Court Holds that Teachers at a Jewish Synagogue are not Exempt from Employment Laws under the Ministerial Exception

Employment laws provide workers with important protections, such as minimum and overtime wages, the right to be free from harassment or discrimination, and workers’ compensation. In certain situations, these laws conflict with The United States Constitution’s prohibition against governmental interference with the free exercise of religion. Specifically, the “ministerial exception” exempts individuals that are classified as “ministers” from various employment laws.

In Su v. Temple, 2nd Appellate Dist., Case No. B275426 (filed March 8, 2019) (“Su”), an appellate court analyzed whether the ministerial exception exempted preschool teachers, employed by a Jewish synagogue, from wage and hour laws.

Facts of the Case

In Su, the Plaintiff was a preschool teacher employed by defendant, Stephen S. Wise Temple (“Temple”). The Temple is a Reform Jewish synagogue that operated an on-site preschool and employed approximately 40 preschool teachers.

The Temple’s preschool program contained both secular and religious components. For the secular component, preschool teachers spent time engaging students in activities, such as games, books, science, and the promotion of reading, writing, and math readiness. Teachers also developed students’ social skills, assisted with toilet use, and supervised meals and snacks.

The religious component introduced students to Jewish life, religious ritual, and Judaic observance. The preschool teachers taught religious concepts, celebrated Jewish holidays, observed weekly Shabbat, and introduced students to Jewish values. The preschool’s purpose was to create a positive sense of Jewish identity and develop favorable attitudes towards Judaism.

The teachers were not required to follow the Temple’s philosophy or practice the Jewish faith. Furthermore, the teachers were not required to have theological training, be educated about Judaism, or be proficient in Hebrew. Last, the teachers were not ordained as religious leaders and did not hold themselves out as ministers of the faith.

The Temple did not require the preschool teachers to undergo theological study. Any guidance related to the practice of Judaism was provided by the Temple’s rabbis or administrators trained in Jewish education. The Temple provided the teachers with reading materials that included explanations of Jewish holidays, symbols, and Hebrew vocabulary.

Procedural History

In September 2013, the California Labor Commissioner brought an action on behalf of the preschool teachers against the Temple for various wage and hour violations, including failure to provide meal and rest breaks, and failure to pay overtime. The Temple filed a motion for summary judgment and asserted that the teachers were exempt from wage and hour laws due to the “ministerial exception” articulated by the United States Supreme Court in Hosanna-Tabor Evangelical v. E.E.O.C. (2012) 565 U.S. 171 (“Hosanna-Tabor”).

The trial court granted summary judgment and concluded that the preschool teachers were ministers under the ministerial exception. It reasoned that the exception is not limited to heads of religious congregations because prior cases recognized that teachers could serve ministerial functions. The Labor Commissioner appealed the trial court’s ruling.

Appellate Court’s Ruling

On appeal, the Second District Court of Appeal analyzed the preschool teachers’ circumstances under the Hosanna-Tabor factors and held that the teachers were not ministers.

To explain its ruling, the appellate court described the purpose of the ministerial exception. In Hosanna-Tabor the defendant, a church, fired a teacher who threatened to initiate a lawsuit for disability discrimination. The church claimed that the teacher was not suitable for carrying out its message, because her threat of legal action violated a core belief that disputes should be resolved internally. After her termination, the teacher filed a complaint with the Equal Employment Opportunity Commission (“EEOC”). This led to the EEOC suing the church for employment discrimination.

As a defense, the church argued that a law forcing a religious group to retain an unwanted messenger of the faith is governmental interference with the free exercise of religion. The United States Supreme Court held that the teacher qualified as a minister under the ministerial exception because she was someone “whose functions are essential to the independence of…[a] religious group.” Hosanna-Tabor, supra, 565 U.S. at p. 200. To reach this conclusion, the United States Supreme Court identified the following factors:

The appellate court analyzed the preschool teachers’ circumstances under the Hosanna-Tabor factors. After doing so, the appellate court reached the following conclusions. First, the Temple did not identify the preschool teachers as ministers. The teachers were not required to practice the Jewish faith, given a religious title, or recognized as spiritual leaders.

Second, the Temple did not require the preschool teachers to attend formal Jewish training or education. In contrast, the plaintiff in Hosanna-Tabor was required to take college-level courses on faith-based subjects and pass an oral examination administered by a faculty committee.

Third, none of the preschool teachers identified themselves as ministers. The plaintiff in Hosanna-Tabor held herself out as a minister by “accepting the formal call to religious service” and claiming housing allowances were only available to those employed in the exercise of the ministry.

