Wage Law

The History of California Minimum Wage

History of California Minimum Wage

effective date new minimum wage old mimimum wage amount of increase percentage of increase over previous wage January 1, 2008 $8.00 $7.50 $0.50 6.7 percent January 1, 2007 $7.50 $6.75 $0.75 11.1 percent January 1, 2002 $6.75 $6.25 $0.50 8.00 percent January 1, 2001 $6.25 $5.75 $0.50 8.70 percent March 1, 1998 $5.75 $5.15 $0.60 11.65 percent September 1, 1997 $5.15 $5.00 $0.15 3.00 percent March 1, 1997 $5.00 $4.75 $0.25 5.26 percent October 1, 1996 $4.75 $4.25 $0.50 11.76 percent July 1, 1988 $4.25 $3.35 $0.90 26.87 percent January 1, 1981 $3.35 $3.10 $0.25 8.06 percent January 1, 1980 $3.10 $2.90 $0.20 6.90 percent January 1, 1979 $2.90 $2.65 $0.25 9.43 percent April 1, 1978 $2.65 $2.50 $0.15 6.00 percent October 18, 1976 $2.50 $2.00 $0.50 25.00 percent March 4, 1974 $2.00 $1.65 $0.35 21.21 percent February 1, 1968 $1.65 $1.30 $0.35 26.92 percent August 30, 1964 $1.30 $1.25 $0.05 4.00 percent August 30, 1963 $1.25 $1.00 $0.25 25.00 percent November 15, 1957 $1.00 $0.75 $0.25 33.33 percent August 1, 1952 $0.75 $0.65 $0.10 15.38 percent June 1, 1947 $0.65 $0.45 $0.20 44.44 percent February 8, 1943 $0.45 $0.33 $0.12 36.36 percent 1920 $0.33 $0.28 $0.05 17.86 percent 1919 $0.28 $0.21 $0.07 33.33 percent 1918 $0.21 $0.16 $0.05 31.25 percent 1916 $0.16 - - - Source: California DLSE.

Equal Pay Penalties

We once worked for a law firm where every single female associate earned less than every single male associate of equal seniority. Amazingly, none of the aggrieved and underpaid females complained. Had they done so (especially the ones who were planning to hang out a shingle soon anyway) they would have had a good case for a violation of Labor Code § 1197.5.

(a) No employer shall pay any individual in the employer's employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.

(b) Any employer who violates subdivision (a) is liable to the employee affected in the amount of the wages, and interest thereon, of which the employee is deprived by reason of the violation, and in an additional equal amount as liquidated damages.

(g) Any employee receiving less than the wage to which the employee is entitled under this section may recover in a civil action the balance of the wages, including interest thereon, and an equal amount as liquidated damages, together with the costs of the suit and reasonable attorney's fees, notwithstanding any agreement to work for a lesser wage.

Though we are aware of no criminal prosecutions ever arising out of a violation of section 1197.5, Labor Code § 1199.5 provides that every employer "or other person acting either individually or as an officer, agent, or employee of another person" is guilty of a misdemeanor and is punishable by a fine of not more than ten thousand dollars ($10,000), or by imprisonment for not more than six months, or by both, who willfully does any of the following: (a) Pays or causes to be paid any employee a wage less than the rate paid to an employee of the opposite sex as required by Section 1197.5. (b) Reduces the wages of any employee in order to comply with Section 1197.5.

Thus, no employer can respond to a complaint by dropping everyone else's salary to match that of the lower-paid female. Bravo! Curiously, there is a "warning" provision in the statute, which says that no person shall be imprisoned under this statute for a first offense.

The reason we mention this, of course, is that we recently had a prospective client come in with what we believe to be a pretty good case. Any readers who would like to have their situations reviewed to see if they have a claim should never inquire by posting a comment. Instead, drop us an email and we would be happy to give you a free evaluation of your potential equal pay act violation.

Uniform Rules Differ Between Private and Public Sector

A recent case illustrated the importance of understanding how employment laws differ between the public and private sector. Labor Code § 2802 provides, among other things, that

"An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful."

In In re Work Uniform Cases (2005) 133 Cal.App.4th 328, the court held that Labor Code § 2802 did not require public entities to pay claims for costs related to employee work uniforms. For county and city employees, pay for uniforms is part of the employees' compensation and is considered like any other payment of wages, compensation, or benefits.

