Employer Cited for More Than $1.6 Million

California Labor Commissioner Julie Su issued citations totaling $1,625,468 to the Bedford Care Group, Inc., an assisted living provider located in Fresno, California. The Labor Commissioner cited the Bedford Care Group for labor law violations including unpaid minimum wage and overtime, meal and rest break violations, as well as the failure to issue itemized wage statements.

The Labor Commissioner ordered the Bedford Care Group to pay $1,398,890 in unpaid overtime, $17,025 in unpaid minimum wage, and $95,053 in meal and rest period premiums to eleven workers employed at six Bedford Care Group facilities in Fresno County. The Bedford Care Group, Inc. was also fined $114,500 in penalties.

The citations were issued after the Labor Commissioner’s Office interviewed and completed an audit for the eleven caregivers, spanning from November 2011 to April 2013, to determine the amount of unpaid wages owed.

Fighting wage theft has been flagged as a top priority by the California Department of Industrial Relations (DIR), which defends and enforces workplace rights, and the Labor Commissioner, which enforces the state Labor Code and Wage Orders.

“Wage theft” is a phrase used to refer to infractions of the California Labor Code involving the payment of wages to workers. With wage theft at the top of the enforcement agenda, employers need to make certain they’re in compliance with California’s sometimes-confusing wage and hour laws.

California Department of Industrial Relations

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Employer Forced to Pay More Than $1 Million for Pay Violations

The state Labor Commissioner recently issued citations to a Chino warehouse and distribution company for overtime violations and failure to provide a required 30-minute meal period to employees. The citations involved 865 employees and resulted in wages and penalties of over $1 million.

The commissioner’s investigation revealed that the company, Quetico, LLC, “established restrictive procedures which shorted workers their wages.”

Among those procedures:

• Requiring employees to punch in but providing only three time clocks, resulting in long lines of more than 100 employees (the company operates two warehouses in an area that’s equivalent to nearly 20 football fields).
• Workers who arrived on time but then had to wait in line to punch in were given warnings for punching in late.
• Workers had to report earlier to wait in line so they could punch in “on time” and were not compensated for that time waiting in line.
• Workers had to stand in long lines again to punch in and out for meal breaks, which cut into their required 30-minute break. The company altered time records to show that the employees took the full 30-minute lunch break.
• The company penalized workers who complained about unpaid wages. The employer disciplined and suspended workers who filed complaints with the Labor Commissioner.

“Wage theft takes many forms,” said Labor Commissioner Julie Su in a statement. “My office will crack down on any employer who is taking hard-earned wages from workers by falsifying time cards and systematically preventing employees from taking a full meal break.”

Wage theft prevention has been at the top of the Labor Commissioner’s agenda. Last year HR Watchdog reported on the creation of a criminal investigation unit to target employers who perpetrate “wage theft.”

Gail Cecchettini Whaley, CalChamber Employment Law Editor/Staff Counsel

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Unpaid Wages Cost California Company $5 Million

California State Labor Commissioner Julie A. Su announced last week that a settlement of nearly $5 million has been reached in a statewide lawsuit filed to recover unpaid minimum wages for real estate agents working for a California company.

The California Department of Industrial Relations (DIR) first became involved in this case in 2010 when four realty agents in Bakersfield filed wage claims against ZipRealty, alleging that the company did not pay minimum wages and overtime wages to the agents.

ZipRealty appealed the initial wage claim award to the four agents, and lost the appeal in a Superior Court. The company then settled the claims for $595,000. The Division of Labor Standards enforcement (DLSE) decided later to expand its legal efforts to attempt to recover unpaid wages and overtime for all agents in California employed by the company. Part of the DIR, the DLSE adjudicates wage claims, investigates discrimination and public works complaints and enforces state labor law.

The case led Commissioner Su to issue the following strong warning to employers: “Employers considering appealing Labor Commissioner awards should keep [this] case in mind. If our agency determines that violations go beyond the claims before us, we can and will pursue those cases for all affected employees. We learned of [this company’s] systemic minimum wage violations during the litigation of these cases in Superior Court.”

With this recent settlement, the company will have paid out a total of $5,595,000. Employers should be aware that the DIR is ramping up its enforcement efforts to protect workers in the current economy. 

“Enforcement of the minimum wage is critical to maintaining a floor that allows workers to survive. Employers need to do the right thing and obey the law. Those employers that don’t should be prepared to pay twice the amount of wages owed, penalties, interest, and attorney’s fees. It pays to follow the law,” Commissioner Su said in a statement.

Gail Cecchettini Whaley, CalChamber Employment Law Editor/Staff Counsel

California laws governing wages and wage payments can cause confusion for employers and HR professionals. In addition, state and federal law sometimes conflict, making it difficult for California employers to know which law to follow.​​​​​​​

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Two "Job Killer" Bills Held; Other Costly Workplace Mandates Move to Senate or Assembly for Action

Two bills were held on the Senate Appropriations Committee suspense file August 16:

• AB 1999 (Brownley; D-Santa Monica) Expansion of Discrimination Litigation — Makes it virtually impossible for employers to manage their employees and exposes them to a higher risk of litigation by expanding the Fair Employment and Housing Act to include a protected classification for any person who is, perceived, or associated with a family caregiver.
• AB 2039 (Swanson; D-Alameda) Expansion of Protected Leave Requirements for California Employers — Creates a burdensome, California–only mandated benefit that significantly expands the category of individuals with serious health conditions for whom an employee can take a leave of absence beyond what is currently included under the federal Family Medical Leave Act.

Following are "job killer" bills that are awaiting action by the full Senate or Assembly:

• OPPOSE AB 1313 (Allen; D-Santa Rosa) Increased Cost on Agricultural Employers — Drives up the cost of commodities to consumers by removing the existing overtime exemption allowed for agricultural employers. Senate Floor.
• OPPOSE AB 1450 (Allen; D-Santa Rosa) Exposure to Costly Discrimination Litigation — Subjects employers to unjustified charges of discrimination for legitimately inquiring into an applicant's most recent employment history. Senate Floor.
• OPPOSE AB 2346 (Butler; D-Los Angeles) Increased Costs and Unreasonable Requirements — Could increase the price of food and force growers to move their crop production to other states and countries, thereby hurting California exports, by creating excessive, unnecessary new rules regarding heat illness prevention with unreasonable consequences for violations. Senate Floor.

For more information on the remaining "job killer" bills, visit www.CAJobKillers.com

Federal Wage and Hour Lawsuits Hit Record High

Employees filed a record number of federal wage-and-hour lawsuits under the Fair Labor and Standards Act (FLSA) from March 31, 2011, to March 31, 2012, according to a chart released by Seyfarth Shaw LLP. The figures were confirmed by the Federal Judicial Center.

FLSA wage-and-hour claims exploded over the past decade — more than tripling since 2002 when only 2,035 claims were filed.

The claims forming the bulk of these numbers include misclassification of employees, alleged uncompensated “work” performed off the clock and miscalculation of overtime pay, according to Richard L. Alfred, chair of Seyfarth Shaw’s wage-and-hour litigation practice.

As employers in California are all too aware, wage-and-hour lawsuits brought under California’s labor laws increased similarly in recent years. This year, California employers received welcome guidance from the California Supreme Court in one area of wage-and-hour litigation — meal and rest periods ­— in the Brinker Restaurant Corp. v. Superior Court decision.

Gail Cecchettini Whaley, CalChamber Employment Law Editor/Staff Counsel

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