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Starting January 1, 2017, California Labor Code, Section 925 generally prohibits choice of law or venue provisions in employment contracts for California employees. Section 925 provides as follows:

(a) An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:

(1) Require the employee to adjudicate outside of California a claim arising in California.

(2) Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.

(b) Any provision of a contract that violates subdivision (a) is voidable by the employee, and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in California and California law shall govern the dispute.

(c) In addition to injunctive relief and any other remedies available, a court may award an employee who is enforcing his or her rights under this section reasonable attorney’s fees.

(d) For purposes of this section, adjudication includes litigation and arbitration.

(e) This section shall not apply to a contract with an employee who is in fact individually represented by legal counsel in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied.

(f) This section shall apply to a contract entered into, modified, or extended on or after January 1, 2017.1

Before Labor Code section 925, when out-of-state employers had full-time employees that live in California, the employers would often incorporate choice-of-law or venue selection provisions into employment contracts. Employees had to agree to these provisions as a condition of employment. The choice-of-law or venue locations typically had labor laws that were more favorable to the employer than California’s labor laws. For example, California law prohibits employers from requiring employees to waive their right to a jury trial before a dispute arises and also places significant limitations on arbitration agreements. California law also requires the reimbursement of certain business expenses, but many other states do not. Some out-of-state employers used choice of law or venue provisions simply to have uniformity throughout the company workforce and to create some litigation predictability. Labor Code section 925 severely limits this practice.

Interestingly, Labor Code section 925 does not render choice of law or venue provisions in employment contracts outright “void”; just “voidable by the employee.” This appears to give the employer some wiggle room in seeking to change venue to outside of California. It also specifically limits the prohibition on choice of law or venue provisions, “…as a condition of employment.” If an employer includes a choice of law provision in some other area of the employment contract, such as with an optional stock plan, the employer might be able to select a different state to adjudicate those types of disputes. Section 925 also does not apply (1) if the employee was represented by independent legal counsel who negotiated the terms of the employment agreement or (2) to any employment agreements entered into before January 1, 2017 (but it does apply to agreements that are modified or extended after that date.)

Many employment contracts include arbitration provisions as a means of resolving any disputes. California Labor Code section 925 expressly defines “adjudication” to include both litigation and arbitration. However, the Federal Arbitration Act preempts state laws, so an employer might be able to include an enforceable arbitration provision if the arbitration clause is governed by the Federal Arbitration Act.

What should an employee do if faced with a choice of law or venue provision in an employment agreement?

• In reality, this is a sensitive issue. Employees are reluctant to point out issues in their employment agreements at the risk of the job offer being retracted. Of course there are potential legal remedies available to employees who are retaliated against for enforcing their rights under Section 925. But there are also economic realities of needing to receive a paycheck sooner as opposed to later or after a legal battle. The best advice is to consult with an attorney to consider your options.

What steps should an employer with California employees take to ensure compliance with section 925? An employer should:

Review their standard employment agreements and boilerplate language regarding venue and choice of law, revising them for future use with California-based employees.
Include an acknowledgment that the employee was independently represented by counsel in negotiating his or her employment agreement (and have the lawyer for the employee execute the acknowledgment as well).
Consider removing all choice of law or venue provisions for employment contracts involving all California employees. (Or, add provisions that expressly inform employees of their right to void the choice of law or venue provision in the employment contract and/or that such provision was not a condition of employment.)
Review current or pending employment contracts and determine (1) if they contain choice of law or venue provisions and (2) if they do, extend the contracts before the end of the calendar year, before section 925 takes effect.

November 22, 2016, San Diego, California – On April 4, 2016, Governor Brown signed Senate Bill (“SB”) 3 into law. SB 3 incrementally raises California’s minimum wage each year between 2017 and 2022 and also changes what constitutes an “exempt” employee from overtime pay requirements. (Had a bill not been passed, California citizens would have had an opportunity to decide on raising the minimum wage. The California $15 per hour Minimum Wage Initiative, was certified for the November ballot but then was withdrawn after SB 3 was passed and signed into law.) Absent certain economic conditions, the minimum wage will increase from $10 to $15 an hour by 2022, as follows:

