many entertainment companies require the interns to simply work for free doing dull menial tasks such as entering names into a database.

 

College students eager for a chance to work in entertainment are taken advantage of and turned into free labor.   The "internships" are usually not educational or training oriented and instead amount to drudgery with no pay.

 

Certain radio stations owned by Cumulus Radio, for example, use interns to perform routine clerical tasks for free or to serve as free roadies who travel to locations and set up stages or equipment for promotions.   They also work inside the stations doing routine administrative or marketing support work like entering the names of contestants into a computer program.   They do all of this for free.  

 

These radio interns are not being trained or educated, instead they are being exploited for free labor.   They just do the work that another paid worker could do and there is often no educational component.  Importantly, these internship programs do not benefit the intern, instead the intern is exploited and the company benefits from free labor.     

 

In the past, the U.S. Department of Labor turned a blind eye to it, but now the law has changed and interns can no longer be forced to work for free.  Last month, the U.S. Department of Labor issued Fact Sheet #17: Internship Programs Under the Fair Labor Standards Act.   This document sets for the new rules for internship programs.  Fact Sheet 17 states that most all interns at private companies will be deemed employees who are entitled to wages and overtime pay.  This means that there is a presumption that the interns are really employees who must be paid for their work. 

 

In order for a company internship to be deemed a bona fide internship program, the following six criteria will be applied:

 

1.     The Internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2.     The internship experience is for the benefit of the intern;

3.     The intern does not displace regular employees, but works under the close supervision of existing staff;

4.     The employer that provides the training derives no immediate advantage from the activities of the intern and on occasion its operations may actually be impeded;

5.     The intern is not necessarily entitled to a job at the conclusion of the internship; and

6.     The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

 

If all six of the above criteria are met, the intern will not be considered an employee who is entitled to wages and overtime pay.  Under these rules, I would bet that most internship programs in the entertainment industry are suspect.  The ones that I have heard about in the radio industry fail miserably and the interns are really just employees who must be paid wages and overtime pay.    

 

 

The 3 Things to Know about Rest Breaks in California

In California, employees ARE entitled to rest breaks.   Here are the 3 key points to remember:

1.  You are Entitled to a 10 minute break every 4 hours

California employees must be provided with a 10-minute paid rest period for every four hours worked. The 10 minute rest period should be in the middle of the work period. 

 

2.  If You Don't Get a Break, You are Entitled to an Extra Hour of Pay

If your employer does not let you take your 10 minute break after four hours, then your employer must pay one extra hour of pay at your regular rate for every day that a rest break is not provided.  

 

3.  You can Enforce Your Rights if a Break or Extra Pay is Not provided

If your employer does not provide the required rest break or pay you the extra one hour of pay at your regular rate, then you can file a wage claim with the the Division of Labor Standards Enforcement.

 

 

Whole Foods Employee Fired for Eating Shrimp

A Whole Foods employee was fired this week for eating shrimp from a free sample offerred to customers at the organic grocery store.   The employee said that it was common for employees to eat free samples while they were cleaning up from events as the food would be thrown away.   But a new manager wanted to stop employees from eating the samples and he fired her to send a message.

The fired employee was shocked and upset and called our law firm to see if we could do anything about it.   Unfortunately, Whole Foods did not violate the law by firing her.   A person can be fired for eating shrimp even if eating shrimp used to be allowed.  

Since the grocery store worker was an employee at will, Whole Foods was free to fire her for any reason or no reason.   An employee at will has no right to keep her job.   At will employees are free to quit at any time for any reason and a company is free to fire at will employees for any reason.  No advance notice is required.  It may seem arbitrary and unfair, but that is the law in America.   There was nothing we could do to help this person. 

 

 

The Difference Between Independent Contractors and Employees

Companies try to reduce overhead by hiring independent contractors instead of employees. We get a lot of calls from people who want to know what the difference is between these two labels and how impacts them.

First, the independent contractor label is usually good for the company and bad for the person. The company saves money because Independent contractors are not entitled to receive any benefits such as health insurance or overtime pay. This is a huge savings for companies.

I write this post so people who are working as independent contractors can tell if they are being illegally deprived of benefits and legal protection.  The key factor is whether the employer has control or the right to control the worker both as to the work done and the manner and means in which it is performed. Courts typically consider these factors in determining whether a worker is an employee or independent contractor:

1. Whether the worker is engaged in an occupation or business distinct from that of the employer;
2. Whether or not the work is a part of the regular business of the employer;
3. Whether the employer or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged worker's investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The worker's opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the employer retains pervasive control over the operation as a whole, (2) the worker's duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288)

Other points to remember in determining whether a worker is an employee or independent contractor are that the existence of a written agreement purporting to establish an independent contractor relationship is not determinative (Borello, Id.at 349), and the fact that a worker is issued a 1099 form rather than a W-2 form is also not determinative with respect to independent contractor status. (Toyota Motor Sales v. Superior Court (1990) 220 Cal.App.3d 864, 877).