Fajardo v. Glasswerks, L.A. Inc. was settled through private mediation and neither counsel for the plaintiffs nor counsel for the defendants has offered comment, so the details are sparse. Nonetheless, it is clear that California courts continue to lead the way in protecting employees’ rights to their legally protected pay.
Who is entitled to overtime or meal and rest breaks in California?
In California, the general rule is that nonexempt employees are entitled to overtime if they work more than eight hours in any workday or 40 hours in any workweek. Nonexempt workers are entitled to a 30-minute uninterrupted, duty-free meal break if they work more than 5 hours in a workday and a 10-minute uninterrupted, duty-free rest break for every 4 hours worked or major fraction of that period.
These seem like simple enough rules – more matters of simple addition than anything else. The complications, however, come from determining who is covered by the protective provisions of the law and which hours must be counted.
Workers who are not employees, like independent contractors, are not covered by wage and hours laws. Presumably, they are better able to negotiate the price of the goods and services they sell. Neither are managerial employees (who in a strange turn of double-speak are termed “exempt,” even though it is the actually employers who are exempt from the requirement of paying overtime.)
Recent developments in California law have made it clear that workers are presumed to be employees unless employers can demonstrate otherwise, using a three-part ”ABC” test. In order to show that a worker is an independent contractor, and thus not covered by wage and hour protections, an employer must demonstrate that:
• The worker is free from the employer’s control;
• The worker does work that is outside the usual course of business of the employer; and
• The worker is customarily engaged in his or her own business.
This is more generous toward workers than the federal standard: it effectively makes almost every worker an employee. Employers and employer groups, especially those who do business nationwide, have struggled to find ways to limit the application of the rule.
The second large group of workers who are not protected by wage and hours laws are “exempt,” or more colloquially, managerial-level employees. They, historically, have a greater stake in the success of the business and, much like independent contractors, may be more able to negotiate the terms of a salary package.
Exempt status is not determined by title, however, but through evaluation of salary and duties. Thus, a fast-food restaurant “manager” who flips burgers, mops the floor and has no supervisory duties may be protected by wage and hours laws just like a non-managerial employee, fancy title notwithstanding.
The salary prong of the test requires that exempt employees be paid twice the minimum wage for full-time employment. The duties prong is less easily quantifiable, but generally requires the exercise of discretion and independent judgment.
Special rules may apply to some groups of workers including commissioned salespeople, computer professionals, private school teachers and truck drivers. These may be closer cases, more dependent on particular circumstances.
How are hours counted?
The second big issue for California wage and hour lawsuits involves determining which hours should be counted for determining whether an employee has worked more than 8 hours in a workday or 40 hours in a workweek.
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The California legislature and courts remain in the forefront of protections for workers’ wage and hour rights. Even when a lawsuit does not go to trial as Fajardo did not; the legal climate is highly conducive to favorable settlements.