Editor's Note
Breaks and Time Keeping Should Not Be Hard
The big news in California wage hour law is not really news.
Okay, PAGA needed changes, not because employers don't violate wage and hour laws, but because the plan was starting to defeat the purpose. Now, employers are a little less likely to face draconian penalties for small and unintentional mistakes. This is good.
But otherwise, we're still arguing about what it means to give employees meal and rest breaks and whether employers must accurately track employee work time. C'mon. It's ridiculous that we've been fighting about this stuff for decades now. The only ones who are winning are the lawyers (for both sides).
So, let's fix the problem in 10 easy steps.
- Employees are absolutely entitled to meal and rest breaks.
- Employers are not the break police and do not have to ensure that every employee takes every break. Employees don't want this either. Be real.
- Employers must completely relieve employees from all work obligations while they are on breaks.
- Employees can't both choose to work through their breaks and then complain that they didn't get breaks.
- If it's a workload issue and not a break issue, then both employees and employers need to address that and stop arguing about breaks.
- Do not round time for nonexempt employees. Not ever.
- We have the technology to track employee work time down to the minute. There are many great tech solutions that are affordable and easy to use. Let's use them.
- When there are mistakes or issues, fix them. If you're not sure who's right, a tie goes to the employee. It will be cheaper in the long run.
- If y'all can't figure this out, you have much bigger problems than wage and hour law.
- If you have questions, call your friendly employment lawyer BEFORE you make any decisions or take any action.
That is all. Except for this great article on what's up with California wage and hour law updates.
- Heather Bussing
The recent changes to California’s wage and hour laws have significant implications for employers operating within the state. While the reforms are aimed at providing clearer guidelines for employers, there are still complex issues that HR professionals and employment lawyers must address. Key updates that affect your organization and what you can do to stay compliant are provided below.
Private Attorney General Act (PAGA) Reform
For two decades, PAGA has been a vehicle for plaintiffs acting as a “Private Attorney General” to collect penalties for Labor Code violations previously only recoverable by the state. Before the recent reform, PAGA lawsuits often resulted in compounded penalties for effectively the same infraction. For example, an employer might owe an employee $15 for a missed meal break, but the employee could claim additional PAGA penalties for the associated regular rate, wage statement, and waiting time violations. Thus, PAGA claims added substantially to the already-high stakes of wage and hour class actions.
PAGA reform has clarified and reduced some of these penalties. Key highlights include:
Employers Should Remain Wary About Costly Wage and Hour Class Actions
Though the PAGA reforms reduced some penalties, the reform did not include changes to the underlying wage and hour violations. Employers must remain up to date in their compliance with California’s stringent wage and hour requirements. Employers should consult with their counsel on methods to mitigate risks associated with wage and hour claims.
We review a few hot button issues here:
1. Timekeeping Practices for Non-Exempt Employees
- Timekeeping remains a hot topic, particularly with regard to policies on rounding and de minimis claims. California law does not allow employers to use the de minimis defense for timekeeping violations, unlike federal law. This means even small violations, like missing a couple of minutes of pay, can lead to penalties.
- Rounding Policy: In Camp v. Home Depot, the California Court of Appeal cast doubt on an employer’s usage of neutral time rounding policies (e.g., rounding to the nearest 15 minutes) where employees’ time was tracked by a digital timekeeping system (e.g., Kronos). The California Supreme Court is set to hear this case, and most pundits expect that the court will hold that neutral time rounding policies are not compliant with the California labor code. To mitigate risk, employers should ensure that their payroll systems do not use rounding policies that could result in missed wages.
- Meal Breaks: Donahue v. AMN Services clarified that even if an employee misses only a minute of the required 30-minute meal break, the employer is liable for a meal break premium. This could result in hefty penalties for employers who are rounding meal break times. It is essential to ensure that meal breaks are fully compliant and recorded accurately.
2. Cell Phone and Internet Usage for Work
The frequency and importance of personal phone and internet use has become acute in the post-pandemic era where remote work and digital tools are prevalent. Employers may be unknowingly violating wage and hour laws if they require employees to use their personal phones for work tasks, such as checking schedules or responding to emails outside of normal working hours. Employers need to have a clear reimbursement and/or stipend policy for employees who use their personal phones or internet for work purposes. This is especially important for employers who do not provide company-issued devices but require employees to perform work-related tasks on personal devices.
3. Compliance Across States
National employers must acknowledge the differences among California state law, the Federal Labor Standards Act (FLSA), and other states’ laws. For example, the FLSA likely permits neutral time rounding policies and the de minimus defense. Depending on where your employees are located, you may consider enacting state-specific employment policies.