1 On January 1, 2017, the minimum wage will increase to $10.50 per hour.

2 On January 1, 2018, the minimum wage will increase to $11 per hour.

3 On January 1, 2019, the minimum wage will increase to $12 per hour.

4 On January 1, 2020, the minimum wage will increase to $13 per hour.

5 On January 1, 2021, the minimum wage will increase to $14 per hour.

6 On January 1, 2022, the minimum wage will increase to $15 per hour.

There is a delay for small businesses to implement the minimum wage schedule.. Specifically, the above schedule is delayed at each step by one year for employers with 25 or fewer employees. Public employers will also be less impacted by these changes than private sector employers will be. However, K-12 school districts must comply with state minimum wage law. This is because a Court of Appeal decision from 2010, (Sheppard v. North Orange County Regional Occupational Program), considered whether the Industrial Welfare Commission (IWC) could impose a minimum wage on the public sector and held that it could for a K-12 school district.

Some California municipalities have already increased the minimum wage in their cities this year:

• El Cerrito: $11.60/hour

• Emeryville: $13/hour for businesses with 55 or fewer employees; $14.82/hour for businesses with 56 or more employees

• Los Angeles (city): $10.50/hour for employers with 26 or more employees; $15.37/hour for hotel workers

• Los Angeles County: $10.50/hour for employers with 26 or more employees

• Pasadena: $10.50/hour for employers with 26 or more employees

• San Diego: $10.50/hour

• San Francisco: $13/hour

• Santa Monica: $10.50/hour for employers with 26 or more employees;$13.25/hour for hotel workers

• Sunnyvale: $11/hour

In addition to the new minimum wage laws, employees need to be aware of a new Department of Labor (DOL) rule regarding overtime compensation (and how that law differs from California’s overtime and exempt status laws). The biggest change relates to the “white collar” exemptions for overtime pay. The DOL’s new rule increased the “white collar” exemption to at least $913 per week, or $47,476 annually. California has its own “white collar” exemption, which is calculated at 40 hours per week, times twice the state’s minimum wage (currently $800 per week and rising to $1,200 per week by 2022). This means that California employees will have to pay careful attention to how the thresholds change over time to ensure that they are being properly classified by their employers. (In the public sector, overtime exemptions will not be affected by the state minimum wage increases.)

California employers must also be aware that the “primary duty” test still applies to the determination of an employee’s exemption status. California’s standard is different than the federal standard. The state standard requires employees to be “primarily engaged” in exempt duties to qualify as exempt. This means that more than 50% of an employee’s time must be spent engaging in the activities that earn the exemption. So even if a California employer pays someone enough under the federal and state standard, it may still not qualify employees as exempt under California law.

The new DOL rule also raises the salary threshold for highly compensated workers (subject to a different duties test) from $100,000 to $134,004. This is equal to the earnings of the 90th percentile of full-time, salaried workers nationally. However, California does not have the same or a similar exemption, and therefore employees who may be exempt under the new federal law may not be exempt under California law.

When it becomes effective on January 1, 2017, SB 3 applies the new minimum wage broadly to the public sector, defining covered employers to include “the state, political subdivisions of the state, and municipalities.” Charter cities and counties might have arguments on their side that they should not have to abide by the minimum wage. Because of the changing legal landscape, employees should seek counsel to assist them in determining which minimum wage laws apply to them.

This summer, Uber announced a settlement of the class actions claims against it in California and Massachusetts for a monetary payment of up to $100,000,000. But the judge overseeing the case rejected the settlement. Separately, but significantly, a federal appeals court ruled that the arbitration agreements signed by most drivers were enforceable. So what does this mean for the tens of thousands of people who drive for Uber in California?

The Rejected Settlement

The class action settlement rejected by the judge included both monetary and non-monetary terms. The monetary component included a guaranteed payment of $84,000,000, with an additional $16,000,000 possibly added as part of an Initial Public Offering (IPO). The non-monetary component included a new “Deactivation Policy”, a more comprehensive Star Ratings policy, the creation of a Driver Association, and a clarification on Uber’s tipping policy. But perhaps most puzzling and potentially problematic, the rejected settlement did not require Uber to reclassify drivers as employees.

