What’s in a Name? An Analysis of California Wage Statements and the Requirement that an Employer Provide both its Name and Address

“What’s in a name?” That was the question asked by the California Court of Appeal in Noori v. Countrywide Payroll & HR Solutions, Inc. (2019) 43 Cal. App. 5th 957, 964. California Labor Code Section 226(a)(8) requires employers to provide wage statements that list “the name and address of the legal entity that is the employer” each pay period. “Name” is undefined in Section 226(a)(8). The California Labor Code further provides that “[a]n employee is deemed to suffer injury for purposes of this subdivision if the employer fails to provide accurate and complete information as required […] and the employee cannot promptly and easily determine from the wage statement alone […] the name […] of the employer.” Cal. Lab. Code § 226(e)(2)(B)(iii).

Section 226(a)(8) seeks to avoid confusion by employees regarding the identity of their employer so that employees may quickly identify their employer when grievances arise out of wages, for unemployment insurance purposes and for income tax and pension purposes. Mejia v. Farmland Mut. Ins. Co., No. 217CV00570TLNKJN, 2018 WL 3198006, at *6 (E.D. Cal. June 26, 2018) (citing Paul D. Ward, bill mem. to Governor Brown re Assem. Bill No. 1750 (1963–1964 Reg. Sess.) June 24, 1963).

Courts have held that Section 226(a)(8) does not expressly require that the company’s complete name or the name registered with the California Secretary of State be included on the wage statement. See, e.g., Mejia, 2018 WL 3198006, at *6 (“[I]f the Legislature had intended the name on wage statements be identical to the name registered with the Secretary of State, it would have stated so.”) Instead, Courts have repeatedly held that companies may list their fictitious business names on wage statements. See Savea v. YRC Inc. (2019) 34 Cal. App. 5th 173, 180 (using California registered fictitious business name “YRC Freight” instead of the legal corporate name “YRC Inc.” did not violate statute); see also York v. Starbucks Corp., No. CV-08-07919 GAF, 2009 WL 8617536, at *8 (C.D. Cal., Dec. 3, 2009) (using “Starbucks Coffee Company” a fictitious business name of “Starbuck Corporation” rather than the official corporate name satisfied Section 226(a)(8) as a matter of law); see also Mejia, 2018 WL 3198006, at *6 (Defendant’s use of the name “Farmland Mutual Insurance Co.” instead of its registered name “Farmland Mutual Insurance Company” did not violate Section 226(a)(8) as a matter of law); see also Sali v. Corona Reg’l Med. Ctr. (9th Cir. 2018) 909 F. 3d 996, 1011 (finding no violation where company issued wage statements that listed the employer as Corona Regional Medical Center, rather than Corona’s corporate name, UHS-Corona, Inc.).

However, not all fictitious business names satisfy the statute. Numerous courts have found that “severe truncations or alterations of the employer’s name can violate the statute, particularly where confusion might ensue.” Noori, 43 Cal. App. 5th at 965. For example, in Cicairos v. Summit Logistics, Inc. the California Court of Appeal found a violation of Section 226(a)(8) where an employer printed the word “SUMMIT” along with logo on earning statements, instead of “Summit Logistics, Inc.” (2005) 133 Cal. App. 4th 949, 961. Likewise, the District Court for the Central District of California found a violation where an employer listed “Wal-Mart Associates, Inc.” instead of “Wal-Mart Stores, Inc.” on earnings statements, where multiple Wal-Mart entities shared the same address. See Mays v. Wal-Mart Stores, Inc. (C.D. Cal. 2019) 354 F. Supp. 3d 1136, 1142-1144. The District Court for the Central District of California also found that an employer did not comply with Section 226(a)(8) where the employer printed “First Transit” and a logo on wage statements, instead of “First Transit Transportation, LLC,” where a different entity “First Transit, Inc.” also existed. Clarke v. First Transit, Inc., No. CV 07-6476 GAF (MANX), 2010 WL 11459323, at *4 (C.D. Cal., Nov. 4, 2010).

