E-Blasts

Ask The Locals: Cities and Counties Enacting Their Own Wage Ordinances

By: Rebecca Hause-Schultz

In addition to complying with state and federal minimum wage standards, California employers must also be aware of local wage and hour ordinances. Local wage ordinances allow cities and counties to enact more employee-friendly minimum wage regulations and are becoming more popular. California cities and counties have enacted a variety of ordinances affecting wage and hour law, including: a higher minimum wage than required by state law, implementation schedules for increasing minimum wages that differ from state law; and implementation of paid sick leave laws that exceed California’s statewide minimums.

As an update to our June 14, 2016 eblast, the U.S. House of Representatives recently passed a bill to delay the Department of Labor’s (“DOL”) rule which is currently set to raise the threshold for exemption to overtime pay, effective December 1, 2016.

As a refresher, the new DOL rule will nearly double the minimum salary threshold to qualify for the federal  overtime exemption for “white collar” employees from $23,660 to $47,476 per year. If enacted into law, the bill would delay the implementation of the rule until June 2017 so that employers have additional time to prepare for the sharp increase in the exemption threshold. Employers argue that the new rule would force them to lay off many employees in the face of increased payroll costs. Opponents to the bill have said that the current $23,600 threshold is outdated and no longer does its job of separating the low wage workers who deserve overtime from workers who make enough money and should be exempt. Opponents also believe that this delay is the first step in an attempt to have the rule repealed altogether.

Last week, the California Assembly sent Governor Jerry Brown a bill which would expand overtime rules for farmworkers. You can read our previous E-Blast here.

A new website has been launched in an attempt to sway the Governor from signing the bill. VetoAB1066.org allows growers, farm labor contractors and/or vineyard managers to quickly calculate the damage that this bill will have on labor costs over the next six years. Simply enter in your company’s 1) labor cost as percentage of sales; and 2) average hours per week of your harvesting employees and voila! You will now see the shocking and destructive increase in costs this bill will have on your business and the agriculture industry as a whole.

Most importantly, VetoAB1066.org provides a forum for employers to describe the operational changes they will make due to the raise in cost the calculator shows and to send a message directly to Governor Brown with their concerns about AB 1066.

The Department of Labor (“DOL”) just agreed to pay $7 million to settle a longstanding arbitration with its own employees, according to a press release issued by the American Federation of Government Employees Local 12 (“AFGE”).  The settlement concerns allegations reportedly dating back to 2006, when the AFGE first filed a grievance against the DOL on behalf of its members.  Yes, the DOL, the agency that doggedly pursues employers for failing to abide by federal wage laws, has itself been embroiled in a 10 year battle with the AFGE over allegedly not paying its own employees overtime pay.  According to Law360, who first reported the settlement, the basis for the alleged non-payment of overtime stemmed from the DOL misclassifying an undisclosed number of its employees as exempt from overtime under the Fair Labor Standards Act (“FLSA”).  Further details regarding this settlement are sure to emerge.

Today, the California Assembly sent Governor Jerry Brown a bill which would expand the overtime rules for farmworkers. Assembly Bill 1066, which passed on a 44-32 vote, with 4 abstentions, brings farmworkers more in line with other industries, despite its vast differences from other industries, most notably its seasonality. Under existing law, farmworkers are entitled to overtime wages if they work more than 10 hours in a single day or on the seventh consecutive day.  The new law would offer time-and-a-half pay for farmworkers who work more than 8 hours in a day or 40 in a week and double pay for working more than 12 hours in a day.  As a result, the new law will put California farmers at an even greater competitive disadvantage compared to the vast majority of other states who continue to exempt farmworkers from overtime requirements.  

When properly drafted, arbitration agreements can protect employers from lengthy and expensive litigation in court. However, even when an arbitration agreement is valid, it may be waived by a party’s conduct during litigation. On June 21, 2016, the Ninth Circuit Court of Appeal confirmed this rule in Martin v. Yasuda.
 
In Martin, Plaintiffs were a group of cosmetology students who had studied at Defendants’ cosmetology school.  As part of their enrollment in the school, Plaintiffs signed an arbitration agreement. The agreement provided that any dispute with the school would be subject to binding arbitration. 
 
Despite the signed arbitration agreement, Plaintiffs filed a class-action lawsuit seeking unpaid wages and penalties. Plaintiffs contended that they were entitled to minimum hourly wages, overtime wages, and unpaid premiums for missed meal and rest breaks for the services they provided to the school, such as cleaning and washing laundry, that were unrelated to their education. 

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