Marian Birge is a highly-experienced employment lawyer in California who offers a well-informed perspective on wage and hour protections in California and illustrates the areas where employers fall short most often of the legal requirements.
Can you provide some background on the Fair Labor Standards Act, and the obligations that it imposes on employers?
The federal FLSA is 29 USC SS201 and seq. In 1938, a landmark law was passed to set a minimum wage and limit child labor. It is fascinating to learn about the history of federal and state efforts to introduce pro-labor legislation. Before 1938, the Supreme Court expressed a profound hostility towards wage and hour laws. For example, it held a federal law on child labour to be an unconstitutional imposition of state authority, under the guise of a commerce power , and it struck down a District of Columbia minimum wage law, finding that it was an intolerable interference with freedom of contracts.
Frances Perkins was President Roosevelt’s secretary of labor. She was an invaluable ally when it came to pushing through a bill that was ultimately successful. Although greatly altered, the revolutionary linkage between minimum wage and subsistence level, as well as basic decency, was still revolutionary. She was the first woman to ever serve in a cabinet of a president. Arkansas’s female governor signed into law a bill that rolled back several state protections for child labour.
The FLSA is a federal law that sets standards for wage, hours, record keeping, and youth work for a wide range of businesses, including those involved in commerce or the production of goods for the interstate market. For example, the FLSA may apply to a construction company with two or more employees or a gross annual sales amounting to $500,000 or higher. The FLSA also applies to restaurant businesses that have annual gross sales of at least $500,000.
FLSA standards generally include a $7.25 minimum wage, overtime pay if you work more than 40 hours per week, and protections from retaliation or pay discrimination on the basis of gender. The law’s underlying goal is to prevent and deter from creating “labor conditions that are detrimental to maintaining the minimum standard necessary for the health, efficiency and general well-being” of workers. (29 U.S. code SS202(a).
The FLSA defines types of workers who are exempted from overtime rules and those who do not. These include certain IT workers, executive, administrative and professional workers, as well as outside salespeople. The FLSA doesn’t cover sick leave, paid time off, or rest and meal breaks.
The Wage and Hour Division of US Department of Labor administers the law. It offers administrative interpretations and opinion, and can investigate compliance issues and oversee payment of compensation to claimants. Section 216 authorizes civil penalties, equitable relief (including the potential for liquidated damage), and attorneys’ fees.
What other laws govern the payment of wages, hours and overtime in California? What is the extent of variation in these laws from one state to another?
There are quite a few variations. It is somewhat unbelievable that the federal minimum wage remains at $7.25. In the US, employers must follow both state and federal laws. Employees in states with more stringent wage/hour laws are entitled to higher minimum wages as well as greater protections. Five states do not have a state-level minimum wage and two, Georgia and Wyoming, have a wage that is lower than the federal standard.
California’s minimum wages will go up to $15.50 by 2023. After 2023 the rate of increase is based on the annual review of changes in the US Consumer Price Index (CPI) for Urban Wage-earners and Clerical Workers. Comparatively, Washington’s minimum wage is $15.74; New Mexico, Hawaii, and Arizona’s rates are $12.00 and $13.85. California has some of the best protections in the country for its workers, if they are not the strongest. California is home to the biggest economy in the United States and the largest subnational economy in the entire world. It is also expected to surpass Germany as the fourth largest economy in the whole world.
What wage and hour disputes are most common in your experience as an employment lawyer?
There are two main types of disputes: (1) compensable-time claims where employees claim that they have not been paid for the time worked, (paying less than the minimum wage, missing meal and rest breaks or waiting or travelling times, and unpaid travel or wait time); and (2) misclassification of workers as independent contractors, exempt executives or administrators, or professionals. Pay violations are often punishable by heavy penalties, and plaintiffs’ attorneys can recover their statutory attorney fees. This is because the purpose of these laws is deterring and preventing the unfair and anticompetitive harms that arise when normal business costs are transferred to workers.
California’s workers enjoy some of the best protections in the country, if they are not the strongest.
What are the legal remedies available to employees who believe they haven’t been fairly compensated for their work? What are the first steps they should take?
Former or current private sector employees can assert FLSA claims either individually or collectively on behalf of other similarly situated individuals. Employees covered by more robust state laws may also file individual suits. In some states, employees may also assert individual and collective claims through Private Attorney General (PAGA) actions. Small claims in these lawsuits can lead to large back pay awards.
Employees may also file administrative claims with the state. The Labor Commissioner’s Office in California, a division of Department of Labor Standards Enforcement, assists employees to file administrative claims without cost. It also investigates and arranges hearings and conciliations when possible. The Labor Commissioner’s decisions and awards are sent to the Superior Court, where they become legal judgments. Retaliation by an employer against employees who complain about violations can also be reported. The Department has the authority to conduct investigations, make discovery and issue citations.
What steps can companies take to ensure they are in compliance with US wage laws and hours?
Employers who have operations in more than one state should be aware of the employment laws for each state. Many states, such as California, have employment laws which are much more favorable to employees. It is not wise to rely on payroll or human resources to provide the necessary safeguards. Wage/hour laws and anti-discrimination legislation can be confusing and change at a rapid pace.
Some companies were surprised by employee lawsuits after California counties set wages above the state minimum. While the corporate counsel of a Delaware company may be familiar with federal wage laws and regulations, she might not be aware of those in other states in which the company conducts business. This is why it’s advisable to consult local counsel. State Chambers of Commerce are a great resource for legal updates, news, and required posters.
Employers that operate in more than one state should be familiar with the employment laws of each state.
What can an experienced employment attorney do to help in both scenarios?
Many employment lawyers help businesses manage risk by vetting issues of compliance. A lawyer who specializes in employment law can help with handbooks, employment policies, and practices. They can also investigate internal complaints and prepare or revise severance and contracts agreements. California employers should ensure that they are in compliance with the law to avoid unpleasant surprises such as administrative agency investigations, civil penalties, and lawsuits requesting plaintiff’s attorney fees.
Marian Birge is Co-Founder
2173 Salk Ave Suite 251, Carlsbad, CA, 92008, USA
Tel: +1 760-579-7650
Marian Birge has more than 20 year’s experience in civil litigation. She represents both plaintiffs and defendants. She practices employment law, discrimination and wrongful termination. She also handles disability issues, retaliation and contracts. She represents her clients in court, before administrative agencies and in negotiations and mediation.
Garcia & Birge, a San Diego-based law firm, focuses on employment law. As part of the firm’s mission, its lawyers are committed to principled advocacy and use their experience as strong advocates in litigation. Garcia & Birge works with employees and employers, providing legal representation, consulting, and quality legal solutions that are created with their clients.
1 Hammer v. Dagenhart, 247 U.S. 251, 38 Sup. Ct. 529, em> (1918 em> In Hammer, the court held that Congress had no power to ban interstate commerce for cotton products made in a factory which, within 30 day of shipment, employed under 14-year-olds or permitted children between 14-16 to work over eight hours per day, six days a week or between 7:00pm to 6:00am.
Children’s Hospital v. Adkins, 261 U.S. Ct. 394, 1923 ). Chief Justice William Howard Taft dissented. Morehead v. N.Y. Ex Rel. Tipaldo, 298 U.S. 587, 56 Sup. Ct. 918 (1936).