These unpaid minutes may seem minor on a per-worker basis, but nickel-and-diming hundreds of employees over hundreds of shifts can add up to real money for an employer. Few workers may notice and fewer will sue. But under California’s Private Attorneys General Act (PAGA), this kind of petty chiseling can cost employers big penalties.
That is, unless a worker’s claim dies in arbitration.
Nickle-and-diming
According to the complaint, Moncler required workers to line up and undergo bag checks before they were allowed to clock in at the beginning of their shifts. The company also required them to put on their uniforms before clocking in and remove them after clocking out. They were not paid for the unrecorded time. Nor did Moncler’s nonexempt employees receive the legally required extra hour of premium pay for missed meal periods or meals eaten while on duty. Sick pay was also miscalculated because of uncounted time and penalties. Rivera also accuses Moncler of failing to turn over employment records upon request and of failing to set up a program to prevent violence and injuries in the workplace.
Individually, each of these violations may seem minor, but taken together they paint a picture of Moncler’s widespread disregard of California laws that protect the rights of workers.
California Labor Code protections
The California Labor Code requires that employees be compensated for all time spent on “work.” “Compensable time,” or “hours worked” includes all the time that an employee is under their employer’s control or when an employer suffers or permits them to work. This includes mandatory security checks, pre- and post-shift activities, and certain types of mandatory work-related travel and training. In Frleken v. Apple, Inc., the California Supreme Court clarified that the employer’s control over the employee, not just the employee’s productivity, determines if time is compensable.
Whether donning and doffing is considered “work” depends on a number of factors, including:
- whether wearing the clothing, gear, or equipment is mandatory or optional;
- whether employees are permitted to change at home or are required to change at work;
- whether changing is a cumbersome and time-consuming process; and
- whether the clothing, gear, or equipment is necessary and integral to performing the employee’s job duties.
The Labor Code also requires that employers must pay workers a penalty equal to one hour’s pay for missed meal times. Meal breaks are required after five hours of work but are otherwise unpaid.
Finally, under section 226(b) of the California Labor Code, employees must be provided with an opportunity to inspect and receive a copy of their employment records. Labor Code sections 6401.7 and 6401.9 also mandate that most employers establish a Workplace Violence Prevention Plan to protect employees from violence and related injuries.
These are extensive protections but enforcing them is another matter entirely. Realistically, the cost to workers of bringing an individual lawsuit far exceeds the potential for any kind of meaningful recovery. This is why PAGA plays an essential role.
PAGA: Private Attorneys General Act
Since it became law in 2003, PAGA has been an important element of many California labor lawsuits because it functions as a deterrent to wage theft. The primary purpose of PAGA is to strengthen California labor law by essentially “crowd sourcing” enforcement. To that end, the law gives aggrieved employees a simplified and inexpensive process for filing a representative lawsuit.
The penalty for the first violation of California’s labor and employment laws is $100. After that, the penalty is $200 for each subsequent violation. The penalties seem modest, but it is important to realize that violations are counted on a per person/per instance basis often over a period of years. The sums can escalate quickly for employers who have a large workforce. Where the employee prevails, 75 percent of all penalties recovered goes to the Labor and Workforce Development Agency for enforcement.
The arbitration trap – strategic twists and turns
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Ever inventive, employers have recently argued that employees who have signed an agreement to arbitrate employment disputes must also arbitrate PAGA claims. The majority of workers have signed these agreements, generally without realizing that they have done so, especially where the arbitration agreement is buried in onboarding paperwork. Arbitration is where PAGA lawsuits go to die.
The latest strategic turn of plaintiffs, like Byanka Rivera, is to bring their claims as “headless PAGA lawsuits,” which advance only representative claims minus any claim on their on behalf. California courts have, so far, been divided in their decisions about whether headless PAGA claims can be resolved outside of the arbitration process. Rivera v. Moncler raises the issue again. That may be its lasting impact.
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