If your wage statements list a company name that is confusing and makes it difficult to identify your employer, please feel free to contact the experienced attorneys at Hunter Pyle Law for a free and confidential intake process. We can be reached at inquire@hunterpylelaw.com, or at (510) 444-4400.

Individual Liability under California Labor Code section 558.1: Some guidance from the courts of appeal

Until relatively recently, an employee could not recover damages for unpaid wages and other wage and hour violations from an individual owner or officer of the employer unless the employee could prove some other legal basis for liability such as alter ego liability. However, alter ego liability is generally difficult to prove and has been described as an extreme remedy that is sparingly used.

As a result, even if an employee obtained a judgment against a corporate employer, it was often difficult to collect that award for a number of reasons: the employer could have “hidden their cash assets, declared bankruptcy, or otherwise become judgment-proof.” See Assem. Com. on Judiciary, Analysis of Sen. Bill No. 588 (2015-2016 Reg. Sess.) as amended July 1, 2015, p. 4; accord, Sen. Com. on Labor & Industrial Relations, Analysis of Sen. Bill No. 588 (2015-2016 Reg. Sess.) Apr. 29, 2015, pp. 5-6 [“the vast majority of wage theft victims received nothing, and those that received anything received little of what they were legally due”].

In response to this problem, the California Legislature enacted Labor Code section 558.1 in order to expand liability for wage and hour violations and to “discourage business owners from rolling up their operations and walking away from their debts to workers and starting a new company.” See Sen. Com. on Judiciary, Analysis of Sen. Bill No. 588 (2015-2016 Reg. Sess.) Apr. 20, 2015, p. 12; see also Voris v. Lampert (2019) 7 Cal.5th 1141, 1161 [section 558.1 “targets individual officers who are involved in the failure to pay wages”].

Section 558.1 has two provisions that are relevant here. First, section (a) provides as follows:

Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.

The term “other person acting on behalf of an employer” is defined in section (b) as follows:

For purposes of this section, the term ‘other person acting on behalf of an employer’ is limited to a natural person who is an owner, director, officer, or managing agent of the employer, and the term ‘managing agent’ has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.

Section 3294, subdivision (b), of the Civil Code in turn provides an employer shall not be liable for punitive damages based on acts of an employee unless there has been “advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice” on the part of “an officer, director, or managing agent of the corporation.” Courts have defined a “managing agent” pursuant to this statute to be an employee who “exercises substantial discretionary authority over decisions that ultimately determine corporate policy.” White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 573.

In the last year, two decisions from the California Courts of Appeal have helped to further shape the meaning of “other person acting on behalf of an employer” as used in Section 558.1. Most recently, in Espinoza v. Hepta Run, Inc. (Jan. 19, 2022, No. B306292) 2022 WL 167770 the Second District Court of Appeal concluded that in order to “cause” a violation of the Labor Code and therefore to come within the ambit of Section 558.1, an individual must have engaged in some affirmative action beyond his or her status as an owner, officer or director of the corporation. The court noted, however, that that “does not necessarily mean the individual must have had involvement in the day-to-day operations of the company, nor is it required the individual authored the challenged employment policies or specifically approved their implementation.” Rather, to be held personally liable, he or she must have had some oversight of the company’s operations or some influence on corporate policy that resulted in Labor Code violations.

Under this test, the individual defendant in Espinoza was clearly liable under Section 558.1. Among other things, he was the sole owner and president of the corporate employer. He also admitted that he had approved the policy that allegedly violated various provisions of the Labor Code.

The Espinoza court’s reading of section 558.1 is therefore broader than the gloss provided by the Fourth District Court of Appeal in Usher v. White (2021) 64 Cal.App.5th 883, 895, There, the court considered the question of whether personal liability could be imposed on a corporate officer who assisted with administrative and banking tasks but had no role in day-to-day operations or employment policies. The court relied mainly on federal district court decisions in finding that to be held individually liable, the officer must have been “ ‘personally involved’ in the alleged violations” or “engaged in ‘individual wrongdoing’ ” Id. at pp. 895-896.