This determination creates a conflict between an employee's right to reimbursement or indemnification for employee expenses under Labor Code § 2802 and a public entity's power to determine the compensation for its employees and to bargain with employee representatives under the Meyers-Milias-Brown Act (Government Code § 3500 et seq.)

The conflict was resolved in two ways, both weighing against the employees. First and foremost, the Supremacy of state constitutional provisions over contrary statutory provisions renders Section 2802 powerless against contrary provisions in Article XI of the California Constitution, which confers upon public agencies the power to prescribe the terms and compensation for their employees. Statutes which provide otherwise, including, arguably, Labor Code § 2802, infringe upon that constitutional delegation of power. Secondly, the broader provisions of Section 2802 are trumped by the specific treatment of public employee uniform obligations established under Government Code § 19850.1, which provides that "state employees shall be responsible for the purchase of uniforms required as a condition of employment. The state shall provide for an annual uniform allowance to state employees for the replacement of uniforms."

The private sector operates under different rules. Employee uniforms must be paid for by the employer, and uniform expenses are treated like a component of employee compensation. The Division of Labor Standards Enforcement is authorized to collect, as unpaid wages, the costs of required uniforms. In Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55 Cal.App.4th 1084. And virtually all of the IWC wage orders provide that "When uniforms are required by the employer to be worn by the employee as a condition of employment, such uniforms shall be provided and maintained by the employer. The term "uniform" includes wearing apparel and accessories of distinctive design or color." None of the wage orders, of course, apply to employees in the industries of government or government administration.

Class Members Who Get No Notice

Unlike product liability and consumer cases, in most wage and hour class actions, notice is not published in any general circulation medium. Instead, notice of the class action and its settlement is provided by mail to an affected employee's last known address. What happens to the unlucky class member who moved and received no notice of a pending class action settlement? Under many circumstances, that employee has a good argument that he or she is not bound by the settlement.

What is clear is that unnamed class members are not bound by a settlement that does not comply with minimal due process requirements. Phillips Petroleum Co. v. Shutts (1985) 472 U.S. 797, 811-812. The class member must receive notice plus an opportunity to be heard and participate in the litigation, whether in person or through counsel. The notice must be the best practicable, "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." The notice must describe the action and the plaintiffs' rights in it. Additionally, due process requires, at a minimum, that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an "opt out" or "request for exclusion" form to the court. Finally, the Due Process Clause requires that the named plaintiff at all times adequately represent the interests of the absent class members. Id.

What is unclear is whether the settlement is binding upon those persons who do not get notice, when publication is not made, and individual notices are returned as undeliverable. We believe that under Phillips Petroleum and Hansberry v. Lee (1940) 311 U.S. 32, such notice is not proper as to those persons. The notice "must be the best practicable, 'reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. If the parties know, because of a returned notice, that the class member did not get adequate notice, then the notice procedure is not calculated, under all the circumstances to give notice to those particular class members.

Under Federal rules, FRCP Rule 23(c)(2) requires "the best notice practicable under the circumstances," and that individual notice need be given only to members of the class "who can be identified through reasonable effort." Sometimes, that means first class mail, not only upon certification of the class, but at each time notice would thereafter be necessary. Phillips Petroleum Co. v. Shutts (1985) 472 U.S. 797, 811-812, 86 L. Ed. 2d 628, 105 S. Ct. 2965; Eisen v. Carlisle & Jacquelin (1974) 417 U.S. 156, 173-176, 40 L. Ed. 2d 732, 94 S. Ct. 2140 [where names and addresses of 2,250,000 class members were easily ascertainable, individual notice had to be given]. In Cartt v. Superior Court (1975) 50 Cal.App.3d 960, in a consumer case, a California court held that meaningful notice must be given in a form that "should have a reasonable chance of reaching a substantial percentage of the class members." Under Civil Code § 1781(d), notice by publication may be ordered "if personal notification is unreasonably expensive or it appears that all members of the class cannot be notified personally."

