Wage And Hour Law Class Actions Threaten California Employers

“Class action” lawsuits based on labor law violations threaten large and small businesses throughout California. Wage and hour laws are designed to protect laborers against unfair practices by employers and are some of the oldest labor laws in the nation. But today, class-action lawsuits allow a single “representative” plaintiff and their attorney to prove his or her case against an employer on behalf of many other employees. In California there is the added threat of a “representative action” under Business & Professions Code 17200 for “unfair competition.”

If you are a business owner, you could receive a summons to respond within 30 days to a complaint that demands millions of dollars in damages. What would you do?

Employer Errors

There are many ways in which employers may unwittingly set themselves up for wage and hour lawsuits:

• Classifying workers as “employees” vs. “independent contractors”
• Classifying workers as “exempt” vs. “non-exempt”
• Misapplying state or federal overtime rules
• Failing to keep accurate time records
• Failing to provide meal or rest periods
• Failing to pay for travel time
• Failing to pay for preparation time
• Improper use of makeup (comp) time
• Improper alternative workweek schedules
• Payment of commissions

The laws that jeopardize California companies are very complex and, as you can see from the list above, involve many critical watch points for employers. A mistake in any area could cost your company hundreds of thousands, if not millions of dollars. This includes not only back wages, but “waiting time” penalties, itemized statement penalties, or penalties for not providing rest or meal periods under Labor Code sections 203, 226, and 226.7.