“[T]o be held liable under section 558.1, an ‘owner’… must either have been personally involved in the purported violation of one or more of the enumerated provisions; or, absent such personal involvement, had sufficient participation in the activities of the employer, including, for example, over those responsible for the alleged wage and hour violations, such that the ‘owner’ may be deemed to have contributed to, and thus for purposes of this statute, ‘cause[d]’ a violation.” Id. at pp. 896-897.

Turning to the case before it, the Usher court held the individual defendant was not liable because the undisputed facts showed she had not participated in the relevant employment decisions.

Individual liability can mean the difference between being able to collect on a judgment for unpaid wages and being left with nothing. If you have questions about your wages, please feel free to contact the attorneys at Hunter Pyle Law. We can be reached at inquire@hunterpylelaw.com or at (510) 444-4400.

Pay for Reporting Time under California Law: Do On-Call Shifts Count?

California law requires employers to pay employees for “reporting time” under the following circumstances:

(1) when employees are required to report for work, (2) do report but (3) are either not put to work or provided less than half of their usual daily shift or scheduled shift. See Industrial Welfare Commission (“IWC”) Wage Orders 1-16, Section 5; Ward v. Tilly’s, Inc. (2019) 31 Cal. App. 5th 1167, 1171.

Under IWC Wage Orders 1-16, reporting time pay amounts to two to four hours of pay at an employee’s regular rate, as follows:

(A) Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which shall not be less than the minimum wage.

(B) If an employee is required to report for work a second time in any one workday and is furnished less than two (2) hours of work on the second reporting, said employee shall be paid for two (2) hours at the employee’s regular rate of pay, which shall not be less than the minimum wage.

In Ward v. Tilly’s, Inc. the California Court of Appeal considered whether employees must physically appear at their worksite in order to be entitled to reporting time pay. Ward, 31 Cal. App. 5th at 1172. Defendant Tilly’s, Inc., a retail clothing company, required employees to contact their stores two hours before the start of on-call shifts to determine whether they were needed to work those shifts. Id. at 1171.  Employees were told to “consider an on-call shift a definite thing until they are actually told they do not need to come in.” Id.

The plaintiff, a sales clerk, argued that employees were entitled to reporting time pay even when they did not physically appear at the worksite at the start of scheduled shifts but were on-call and called-in. Id. Tilly’s argued that in order to be eligible for reporting time pay, employees must be present at the worksite at the start of their shift. Id.

The California Court of Appeal sided with the plaintiff, holding that eligibility for reporting time pay does not hinge on physical presence at the worksite. Id. at 1185. Instead, the court found that reporting to work is “best understood as presenting oneself as ordered” and therefore reporting time pay also extends to those employees who are on-call. Id.

The Ward Court reasoned that this interpretation of reporting time was consistent with the IWC’s goals in adopting reporting time pay under the wage orders. Id. at 1183. In particular, the court found that requiring reporting time pay for on-call shifts was consistent with the policy goals of requiring employers to internalize the costs of overscheduling, compensating employees for the inconvenience and expense of being available for on-call shifts (including hiring caregivers, forgoing other employment and traveling) and making employee pay more predictable. Id. at 1184-85.

In sum, even if you do not physically report to work, you may still be eligible for reporting time pay. Reporting time violations are common in retail, fast food, restaurant, construction and other industries.

The workers’ rights attorneys at Hunter Pyle Law have handled PAGA and class cases throughout California. If you have questions about your rights in the workplace, please feel free to contact us in order to utilize our free and confidential intake process. We can be reached at inquire@hunterpylelaw.com or at (510) 444-4400.

 

California Resident Managers’ Workplace Rights

Live-in resident managers face a unique challenge: their bosses are often also their landlords.

California law requires an individual to live on the premises if a building has sixteen (16) or more units. Cal. Code Regs. tit. 25, § 42. These individuals are often referred to as resident managers. Resident managers carry out various job duties, including but not limited to, collecting rent, assisting tenants, facilitating repairs, and attending to emergencies in the building.

