Wage Disclosure LawsThis settlement also demonstrates the importance of wage statements and wage disclosure laws: not providing accurate information could result in wage theft. While the Fair Labor Standards Act of 1938 (FLSA) mandates minimum wage and overtime pay for eligible employees, some laws require employers to provide employees certain information about their pay.
California is one state that has a private attorney general law to assist in the enforcement of this wage disclosure law. Under PAGA, that went into effect in 2004, aggrieved employees can act on behalf of the California attorney general to recover civil penalties for labor law violations. And 25 percent of anything the employee could recover, they could keep, with 75 percent of recovered money going to the state of California.
Vidrio v. United AirlinesVidrio v. United Airlines Inc. goes back to 2015. As explained by Forbes, this case was complicated because of the way United flight attendants were paid. “For example, due to the Plaintiffs’ collective bargaining agreements (CBAs), the Plaintiffs were paid twice each “bid period,” which lasted about a month. The first payment came on the first of the month and was an advance payment in that it was based on the flight attendant’s anticipated work volume and not actual hours worked,” reported Forbes. About two weeks later, the second payment arrived, that included the flight attendant’s actual earnings, plus per diem payments, but less the advance payment. The actual earnings amount could be calculated by taking the higher of either a “minimum pay guarantee” or the value of the flight attendants “flying activity” during the relevant period.
Wait, it gets even more complicated: by applying several formulas, the “flying activity” amount was calculated and then these formulas were subject to adjustment based on several variables, such as the flight attendant’s seniority, responsibilities on a given flight, when the flight attendant worked and if they held a language-qualified position. The amount of wage information reads like a short novel.
A federal court in the Central District of California in May, 2022, granted partial summary judgment in favor of flight attendants suing United Airlines, Inc., for violating California’s state wage and hour laws. The former flight attendants claimed in their class action that United issued insufficiently detailed wage statements – they were not given the comprehensive “Wage Statement” required under California law. Specifically, the airline failed to include:
- Total hours worked each pay period
- All applicable hourly rates of pay in effect during the pay period
- All corresponding hours worked at each applicable hourly rate
- The employer’s address
Wage Statements and the California Labor CodeCalifornia’s Labor Code requires that pay stubs include specific, accurate and itemized information. An employer’s failure to comply can result in a statutory penalty of up to $4,000 for each employee.
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- gross wages earned;
- total hours worked;
- number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis;
- all deductions made from the employee’s pay;
- net wages earned;
- the applicable dates for the relevant pay period;
- the name and identification number of the employee;
- the name and address of the employer; and
- all applicable hourly rates in effect during the pay period and the corresponding number of hour worked at each hourly rate.
The $53.5 million settlementJudge Philip Gutierrez granted the flight attendants’ motion for preliminary approval of the settlement after finding that the settlement plan met the requirements for approving a class action settlement. Of the $58.5 million, after deducting attorneys’ fees and costs, service awards for the two class representatives, settlement administration fees, and civil penalties payable to the California Labor and Workforce Development Agency, the Net Settlement Amount to be distributed to the class is approximately $35.2 million. The final approval hearing for the case is set for June 16.
According to one wage-and-hour attorney, this ruling represents a major victory for the flight attendants directly involved in the California lawsuit, but the court’s reasoning may apply equally to other state and local laws with similar notice requirements. And as United Airlines flight attendants’ victory shows, employers should pay attention to “Wage Statement” and similar notice requirements, especially in California.