Evidence of actual receipt is not required. But, at least in class actions for damages or similar relief, the claims of class members whose notices are returned as undeliverable must be excluded from any judgment in the class action. Phillips Petroleum Co. v. Shutts (1985) 472 U.S. 797, at 813, 105 S.Ct. at 2975 (28,000 notices mailed, 1,500 returned as undeliverable). This does not, of course, invalidate the entire settlement. "Courts should not be deterred from Rule 23 economies in litigation by exaggerating the presumed requirements of due process, or by the specter of an occasional successful collateral attack on the basis of due-process." Philadelphia Electric Co. v. Anaconda American Brass Co. (E.D.Pa. 1968) 43 F.R.D. 452, 459. If the class member can show that the process was not reasonably calculated, under all the circumstances, to give him or her notice, then he or she would not be bound by the terms of the settlement. Other class members, however, will be.

Employer Recordkeeping Requirements

A client came to us recently with a wage case. She had heard that the law had changed (actually, the law had no changed, but her employer had just started obeying it), and that she might now be entitled to back overtime. The problem was, she had no time records to support her claim. We told her not to worry, because the employer is required to keep those records, and we can get them from the employer through a written demand or via pre-trial discovery.

Employers must keep records of the names and addresses of all employees, the ages of any minors working, and daily hours worked and wages paid to all employees. Labor Code § 226, 1174, 1175. They must keep such records for a minimum of two years, and a year longer for wage deductions. The employer must allow inspection by the employee (and the DLSE, too). Labor Code §§ 226(a), 1174(d). Furthermore, the employer must provide an employee or former employee copies of his or her payroll records within 21 days after a request, or permit the employee to inspect those records. Failure to comply results in a $750 fine, and the employee may sue to obtain the information and recover costs and fees. Labor Code § 226(c),(f), (g).

Federal law imposed similar obligations. Every employer subject to the FLSA must "make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records" for specified periods of time. 29 USCA § 211(c). Those specified times are:

Three years: payroll records, including each employee's name, address, occupation, hours worked each day and week, wages paid and date of payment, amounts earned as straight-time pay and overtime, and deductions; plans, trusts and collective bargaining agreements; employee notices; and · sales and purchase records. (29 CFR § 516.5)

Two years: time and earnings cards; wage rate tables; work schedules; order, shipping and billing records; and records of additions to or deductions from wages. (29 CFR § 516.6)

What if the employer throws out the work schedules, time cards or other records required to be kept?

It is the employer who is penalized, not the employee. If their employer fails to keep adequate records, employees suing to recover wages can meet their burden of proof simply by testifying that they performed work for which they have not been properly compensated. They do not have to prove the precise hours worked. They need only produce sufficient evidence to show the estimated amount and extent of such work, and an inference will be drawn that the estimate is correct, because the employer failed to maintain the most accurate records. See Beliz v. W.H. McLeod & Sons Packing Co. (5th Cir. 1985) 765 F.2d 1317, 1330-1331 ("Because precise evidence of the hours worked by each individual is not available due to the failure of [employers] to keep adequate records, the workers may satisfy their burden with admittedly inexact or approximate evidence.").

The burden of proof then shifts to the employer to come forward with evidence of the precise amount of work performed or sufficient evidence to refute the inference drawn from the employee's testimony. If the employer fails to meet that burden, the court awards damages to the employee according to the estimate provided by the employee. Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 687-688, 66 S.Ct. 1187, 1192. And that happens quite frequently in our trials.

Busting Myths About The Davis-Bacon Act

While perusing a site published by The Building and Construction Trades Department, we just found this informative article on the Davis Bacon Act -- the federal prevailing wage statute. It's worth reading, even if you think you know the prevailing wage law well.

Wal-Mart Pushes To Let Truckers Work 16-Hour Days

Today, Republican Congressman John Boozman, whose district includes Wal-Mart's Bentonville, Arkansas headquarters, is sponsoring an amendment to a pending highway bill (H.R. 3, The Transportation Equity Act) that would extend the workday for truckers from 14 hours to 16 hours, provided that the trucker takes an unpaid two-hour break during the shift.

According to an AP report, Boozman claims that the breaks "will reduce driver layovers and improve both safety and efficiency." At a news conference on Tuesday, Teamsters vice-president John Murphy announced that the union has never received even a single complaint that union drivers do not have time for breaks. Current rules limit driver workdays to 14 hours, with a maximum of 11 consecutive hours of driving. Therefore, truckers can take up to three hours for loading and offloading their trucks, and/or eating and taking other mid-shift breaks.

