Code, § 2669.3, subd. (d).). Use an expert or staff member to go through the wage statements to determine if the employees were properly paid for all overtime and double-time. If so, you should advocate for a higher quantifier. v. Superior Court, No. Based on these alleged violations, the employee pursued a single cause of action for violation of PAGA seeking to recover, "penalties and wages" for the listed Labor Code sections, including Section 558. Irvine Office “In our view, the language of section 558, subdivision (a), is more reasonably construed as providing a civil penalty that consists of both the $50 or $100 penalty amount and any underpaid wages.” (Thurman v. Bayshore Transit Mgmt., Inc. (2012) 203 Cal.App.4th 1112, 1145; see also, Lawson v. ZB, N.A. California's appellate courts quickly became divided in their attempts to interpret these provisions. Cal. If you do agree to a stay discovery at the defendant’s request, inform the mediator so that gaps in the record are weighed in your favor. If your job involves dealing with meal and rest periods and calculating overtime, well, I pity you. And the penalty doubles to $200 per pay period in certain circumstances. They can pursue civil penalties as if they were a state agency. (Code Civ. They contain evidence of unpaid wages, unpaid premiums, meal and rest break violations, and unlawful timekeeping practices, such as rounding or auto-deductions, among other things. The PAGA does not create a private right of action to directly enforce a wage order but “PAGA actions can serve to indirectly enforce certain wage order provisions by enforcing statutes that require compliance with wage orders.” (Thurman, supra, 203 Cal.App.4th, at p. There is no better example of California窶冱 distinction in this area than the Private Attorneys General Act (PAGA窶ヲ Class damages – reasonable quantification per workweek. Instead, the Lawson court merely notes that the total penalty recoverable under Section 558 may, depending upon the number of violations and employees' pay rates, still be "largely" payable to the state. 2015), the Court held that PAGA penalties may not be counted when calculating damages for the purpose of the Class Action Fairness Act (CAFA). Because PAGA did not increase Cintas窶冱 liability for Labor Code penalties, its application in this case was not retroactive. Next, look at the written wage-and-hour policies, practices and procedures. Please enter a valid phone number. As we have frequently written, PAGA allows an aggrieved employee to seek civil penalties for his employer's violations of the Labor Code on behalf of himself, the State, and other aggrieved employees. 1 In short, the court held that PAGA 窶ヲ Website Copyright © 2020 by Neubauer & Associates, Inc.The articles appearing in Advocate Magazine are Copyright © 2020 by Consumer Attorneys Association of Los Angeles. Pity Party at Greggie's! Before AB 1506, unlike many other labor code sections, pay stub violations were not considered curable. Note that the amount is doubled because employees are entitled to liquidated damages in the amount of the total unpaid minimum wages. Posted in Civil rights in the workplace, Employee Rights, Employment Law on April 14, 2014. 949-261-8800 (g).) This article addresses these issues and discusses different approaches to creating a damages model that can optimize your success at mediation. Interest!? Give yourself enough time to work out an agreement regarding the scope of the exchange and set reasonable production deadlines so that you’re not stuck sifting through thousands of pages of time and wage records at the eleventh hour. When PAGA窶任alifornia窶冱 Labor Code Private Attorneys General Act of 2004窶背as first enacted, we knew it would take years to see how it would be applied. As such, you should demand production of all employee handbooks and standalone policies regarding timekeeping, meal and rest breaks, payroll practices, overtime compensation, and expense reimbursements that were in effect at any time during the applicable damages period. The Private Attorney General Act of 2004 or 窶�PAGA窶� provided a private right of action for employees to recover Las Vegas, … The wage orders can be found online at the Department of Industrial Relations public website. Of the penalties recovered, 12 ½ percent of the penalty will be paid into a labor law education fund and the remaining 87 ½ percent will be paid into the California General Fund. The damages periods used below should be reduced to three years if the lawsuit does not include a cause of action for unlawful business practices in violation of the UCL. PAGA, California窶冱 Private Attorneys General Act of 2004, allows employees to sue their employers on behalf