Because the Uber case had not been formally certified by the court as a class action and because the settlement involved class-wide compensation, the judge was required to closely scrutinize the settlement to determine if it was “…fundamentally fair, adequate, and reasonable.” (See, Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)). The judge analyzed, among other things, the risks to the plaintiffs and Uber if the settlement was rejected; the monetary and non-monetary terms of the settlement; the status of the proceedings and extent discovery had been completed; the experience and views of counsel; the presence of a government participant; and the reaction of class members to the settlement. Balancing those factors, the court was inclined to find that the compensation provided to drivers under the settlement to be adequate, but nonetheless rejected settlement partly due to the amount the state of California would receive for claims brought under the California Private Attorneys General Act (PAGA). Under PAGA, private plaintiffs may recover on the state’s behalf civil penalties, of which 75% is owed to the state. The settlement would have settled all PAGA claims for $1 million. California’s Labor & Workforce Development Agency (LWDA) objected to this amount, arguing that the PAGA claims could result in penalties totaling over $1 billion. Because the parties failed to offer any rational basis for settling the PAGA claims for only $1 million, the court could not find the PAGA portion of the settlement to be fair and adequate. As such, the Court rejected the entire settlement because it was not, “…fair, adequate, and reasonable.”

The parties have returned to the negotiating table, but in light of a ruling handed down by the Ninth Circuit Court of Appeals in September (see, below), settlement may prove difficult.

Ninth Circuit Court of Appeals decision re: arbitration provision

On September 7, 2016, the Ninth Circuit Court of Appeals ruled that the district court erred in deciding the Uber arbitration agreements were unenforceable. As a result, all Uber drivers who did not “opt out” of the arbitration provisions will be required to separately arbitrate their misclassification claims. This will significantly reduce the number of drivers who can pursue their claims against Uber through a class action. The Ninth Circuit also held that the waiver of PAGA claims against Uber contained in Uber’s service agreement should be severed, because the PAGA claims could proceed in court. It is possible that just the PAGA claims may proceed against Uber in court.

Impact on Uber drivers

At this juncture, Uber drivers are still in limbo as to whether they are employees or independent contractors, whether they can ask for tips, and whether the new “deactivation policy” has, or will be, implemented. As to their status, drivers may just have to wait until after a trial and appeals process has concluded. Further, for all of the Uber drivers who did not “opt out” of the arbitration provisions, they will likely have to pursue their claims in arbitration.

Sexual harassment usually is not an isolated event. Gretchen Carlson, a former Fox News host, recently filed a lawsuit against (now former) CEO of Fox News, Roger Ailes, alleging causes
of action for sexual harassment and retaliatory termination. Ms. Carlson primarily alleges that Ailes propositioned her on numerous occasions, ogled her, demanded that she turn around so he could view her rear, and used sexually demeaning language. Ms. Carlson also alleges that Ailes fired her after she continually rebuffed his overtures over a 9-month period. Since Ms. Carlson filed her lawsuit, several other women came forward and accused Ailes of similar behavior. Some have spoken anonymously and others have gone on the record. While many of these allegations are decades old and no longer actionable, if true, they show a startling pattern of abuse of power, sexual discrimination and harassment, and downright perversion over almost a half a century.

Who is Roger Ailes?

Ailes’ early career was as a media consultant for Republican presidents Richard Nixon, Ronald Reagan, and George H. W. Bush, and for Rudy Giuliani’s first mayoral campaign. In the
fall of 1996, Ailes became the founding CEO of Fox News. In 2005, he was named Chairman of the Fox Television Stations Group.

Who are the accusers?

At least three women accuse Ailes of engaging in sexual harassment while he produced the Michael Douglas Show in the late 1960’s. Marsha Callahan is one of these women,. Ms. Callahan, a former model, alleges that Ailes offered to put her on the show if she had sex with him. She further alleges that he said she also would have to sleep with “a few of my select friends”. Two other women accuse Ailes of groping, kissing, and exposing his genitals. And an 1unidentified television producer accuses Ailes of demanding that she have sex with him and “anyone I tell you to” if she wanted her career advanced.

Other women accuse Ailes of harassment in the 1980’s. Kellie Boyle, who was a married Republican National Committee field adviser, alleges that Ailes told her, “If you want to play with the big boys, you have to lay with the big boys”. When she refused his advances, Ailes allegedly had her blackballed by the RNC.