Why would the Wal-Mart Congressman (Boozman's campaign received $48,152 in contributions from Wal-Mart employees during the last election, after getting $44,500 in the prior election) want such a change? Adding to the workday and inserting two-hour unpaid breaks means that retailers can have truckers spend more off-the-clock time waiting at loading docks. That helps Wal-Mart save labor costs.

But labor unions and highway safety experts say that the added hours of work would make roadways more dangerous. Drivers could be forced to work shifts such as 6 a.m. to 10 p.m., or 8 a.m. to midnight. Since many collective bargaining agreements permit employers to require trucker to work any shifts permissible under federal law, the change could quickly move many truckers into the new work hours. Putting those truckers, already fatigued at the end of 14 hour days, back on road for 2 more hours each day is a clear threat to the safety of truckers and those who share the highways with them.

Wal-Mart, which makes about $20,000 per minute in profits, and pays most store employees less wages than necessary to keep a family of three above the proverty level, continues to be the enemy of the working class. We hope that the Boozman Amendment to the House highway spending bill fails as quickly as the Santorum Amendment to the Senate bankruptcy bill.

[UPDATE: The proposed amendment lasted just ten minutes on the House floor before Boozman saw the light and withdrew it.]

Bill To Give Free Labor To Certain Businesses Fails

Pennsylvania GOP Senator Rick Santorum, the hero of Lackawanna County, proposed an amendment to the pending bankruptcy "reform" bill (S.256) that could have actually lead to more Americans going broke. The bankruptcy bill, a big priority for Republicans and the credit card companies who finance their campaigns, is intended to make it more difficult for people to eliminate medical and other personal debts by declaring bankruptcy. And even worse, hidden in the Santorum Amendment were a number of provisions that could actually have resulted in companies being able to hire workers for no pay whatsoever. This is going to sound like an urban legend, the sort of thing that gets passed around by email, citing "Senate Bill 602P" or some such similar garbage. But it was true, very real, and could have become law faster than you can say "Class Action Fairness Act of 2005," or, in this case an amendment to the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," intended "[t]o promote job creation, family time, and small business preservation in the adjustment of the Federal minimum wage."

The short description and the main selling point made it sound like good legislation. The Santorum Amendment, the actual text of which we had trouble finding, proposed to raise the minimum wage by $1.10 per hour -- a change which is arguably well overdue. The last minimum wage raise was eight years ago. Since then, inflation has shaved 19.4% off the value of those wages, and minimum wage workers, who currently earn $10,700 a year, now find their income a full $5,000 below the poverty line for a family of three. During those same eight years, Congress raised their own salaries seven times, by a total of $28,500 per year.

So the minimum wage raise looked like a pro-worker proposal. But the AFL-CIO called it "a sham," because hidden in the fine print of the Santorum Amendment were a series of provisions that would cut wages for millions of Americans to as little as zero. How? There were two provisions which spelled disaster for the workers who could least afford disaster.

First, the amendment exempted any business with revenues of $1 million or less from regulation. The current exemption is $500,000. The difference would have meant almost seven million workers losing their protections under federal law.

Second, the amendment severely limited the right of tipped workers to get wages paid by their employers. The FLSA (Fair Labor Standards Act) currently specifies that states have the right to impose higher wage standards than those under the FLSA. The Santorum Amendment proposed to end that when it comes to tipped employees. Moreover, it actually proposed to ban states from requiring employers to pay tipped workers with any sort of guaranteed wage. Currently, tipped workers are guaranteed just $2.13 per hour in wages under the FLSA, and they can be required to credit their tips against the FLSA minimum. Most states have higher minimum wages for tipped employees, and do not require tip offsetting. California, for example, applies the same minimum wage to tipped employees and non-tipped employees alike, with no offsets for tips.

Under the Santorum Amendment, states could not pass or enforce laws requiring employers to pay wages to tipped employees. And many employers, such as individual restaurant owners, would be exempt from the federal minimum wage because they don't reach that $1 million revenue level. The potential for abuse would be tremendous. Restaurant workers make no tips while performing "side work," the extra work that a custodian or other full time employee might perform, but which restaurants often have servers, bussers and bartenders divide: tasks like cleaning drains, sorting utensils, folding napkins, collecting laundry, washing floors and similar menial tasks. Under the Santorum Amendment, that work would be essentially free. Do you think employers would take advantage of it? And paid breaks? Forget them. The labor would be free already anyway. Breaks would just mean you have to stay later to complete your remaining unpaid tasks once the tipping customers have left for the day.

