Please read below to learn about the following
subjects:
- Earned Wages
- Overpayment of Wages
- Minimum Wage
- Deductions From Wages
- Loans From Employers
- Overtime and Double-Time Wages
- Work Week Limits
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- Severance Pay
- Health Insurance and Life Insurance
- COBRA
- Pensions (Erisa)
- Vacation Pay
- Sick Leave
- Holiday Pay
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Earned Wages
Under California law, all wages owed are due
immediately upon termination of employment. Similarly, failure to pay an
employee his regular wages on time is a violation of California labor laws. An
employee is entitled to a day's pay for every day the employer is late in
paying the employee all wages she has earned.
Overpayments
An employer breaks the law if it deducts wage
overpayments from an employee's paycheck. However, periodic deductions from
wages authorized in writing by an employee to recoup predictable, expected
overpayments that occur as a consequence of the employer's payroll practice are
not unlawful. An employer may make deductions from wages to reflect predictable
and expected wage overpayments made in the immediately prior paycheck that
resulted from the employer’s payroll system, if the employee provides
voluntary, written authorization.
Minimum Wage
A minimum wage is the lowest hourly, daily or monthly
wage that employers may legally pay to employees or workers. Under California
law, the minimum wage is $8.00 per hour. The federal minimum wage is $6.55 per
hour effective July 24, 2008.
Deductions From Wages
An employer can lawfully withhold amounts from an
employee’s wages only: (1) when required or empowered to do so by state or
federal law, or (2) when a deduction is expressly authorized in writing by the
employee to cover insurance premiums, benefit plan contributions or other
deductions not amounting to a rebate on the employee’s wages, or (3) when
a deduction to cover health, welfare, or pension contributions is expressly
authorized by a wage or collective bargaining agreement. Labor Code Sections
221 and 224. Money may not be deducted from an employee’s wages to pay for
salaries, bonuses, wages of other employees, failure to clock in and out, or
uniform cleaning. Some common payroll deductions that are unlawful are
gratuities (tips), photographs of the employee, bonds, uniforms, business
expenses, and medical and physical examinations. Your employer cannot legally
make such a deduction from your wages if, by reason of mistake or accident a
cash shortage, breakage, or loss of company property/equipment occurs. The
California courts have held that losses occurring without any fault on the part
of the employee or that are merely the result of simple negligence are
inevitable in almost any business operation and thus, the employer must bear
such losses as a cost of doing business. For example, if you accidentally drop
a tray of dishes, take a bad check, or have a customer walkout without paying a
check, your employer cannot deduct the loss from your paycheck
Loans From Employers
Although deductions for the periodic installment
payments on a loan made to an employee by the employer are permissible when
authorized in writing by the employee, the court also concluded that the
balloon (lump sum) payment of the outstanding balance to be made at the time
the employment relationship ends is not allowed notwithstanding the fact the
employee has given his or her written consent to such a payment. When the
employment relationship ends, your employer can only deduct the amount of one
installment payment from your final paycheck.
Overtime & Doubletime Wage
Overtime & Doubletime Wagesovertime Under
California law, you are entitled to 1 and ½ times your regular hourly
wage rate for every hour after the 8th hour you work in the same day. This is
overtime pay. You are also entitled to overtime pay for work beyond 40 hours in
the same week under federal law. However, you are entitled to two times your
regular hourly wage rate for every hour after the 12th hour you work in the
same day. This is doubletime pay. Overtime is due after 8 hours per day or 40
hours per week unless an alternative workweek of no more than 4 days of 10
hours was established. Premium pay on 7th day not required for employee whose
total weekly work hours do not exceed 30 and whose total hours in any one work
day thereof do not exceed 6, in specific wage and hour orders.
Certain employees may not benefit from the overtime
laws. For instance, certain truck drivers who driver between states are exempt
because of the nature of their work. This is referred to as the Motor Carrier
Exception.
Overtime for Salaried Employees
A salaried employee must be paid overtime unless they
meet the test for "exempt" status. Please refer to our discussion of exempt
status here. Exempt status will lawfully deprive an employee of legal
protections such as the overtime (1 1/2x) and doubletime (2x) premiums, minimum
wage, reporting time pay, employer compensation for uniforms and equipment, and
meal and rest periods..