One of the most shocking allegations against Ailes is by Laurie Luhn, a former Fox News booking director. According to Ms. Luhn’s recent statements, she was sexually harassed by Ailes over a 20-year span, starting in the late 1980’s. She claims that Fox News executives not only knew about harassment, but also helped cover it up. She alleges that the sexual harassment began soon after she met Ailes in 1988, and continued on and off until approximately 2010 when Ms. Luhn finally reported the harassment to Fox News attorney Dianne Brandi. Brandi allegedly asked Ailes about the harassment, which sources say he vehemently denied. Despite the denial, Ailes, supposedly told Brandi to work out a settlement. In June, 2011, Luhn and Brandi signed a $3.15 million settlement agreement with extensive nondisclosure provisions. The settlement bars her from ever suing Fox News over the harassment and precludes her from speaking to government authorities (EEOC, FBI) and the press.

The recent allegations against Ailes most likely would not have ended his career had they surfaced 20, 30 or 40 years ago. It was a different era and Rupert Murdoch ran Fox News. Now, employers (and the law) are less lenient and tolerant of sexual harassment. One thing is clear, over the last 20 years, Ailes built at Fox News a multi-billion dollar media juggernaut. But, in the end, he may be remembered as just another pervert who couldn’t keep it in his pants.

Uber recently announced a class action settlement for California and Massachusetts drivers involving a monetary payment of up to $100,000,000. This lawsuit was the first of several class action lawsuits against Uber.

WHY ARE DRIVERS SUING UBER?

The recently settled lawsuit primarily focused on how Uber classifies its drivers. Uber classifies its drivers as independent contractors, but many drivers feel that they should be classified as employees. How a driver is classified is important because it determines whether the driver or Uber is responsible for paying all costs associated with performing driving duties, such as insurance, maintenance, cell phone, and gas. Inparticular, California Labor Code §2802 provides, in relevant part, that “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties…” This means that employers must pay for all business related experiences incurred by it employees when they are performing their job duties. So if a court determined that Uber drivers should have been classified as employees, then Uber would owe drivers for all costs they occurred while performing work for Uber. Considering Uber utilizes almost half a million drivers across the country, this financial burden would be significant.

WERE UBER DRIVERS MISCLASSIFIED AS INDEPENDENT CONTRACTORS UNDER CALIFORNIA LAW?

Under California Labor Code §3357, workers are presumed to be employees. This presumption, however, can be overcome if numerous factors weigh in the hirer’s favor:
⇒ Does the hirer control the person’s work details, such as how, when, where, and where the work is performed? If yes, then this factor weighs in favor of the person being an employee
⇒ Does the person perform work in an occupation or business that is the same as the hirer’s business? If yes, then this factor weighs in favor of the person being an employee
⇒ Does the person perform work that is part of the hirer’s regular business? If yes, then this factor weighs in favor of the person being an employee “1
⇒ Does the hirer provide the person with a work place, as well as the equipment, materials, instrumentalities and tools necessary to perform the work? If yes, then this factor weighs in favor of the person being an employee
⇒ Does the person only have minimal financial investments in equipment, materials, and tools required to perform the work? If yes, then this factor weighs in favor of the person being an employee
⇒ Does the work performed require a unique skill in a particular occupation? If no, then this factor weighs in favor of the person being an employee
⇒ Does the person require the hirer’s supervision? If yes, then this factor weighs in favor of the person being an employee
⇒ Does the person’s opportunity for profit or loss depend on his or her own managerial skills? If no, then this factor weighs in favor of the person being an employee
⇒ Is the length of the working relationship limited to particular tasks the person was hired to perform? If no, then this factor weighs in favor of the person being an employee
⇒ Does the person get paid by hour as opposed to by the job? If yes, then this factor weighs in favor of the person being an employee
⇒ Do the parties believe they are creating a hirer-independent contractor relationship? If no, then this factor weighs in favor of the person being an employee
Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the hirer 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. (See, Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288). In short, when these factors are applied to Uber drivers, the factors seem to favor independent contractor status, but it’s a close call, which is likely a reason why the case settled.

THE PROPOSED UBER SETTLEMENT TERMS

The primary monetary and non-monetary terms agreed to in the settlement of the California/Massachusetts class action are as follows:

Monetary Payouts

The monetary component of the Settlement provides for a non-reversionary Settlement Fund in the amount of $100,000,000 of which a payment of $84,000,000 is guaranteed and as additional $16,000,000 is contingent on an Initial Public Offering (IPO) of Uber yielding an average valuation of at least 1 ½ times Uber’s most recent valuation over a 90-day period at any point within 365 days from the closing of the IPO, or if a Change in Control of Uber within three years of the date of final settlement approval yields a valuation of at least 1 ½ times Uber’s most recent valuation.