Under the fourth factor, the appellate court found that the preschool teachers’ duties reflected a role in conveying the Temple’s message and carrying out its mission. The teachers were responsible for implementing religious curriculum, such as teaching Jewish rituals, values, leading children in prayers, celebrating Jewish holidays, and participating in weekly Shabbat services. Thus, they served a role in transmitting Jewish religion and practice to future generations.

Based on an analysis of the aforementioned factors, the appellate court held that the ministerial exception did not apply to the Temple’s preschool teachers. Therefore, the teachers were not exempt from wage and hour laws.

Conclusion

After reaching its conclusion, the appellate court emphasized an important point regarding the ministerial exception. The factors articulated in Hosanna-Tabor are not a rigid formula for determining the application of the ministerial exception. The analysis is based on a totality of whether an employee is sufficiently central to a religious institution’s mission to require exemption from generally applicable employment laws.

If you have questions about whether you are protected by to California or federal employment laws, please feel to contact Hunter Pyle Law at (510) 444-4400 or inquire@hunterpylelaw.com.

 

Unpaid Wages and PAGA: A Third Approach in Zakaryan v. The Men’s Wearhouse

On March 28, 2019, a third California Court of Appeal weighed in on the issue of whether California employees who have signed arbitration agreements can bring claims under the Private Attorneys General Act (PAGA) for unpaid wages.

To set the stage, in Esparza v. KS Indus., L.P. (2017) 13 Cal.App.5th 1228, the Fifth District Court of Appeal held that a PAGA claim can be split, and that PAGA claims for unpaid wages under Labor Code section 558 can be sent to individual arbitration.   In Lawson v. ZB, N.A. (2017) 18 Cal.App.5th 705, the Fourth District Court of Appeal disagreed, holding that employees can bring those PAGA claims on a representative basis in court.

The Second District Court of Appeal has now weighed in on this issue in the case of Zakaryan v. The Men’s Wearhouse (March 29, 2019) Case No. B289192.  In that case, the court agreed with Lawson for the most part, but added this interesting twist:  Of the unpaid wages recovered, 75 percent must go to the State, and 25 percent to the workers.  In reaching this holding, the Zakaryan court relied on the fact that Labor Code section 558 was enacted before PAGA.  Therefore, PAGA’s later-enacted rule regarding the distribution of civil penalties recovered under that statute must control. (more…)

Is calling in to check your work schedule considered reporting to work?

Predictive scheduling laws have recently received a great deal of attention. Although California is considering passing statewide predictive scheduling laws, individual entities like the City of San Francisco have already enacted similar legislation. The push for predictive scheduling is to provide workers with stability and predictability by allowing them advance notice of their work schedules.

Similar to predictive scheduling laws, the Wage Orders require employers to pay employees that are required to report to work but are not permitted to work. In the past, courts have interpreted “reporting to work” as being physically present at the workplace. However, is using modern technology, such as cell phones, email, and the internet to report to work considered “reporting to work?” An appellate court addressed this question in Ward v. Tilly’s, Inc., 2nd Appellate Dist. Case No. B280151 (filed Feb. 24, 2019) (Ward).

Facts of the Case

In Ward, the Plaintiff was a sales clerk for the clothing chain, Tilly’s. In additional to normal shifts, Tilly’s assigned certain employees to “on-call” shifts. These shifts provided Tilly’s with the ability to quickly increase or decrease a store’s staffing needs.

Each on-call shift had a specific start and end time. An employee assigned to an on-call shift was required to contact Tilly’s two hours prior to the start of the shift to determine if he or she needed to work. An on-call shift was considered a scheduled shift until an employee was informed that he or she was not required to work. An employee was disciplined if he or she did not contact the store before an on-call shift, contacted the store late, or refused to work an on-call shift.

Procedural History

Plaintiff filed a class action alleging that Wage Order No. 7 required Tilly’s to provide reporting time pay for on-call employees that were: 1) required to report to work but were provided less than half of their usual or scheduled day’s work; or 2) required to report to work a second time in a workday and provided with less than two hours of work. See Cal. Code regs. tit. 8, § 10070, subd. (5) (Wage Order No. 7).

For the first violation, an employee is entitled to “half the usual or scheduled day’s work” which cannot be less than two hours, but cannot exceed a maximum of 4 hours, at the employee’s regular rate of pay. Wage Order No. 7, subd. (5)(A). For the second violation, an employee is entitled to two hours of pay. Id., subd. (5)(B).