Nondiscretionary Bonuses and Overtime Pay
A bonus is money promised to an employee in addition
to the monthly salary, hourly wage, commission or piece rate usually due as
compensation. Bonuses are in addition to any other remuneration rate and may be
predicated on performance over and above that which is paid for hours worked,
pieces made, or sales completed. A bonus may be in the form of a gratuity where
there is no promise for their payment, for example, a holiday bonus at the end
of the year. Additionally, a bonus may be a contractually required payment
where a promise is made that a bonus will be paid in return for a specific
result, such as exceeding a minimum sales figure or piece quota, or as an
inducement to remain in the employ of the employer for a certain period of
time. In general, an employee who voluntarily quits his or her employment
before the payout date of the bonus is not entitled to receive the bonus.
Certain types of bonuses are included in the regular
rate of pay for calculating overtime. They are known as nondiscretionary
bonuses. Discretionary bonuses or sums paid as gifts at a holiday or other
special occasions, such as a reward for good service, which are not measured by
or dependent upon hours worked, production or efficiency, are not included for
purposes of determining the regular rate of pay. A nondiscretionary bonus that
is based upon hours worked, production and efficiency of the employee will
figure into the hourly rate of pay for purposes of calculating overtime.
Work Week Limits
Under California law If you work more than 6 days in a
row, you will be entitled to 1 and ½ times your regular hourly wage rate
for every hour and one and one half times your regular hourly wage rate for
every hour after the 8th hour you work in the same day.
Severance Pay
Ordinarily, an employee is not entitled to severance
pay on the termination of his employment. Similarly, employers are not
ordinarily required to provide their employees with two weeks notice before
firing them, though longer warning periods may be required for mass layoffs by
larger employers. However, the employee and employee may agree otherwise.
Employees should refer to their employer’s policy with respect to
severance pay. Severance pay plans provided by an employer pursuant to the
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.
(ERISA), are subject to federal law.
Health Insurance and Life Insurance
There is no requirement under California law for
employers to provide employees with medical or life insurance. Employees should
refer to their employer’s policy with respect to medical and life
insurance benefits. However, an employer who provides employee medical benefits
and discontinues those benefits must provide employees with written notice at
least 15 days in advance of the discontinuance of coverage. A terminated
employee may be entitled to continued coverage under the federal COBRA act or
California's continued coverage requirements.
COBRA
COBRA provides certain former employees, retirees,
spouses former spouses, and dependent children the right to temporary
continuation of health coverage at group rates. This coverage, however, is only
available when coverage is lost due to certain specific events. Group health
coverage for COBRA participants is usually more expensive than health coverage
for active employees, since usually the employer pays a part of the premium for
active employees while COBRA participants generally pay the entire premium
themselves. It is ordinarily less expensive, though, than individual health
coverage.
Pensions (ERISA)
The Employee Retirement Income Security Act of 1974,
or ERISA, protects the assets of millions of Americans so that funds placed in
retirement plans during their working lives will be there when they retire. If
an employer maintains a pension plan, ERISA specifies when an employee must be
allowed to become a participant, how long they have to work before they have a
nonforfeitable interest in their pension, how long a participant can be away
from their job before it might affect their benefit, and whether their spouse
has a right to part of their pension in the event of their death.
The law requires plans to pay retirement benefits no
later than the time a participant reaches normal retirement age. But, many
plans, including 401(k) plans, provide for earlier payments under certain
circumstances. For example, a plan's rules may provide that participants in a
401(k) plan would receive payment of his or her benefits after terminating
employment.
ERISA protects plans from mismanagement and misuse of
assets through its fiduciary provisions. ERISA defines a fiduciary as anyone
who exercises discretionary control or authority over plan management or plan
assets, anyone with discretionary authority or responsibility for the
administration of a plan, or anyone who provides investment advice to a plan
for compensation or has any authority or responsibility to do so. Plan
fiduciaries include, for example, plan trustees, plan administrators, and
members of a plan's investment committee.
