She works hard for the money, so you better treat her right.

Is your employer behind on paying your wages? Is she refusing to pay you overtime? Did you know that you are owed overtime wages whether or not your employer approved the extra time worked? 


This article will shed light on this area of the law. What attorneys don’t want you to know is how simple and accessible wage claims really are. You don’t even need an attorney to file a claim. In fact, there is a public agency dedicated to improving working conditions for California’s wage earners and for handling wage claims. It is the Department of Industrial Relations. Its very informative website can be found at www.dir.ca.gov. Much of the information in this article can be found on that website, along with all forms necessary to file a wage claim. Of course, this means that you will have to interact with a government worker; so, be prepared to have your patient Goofy voice ready. Yes, the always happy, Mickey Mouse character, Goofy. Even the most impatient government worker will offer an extra 15 seconds of work time to a friendly caller. On the bright side, you will not be paying an attorney to speak with the same government worker.


Why is this area of the law so accessible? It is fairly cut and dry; unique situations do not affect whether the employer need comply with wage law. Your employer must pay wages for hours worked and must pay overtime wages earned. But you are not reading a two-page article on your already-too-busy-day to hear some fluffy favorable facts. Here is the proof.

                  
California Labor Code § 1194 states: “Any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit.” What is the legal overtime compensation applicable, you ask? According to California Code of Regulations, overtime is one-and-a-half times regular pay for: all hours worked over 40 hours in the workweek, all hours worked over eight hours in a workday, and for all hours worked on the seventh consecutive day of work in a workweek. Also, the same code provides double the regular rate of pay for: all hours worked over 12 hours in a work day, and for all hours worked in excess of 8 hours on the seventh consecutive day of work in a workweek. Explanation to come, but first, let me throw some more law at you.


If you are still employed, all overtime wages earned are due on the payday for the next payroll period. (See California Labor Code §204). California Labor Code § 201 states in part, with limited exceptions “if an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.”   In the case of an employee quitting rather than being discharged, California Labor Code § 202 applies: “If an employee…quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting.”


Under California Labor Code § 256 “the Labor Commissioner shall impose a civil penalty in an amount not exceeding 30 days pay as waiting time under the terms of Section 203.” Lastly, to give a complete representation of the law, California Labor Code § 203 states: “If an employer willfully fails to pay…any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.”

Now I will explain. Your employer must pay all wages earned, including all overtime wages - no excuses. If you were laid off, your employer should have paid you all unpaid wages, including overtime, immediately upon discharge. If you quit your job, you should have been paid all wages, including overtime, within 72 hours of quitting. If the employer was given at least 72-hour notice, all wages were due immediately upon quitting.

                
If your employer refuses to pay earned wages or overtime wages, you may file a claim with the Labor Commissioner. Through your claim you may recoup your earned wages and overtime wages, including interest, plus thirty days of additional wages as a penalty for your employer’s disregard of the labor codes.

Let’s take it from theory to action. Here is your action plan for claiming your hard-earned money:


1. Get organized. Gather all your timesheets and pay stubs. Make copies, organize the copies chronologically, and highlight important numbers and dates.

              

2. Bow before battle. Based on the information you gathered, write a respectful yet poignant letter to your employer. Alert her of your intention to file a claim based on California Labor Code violations. Also, outline the highest award you expect the Commissioner may grant you. Calculate unpaid wages and overtime wages, plus thirty days of additional wages per sections 203 and 256. Do not forget interest, which is calculated at 10% under California Civil Code § 3289. The letter invites the employer to make payment, or suffer the additional costs of responding to a winning claim.


3. Don’t be late. File a claim for wages with the Labor Commissioner within two years from the date the claim arose, if based on a verbal employment agreement. File within four years from the date the claim arose, if based on a written employment agreement. A claim for unpaid overtime wages must be filed within three years from the date the claim arose. It is your prerogative to file a lawsuit rather than filing a claim with the Labor Commissioner first.

             

4. Present your case. Within thirty days of filing your claim, the Labor Commissioner will either (1) schedule an informal conference, (2) schedule a formal hearing, or (3) dismiss the claim. The purpose of a conference is to determine if a claim can be resolved without a hearing. A hearing is a formal process in which the employer and employee will present evidence and testify (a.k.a., explain) under oath.
                  

5. Victory. Within fifteen days after the hearing, the Labor Commissioner will file a decision with the Division of Labor Standards Enforcement office. You or the employer may appeal this decision in court.


Why buy the cow when you can get the milk for free? While this area of the law is fairly straightforward, it is wise to have an attorney present with you at the Labor Commissioner conference and hearing. An attorney will be able to outline the California Labor Code violations in a clear and concise way for the Commissioner. Further, articulating an argument for § 203 penalties takes some sophistication. The purpose of this article is to shed some light on your rights as an employee, and empower you to demand what is yours!