Plaintiff alleged that on-call employees “reported for work” when they called Tilly’s to determine if they were required to work. Therefore, Tilly’s violated Wage Order No. 7 when it did not provide on-call employees, who had their shifts canceled or shortened, reporting time pay.

Tilly’s argued that the act of calling in by telephone did not qualify as reporting to work. In order to “report to work,” an employee must be physically present at a Tilly’s store. The trial court agreed with Tilly’s interpretation of “reporting to work,” and sustained Tilly’s demurrer without leave to amend. Plaintiff appealed the trial court’s dismissal order.

Appellate Court’s Ruling

On appeal, the Second District Court of Appeal held that on-call employees calling in to determine if they were scheduled to work qualified as “reporting to work.” The appellate court emphasized that the purpose of the Wage Order’s reporting time requirement is to ensure that employers provide proper notice of work schedules and compensation for employees.

The appellate court gave the following reasons for its ruling. First, permitting employers to schedule workers to be ready and able to work, without actually compensating employees for this time, discourages employers from making competent scheduling decisions. Without reporting time pay, employers are incentivized to keep a large pool of contingent workers on standby for staffing shortages, but able to prevent individuals from working without financial consequences.

Second, on-call schedules impose major costs on workers. Workers are prevented from using their time to pursue higher education, forced to spend resources on child or elder care arrangements, and prevented from earning additional income at another job. On-call workers must incur these expenses, even if an employer chooses not to allow them to work.

Third, Tilly’s requirement to call two hours prior to the start of an on-call shift prevents an employee from using this time for his or her own purposes. The employee cannot schedule time with family members, engage in personal activities, or travel to areas without cell phone service.

Conclusion

The appellate court’s ruling was based on a 2-1 decision. Justice Egerton dissented and held that an employee must physically appear at the worksite in order to “report of work.” Although the appellate court held that an employee under Tilly’s on-call policy reported to work, the court declined to make a blanket ruling that an employee “reported to work” anytime that he or she contacted an employer to check his or her work schedule.

 

If you have questions about reporting time pay or your rights in the workplace, please feel to contact Hunter Pyle Law at (510) 444-4400 or inquire@hunterpylelaw.com.

Are taxi drivers independent contractors under Dynamex’s ABC Test?

Whether an individual is an employee or independent contractor has become a hotly disputed legal topic. This classification is important because independent contractors do not receive employment-related protections, such as the right to minimum and overtime wages, the prohibition against discrimination, and workers’ compensation.

In Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex) the California Supreme Court provided a new method for determining if an individual is an employee when pursuing claims under California’s Wage Orders. Following Dynamex, an appellate court analyzed whether taxi drivers are employees under the new ABC test articulated in Dynamex. See Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5th 558 (Garcia).

Facts of the Case

In Garcia, the Plaintiff was a former taxi driver who worked for the Border Transportation Group, LLC (BTG). BTG’s business model was to lease out taxi permits through subsidiaries to drivers. BTG’s lease agreement expressly stated that Plaintiff was an independent contractor. Furthermore, Plaintiff’s vehicle contained a BTG subsidiary’s, Calexico Taxi, color scheme and logo. Last, BTG permitted Plaintiff to set his own work hours, use the taxi for personal errands, keep his own fares, enter sublease agreements, and advertise under his own name.

Procedural History

In 2014, Plaintiff sued BTG, and other related entities, for various wage and hour violations and wrongful termination. The wage and hour violations included claims for unpaid wages, failure to pay minimum and overtime wages, failure to provide meal and rest breaks, failure to furnish accurate wage statements, waiting time penalties, and violations of the Unfair Competition Law. The trial court granted summary judgment in favor of BTG, and held that BTG did not exercise the requisite control required to establish an employment relationship. While Plaintiff was appealing the trial court’s order, the California Supreme Court decided Dynamex.

Appellate Court’s Ruling

On appeal, the Fourth District Court of Appeal applied Dynamex’s ABC test to determine if Plaintiff was an employee or independent contractor. After applying the ABC test, the appellate court held that summary judgment was inappropriate for Plaintiff’s Wage Order claims. To support its ruling, the appellate court discussed the differences between the old control test applied in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 38 Cal.3d 341 (Borello) and the new ABC test in Dynamex.

