Misclassification Attempts to Avoid California Overtime

San Francisco, CAGranted, some employers make legitimate mistakes and misclassify their employees, but others use misclassification to avoid paying California overtime. Increasingly, employees are fighting for their overtime pay and joining California overtime class-action lawsuits.

On its website, Cogent Communications states that “Communication has become a 24/7 activity, as companies try their best to reach out and have meaningful conversations with their respective audiences.” While this statement may be true - since the advent of the Internet communications is 24/7 - Cogent doesn’t appear to be having meaningful talks with its employees.

Last January a class-action lawsuit was filed against Cogent for failing to pay overtime wages. The lawsuit, Valverde v. Cogent Communications, Inc., Case No. 113CV239322, claims that current and former account managers were in fact managers in name only - they were misclassified and therefore didn’t meet any of the exemptions to California overtime pay. Valverde’s lawsuit claims that so-called account managers are owed overtime wages for all time worked in excess of eight hours a day and in excess of 40 hours in any workweek.

Attorney Norman Blumenthal, who filed the class action on behalf of Christopher Valverde and Account Managers said that “a common example of misclassification involves an employee who is a salaried manager with few management duties. Employers do this in order to avoid payment of overtime. Another example is a worker classified as an independent contractor, but most aspects of their employment is controlled by the employer in some way.”

A similar proposed collective and California overtime class-action lawsuit was filed in California federal court by a former inside sales representative against Indeed Inc., a job posting website. The lawsuit, Rosh v. Indeed, Inc., Court File No. 5:13-cv-03751-PSG (Northern District of California), claims that “Indeed” violated both federal and state overtime laws for not paying its employees overtime pay. The inside sales reps claim they were misclassified as exempt salaried employees so that they wouldn’t qualify for California’s overtime pay requirements.

Misclassification also happens to hourly employees. Last December Solarcity Corporation was slapped with a class-action lawsuit claiming it failed to pay its non-exempt hourly employees overtime pay and failed to give uninterrupted 30-minute meal breaks, which is another violation of California labor laws. The lawsuit, Irving vs. Solarcity Corporation, Case No. CIV 525975, is currently pending in the San Mateo County Superior Court for the State of California.