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Not Paying California Overtime? Misclassified as Exempt No Excuse

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Los Angeles, CATrevor, who works for a small IT California consultation/support company, says he and his co-workers have worked thousands of hours in California overtime and they were misclassified the entire time. “We looked into the California labor laws and there is no way that we are exempt,” says Trevor. “A simple Google search will show you that pure tech support without supervising anyone doesn’t spell exempt.”

When Trevor (not his real name) was hired he was told that he might need to work some weekends. But he has worked just about every other weekend since he started. “We have to do remote installations so we are flown to a customer location somewhere in North America and set up in a hotel where we feverishly work 20-hour days,” says Trevor. “In the first year I worked here, I must have accumulated 1,000 hours of IT overtime.”

Trevor was told that he was exempt because he worked in IT and he was a salaried employee. As well, he is from Canada so he believed the boss and didn’t want to rock the boat. Although the employees all work the standard 40-hour week, weekends are clearly the issue here.

“I confronted our boss about being misclassified and said he would check it out,” says Trevor. “He hired an HR consultant who confirmed that we were not exempt and therefore entitled to overtime compensation. But instead of paying us overtime he crafted some crazy time-off scheme where we would bank the overtime and take a day off here and there to reduce the ‘bank’. That would be a long vacation--and I still haven’t taken time off.”

Trevor says they signed an agreement that includes a 14-day revoke law. Apparently the boss’s lawyer wrote a standard release form that stipulates that he will pay the employees XX amount of dollars, which is far less than he owes them in overtime pay. “Now he fully acknowledges his classification mistake, and for over a year he has put in place some silly compensatory time-off system where we banked any overtime and deducted it when we'd take time off in lieu of paying it to us. It didn't work and we continued to accrue many hundreds of hours in the past year.

"I have looked at the California labor law and our employer is clearly violating the California labor codes 206.5 and 1194.”

(California Labor Code 206.5 states that, “An employer shall not require the execution of a release of a claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of those wages has been made. A release required or executed in violation of the provisions of this section shall be null and void as between the employer and the employee. Violation of this section by the employer is a misdemeanor… California Labor Code 1194 is construed as an unwaivable, statutory right to receive overtime pay”, which means that an employee cannot sign off his rights to California overtime.)

“I’m afraid he will shut the company down and start up again,” adds Trevor. “I am worried that our jobs will vaporize from his fear. Part of me wants to figure this out with him. Some guys worked here 10 years and really got shafted; they helped him build the company to what it is today and made him successful. They don’t want to lose their jobs but they want their employer to be fair. Why take someone to court and risk losing everything? I think our employer understands our position and he is trying to make us happy with this settlement agreement.”

And there is more. When Trevor looked further into the California labor code and overtime issues, he saw more violations, besides not being exempt. “When we found out that we are supposed to be paid for our lunches we couldn’t believe our eyes,” he adds. “It was a big shock to us and to our boss. I also found out that he had two lawsuits filed against him for previous labor issues so he must have known all along if we were exempt or not.

"Now he wants us each to sign separate settlements his lawyer drafted that releases him from any claims. This settlement isn’t fair; it doesn't punish him at all, and it’s possibly even illegal. We received the settlement agreement last week and were told to sign it and submit it before December 31. We did so, but the agreement does contain a revoke clause for 14 days, which allows us to get counsel and reject it outright if we see fit... So that's where we're at.”

Trevor and his co-workers are trying to find an employment attorney who can look at this agreement ASAP and tell them if they were ‘fools for signing it’ and if they have a decent shot at getting what they are actually due in overtime pay--and then some.

READ ABOUT CALIFORNIA OVERTIME LAWSUITS

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