There were several other horrible provisions. The amendment would also have increased the revenue level at which businesses would become subject to fines under various health and safety laws, to $7 million. Working conditions that have been barred by federal laws for the past several generations could have made a comeback. While this would mean that American businesses could again compete with Bangladeshi sweatshops, this is not what most Americans wanted when they cast their votes for the candidates who promised more jobs in their communities.

Finally, the 40-hour work week was to be eliminated from federal protection, to be replaced with 80-hour work "two-weeks." A company could work employees 50 hours a week at straight time, and avoid liability for overtime pay by having the employees work just 30 hours the following week. Supposedly, this is a "flexibility" that workers want. We haven't heard the clamor, however.

The Santorum Amendment quietly came up for a vote last night and was soundly rejected 61-38 (with Senator Mikulski not casting a vote). Its defeat is good news for America's hardworking poor. If you agree, you can send Senator Santorum an email by visiting his website. Tell him you aren't sorry he lost, and he should be ashamed of himself for even trying. In his defense, Santorum offered this pathetic spin: "I would hope candidly that we didn't pass either of these at this time," he said, referring to both his amendment and one proposed by Ted Kennedy. Of course, that "candid" hope didn't prevent him from introducing his amendment or voting for it.

Meanwhile, the bankruptcy bill continues to be debated, focusing largely on a controversy over whether abortion protesters should be allowed to file bankruptcy to avoid court fines for contempt.

Class Action Deform Complete

As expected, President Bush signed the Class Action "Fairness" Act of 2005 this morning. The law is intended to curb frivolous class actions by taking the very good cases, worth $5 million or more, and making them harder to pursue. The frivolous cases, worth less than $5 million, will still remain in state court, where they will continue to occasionally frustrate defendants and judges, enriching a very small number of plaintiff's lawyers and a somewhat larger count of defense lawyers, and benefitting few, if any, consumers. If the bill has an unintended result of letting big corporate donors off the hook for mass-inflicted harms on low wage workers, consumers and other individuals, that is probably a pure coincidence.

Next up for the Bush administration: fighting frivolous medical malpractice cases by capping the amount of damages that plaintiffs can recover in good cases. The logic, though flawed, is at least consistent.

Class Action Bill To Be Signed By Bush Friday

The House of Representatives approved today the class action federalization bill that the Senate passed on February 10. President Bush is expected to sign the measure into law tommorrow. The House vote was 279-149, largely along party lines.

House leaders hailed the bill as a tool to prevent greedy lawyers from profiting by filing "frivolous lawsuits" in state court. Absurdly, they chose to battle these "frivolous lawsuits" solely by attacking claims worth more than $5 million, which, by most definitions, is more than a frivolous lawsuit is worth.

"Frivolous lawsuits are clogging America's judicial system, endangering America's small businesses, jeopardizing jobs and driving up prices for consumers," said House Majority Whip Roy Blunt. Moving those cases to federal court will ensure that state judges will no longer "routinely approve settlements in which the lawyers receive large fees and the class members receive virtually nothing," he added.

However, class actions in which the class members "receive virtually nothing" will be unaffected by the bill, since claims valued at $5 million and below are exempt from the new procedures.

"These out-of-control class action lawsuits are killing jobs, they're hurting small business people who can't afford to defend themselves and they're hurting consumers who have to pay more for products," said Rep. Ric Keller. Curiously, however, the bill will exclude most, if not all, lawsuits against "small business people", who rarely if ever find themselve defending against lawsuits, class action or otherwise, with claims in excess of $5 million.

Representative Jay Inslee was more honest. "This bill is the Vioxx protection bill, it is the Wal-Mart protection bill, it is the Tyco protection bill and it is the Enron protection bill," he said. "It's the final payback to the tobacco industry, to the asbestos industry, to the oil industry, to the chemical industry at the expense of ordinary families who need to be able go to court to protect their loved ones when their health has been compromised," said Rep. Ed Markey. "And these people are saying that your state isn't smart enough, your jurors aren't smart enough" to hear those cases.

The bill will only affect cases that are filed after president Bush signs it into law. We made a point of making sure our large class action cases were all filed before the courts close today.