The appellate court noted that under Borello “[t]he principal test of an employment relationship is whether the person to whom the services is rendered has the right to control the manner and means of accomplishing the result desired…” Borello, supra, 48 Cal.3d at p. 351. In addition to control, other factors are considered, such as:

  1.   whether the one performing services is engaged in a distinct occupation or business;
  2.   the kind of occupation, with reference to whether, in the locality, the work is usually done    under the direction of the principal or by a specialist without supervision
  3.   the skill required in the particular occupation;
  4.   whether the principal or the worker supplies the instrumentalities, tools, and the place of    work for the person doing the work;
  5.   the length of time for which the services are to be performed;
  6.   the method of payment, whether by the time or by the job;
  7.   whether or not the work is a part of the regular business of the principal; and
  8.   whether or not the parties believe they are creating the relationship of employer and            employee. Garcia, supra, 28 Cal.App.5th at p. 567.

The new ABC test differs in key aspects from the control test. Under the ABC test, an individual is presumed to be an employee unless the hiring entity establishes each of the following:

The appellate court focused on Part C of the test. Part C analyzes whether the worker has actually chosen to go into business for himself or herself. To satisfy Part C, it is important that an individual is actually engaged in an independent business, not that the fact that an individual had the opportunity to pursue such an activity.

In Plaintiff’s case, his taxi permit was limited to providing services for a specific company. If Plaintiff chose to provide services to a different company, he would need a new permit bearing the new company’s name. Furthermore, BTG did not provide evidence that Plaintiff provided services for other entities or operated an independent business. Thus, summary judgment was inappropriate because BTG did not meet its burden to establish that the Plaintiff engaged in an independent business.

Conclusion

Although the appellate court held that Plaintiff may be an employee, it limited its ruling to Plaintiff’s Wage Order claims. The appellate court emphasized that because Plaintiff’s claim for wrongful termination was not related to a Wage Order, Plaintiff failed to establish that he was an employee for the wrongful termination and other non-Wage Order claims.

 

If you have questions about whether you are an employee or independent contractor, please feel to contact Hunter Pyle Law at (510) 444-4400 or inquire@hunterpylelaw.com.

 

Labor Code 226.2: Are Piece-Rate Workers Compensated for Rest Periods?

What is California Labor Code 226.2?

California Labor Code section 226.2 says that workers who are paid on a piece-rate basis must be paid separately for their rest periods and “other nonproductive time.” Section 226.2 defines other nonproductive time as “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.” For workers in California who are paid on a piece-rate basis this means that they must be paid at least the minimum wage for all hours worked, and for their rest period time, in addition to their piece-rate compensation. This law was passed following two appellate court decisions that interpreted California Wage Orders to require that piece-rate workers be compensated for all hours worked, which includes the time they are not performing work for piece-rate wages. Gonzalez v. Downtown LA Motors, LP, 215 Cal. App. 4th 36, 40 (2013) (piece-rate auto-repair workers “entitled to separate hourly compensation for time spent waiting for repair work or performing other nonrepair tasks directed by the employer during their workshifts”); Bluford v. Safeway, Inc., 216 Cal. App. 4th 864, 872 (2013) (under California law that employees must be compensated for each hour worked, “rest periods must be separately compensated in a piece-rate system”). (more…)

Supreme Court: Service Advisors are Exempt under the FLSA

Reversing the Ninth Circuit Court of Appeals, the U.S. Supreme Court ruled that “service advisors” employed by car dealerships are exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA”). Encino Motorcars, LLC v. Navarro, No. 16-1362, 2018 WL 1568025 (U.S. Apr. 2, 2018) (“Encino Motorcars II”).

The FLSA requires employers to pay employees overtime compensation if they work more than 40 hours a week, unless the employee is exempt. One of the exemptions in section 213 of the FLSA covers “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements….” 28 U.S.C. § 213(b)(10)(A). (more…)

Are Stock Options and Stocks Considered Wages?

There has been an increase in companies that compensate employees with stock options or equity (e.g. stock). This practice is used to reduce the financial burden on cash-strapped startups or to incentivize employees to maximize a company’s financial success. Because it is unclear if stock options or equity have tangible value, there is ambiguity regarding whether these items are considered wages under California law.

Whether stock options or equity are classified as wages is important because California law prohibits employers from reducing, denying, or taking back a worker’s rightfully earned wages. Thus, workers will receive additional legal protections if the law considers their stock options or equity to be wages. Currently, two cases have discussed this issue.