Generally, if you are enrolled in a 401(k), profit
sharing or other type of defined contribution plan (a plan in which you have an
individual account), your plan may provide for a lump sum distribution of your
retirement money when you leave the company.
However, if you are in a defined benefit plan (a plan
in which you receive a fixed, pre-established benefit) your benefits begin at
retirement age. These types of plans are less likely to contain a provision
that enables you to withdraw money early.Whether you have a defined
contribution or a defined benefit plan, the form of your pension distribution
(lump sum, annuity, etc.) and the date your pension money will be available to
you depend upon the provisions contained in your plan documents. Some plans do
not permit distribution until you reach a specified age. Other plans do not
permit distribution until you have been separated from employment for a certain
period of time. In addition, some plans process distributions throughout the
year and others only process them once a year. You should contact your pension
plan administrator regarding the rules that govern the distribution of your
pension money.
ERISA requires that plans disclose when you begin to
participate in the plan, how your service and benefits are calculated, when
your benefit becomes vested, when you will receive payment and in what form,
and how to file a claim for benefits.
Vacation Pay
There is no legal requirement in California that an
employer provide its employees with either paid or unpaid vacation time.
However, if an employer does have an established policy, practice, or agreement
to provide paid vacation, then certain restrictions are placed on the employer
as to how it fulfills its obligation to provide vacation pay. Under California
law, earned vacation time is considered wages, and vacation time is earned, or
vests, as labor is performed. For example, if an employee is entitled to two
weeks (10 work days) of vacation per year, after six months of work he or she
will have earned five days of vacation. Vacation pay accrues (adds up) as it is
earned, and cannot be forfeited, even upon termination of employment,
regardless of the reason for the termination. An employer can place a
reasonable cap on vacation benefits that prevents an employee from earning
vacation over a certain amount of hours and, unless otherwise stipulated by a
collective bargaining agreement, upon termination of employment all earned and
unused vacation must be paid to the employee at his or her final rate of
pay.
Advanced Vacation Pay and Leave
Your employer cannot deduct "advanced" vacation (i.e.,
vacation that is taken before it is earned or accrued) from your final
paycheck. Because of work schedules and the wishes of employees, many employers
allow employees to take their vacation before it is actually earned. Under
California law, vacation benefits are a form of wages, and an employer's
practice of allowing employees to take their vacation before it is actually
earned or accrued is in effect an advance on wages. Thus, if an employee takes
an advance on vacation and then quits or is discharged before all of that
advanced vacation is earned or accrued, the effect is that there has been an
overpayment of wages which is a debt owed to the employer.
Paid Time Off
Where an employer replaces its separate arrangements
for vacation and sick leave with a program whereby employees are granted a
certain number of "paid days off" each year that can be used for any purpose,
including vacation and sick leave, the employees have an absolute right to take
these days off. Consequently, again applying the principles of equity and
fairness, DLSE takes the position that such a program is subject to the same
rules as other vacation policies. Thus, for example, the "paid time off" is
earned on a day-by-day basis, vested paid time off days cannot be forfeited,
the number of earned and accrued paid time off days can be capped, and if an
employee has earned and accrued paid time off days that have not been used at
the time the employment relationship ends, the employee must be paid for these
days.
Sick Leave
If an employer has a sick leave policy, the employer
must permit an employee to use in any calendar year, the employee’s
accrued and available sick leave, in an amount not less than the sick leave
that would be accrued during 6 months at the employee’s current rate of
sick leave, to attend to an illness of a child, parent, domestic partner, or
spouse of the employee.
Holiday Pay
California law does not require that employers provide
employees with paid time off for holidays, observe any holidays, or pay an
employee any additional compensation for working on a holiday. Employees should
refer to their employer’s policy with respect to paid holidays.
For a free consultation about California labor law
violations with an experienced employee rights attorney, contact David Spivak:
- Email David@MyWorkMyWages.com
- Call toll free (877) 277-2950
- Visit The Spivak Law Firm, 16530 Ventura Boulevard Suite 312 Encino, CA 91436
- Fax (310) 499-4739
The Spivak Law Firm is a full service employee rights
law firm. David Spivak and his team are proud to represent aggrieved employees
like you in the following matters:
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