New California Overtime Laws Set to Take Effect in 2014

Anaheim, CANew California overtime laws are set to take effect as of January 1, 2014. Those laws will make a new category of worker eligible for overtime pay in California. Specifically, domestic workers in California will now be covered by overtime pay laws.

Under the law (found online at leginfo.legislature.ca.gov), which was approved by the governor on September 26, 2013, people employed as domestic workers will now be eligible for overtime pay. That overtime pay differs from regular overtime pay in that it does not kick in until either nine hours worked in a workday or 45 hours in a workweek, whereas typical overtime kicks in at more than eight hours in a workday or 40 hours in a workweek. Once the overtime kicks in, the domestic worker is eligible to receive one-and-one-half their regular rate of pay.

The law defines domestic workers as those who perform domestic work, including live-in workers, child-care providers, housekeepers and maids. It does not, however, include people under the age of 18 who are employed as a babysitter or those who work irregularly or intermittently as babysitters.

The new law is only in effect until January 1, 2017, after which it could be extended. California has seen its share of overtime lawsuits in recent months, with lawsuits filed against Best Buy, Apple and other organizations, alleging employers misclassified employees as exempt from overtime or failed to pay overtime to employees regardless of their classification.

In one such lawsuit, a Wal-Mart contractor agreed to pay $4.7 million to settle allegations that, among other things, it illegally had employees sign a waiver giving up their right to overtime pay. According to the Los Angeles Times (12/11/13), the lawsuit was filed against Schneider Logistics in March 2012, and also included allegations of denied meal and rest breaks going back five years. Wal-Mart was not a defendant in the lawsuit.

A judge gave preliminary approval to the settlement.

Meanwhile, a recent ruling in an employment lawsuit may have a huge effect on future employment and litigation. According to The Legal Intelligencer (12/17/13), an employee of Applebee’s filed a lawsuit alleging that the company’s practice of paying less than minimum wage because workers earn tips, but then forcing employees to perform tasks that do not allow them to earn tips is a violation of minimum wage standards. Applebee’s, however, has an arbitration clause requiring employees to file individual arbitration rather than a lawsuit in the case of a dispute. The judge said he finds arbitration clauses unjust in many situations but had to uphold the arbitration clause. This means the claim cannot move forward as a class-action lawsuit but instead as an individual arbitration.