This makes resident managers especially vulnerable to workplace violations such as wage theft and retaliation. In most instances, when resident managers are fired, their landlord can evict them immediately.

This is because housing protections that apply to tenants do not usually apply to resident managers, who are often considered to be “licensees”.

Employers therefore often use the threat of losing one’s housing to keep resident managers from complaining about mistreatment at work. However, the law protects resident managers from this sort of retaliation.

Resident managers should be aware of the rights they have to be (1) paid correctly; and (2) protected from retaliation if they complain that they are not.

Resident Managers Should Keep Track Of All Hours Worked.

In the case of resident managers who are required to reside on the employment premises, “hours worked” means “that time spent carrying out assigned duties shall be counted as hours worked”.

Wage Order 5 § (2)(k). For resident managers, “hours worked” does not include on-call time, but only “time spent carrying out assigned duties” for resident managers. Isner v. Falkerberg, 160 Cal. App. 4th 1393, 1399 (2008).

Although resident managers generally bear the burden of proving the hours they work, the burden shifts when the employer has failed to keep accurate records.  Under California law, where the employer has failed to keep statutorily mandated time records, the burden then shifts to the employee for a best faith estimate of the hours they worked. Hernandez v. Mendoza, 199 Cal. App. 3d 721, 727 (1988).

Resident managers should keep track of all time they spend working, even if their employer does not require them to complete time records.

Employers Must Pay Resident Managers For All Hours Worked.

A resident manager must be paid at least the minimum wage for all hours worked. See Lab. Code  § 1197; Wage Order 5 § 4. Resident managers may not enter into an agreement to work for less than the minimum wage.  Lab. Code § 1194(a).

Unique Wage And Hour Laws Apply To Live-In Resident Managers In California.

There are two common ways employers pay resident managers: (1) using the value of the resident manager’s rent to pay their wages (also called a “rent credit”); or (2) offering the resident manager reduced rent. In each case, the employer must always provide the resident manager a paystub.

However, employers often do not follow the law to pay resident managers correctly.

When an Employer Can Use the Value of Rent to Pay a Resident Manager’s Wages (Also Known as a “Rent Credit” or “Lodging Credit”).

An employer may only use the value of rent to pay a resident manager’s wages if:

Wage Order 5 § 10(C).

For example, a resident manager who works 40 regular hours in a week in San Francisco is entitled to be paid at least the minimum wage (currently $15.59 per hour) for the work performed. Therefore, in this example, the resident manager must be paid a total of $623.60 for that week (40 hours x $15.59).

However, if the resident manager is provided with a room that is occupied alone, the employer may only credit a maximum of $61.13 in rental value to the resident manager’s wages. Therefore, the employer must still pay the resident manager $562.47 in wages for their work ($623.60 – $61.13).

Legal Requirements in Order to Charge a Resident Manager Rent

Employers may charge a resident manager rent if:

See Lab. Code § 1182.8.

For example, if an employer charges a resident manager 2/3 of the fair market rental value, then the employer must pay the resident manager all of their wages, in full, in a separate paycheck. That means the employer cannot apply any “rent credit” to pay the resident manager’s wages, as discussed above.

See Wage Order 5 § 10(E).

Employers May Not Retaliate Against Resident Managers Who Speak Out About Their Legal Rights

The law protects resident managers from retaliation if they complain that they are owed wages or about other workplace violations. See Lab. Code §§ 98.6, 1102.5(b). Employers are liable for penalties of $10,000 per employee per violation, and other damages, for retaliatory conduct.

If you have been subject to wage theft or retaliation in the workplace, please feel free to call the experienced workers rights attorneys at Hunter Pyle Law, and to make use of our free and confidential initial intake process.  We can be reached at (510) 444-4400, or at inquire@hunterpylelaw.com.

Do California’s Wage and Hour Laws apply to Workers who live in other States or who travel outside of the State for work?

man sitting on gang chair with feet on luggage looking at airplane

California’s laws are among the best, if not the best, for workers in the United States. But do those laws apply to workers who live in other states? And how about workers who live and work in California, but also work in other states?