This Settlement Fund…will be distributed to Class Members pursuant to a plan of allocation…based on a formula that reflects the proportionate value of class members’ claims, considering the following factors: (1) whether they drove in California or Massachusetts; (2) if they drove in California, whether they are a member of the certified class; (3) whether they opted out of Uber’s arbitration clause; and (4) the number of miles drivers have transported Uber passengers (i.e., ‘on trip’ mileage”).

Changes to Uber’s Business Practices

Uber also agreed to change to its business practices in California and Massachusetts as follows:

Deactivation Policy – Uber will institute a ‘Comprehensive Deactivation Policy’ that will only allow Uber to deactivate drivers if it has ‘sufficient cause.’ Uber will give drivers at least two prior warnings (except for reasons involving safety, fraud, discrimination or illegal conduct) and must give reason for any deactivation in writing. Uber also will publish its deactivation guidelines to provide transparency regarding its deactivation rules and policies.

Star Ratings – Uber will provide additional information to drivers about their star ratings and their rankings relative to other drivers and will provide more clarity about what customer ratings thresholds a driver must maintain in order to increase clarity and transparency for drivers.

The Driver Association – Uber will fund and facilitate the creation of a ‘Driver Association’ in California and Massachusetts, through which drivers will have the opportunity to elect driver leaders who will meet quarterly with Uber management.

Tips – Uber will clarify on its website and in communication with drivers and riders that tips are not included on Uber’s platforms and that tips are not expected, required or prohibited.

No Reclassification – The agreement does not require Uber to reclassify drivers as employees.

WHY ISN’T EVERYONE HAPPY WITH THE SETTLEMENT?

Although the settlement requires Uber to shell out money, the settlement also allows Uber to continue classifying its drivers as independent contractors. This would save Uber millions of dollars in business expense reimbursements by requiring drivers to continue paying for all business related expenses. The driver who served as lead plaintiff, Douglass O’Connor, a San Francisco Uber driver, submitted a formal declaration to the court objecting to the settlement and requesting to withdraw his consent. He declared that Class Counsel, Shannon Liss-Riordan, “…pushed him to sign the deal before he understood all that it would entail”. Hunter Shkolnik, a New York lawyer who is pursuing other driver cases against Uber, stated that “[Ms. Liss-Riordan] has single-handedly stuck a knife in the back of every Uber driver in the country. The entire class was thrown under the bus and backed over.”

In response, Ms. Liss-Riordan said, “It is easy for others to come in and second-guess, but cases are settled all the time, and it is the lawyer’s duty to assess and balance the risks and make recommendations.” Ms. Liss-Riordan believes she achieved a fair settlement for the drivers.

Uber published a letter to its drivers indicating that over 450,000 drivers use the app each month in the U.S. and that nearly 90 percent of drivers say that they use Uber because they want to be their own boss — and thus presumably want to remain classified as an independent contractor. http://uberpeople.net/threads/letter-from-travis-uber-settlement-deactivation-policy. 73814/ UBER DRIVERS HAVE SEVERAL OTHER LAWSUITS AGAINST UBER Since the California/Massachusetts settlement was announced, Uber has been sued in class action lawsuits in Florida, Illinois, Indiana, New Jersey, New York, and Texas, to name a few. It should come as no surprise that other lawsuits would pop up, considering the plaintiffs’ attorney in the California/Massachusetts litigation will likely pocket $10,000,000 to $20,000,000 of the total settlement. The Florida and Illinois actions are “nationwide” and pertain to all current and former Uber drivers in the United States, except for those in California and Massachusetts. Because Uber wants drivers to remain classified as independent contractors, it will likely also settle these cases before trial.

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Independent contractors are not entitled to minimum wage under California law and the federal Fair Labor Standards Act. They can work full time hours for below minimum wage.

CURRENT MINIMUM WAGE

Federal and state laws set minimum wage. Minimum wage is the minimum amount employers must pay employees for each hour worked. The purpose of minimum wage is to keep employers from paying unbearably low wages and provide employees with sufficient compensation so that they can meet their basic needs, such as food, clothing, and shelter.

      • California: California’s minimum wage is $9.00 an hour, and on January 1, 2016, it will increase to $10.00 an hour.
      • San Francisco: People who live and work in San Francisco are entitled to a higher minimum wage of $10.24 an hour.
      • Federal: Minimum wage under federal law is just $7.25 per hour. Because California’s minimum wage is higher, California employers must comply with it.