Stock Options and Equity Are Not Wages:

In IBM v. Bajorek (1999) 191 F.3d 1033, the Ninth Circuit Court of Appeals held that equity is not considered a wage because it has no monetary value. In this case, the Plaintiff, Dr. Bajorek, claimed that his employer, IBM, illegally deducted his wages by cancelling the stocks the company granted him. As part of his employment agreement, IBM provided Dr. Bajorek with a stock option plan. However, the plan required him to return any stock option profits if he joined a competitor within six months of exercising his stock options to purchase IBM stock. After exercising his stock options, Dr. Bajorek immediately left to work for a competitor. In response, IBM notified him that his stocks were being cancelled.     

Dr. Bajorek filed a lawsuit in California state court seeking a declaratory judgment that he was in compliance with the stock option agreement. IBM countered by filing a lawsuit in New York state court for a breach of contract for violating the agreement. Both cases were removed to federal court, and then consolidated in California. When deciding which state’s laws governed these issues, the federal district court determined that California law would be used to decide the dispute.

Dr. Bajorek argued that under California law, IBM’s actions violated California’s prohibitions against: 1) unlawful restraint of trade; and 2) deduction of wages paid to an employee. The district court granted judgment on the pleadings for Dr. Bajorek and held IBM’s reimbursement provision to be unenforceable because it served as an unlawful restraint on Dr. Bajorek’s ability to practice his trade.

On appeal, the appellate court found IBM’s stock option agreement to be valid under California law. First the court found that a limited restraint on trade was not illegal. Only a complete restraint is illegal, and Dr. Bajorek’s agreement only prevented him from working for a competitor for a six month period.

Next, the court analyzed California’s prohibition against an employer illegally deducting an employee’s wages by collecting “any part of wages theretofore paid by said employer to said employee.” To determine if IBM unlawfully deducted Dr. Bajorek’s wages, the Court needed to determine if his stocks constituted wages. To answer this question, the court focused on the definition of wages as “all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.”

The appellate court concluded that Dr. Bajorek’s stocks were not wages because stocks have no fixable or ascertainable worth due to their value depending on the “vagaries of stock market valuations” on the date of purchase. Furthermore, the court also reasoned that stock options have no value because stock options are a contractual right to purchase stock in the future. The court considered a contractual right to be different from earned wages with a definite value.

Stock Options and Equity Are Wages:

Ten years later, in Schachter v. Citigroup (2009) 47 Cal.4th 610, the California Supreme Court held that stocks are wages under California law. The court discussed whether an employer, Citigroup, failed to pay employees all wages due upon their separation from employment when employees forfeited unvested stocks at the end of their employment.

As part of an employee’s compensation plan, Citigroup provided certain employees with the choice to purchase company stocks at a reduced price for a portion of their annual compensation. However, the employee agreed to forfeit his or her stocks, and the compensation contributed for the stocks, if he or she was terminated for cause or resigned before the vesting of the stocks. Employees filed a class action alleging that the agreement violated an employer’s legal duty to pay all wages upon separation from employment because Citigroup failed to repay the compensation contributed to the unvested stocks.

On summary judgment, the trial court held that the agreement did not violate the law. The Court of Appeal affirmed the trial court’s grant of summary judgment for Citigroup. On review, the California Supreme Court held that Citigroup did not violate the law. Nevertheless, the court held that stocks are wages because wages include “other benefits to which [an employee] is entitled to as a part of his compensation.” The reason that Citigroup did not violate the law is because an employer may condition compensation upon completion of specific terms. Since employees voluntarily chose to receive a portion of their compensation in the form of stock, employees assumed the risk of loss if they failed to satisfy the necessary terms to acquire full ownership of the stock.

Split Between the Courts

As it stands, California and federal courts differ regarding whether stock options or equity are classified as wages. If you feel that you have not been paid your rightful wages, please feel free to contact Hunter Pyle Law for a free consultation at (510) 444-4400 or contact us today.

Are You a Salaried Employee If You are Paid by the Hour?

Under California law, employers must pay workers overtime when work is performed: 1) over forty hours in a workweek; 2) over eight hours each day; or 3) on the seventh consecutive day in a workweek. However, employees that fall under the professional, executive, and administrative exemptions may be excluded from earning overtime compensation. For an employer to claim that its employee falls within these exemptions, the employee’s work conditions must satisfy both the “salary basis” and “job duties” test. The purpose of this article is to discuss the legal requirements of the “salary basis” test.

Although it is commonly understood that a salary is a fixed amount of pay, the legal definition of a salary is much more complex. These requirements are set forth in the “salary basis” test. To constitute a salary, an employee must be paid: 1) a set amount of compensation; 2) that is not subject to any reductions or variations. If an employee’s compensation fails to satisfy this test, the employee must be paid overtime. Employers cannot avoid paying overtime by improperly labeling an employee’s pay as a salary.

