Employment Law

Administrative Exemption. Companies often employ workers as “administrative assistants” to perform important tasks such as formulating bids, drafting studies and reports, and other work directly related to the company’s overall management or general business operations and which require the exercise of discretion and independent judgment.

If these employees in fact spend most or all of their work time performing such tasks, and meet the minimum salary level and other requirements for the administrative exemption to apply, they might be properly classified as exempt, and the employer may be excused from paying these employees overtime premium or any additional pay for overtime hours worked, or providing them other employee benefits such as timely and duty-free meal and rest breaks.

However, if salaried employees with the job title of “administrative assistant” or similar title implying that he or she regularly performs exempt work in fact spend most of their time performing secretarial work or other support tasks not involving the use of discretion and independent judgment, they might be misclassified as exempt, and consequently be owed significant compensation. Determining whether the actual work of a particular “administrative assistant” or similarly titled employee in fact qualifies under the FLSA or California administrative exemption is one issue that can be complex and highly factually dependent and should be reviewed by a lawyer who is familiar with the issues.

Milhaupt and Cohen has recovered money for unpaid wages and statutory penalties owed to many California service advisors, construction superintendents, and other salaried employees who were improperly misclassified under the administrative exemption.

Executive Exemption. As with the administrative exemption, determining whether a particular salaried “manager” or “supervisor” or “director” actually performs a sufficient amount of qualifying work, or otherwise possesses and exercises sufficient authority on the job, to qualify for the executive exemption can be complex and should be reviewed with a labor law attorney. Also, as with the situation of misclassified administrative employees discussed in the above paragraph, supposedly exempt managers who spend most of their work time doing the same work as the employees they manage or performing other nonexempt tasks may be owed significant compensation. Milhaupt and Cohen has recovered significant amounts for many salaried employees who were improperly misclassified under the executive exemption.

Professional Exemption. Some employees who possess specialized skills, such as accounting clerks, chefs, computer and IT specialists, engineers and persons working in the medical field, are paid a salary and treated as exempt, based on the theory that they qualify under the professional exemption. Like employees misclassified under the administrative and/or executive exemptions, employees who supposedly qualify as exempt may not meet the specific educational, licensing, or other task-specific standards governing the applicability of the professional exemption as to their particular job duties, and may be owed significant compensation. Milhaupt and Cohen has recovered significant amounts for employees misclassified as exempt under the professional exemption.

Receptionists, dispatchers and others are sometimes not paid for all time worked. Besides occasionally performing work off-the-clock (e.g. answering phones outside of work hours for which they are paid, receptionists are sometimes expected to remain available to monitor the phones for calls during meal and rest breaks. California law generally provides (subject to limited exceptions) that employers provide their employees the opportunity to take one legally compliant 10-minute off-duty rest break for every four hours of work, and one 30-minute off-premises and off-duty meal break. Affected employees may be owed one hour of pay under Labor Code sections 226.7 and 512, and the applicable Wage Orders, for each day a legally compliant meal or rest break is not provided.

Employers sometimes prefer that dispatchers and receptionists monitor the phones during their breaks because it is sometimes hard to replace them for breaks, and because it is easier and cheaper for the employer to tell them to keep on monitoring phones during breaks and to restart their breaks if interrupted. However, that practice can result in significant monetary awards to affected employees. Milhaupt and Cohen has recovered significant amounts for many such employees.

Workers in all kinds of occupations (food service, labor, manufacturing, etc.) are sometimes paid all or part of their wages in cash. Workers are also sometimes incorrectly labeled “independent contractors” by the employer and receive Form 1099 instead of a Form W-2, even though the workers are in reality employees.

Employers who pay in cash often do not pay their employees the extra overtime premium wages owed (time-and-a-half or double time) for the overtime work. Cash-paying employers also often owe their employees penalties for not including the time worked for cash in written or electronic paystubs which all employees must receive every pay period. California law requires employers to provide this information to employees, to help them check so they can able to make sure they were paid correctly.

Workers paid as “Independent Contractors” either in cash or by check, are sometimes misclassified as independent contractors and are actually employees who have the right to protections given other California employees such as overtime pay, duty-free and timely meal breaks, paid rest breaks, vehicle expense reimbursement, etc. Affected employees may be owed one hour of pay under Labor Code sections 226.7 and 512, and the applicable Wage Orders, for each day a legally compliant meal or rest break is not provided.

Milhaupt and Cohen has recovered significant amounts for many such employees as well.

Assembly, processing, and production line workers are often not fully relieved of duty during meal or rest breaks (especially if the line does not shut down for breaks). These workers are also frequently required to sign on-duty meal break agreements, which agreements are often illegal and unenforceable. Affected employees may be owed one hour of pay under Labor Code sections 226.7 and 512, and the applicable Wage Orders, for each day a legally compliant meal or rest break is not provided.

Milhaupt and Cohen has recovered significant amounts for thousands of processing and production line workers in California, and been instrumental in changing employer work policies for the prospective benefit of the affected employees.

Workers in the auto repair, fabrication, installation, in-home servicing and similar industries are often paid by the piece, i.e. by number of units produced, or by a version of the flag hours and flag rate method of piece rate compensation, i.e. multiplying the stated number of flag hours each completed task is deemed to take to perform, by the stated flag rate (the hourly rate of pay the task is deemed to be worth or the employee’s stated hourly rate of pay), and the number of pieces made or tasks performed during the applicable pay period.