of themselves and other 窶彗ggrieved窶� employees to recover penalties for Labor Code violations. If your client presents poorly, is a poor historian, has a significant disciplinary record, or only worked part time or for a short period, modify your quantifier accordingly. He can be reached at arhodes@spattorneys.com. Resolving the Split - ZB, N.A., et al. This ruling drastically limits the amount of penalties that plaintiffs can attempt to recover in PAGA actions. Assess whether your client will make an adequate class representative. (3) Wages recovered pursuant to this section shall be paid to the affected employee. Applies for a full month, even if the return is filed less than 30 days late 5. (ZB), moved to compel arbitration of Lawson’s 558 claim for unpaid wages. Brown v.American Airlines, Inc., No. For repeat violations, the penalty increases to $200 per pay period, per employee. The penalty period for actions brought under the Private Attorneys General Act of 2004 (“PAGA”) is one year prior to the date of filing, plus 65 days for the PAGA notice period. The PAGA applies a default penalty of $100.00 for initial violations and $200.00 for subsequent violations unless the predicate Labor Code section that has been violated expressly provides for a different civil penalty. Because it is a type of qui tam claim, the process and damages for a PAGA claim are different than a normal lawsuit. (e).) Many attorneys don’t have the resources to conduct an independent analysis of a large production of time and wage records and agreeing to a smaller sample size may be the most practicable approach. Map & Directions, Las Vegas Office Irvine, Copyright © 2020 by the author. 89128 The plaintiff sought civil penalties pursuant to the PAGA based on those purported violations. . Code, § 226, subd. In calculating these penalties, PAGA often "borrows" from penalties set forth in particular provisions of the Labor Code. Interestingly, the court reached this decision, in large part, based upon its finding that unpaid wages recovered under Section 558 are payable solely to the aggrieved employees. 949-345-1621 This formula assumes that there is a wage statement violation each pay period throughout the one-year period. (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1800; Lab. What information do you need, how do you get it, and, most importantly, how do you go about calculating the damages on behalf of your client and all others similarly situated and/or aggrieved? Labor Code 2699(e)(2). Yes. Aug 21, 2015 | attorneys general, California Employment Law, Class action, employee rights, Labor Code, PAGA, penalties A Fictional Account of Labor Code Violations Disclaimer : This story is completely fictional without reference to any particular person, company or employee. Note that the California Supreme Court recently held that the de minimis defense is not applicable to off-the-clock wage-and-hour claims. You can also demand a Belaire-West administration, which will give you access to putative class members who may provide supporting declarations prior to mediation. What Are PAGA Penalties? (Lab. In the opinion's sole glimmer of hope for employers, the court discussed and agreed with the unpublished federal opinion in Yadira v. Fernandez (N.D. Cal. PAGA, as the law is known, provides monetary penalties in the amount of $100 per employee per pay period, and $200 for subsequent pay periods, including attorneys’ fees, for violations of the California Labor Code where … Code, § 2802.). Courts do not allow PAGA penalties to be included as part of calculating the “amount in controversy” when defendants try to remove a case from state court to federal court under the Class Action Fairness Act or any other basis. CA Subscribe to our newsletter to receive important legal updates and the latest at Kring & Chung. (c).) Although California Labor Code section 204 does not expressly provide for civil penalties, penalties can be obtained under California’s Private Attorneys General Act. Suite 150G Note that interruptions to meal periods are not readily apparent on the time records, so your actual violation rate may be higher than that which is shown on the face of the time records. Time and wage records typically consist of handwritten or digital timesheets, wage statements, paystubs, and/or pay summaries. (a)(1)-(2).) (Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 223-24.) (Lab. On September 12, 2019, the California Supreme Court in ZB, N.A., et al. Oct. 5, 2015) is the latest case to dismiss PAGA claims based on the presence of numerous individualized issues that render 窶ヲ (2017) 18 Cal.App.4th 705, the plaintiff alleged violations of various Labor Code provisions related to