What is a Salary?

In Negri v. Koning & Associates (2013) 216 Cal.App.4th 392, the California Sixth District Court of Appeals held that a salary must be a predetermined amount of pay that is not subject to reductions or variations. However, there are specific exceptions, which are related to absences, under the Code of Federal Regulations[1].

The key issue in this case is whether a compensation system based on an hourly rate of pay qualifies as a salary. Mark Negri, the Plaintiff, was an insurance adjuster employed by Koning & Associates. He was paid an hourly rate, twenty-nine dollars per hour, with no guarantee of the minimum number of hours to be worked. Whenever Mr. Negri worked more than forty hours in a workweek, his employer only paid him at his hourly rate instead of an overtime rate of one-and-one half times his hourly rate. His employer argued that Mr. Negri was not entitled to overtime pay because he was an exempt administrative employee.

Mr. Negri argued that he was entitled to overtime pay, because his compensation structure did not comply with the “salary basis” test. Due to being paid on an hourly basis, his pay was not fixed because it fluctuated based on the number of hours worked each week. In contrast, his employer argued that Mr. Negri was paid a de facto salary because he always worked sixty hours each week. Therefore, his salary was fixed because it was predetermined and not subject to reduction or variation. Furthermore, Mr. Negri’s employer emphasized that it never reduced Mr. Negri’s de facto salary by reducing his workload.

Due to a technical nuance that occurred during the lawsuit, the appellate court held that Mr. Negri was not paid a salary. As the case proceeded through litigation, both the employer and Mr. Negri stipulated that it never paid Mr. Negri a fixed amount of compensation. A stipulation is when a piece of evidence is submitted to the court as the truth. In the stipulation, the employer stated, “[I]f he [Mr. Negri] worked fewer claims ‘he made less money than if he worked more claims.’” Essentially, the employer admitted that Mr. Negri was never provided a fixed amount of pay because it was possible for his compensation to change based on the number of hours he worked. Despite Mr. Negri prevailing on his claim, the appellate court noted that employees with a fixed salary may receive extra payment without losing their exemption.

Conclusion

As it stands, a salary is a predetermined amount of pay: 1) that is not subject to reductions or variations; and 2) twice the state minimum wage. However, employers may pay an exempt employee additional compensation beyond the predetermined salary. An example of this is a salaried employee who receives two thousand dollars bi-weekly, but also receives additional pay that is lower than the minimum wage for each hour worked over forty hours a week.

If you feel that you have not been paid your rightful wages, please feel free to contact Hunter Pyle Law for a free consultation at (510) 444-4400 or inquire@hunterpylelaw.com.

[1] 29 C.F.R. § 541.602(b)

California’s “Day of Rest” Requirements

In an important decision for California employees and employers, the California Supreme Court issued its opinion in Mendoza v. Nordstrom, 2 Cal. 5th 1074, 393 P.3d 375 (2017) clarifying the Labor Code’s “day of rest” requirements.  The Court was addressing questions posed by the Ninth Circuit Court of Appeals regarding how to interpret California Labor Code sections 551 and 552. See Mendoza v. Nordstrom, Inc., 778 F.3d 834 (9th Cir. 2015). Labor Code section 551 states that “every person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” Labor Code section 552 prohibits employers from “causing their employees to work more than six days in seven.”  However, Labor Code section 556 provides that employers do not have to provide a day of rest “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.”

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Rest Periods Must be Separately Compensated for Commissioned Employees

In Vaquero v. Stoneledge Furniture LLC (Feb. 28, 2017, B269657) __ Cal.App.4th __ (“Slip Op.”), the Court of Appeal explained that an employer’s obligation to separately compensate employees for rest periods extends to employees who are paid on a commission basis. This decision is in accord with other Court of Appeal decisions that require employers to separately compensate rest periods for employees who are paid on a piece-rate basis. (See Bluford v. Safeway Stores, Inc. (2013) 216 Cal.App.4th 864; Gonzalez v. Downtown L.A. Motors, LP (2013) 215 Cal.App.4th 36; see also Labor Code § 226.2.)

In Vaquero, the court analyzed IWC Wage Order No. 7, which applies to the Mercantile Industry, including retail and wholesale salespeople. Section 12 of Wage Order No. 7 says that employees must receive 10 minutes of rest time for every four hours worked, or major fraction thereof, which must be counted as hours worked for which there shall be no deduction from wages.

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