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California and its legislature have prioritized protecting workers’ wages and salaries across the state, but not all employers understand the importance of these laws. Many employees don’t know they could be taken advantage of because of this. Because employees have the legal right to appropriate, fair, and justified compensation, knowing these rights can help protect them from employers who may seek to cut corners or take advantage of the laws. Employment attorneys can help employees mitigate any violations that may arise with state and local wage and hour laws.

Employees vs. Independent Contractors

California wage and hour laws are designed to cover those who are designated as employees. An employee is anyone who provides a service to or on behalf of an employer. Employment laws do not protect these types of workers. However, the exception is if the person is designated as an independent contractor. While it may seem as easy as your employer telling you that you are an independent contractor, you must still meet certain requirements to classify a person as this type of employee. Traditionally, to be called an independent contractor, you must:

  • Provide services through an agreement that specifically states the services to be provided and the pay to be offered
  • Be solely responsible for how the job is to be completed

In California, the following criteria also apply to this designation:

  • The distinct operation and business the worker is engaged in
  • The type of work being done and how it is traditionally completed
  • If there is a particular skill required to complete the job
  • Who provides the necessary tools to complete the work
  • The designated amount of time the work is to be complete
  • Whether the compensation is based on time or on completion
  • Does it feel more like an employer/employee relationship

It may not seem important to a retail worker to understand the difference between an independent contractor and an employee, but there may be a situation in which an employer may try to tell an employee they are designated as such, but they fail to meet the requirements outlined above. This could happen to seasonal employees or those that work overnight shifts in counting inventory or restocking merchandise.

Exempt vs. Non-Exempt Employees

California Retail Workers Wage and Hour Laws

Beyond employees vs. independent contractors, California employees are also designated exempt or non-exempt. These designations help to determine which specific laws apply to that classification of workers.

Exempt employees are designated to work in executive, professional, or administrative positions. They spend much of their time doing work that is classified as intellectual, managerial, or creative. In addition, they are in control of the decision-making for completing their work and earn a salary equal to twice the state’s minimum wage offered to full-time employees.

Exempt employees are not protected by the same laws as non-exempt employees. They are not subject to being paid overtime and are not required to be allotted breaks during their work time. Employees that are considered non-exempt are protected by California employment laws and qualify for overtime pay as well as designated breaks.

In the retail industry, an employer may ask an employee to sign an agreement that designates the employee as exempt or tell them they will be paid a salary. These two situations do not mean an employee is then exempt. They must still meet the requirements of the law as outlined. Employers may seek to change an employee’s designation to save money.

Salaried vs. Hourly Employees

Employee exemptions are not defined by the amount of income they receive. Exempt or non-exempt is determined by the employer’s classification for the position the employee was hired for. That means an employee in charge of restocking merchandise or their manager could be classified in the same way. However, in this same example, one may be paid hourly and the other by salary.

If a person is classified as a salaried employee, they are still protected by the law in the same way an hourly employee is. By law, a salaried employee should be paid no less than the amount equal to the minimum wage for the number of hours worked. So, if an employee is salaried and works 40 hours per week, they are entitled to a minimum salary of $620 per week.

Understanding Minimum Wage

Historically, many retail workers have been paid low salaries. The law that holds the most impact on retail workers is the law regarding minimum wage. The law dictates that an employer must pay employees a minimum salary mandated by state or county regulations. When a local city or county has adopted a minimum wage higher than the state minimum, the law requires that employees are paid at the higher rate. For example, the city of San Diego offers employees a minimum wage of $15.00 per hour. The state minimum wage increases that began in 2017 are expected to peak in 2024 at $15.50 per. This change means that employers in San Diego will be required to increase their minimum pay from $15.00 to $15.50 per hour.

The Challenges of Overtime

In addition to minimum wage, employers must also adhere to specific California overtime laws that only apply to non-exempt employees. That makes the correct designations so much more important. Those who are designated as non-exempt are entitled to overtime pay that is equal to one and a half times their regular wage.

Employers may try to get around this law by asking employees to work off the clock or do the work, have the pay added as extra hours on the next paycheck, or even attempt to pay in cash. These types of agreements and requests are against the law. Overtime pay is for any amount of time worked beyond eight hours per day or forty hours per week. If an employee works six days in a row, even if the time requirements are not met, they automatically qualify for overtime on the seventh day for any hours worked during the first eight.

Further Overtime Help for Retail Workers

In addition to qualifying for time and a half, employees may further qualify for double pay during overtime hours. This applies to any time an employee works more than twelve hours in one day or any time beyond the first eight hours on the seventh day.

An employer can only get around these laws if at least two-thirds of the employees agree to work what is known as an “alternative workweek schedule.” In this agreement, employees can agree to work up to ten hours per day and forty hours per week without overtime.

Overtime laws are imperative for retail workers as there may be situations. For example, consider a situation where you are working and your coworker calls in sick. Your employer may then ask you to stay and cover. Even if you agree, you need to be sure that your right to overtime is protected, that you are being paid per law, and that you can leave when you are ready.

For salaried employees, if they work beyond forty hours per week, they are entitled to overtime pay at the rate of time and a half, just as an hourly employee would. Incorrect overtime classification is one of the most litigated violations. Many of these litigations come from salaried employees whose hours are seen more ambiguously. Ensuring correct calculation of hours and classification of employees can help to mitigate this.

