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Employers are already familiar with the importance of having a proper payroll system. With both exempt and nonexempt employees, companies must be mindful of any changes within their business.
When wages aren’t allocated correctly or on time, it does more than impact someone’s ability to make a living. It could result in a lawsuit – costing millions in compensation and requiring help from an employment attorney.
Recently, California’s Supreme Court decided missed meal and rest periods must be calculated at the same “regular rate of pay” used for overtime moving forward. But there’s one catch – it applies retroactively. That means this amendment could be met with some push back in court if there are any “constitutional objections.”
Ferra v. Loews Hollywood Hotel
This new change was established after the case, Ferry v. Loews Hollywood Hotel, LLC, earlier this year. The plaintiff in Ferra was a bartender at a hotel in California. She filed a putative class action against her boss for using quarterly nondiscretionary bonuses to avoid making premium payments for missed meal and rest breaks.
She argued that the regular compensation rate for break violations was one and the same as the regular rate of pay for overtime. But the Court of Appeal ruled in favor of the defendant – pushing it to the Supreme Court.
California Labor Code Sections 226.7 And 510
The Supreme Court concluded that both labor code sections 226.7 and 510 have the same purpose and meaning. Therefore, premium pay for noncompliant meals or rest periods should factor hourly wages and other non-discretionary payments for work. To better understand how these policies work, we briefly explain below:
- California Labor Code Section 226.7 applies to non-exempt employees. Those who aren’t getting meal and rest breaks are entitled to one extra hour of pay at the employee’s regular compensation rate for each missed period during the week.
- California Labor Code Section 510(a) requires employers to compensate at least one and one-half times the normal pay rate for working over 8 hours in a day or 40 in a week. And double for contributing over 12 hours in a day or working over 8 hours on the 7th day of the workweek.
How The Retroactive Policy Will Affect Employers
The policy went into effect on July 15, 2021. If it hasn’t happened already, employers should extensively review how they calculate break violations to avoid liability risks. Anytime employees work beyond their allotted time for small or large tasks, they must be compensated free from retaliation.
The legal dispute created by Ferra has initiated a lot of class action suits within the state and across the country. If you feel that your employer has miscalculated your hourly and additional earnings (ex. shift changes, incentives), call our attorneys at Mann & Elias. We can help you retrieve the back pay you’re entitled to.
What To Do If My Job Owes Me Money
Knowing what to do if an employer owes you wages is crucial – especially if you’ve just discovered past discrepancies in premium pay. The statute of limitations to file a claim is within two years of the violation. It seems like a long time but can end quickly. An unpaid overtime lawyer would recommend you do the following:
- Schedule a meeting with your boss to address your concerns over missed wages. Bring copies of your timesheets, paystubs, and other financial documents that could support your argument.
- Keep calm and communicate with intention. Some employers are willing to see staff quit than to compensate. However, you should see the change reflected in your next check if they agree.
- When wage disputes don’t go well – you’ll need an experienced attorney on your side. We can help address your concerns with the company and take it further by filing a report to the Department of Labor Standards Enforcement. It is a division of California’s Department of Industrial Relations.
For more information about the amendment to premium pay, you can always reach out to our legal team.
About Mann & Elias
The Law Offices of Mann & Elias is an employment law firm that provides guidance and legal support for individuals facing issues in the workplace. We represent clients at every level of the state and federal court systems. While there are thousands of lawyers to choose from, we strongly believe our success is based on:
- 50+ years of trial experience
- Excellent advocacy skills
- Intense preparation and research
- Quality care
When your case is in our hands, we hope to minimize stress and concerns associated with work. For dedicated representation with no upfront fees, give us a call at 323-866-9564 or email info@mannelias.com.