overtime, meal and rest periods, minimum wages, timely wage payments, wage statements, and expense reimbursement. Phone: The good news is that there are several options designed to simplify the calculation process without risking rejection during the court approval process. $100/ penalty for subsequent violations x 35/aggrieved former and current employees x 25/subsequent pay periods = $87,500. They also sought more than $160 million in PAGA penalties on top of their statutory damages, yet the court reduced that award to just under $54 million. Disclaimer. Every subsequent violation carries a $200 penalty. Fax: On appeal, the employer argued that the award of unpaid wages under PAGA was improper because such wages were not part of the civil penalty provided for in Section 558. On the employer's appeal, the California Court of Appeal for the Second Appellate District agreed, holding that where an employee brings a solitary PAGA claim, the court may not split that claim by sending the employee to arbitration to recover underpaid wages while retaining jurisdiction to award per-pay-period statutory penalties. However, California’s Unfair Competition Law (“UCL”) can be used to extend the class action recovery period to four years for claims seeking restitution, including claims for unpaid wages, unpaid overtime, meal and rest break premiums, and reimbursement of necessary business expenses. In addition, employees are entitled to an unpaid 30-minute meal break once they work five hours. If putative class members have told you that employees were required to be on-call during their rest breaks, uptick the quantifier. See Arias v. Superior Court , 46 Cal. In ZB, N.A. Unfortunately, evaluating an employer’s exposure in a wage-and-hour class and/or PAGA action requires a fair amount of number crunching. The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Most defendants will produce these policies without hesitation. Special considerations regarding PAGA penalties. 2012) 2012 WL 2373372 at *17; Schiller v. David’s Bridal, Inc. (E.D. Code, §  2699, subds. Charged each month or part of a month the return is late, up to 5 months 4. The court reasoned that this conclusion was compelled by the LWDA's ability to seek underpaid wages on behalf of employees under Section 558, combined with the PAGA plaintiff suing "as a proxy or agent of the state's labor law enforcement agencies. (Lab. For example, if the predicate violation occurs every other pay period, decrease the total penalty amount for subsequent violations by half. (l)(2).). The California Court of Appeal for the Fourth Appellate District disagreed, holding that the civil penalty under Section 558 "consists of both the $50 or $100 penalty amount and any underpaid wages." In 2005 and 2006, two courts held that the penalties available under PAGA are different than the statutory penalties set forth in various Labor Code provisions and that, as a result, a plaintiff alleging Labor Code violations canand Phone: Any civil penalties collected in a PAGA action must be divided 75 percent to the LWDA and 25 percent to the “aggrieved employees.” (Lab. CV 10-8431-AG (PJWx), 2015 WL 6735217 (C.D. Lab. The most streamlined approach to calculating class-wide damages is to multiply the total number of workweeks during the applicable damages period by a reasonable quantifier. Code, § 1194.) PAGA Claims In addition to penalties for labor code violations, employers may face fines under California's Private Attorneys General Act (PAGA). Furthermore, because PAGA allows an individual to stand in the shoes of the LWDA, the individual's ability to pursue PAGA penalties should be coextensive with the LWDA's. The law allows for $100 for each failure to pay each employee for “any initial violation” and $200 for each failure to pay each employee, plus 25% of the amount wrongfully withheld, for “each subsequent violation.”. Don’t forget to check for second meal periods which must be provided for shifts that are over 10 hours! Code, § 558, subds. The employer moved to compel arbitration of the portion of the claim seeking unpaid wages, arguing that the label "civil penalties" could not disguise the nature of the relief sought - individualized damages. (Ibid.) The time and wage records are critical to your damages analysis. If the defense is being difficult or resistant, remind them that class action and PAGA settlements are subject to court approval and that, without a reasonable exchange, any settlement reached might not withstand judicial scrutiny during the approval process. The defense has expressed an interest in resolving your wage-and-hour class and/or representative action. 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