Meals and Breaks

Employers with non-exempt employees are required to provide those employees with scheduled meals and work breaks. Each is outlined as follows:

  • Meal breaks – Employees who work a minimum of five hours must be provided at least 30 minutes for a meal break. An exception applies if the employee does not work more than 6 hours and agrees to waive the meal break. However, a break must be provided if the employee agrees otherwise. Employees who work more than ten hours must be provided a second break during that time. An employee that has worked no more than twelve hours and did not waive the first meal may choose to waive their second meal break. While certain industries with collective bargaining agreements, such as construction, commercial drivers, security officers, or the motion picture industry, have exceptions, retail workers are not in that category. Therefore employers must adhere to this law.
  • Rest breaks – Employers must provide all non-exempt employees a ten-minute break for every four hours of work or partial hours beyond that. Rest breaks are required to be uninterrupted time, and the employee is under no obligation to perform any duties of their job during these breaks. If an employee is scheduled for less than three and a half hours, employers are not required to provide any breaks to the employee.

These same protections are offered to salaried employees as well as hourly workers and are used to encourage a strong workforce by allowing employees ample recovery time during their job to avoid burnout and keep the workforce strong.

Work Permits for Minors

The retail industry is likely to employ a high number of workers who are under the age of 18 as these entry-level positions are great starting points for entering the workforce. If, however, an employee is under the age of 18, an employer must have the minor obtain a work permit that is signed by their school or Department of Education, their parents or guardians, the minor themselves, and the employer. Once the completed form is returned to the school, the minor is then issued a permit that allows them to work.

In addition to these permits, employees under the age of 18 are restricted to a limited number of hours each day. During the school year, employees that are 16 or 17 years of age can work up to four hours per day if it is a school night or up to eight hours per day on non-school days. Their total number of hours may not exceed 48 hours in a week.

Minors that have completed seventh grade and are 14 or 15 years of age are allotted three hours of work on school nights and eight hours on non-school days. Their hours may not exceed 18 hours of work in a week.

If a minor is 12 or 13, they are not allowed to work at any time when school is in session.

When school is not in session, minors between the ages of 12 and 15 may work up to eight hours per day but not more than 40 hours per week. Those who are 16 to 18 years of age are allowed to work eight hours per day and not more than 48 hours per week.

Other Wage and Hour Employment Laws

Counties and cities can provide their own sets of laws to help regulate the workforce in their municipality. For example, in Los Angeles, the city council passed what is called the Fair Work Week ordinance. The purpose of the ordinance is to provide employees with a more regulated schedule to help with the consistency of their work by providing their work schedules a minimum of two weeks in advance. Under this localized ordinance, retail workers, in particular, benefit from many new protections.

In addition, this specialized ordinance provides that employees must have at least 10 hours in between shifts or that they are paid for the extra time off work. Employers who violate this law are not only susceptible to legal claims but could also be fined $50 per day if they are found in violation.

California Labor Wage and Hour Violations

Even with protections in place, there are still times when employers violate the terms of the law. An employer may be attempting to save on costs, cover work because they are short-staffed, or feel their employees aren’t going to know the terms of the job. However, you have a right to file a claim against your employer under the California Labor Code if your employer violates the terms of minimum wage.

When filing a claim against employers, employees may seek compensation for any of the following:

  • Unpaid wages or owed overtime that the employee did not receive
  • Any back pay or wages that are owed
  • Any applied interest that is compounded on top of this
  • Any attorney or litigation fees that are a result of filing the claim

If the claim involves time that was not provided for meals or breaks, the employee is also entitled to receive one hour of pay equal to their regular wage for each occurrence.

While there are many types of claims that can be brought against employers, wage and hour claims are specific and cannot include certain terms, such as emotional distress, which are reserved for claims of wrongful termination.

In some claims, the employers themselves are not the only ones on the hook for compensation. In some claims, individuals within the employer can be held accountable. These individuals include:

  • Owners
  • Directors
  • Officers
  • Managing agents

Class Action Lawsuits

Not all wage and hour claims are on an individual level. If an employer or a company commits broad violations of these laws, there may be several employees that come together and file a claim together in the form of a class action lawsuit. One of the largest benefits of filing a claim in this way is that an employee who has difficulty affording an attorney to represent them may be able to do so because there will be only a handful of attorneys to represent the entire group.

Another added benefit to class action lawsuits is that they can appear more threatening than individual actions. This could force the employer to feel the need to settle more quickly. This helps to save everyone both time and money throughout the process.

How Wage and Hour Laws Impact Out-of-State Employees

In 2022, the California State Supreme Court ruled that overtime employment laws that are in place for in-state workers also apply to those that are considered out-of-state. In the case before the supreme court, an employee who worked for a California-based company was living in Arizona and Colorado. On occasion, the employee would work in California. Because the company classified certain employees as non-exempt, they were deemed to be covered by California laws and were able to file a claim for overtime and wages owed based on the law.

Employees should take time to track and record their hours to ensure there is fair compensation. 

California Retail Workers Wage and Hour Lawyer

If you think you are not being treated fairly or that your retail employer isn’t adhering to California laws, you need experienced help. It is important to seek legal representation that can make sense of your evidence and reach the best possible outcome if you or someone you love works in the retail industry and you feel there may be instances of violations. These instances can include violations regarding earned wages, overtime or “off the clock” work, or not allowing for breaks or meals. At Ferraro Vega, our team of knowledgeable and expert attorneys is available to help you receive the compensation you may be entitled to. Contact our offices today.