Oman v. Delta Air Lines and Ward v. United Airlines, two 2020 decisions from the California Supreme Court provide some guidance with respect to those questions. Because they build on an earlier case, Sullivan v. Oracle (2011) 51 Cal.4th 1191, 1201, we will start our analysis there. (more…)

Proving Unpaid Wages without Records: A Roadmap for Claims under California and Federal Law

Wage theft, or situations in which an employer fails to pay its employees for some or all of the wages of that they earned, has gotten more attention in recent years. (See, for example, https://www.kqed.org/news/11780059/were-being-robbed-california-employers-who-cheat-workers-often-not-held-accountable-by-state.) This post explores how workers battling wage theft can prevail even when there are no exact records showing how much they are owed.

In Minnesota, Wage Theft Will be a Felony | Workday Minnesota

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Independent Contractor vs. Employee: AB 5 Makes Dynamex California Law

On September 18, 2019, Governor Gavin Newsom signed California Assembly Bill 5 (AB 5) into law –expanding the California Supreme Court’s decision in the Dynamex Operations West, Inc. v. Superior Court (Dynamex) and codifying the “ABC test” for determining if a worker may be classified as an independent contractor, instead of an employee.

In Dynamex, the California Supreme Court revisited whether the factors from its prior decision in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (Borello) were the best way to determine employment for purposes of claims under the California Wage Orders. The Court concluded that Borello was not the proper test, ruling that the ABC test should be used to determine whether a worker should be classified as an employee or an independent contractor.

Under the ABC test, a worker is presumed to be an employee unless the company proves that the worker:

(A) Is free from the control and direction of the company in performing work, both practically and in the contractual agreement between the parties; and

(B) Performs work that is outside the usual course of the company’s business; and

(C) Is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the company.

To satisfy the ABC test and legally classify a worker as an independent contractor, the employer must prove that a worker is free from the company’s control, performs work outside the company’s primary business, and is regularly engaged in the trade the worker is hired for, independent of work for the employer. All three parts of the ABC test must be satisfied before a worker can properly be considered an independent contractor.

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PAGA, Individual Claims, Public Entities, and Section 1102.5 Whistleblower Claims

Gear and Gavel

On September 8, 2019, the Court of Appeal for the Second Appellate District issued an important decision in the case of Hawkins v. City of Los Angeles (Case Nos. B279719, B282416).  That decision casts light on the following questions:  (1) Whether PAGA claims can be brought on behalf of an individual, as opposed to a group of aggrieved employees; (2) Whether PAGA claims can be brought against public entities; and (3) Whether attorneys’ fees are recoverable under Labor Code section 1102.5.

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My Company Owes Me Wages.  Can I Sue My Boss Individually For Them?

Gear and Gavel

In California, employees can sue certain individuals for money that their employers owe them.  But a recent decision by the California Supreme Court limits the avenues for that type of recovery.

First, the good news:  California Labor Code section 558.1 allows “person[s] acting on behalf of an employer” to be held liable as the employer for violating any provision regulating minimum wages or hours and days of work in any of the Industrial Welfare Commission wage orders.  This section also applies to the following Labor Code sections:  203 (failure to pay wages due at the time of termination); 226 (failure to provide proper wage statements); 226.7 (failure to provide meal and rest breaks); 1193.6 (failure to pay minimum wage); 1194 (failure to pay minimum wage) and 2802 (failure to reimburse for business expenses). (more…)

Which Wage and Hour Laws Apply to California Public Employees?

Gear and Gavel

Wage and hour laws require that employers pay minimum wages and overtime wages, provide meal and rest breaks, and pay all wages immediately upon termination of employment, among many other things. Public employees often wonder whether they are covered by these laws, or whether such basic protections do not apply to them.  The answer in California, in true lawyerly fashion, is, “it depends.”  This post will attempt to sort out which wage and hour laws apply to public employees and which, unfortunately, do not. (more…)