Employment Law Topics
Employment Law Topic WAGE AND HOUR
A. Holiday Pay
Hours worked on holidays, Saturdays, and Sundays are treated like hours worked on any other day of the week. California law does not require that an employer provide its employees with paid holidays, that it close its business on any holiday, or that employees be given the day off for any particular holiday. Therefore, if an employer chooses to close its business on holidays and gives its employees time off from work with pay, the employer is doing so pursuant to a workplace policy or practice adopted by the employer, or pursuant to the terms of a collective bargaining agreement, or terms of an employment agreement between the employer and employee, as there is nothing in the law that requires such a practice. Additionally, there is nothing in the law that mandates an employer pay an employee a special premium for work performed on a holiday, Saturday, or Sunday, other than the overtime premium required for work performed in excess of eight hours in a workday or 40 hours in a workweek.
Once an employer establishes a policy granting a paid holiday, the courts consider this to be a contract to do so. Employers should therefore establish a policy that addresses what occurs if the employee is required to work on a day designated as a holiday. For example, the employer could provide another paid day off, or pay holiday wages, in addition to wages for the regularly worked hours. If an employee is terminated or voluntarily resigns, the employer is not obligated to pay for future holidays. (Source: http://www.dlse.ca.gov)
B. Meal Periods
Under California law (IWC Orders and Labor Code Section 512), employees must be provided with no less than a thirty-minute meal period when the work period is more than five hours (more than six hours for employees in the motion picture industry covered by IWC Order 12-2001).Unless the employee is relieved of all duty during the entire thirty-minute meal period and is free to leave the employer's premises, the meal period shall be considered "on duty," counted as hours worked, and paid for at the employee's regular rate of pay. An "on duty" meal period will be permitted only when the nature of the work prevents the employee from being relieved of all duty and when by written agreement between the employer and employee an on-the-job meal period is agreed to. The test of whether the nature of the work prevents an employee from being relieved of all duty is an objective one. An employer and employee may not agree to an on-duty meal period unless, based on objective criteria, any employee would be prevented from being relieved of all duty based on the necessary job duties. Some examples of jobs that fit this category are a sole worker in a coffee kiosk, a sole worker in an all-night convenience store, and a security guard stationed alone at a remote site.
If an employer fails to provide the required meal period, the employee is to be paid one hour of pay at the employee's regular rate of compensation for each workday that the meal period is not provided.
1. "On-duty" Meal Periods
In order for an "on duty" meal period to be permitted under the Industrial Welfare Commission Wage Orders, the nature of the work must actually prevent the employee from being relieved of all duty, and there must be a written agreement that an on-the-job paid meal period is agreed to. Additionally, the written agreement must also state that the employee may, in writing, revoke the agreement at any time.
2. Requiring an Employee to Remain on Premises During His or Her Meal Period
An employer can require that an employee remain on its premises during his or her meal period, even if the employee is relieved of all work duties. However if that occurs, since the employee is being denied his or her time for his or her own purposes and in effect remains under the employer's control and thus, the meal period must be paid. Minor exceptions to this general rule exist under IWC Order 5-2001 regarding healthcare workers. Pursuant to the Industrial Welfare Commission Wage Orders, if an employee is required to eat on the premises, a suitable place for that purpose must be designated. "Suitable" means a sheltered place with facilities available for securing hot food and drink or for heating food or drink, and for consuming such food and drink.
C. Minimum Wage
1. California
Although there are some exceptions, almost all employees in California must be paid the minimum wage as required by state law. Effective January 1, 2008, the minimum wage in California is $8.00 per hour. There are some employees who are exempt from the minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards. Minimum Wage Order (MW-2007)
2. Federal
The Department of Labor enforces the Fair Labor Standards Act (FLSA), which sets basic minimum wage and overtime pay standards. These standards are enforced by the Department's Wage and Hour Division. Workers who are covered by the FLSA are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate of not less than one and one-half times their regular rate of pay is required after 40 hours of work in a workweek. Certain exemptions apply to specific types of businesses or specific types of work.
The FLSA does not, however, require severance pay, sick leave, vacations, or holiday. The FLSA does not address nonproduction cash bonuses, payments that are not production-based. These bonuses are generally a matter of agreement between an employer and an employee (or the employee's representative). Benefits such as educational assistance, life insurance, or travel accident insurance are generally a matter of agreement between an employer and an employee (or the employee's representative).
3. In addition to the FLSA, the Wage and Hour Division enforces other labor laws related to wage payment. Among these are:
- 1. The Davis-Bacon and Related Acts, which require payment of prevailing wage rates and fringe benefits on federally-financed or assisted construction;
- 2. The Service Contract Act, which requires payment of prevailing wage rates and fringe benefits on contracts to provide services to the federal government;
- 3. The Contract Work Hours and Safety Standards Act, which sets overtime standards for most federal service contracts, federally funded construction contracts, and federal supply contracts over $100,000; and
- 4. The Walsh-Healey Public Contracts Act, which requires payment of minimum wage rates and overtime pay on federal contracts to manufacture or provide goods to the federal government. (Source: http://www.dol.gov)
D. Overtime
In California, the general overtime provisions are that a nonexempt employee 18 years of age or older, or any minor employee 16 or 17 years of age who is not required by law to attend school and is not otherwise prohibited by law from engaging in the subject work, shall not be employed more than eight hours in any workday or more than 40 hours in any workweek unless he or she receives one and one-half times his or her regular rate of pay for all hours worked over eight hours in any workday and over 40 hours in the workweek. Eight hours of labor constitutes a day's work, and employment beyond eight hours in any workday or more than six days in any workweek is permissible provided the employee is compensated for the overtime at not less than:
One and one-half times the employee's regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; and,
Double the employee's regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
There are, however, a number of exemptions from the overtime law. An "exemption" means that the overtime law does not apply to a particular classification of employees. There are also a number of exceptions to the general overtime law stated above. An "exception" means that overtime is paid to a certain classification of employees on a basis that differs from that stated above. (Source: http://www.dlse.ca.gov)
E. Rest Periods
Industrial Welfare Commission Wage Orders require that employers must authorize and permit nonexempt employees to take a rest period that must, insofar as practicable, be taken in the middle of each work period. The rest period is based on the total hours worked daily and must be at the minimum rate of a net ten consecutive minutes for each four hour work period, or major fraction thereof. The Division of Labor Standards Enforcement (DLSE) considers anything more than two hours to be a "major fraction" of four." A rest period is not required for employees whose total daily work time is less than three and one-half hours. The rest period is counted as time worked and therefore, the employer must pay for such periods. Since employees are paid for their rest periods, they can be required to remain on the employer's premises during such periods. (Source: http://www.dlse.ca.gov)