SOME DIFFERENCES BETWEEN INDEPENDENT CONTRACTORS AND EMPLOYEES

Unlike employees who may be tied to job obligations for one company, independent contractors may work for multiple companies over a span of time. They may be hired for specialized work, work that is not normally performed by the employer, or work that isn’t classified as long term. Independent contractors are sometimes thought of as freelancers or consultants.

Contrary to employees, independent contractors are paid as if they are operating their own business. Independent contractors are responsible for paying both the employer and employee’s share of taxes. They are often not provided with employer benefits. They are not guaranteed minimum wages or overtime wages, or protected by workers’ compensation. Further, independent contractors are not afforded the numerous other protections provided to employees under California law, such as meal breaks and rest breaks.

ADVANTAGES AND DISAVANTAGES WHEN WORKING AS AN INDEPENDENT CONTRACTOR

Being an independent contractor has several advantages, including:

      • You call the shots.
      • You can control the amount you’re paid in most situations.
      • No federal or state tax is withheld from your pay.
      • You can take increased business deductions.

But there is a fair share of disadvantages as well:

      • You must pay self-employment taxes.
      • You may be personally liable for business debts.
      • You have no employer-provided benefits.
      • You have no employer-provided workers’ compensation.
      • You have few labor law protections.

HOW DO OTHER JOBS STACK UP?

Independent contractors are not the only job positions that do not have to be paid at least minimum wage. Other positions include:

White-collar workers: Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professional employees are exempt from minimum wage.

Farm workers: If you are related to the farm owner, work on a small farm based on total acreage, paid piece rate, or work with livestock, you may not qualify for minimum wage. Be sure to consult with a wage attorney if you have questions or concerns.

Seasonal amusement park and recreational workers: If you work for an employer or a place that operates seasonally, like a water park or a summer camp, you may be exempt from minimum wage.

Casual babysitters: People who do not babysit for an agreed-upon and documented set of hours during designated time period are not entitled to minimum wage.

Workers who receive tips: Although the Fair Labor Standards Act let employers pay tipped employees a lower minimum wage, California law does not. In California, tipped employees are entitled to the full wage for all hours worked.

Student workers: Full-time students who work in retail, agriculture, or colleges might not be entitled to the minimum wage if their employer has a special certificate from the federal Department of Labor.

STAY INFORMED

Although there are many laws in place to protect both wage earners and career employees alike, it never hurts to be informed. This is only a brief discussion on independent contractors and minimum wage laws and issues. Should you have questions, please don’t hesitate to contact me.

Blog 14 - pic 1California employers can require employees to work overtime. They can even demote, discipline or terminate employees who refuse to work overtime.  Despite being allowed to force employees to work overtime, employers nonetheless must: (1) properly pay employees at the appropriate overtime pay rates; and (2) comply with the state’s mandatory days-of-rest law.                                                                          

EMPLOYEES THAT WORK OVERTIME MUST BE PAID AT THE PROPER OVERTIME RATE

California law requires employers to pay their employees overtime if they work more than eight hours in a workday or 40 hours in a workweek. Eight hours of labor is considered a full day’s work.  So employment beyond eight hours in a workday or more than six days in a workweek is permissible so long as employees are paid as follows:

      • One and one-half times the employee’s regular pay rate for all hours worked over eight hours and up to and including 12 hours in any workday;
      • Double the employee’s regular pay rate for all hours worked over 12 hours in any workday;
      • One and one-half times the employee’s regular pay rate for the first eight hours worked on the seventh consecutive workday in a workweek; and
      • Double the employee’s regular pay rate for all hours worked over eight hours on the seventh consecutive workday in a workweek.

EMPLOYEES MUST BE GIVEN AT LEAST FOUR DAYS OF REST EVERY MONTH

California Labor Code Sections 551 and 552 state that every employee is entitled to one day’s rest out of seven days worked. But courts have interpret these sections to mean that “on average” employees must be given four days off per month. So long as employers give their employees this time off, there is no restriction on the number of overtime hours they can make their employees work.

In short, if your employer wants you to work overtime, you generally have to do it. But keep in mind, this is only a brief discussion on overtime laws and issues. If you think you are being forced to work overtime in violation of the law, consult an attorney. Should you have questions, please don’t hesitate to contact me.