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A Tale of Two Extremes in California Overtime Law

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Sacramento, CAThis is a tale of two unpaid overtime cases. One is at the high end, while the other is at the low end. At the end of the day, both have one thing in common: a claim that an employer failed to give the employee his, or her due.

At the high end is Michael J. Pexa, a former district manager for Farmers Insurance Group in Sacramento. According to the Sacramento Bee (10/9/12), Pexa claims his former employer incorrectly classified him as an independent contractor—and in so doing denied him overtime pay and other wages and expenses.

According to Pexa's trial brief, the plaintiff's job "was to recruit for appointment and train agents and have the agents produce sales pursuant to goals, objectives and policies established by Farmers." Pexa's legal team, in their trial brief, went on to say that Pexa couldn't hire or fire and "was not permitted to represent any other insurance company.

"Farmers established a scheme of having District Managers sign an Appointment Agreement, which contains a provision that the District Managers are independent contractors, when in fact the District Managers are employees," Pexa's suit says.

Pexa claims he is owed $6.5 million in unpaid overtime according to overtime pay laws in California, together with other expenses that combine to $13.8 million.

Farmers Insurance vehemently disputes Pexa's claims.

On the other end of the overtime pay scale are workers at retail giant Wal-Mart, who have initiated rotating strikes from retail and warehousing facilities to protest low wages, unpaid overtime and other issues.

Christine Owens, executive director of The National Employment Law Project and writing in the The Daily Gazette (10/21/12), noted a 2011 study that found employees of Wal-Mart earn about 12 percent less than retail workers in general, and 14 percent less than workers in comparable, large retail establishments. That suggests that when overtime is paid, the overtime rate is less than comparative jobs at other retails—and that's assuming overtime is paid at all, according to California overtime law.

According to Owens, Wal-Mart workers sometimes fail to receive what "meager wages" they have earned, by way of working past the clock—a growing trend in many establishments. Owens suggests that some workers have received their paychecks late, while others have found part of the wages missing.

All are in alleged contravention of California overtime law.

Owens notes that a study conducted in 2008 looking at workers in three cities—one of which was Los Angeles—found that 26 percent were paid less than the minimum wage, 76 percent were underpaid or not paid at all for their overtime hours, and 70 percent worked off the clock before, or after their shift.

Some employers have defended complaints by suggesting the initial violation was at the hands of subcontractors. A proposed California overtime law would make originating firms liable for wage violations and unpaid overtime committed by subcontractors.

Whether measured in millions or thousands, at the end of the day workers are simply looking for their due according to overtime pay laws, or workers pursuing workers compensation settlements. Regardless if the matter is settled by mediation, arbitration or through a court of law, it starts with one worker, or one group of workers putting their hands up and saying, "This isn't fair…"

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