The Private Attorneys General Act (PAGA) allows employees, who comply with certain notice and filing requirements, to bring lawsuits for Labor Code violations and recover civil penalties on behalf of themselves, other employees, and the State.  Although PAGA was created to enable employees to pursue claims that the State lacked the resources to pursue, PAGA has become an exploited and abused tool for plaintiffs’ attorneys to line their own pockets. Under the current provisions of PAGA, employers face duplicative penalties, limited procedural safeguards, and costly litigation.

For years, some Legislators have attempted to curb PAGA’s excesses. Some Bills were successful, such as AB 1506 (2015), which gave employers the ability to fix paystubs to include the pay period’s start and end dates, and to fix their legal name and address, as further discussed here. Other Bills have not been successful, such as AB 2463 (2016), which was an attempt to establish a $1000 penalty cap for each aggrieved employee. Notably, eight of the nine PAGA Bills introduced last session did not pass.

As anticipated, the Trump Administration has slowed the appeal process on the injunction of the Obama Administration’s proposed changes to the federal overtime rules.  You can read more about the proposed rule here, which would have increased the federal “white collar” overtime exemption from $23,660 to $47,476, and information about the injunction granted by a U.S. District Court (here).

Before President Trump’s inauguration, the Department of Labor (“DOL”) attempted to expedite the briefing process as it hoped (perhaps foolishly) that it could get the Court to hear the appeal before Trump took over. That did not happen. On February 17, 2017, the DOL requested, and was granted, their second extension to file its final brief, with the deadline now on May 1, 2017. In its unopposed motion, the DOL requested the additional time to “allow incoming leadership personnel adequate time to consider the issues.” This further request may be due to Andrew Puzder’s “withdrawal” from consideration as Secretary of Labor, or may be due to other interests that are priorities to the administration at this time.

In a decision unfavorable to employers, the California Supreme Court in Augustus v. ABM Security recently ruled that employees must be relieved of all duties and relinquish all control over employees during rest periods. At issue in the case, the defendant employer, a security company, required its security guard employees to keep pagers and radio phones turned on and with them during rest periods. The Court reasoned that on-duty or on-call rest periods require employees to essentially perform free work, meaning that the employee receives the same amount of compensation for working through the rest periods as the employee would have had the employee been permitted to take off-duty rest periods.

The Department of Labor (“DOL”) is set to once again raise the standard for minimum wage rates for H-2A workers in California. Federal regulations require that the minimum wage for H-2A employees is the highest of (1) the Adverse Effect Wage Rate (“AEWR”), (2) the prevailing hourly or piece rate, (3) the agreed upon collective bargaining wage rate, if applicable, or (4) the state or federal minimum wage.

Often, the highest rate is the AEWR, a rate specifically set by the DOL for each state as the minimum to be offered to H-2A workers. The goal of the AEWR is to keep wages of similarly employed U.S. workers from being adversely affected by employers’ ability to hire labor from outside the country. The AEWR for each state is updated by the DOL every year based on a review by region of the prevailing wages of U.S. workers.

By: Jacquelyn E. Larson

According to a Department of Industrial Relations’ (“DIR”) press release, Zihan Zhang, owner of Antique Thai Cuisine in San Diego, was sentenced to two years of jail time for “grand theft” and labor violations. According to the DIR, Zhang promised wages to workers but then often paid only in tips. Some of the kitchen staff were paid as little as $4 an hour, and were forced to work during breaks and meal periods. The owner further collected a portion of the tips from the workers, and charged them $5 a shift for “glass breakage” to offset the employer’s operating costs.

According to the press release, this all came to light in 2014 after some of the workers filed wage claims with the Labor Commissioner’s Office. The Labor Commissioner’s Office cited Antique Thai $36,617 in July of 2014, including assessments of $14,567 for rest and meal period premiums, wages, overtime and liquidated damages, and civil penalties of $22,050 for failure to provide itemized wage statements as well as overtime, minimum wage, rest and meal period requirements.

Last week, twenty-one states, including Arizona and Nevada, sped in and filed an emergency motion for preliminary injunction contesting the constitutionality of the Department of Labor’s (“DOL”) new rule expanding overtime protections for “white collar” workers under the Fair Labor Standards Act (“FLSA”), which raises the salary threshold for the white collar exemption to $47,476, and which you can read more about here. This motion, filed in a Texas federal court, seeks to keep the overtime rule from taking effect until there can be a full hearing on the merits of the law (and potential review by higher courts). The States are arguing that the application of the overtime rule is a violation of the Tenth Amendment right to sovereignty and that the new law will result in irreversible budget damage to the States.

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