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Newsletters and articles are offered only for general informational and educational purposes. They are not offered as and do not constitute legal advice or legal opinions. This Newsletter may contain hyperlinks to other resources on the Internet. These links are provided as citations and aids to help you identify and locate other Internet resources that may be of interest, and are not intended to state or imply that we sponsor, are affiliated or associated with, or legally authorized to use any trade name, registered trademark, logo, legal or official seal, or copyrighted symbol that may be reflected in the links.  Please include the following information when citing this Newsletter: Grutman, N., “She works hard for the money, so you better treat her right.” Weblog entry. Law Bites. March 5, 2012. Date accessed (http://lawbites.blogspot.com/2012/02/she-works-hard-for-money-so-you-better.html). 

Renovation Ruination: The Story of Contractors and Sureties

If you have had renovations on your house, you have met and worked with a contractor. Not known for their timeliness, contractors are responsible for providing the material, labor, equipment, and services necessary for the construction of a project. The contractor may then delegate portions of the construction work to specialized subcontractors.

In California, in order to become a contractor, one must first procure a contracting license. You may not have noticed before, but if you search the back of your desk drawer for the business card of the contractor who did your most recent renovations, you will see the terms “Licensed and Bonded” somewhere on the card. The Contractors’ State Licensing Board, in its effort to protect the public, demands that as a prerequisite to obtaining a license, a contractor first obtain a contractor’s bond. Under California Business and Professions Code § 7071.6  the contractor must have on file a contractor’s bond in the sum of twelve thousand five hundred dollars ($12,500). 

The purpose of the bond required by Bus. & Prof. Code § 7071.6 is to protect home owners, suppliers, and subcontractors in case they suffer harm as a result of the contractor’s wrongdoing. Just as the common Joe calls up an insurance company to insure his car in case of an accident, Joe Contractor calls up a Surety company in order to get a bond for the amount of $12,500. However, unlike insurance on a car which will cover the unfortunate “text-and-boom” scenario, a Surety bond will not cover accidental mishaps a contractor may have on the job. It only covers violations of the Bus. & Prof. Code. Such violations typically include intentional wrong doings by the contractor.

Also, depending on which class of claimant you are, you may not qualify for the full $12,500 recovery. Your claim may be capped at a maximum sum of seven thousand five hundred dollars ($7,500) regardless of the full value of the bond. A home owner is defined under Bus. & Prof. Code § 7071.5 as a person contracting for home improvement upon her personal family residence. If a home owner is damaged as a result of a violation of the Code, she may make a claim of up to $12,500, the full value of the bond. All other claimants under this section, even a property owner contracting for renovation of a single-family dwelling but not a personal family residence is limited to a maximum claim of $7,500.

Violations of the Code include but are not limited to abandonment of the contract, diversion or misapplication of funds, failure to pay subcontractors, failure to pay suppliers of materials, departure from accepted trade standards and departure from plans or specifications.

And if you are thinking “Aha! I can get Surety money for the unfortunate mistake the contractor made of putting Honey Melon Tea tiles in my Custom Luxury Beach Bath when I had specifically asked for Honey Suckle Tea Leaf tiles!” The answer is unfortunately: “No Honey, no mullah for you.” In order to prove a violation of the Bus. & Prof. Code for Departure of Plans or Specifications the claimant must show a “willful departure from or disregard of plans or specifications.” This means that if the contractor accidentally chose the wrong tiles, or the tiles in the plans were not available and she substituted similar-looking available tiles, she did not violate the code.

There is justifiable reason for the threshold for recovery being so high. Once a surety finds a violation of the Code and makes payment out of the bond, the Contractor’s State Licensing Board may suspend the contractor’s license. Therefore, once payment is made from the bond, the contractor loses her livelihood. This activity goes on the Contractor’s State Licensing Board record making it much more difficult for the contractor to procure another bond in the future to reactivate or renew her license.

For those of you disheartened by the high threshold to procure indemnifications from the bond, or for you contractors reading who now believe you are untouchable, rest assured, the bond is only one avenue to achieving indemnification for a poor construction job. In addition to making a claim against the bond, a claimant may also pursue a claim in Small Claims Court or State Superior Court. In litigation the burden of proof may be mere negligence and not the high burden of showing willfulness.

As always, when a dispute arises the best procedure is to first attempt to resolve it between the parties in good faith. This information could act as a good tool in convincing your contractor to cooperate in negotiations. Requesting that a contractor redo a mistake or make gradual payments to indemnify you for monetary damages may result in faster recovery than making a claim against the bond or seeking damages through the courts.

Should you have any questions, comments or suggestions for improvement, do not hesitate to email me at ngrutman@hausmansosa.com.