Piece rate and flag rate compensation formulas often do not provide for the payment of overtime (e.g. piece-and-a half or double-piece) based on units completed or flag hours worked after 8 actual (not flag) hours of work daily. Sometimes, employers do not even keep track of hours worked or pieces produced daily, which makes accurate wage calculation and payment difficult or impossible. Consequently, the piece rate payroll calculations often misstate the actual number of hours worked, and inaccurately compensate the employees for wages owed including overtime.

To make matters worse, some employers using the piece rate and in particular the flag hour/flag rate method of compensation have fashioned creative methods of attempting to avoid or lessen their obligation to pay overtime and minimum wage, which need to be carefully reviewed (including review of pay statements and the software used to calculate the flag hour/rate payments) to determine if all compensation owed was actually paid.

Piece rate and flag rate workers, in addition to not receiving all wages owed based on inaccurate and improper pay calculation methods, are often owed additional wages based on the employer’s failure to provide legally compliant meal and rest breaks. Affected employees may be owed one hour of pay under Labor Code sections 226.7 and 512, and the applicable Wage Orders, for each day a legally compliant meal or rest break is not provided.

Also, as for rest breaks, recent case law and newly enacted Labor Code section 226.2 makes it clear that employers must do more for their piece workers than just allow them to take one 10-minute rest break every four hour work period or major fraction thereof. The employers must also pay the piece workers additional compensation to the employee for the break periods, to make the breaks actual paid rest breaks as the law requires. Also, even if employers have recently started compensating piece rate employees separately for rest breaks per Labor Code section 226.2, workers who recently began receiving such payments from their employers may be owed significant additional compensation (up to one hour’s pay per workday) for rest breaks in previous years for which this compensation was not paid. Labor Code section 226.2 also provides that nonproductive work (time spent performing tasks which do not result in the production of compensable pieces) requires separate hourly payment as well.

Milhaupt and Cohen has recovered significant amounts for many employees improperly paid under the piece rate and flag rate systems as well, and is currently actively engaged in litigation seeking additional compensation for piece rate workers entitled to the prospective and retroactive benefits of Labor Code section 226.2.

These workers are very highly paid, salaried individuals who are often improperly classified as exempt employees. Their job duties are typically primarily scheduling and monitoring of work performed by subcontractors, rather than supervision of other employees of their employer (the general contractor) or general project administration such as involvement in the bidding process or other direct involvement in the general business operations of their employer as is required for the administrative exemption, and do not supervise the equivalent of two full-time employees to qualify for the executive exemption. As a result, these workers are often owed substantial compensation for unpaid overtime and unprovided meal and rest breaks.

These workers, in addition to the problems listed above, often have “off the clock” claims arising from their not being paid for time spent reporting to company offices and traveling to their first jobsite and/or leaving a jobsite and returning to the company offices at the end of the day. These workers are also often not fully paid for all vehicle expenses incurred in performing job duties (e.g. the employer pays just for gas, or only 30-40¢ per mile).

Milhaupt and Cohen has recovered significant amounts of underpaid mileage and actual vehicle expense reimbursement for hundreds of California workers including job coaches for developmentally disabled adults and delivery drivers.

These workers are often pressured to work off the clock or not paid for all hours worked or for overtime, or improperly paid on salary basis instead of hourly or (in the case of servers) not paid minimum wage in addition to tips. In addition, restaurant managers and assistant managers (who are paid on a salary basis) are often pressured or encouraged to perform other workers’ duties in addition to their own responsibilities, which (depending on the amount of such work performed and other factors) can result in employer wage liability to the managerial staff. Milhaupt and Cohen has recovered significant amounts for many restaurant employees.

These workers are often not provided off-duty meal and rest breaks due to requirements that drivers remain on duty driving, or on duty during meal and rest breaks to monitor the vehicle due to governmental regulations or other reasons including the employer’s tight scheduling to cut costs. Also, drivers are sometimes not paid overtime based on the claimed applicability of federal law. Milhaupt and Cohen has recovered significant amounts for many drivers.

These workers, who often perform delivery, maintenance and other tasks which is directly a part of their alleged employer’s business product (e.g. an “independent contractor” trucker working for a freight delivery service) and whose work is sufficiently controlled to make them employees rather than independent contractors, may (depending upon an analysis of the facts) be entitled to receive the wage and hour benefits provided to hourly employees in California such as overtime, additional compensation for unprovided meal and rest periods, and reimbursement for job-related personal vehicle use and other personally incurred expenses. Milhaupt and Cohen has recovered significant amounts for many such workers who were misclassified as independent contractors.

Employers sometimes have their employees sign agreements to remain on duty or on premises during a paid meal break. Such agreements are legal only in very specific situations, and should be carefully reviewed.

Milhaupt and Cohen has successfully challenged and recovered money for thousands of workers affected by invalid on-duty meal period agreements, and successfully negotiated agreed revisions to such policies for the benefit of current and future employees.

Security guards are often not allowed to leave their posts for 10 minute rest periods or 30 minute meal breaks, and are not provided an option to request and receive relief to take off-duty meal and rest breaks. As a result, they are often owed money for these failures.

Milhaupt and Cohen has successfully challenged these practices and recovered money for thousands of security guards employed by various California security service providers and forced to work subject to invalid on-duty meal period agreements, and also negotiated agreed revisions to such policies for the benefit of current and future guards.