Overtime, Wage Violations, and Employer Obligations Regarding Disabilities

California Labor Code section 510 requires employers to pay overtime compensation for hours worked over 8 per day and 40 per week.  An employer may avoid paying overtime for hours worked over 8 per day by adopting a valid Alternative Workweek Schedule.  The procedures for adopting a valid AWS are set forth in Labor Code § 511 and the relevant Industrial Welfare Commission (“IWC”) Wage Order No. 4 at California Code of Regulations, title 8, § 11040, subd. 3(B).  Among other things, the law requires an employer to hold a secret ballot election regarding the AWS amongst its employees and to file the results of the election with the State.

Labor Code § 226.7 prohibits employers from requiring an employee to work during any meal or rest period mandated by the relevant IWC Wage Order.  Wage Order No. 4 requires employers to authorize and permit its employees to take one 30-minute meal break for every 5 hours of work and one 10-minute rest break for every 4 hours of work, or major fraction thereof.  8 C.C.R. § 11040, subds. 11–12.  Employees are entitled to one hour of pay per day in which the employer fails to authorize and permit a meal break and one hour of pay per day in which the employer fails to authorize and permit a rest break.  Id.; Lab. Code § 226.7(c).

Subdivision 7(A)(3) of the Wage Order provides that meal breaks shall be recorded.  If they are not, “a rebuttable presumption arises that the employee was not relieved of duty and no meal period was provided.”  Brinker Restaurant Corp. v. Superior Court (Werdeger, J., concurring) (2012) 53 Cal.4th 1004, 1052–1053.  “An employer’s assertion that it did relieve the employee of duty, but the employee waived the opportunity to have a work-free break, is not an element that a plaintiff must disprove as part of the plaintiff’s case-in-chief.  Rather . . . the assertion is an affirmative defense, and thus the burden is on the employer, as the party asserting waiver, to plead and prove it.  Id. (citing Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 31, 33; Williams v. Marshall (1951) 37 Cal.2d 445, 456).

Labor Code § 226(a) requires employers to furnish accurate, itemized wage statements to each of its employees showing, inter alia, the total hours the employee worked during the pay period and the applicable pay rate.  Section 226(e) gives each injured employee the right to collect statutory penalties for an employer’s knowing and intentional failure to provide accurate wage statements—$50 for the initial violation and $100 for each subsequent pay period in which there is a violation, up to a maximum of $4000 per employee.  Clearly, overtime rates and wages should be reported on wage statements.  Furthermore, rest break premium wages constitute wages for the purposes of inaccurate wage statement penalties.  Murphy, supra, 40 Cal.4th 1094, 1114 (missed-break premium wages are part of an employees wages earned).  See also Avilez v. Pinkerton Government Services (C.D. Cal. 2012) 286 F.R.D. 450 (“[I]f an employer fails to provide appropriate meal breaks . . . and also fails to record the premium accured as a result . . . the employer has not kept accurate records and so also violates Section 226(a).”).

Labor Code § 201(a) requires an employer to pay all wages owed to employees immediately upon termination.  If the employer willfully fails to do so, the employer must pay the aggrieved employees 30-days’ pay as an individually-recoverable statutory penalty under Lab. Code § 203.  Missed-break premium wages constitute wages for the purposes of waiting time penalties.  Murphy, supra, 40 Cal.4th 1094, 1114 (missed-break premium wages are part of an employees wages earned).  See also Avilez, supra, 286 F.R.D. 450.  Pursuant to Lab. Code § 203(b), the statute of limitations for these “waiting time” penalties is the same as that for the underlying wages owed.

Unpaid wages, including overtime and missed-break premiums, are subject to a 4-year statute of limitations.  Civ. Code § 338(a) (three-year statute of limitations for a liability created by statute); Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191 (UCL, which carries four-year statute of limitations, provides remedy for failure to pay wages); Murphy v. Kenneth Cole (2007) 40 Cal.4th 1094 (hour of pay for missed breaks is premium wage, subject to same statute of limitations as action for unpaid wages).

The Labor Code provides for a variety of civil penalties for Labor Code violations.  These civil penalties are a part of the State’s law enforcement scheme.  2003 Cal. Legis. Serv. Ch. 906 (S.B. 796).  Up until 2003, only State agencies were authorized to pursue such penalties.  Id.  Individuals had no standing to sue for civil penalties.  Inadequate funding and staffing of State enforcement agencies spurred the Labor Code Private Attorneys General Act (Lab. Code § 2698 et seq.) (“PAGA”), which deputizes an aggrieved employee to pursue civil penalties on behalf of the state on a representative basis.  Id.  PAGA actions are essentially law enforcement actions to pursue civil penalties for Labor Code violations.  Arias v. Superior Court (2009) 46 Cal.4th 969, 986.  PAGA makes clear that PAGA actions can be pursued in addition to, rather than in lieu of, other remedies for Labor Code violations.  Lab. Code § 2699(g)(1) (“Nothing in this part shall operate to limit an employee’s right to pursue or recover other remedies available under state or federal law, either separately or concurrently with an action taken under this part.”).

Labor Code section 2699.3 prescribes an administrative exhaustion requirement.  The aggrieved employee must notify the Labor and Workforce Development Agency (“LWDA”) of the alleged Labor Code violations and give the LWDA the opportunity to investigate and issue citations.  If the LWDA chooses to investigate, then no PAGA action can be brought.  Nothing in the statute purports to give the LWDA the power to eviscerate individuals’ statutory rights to compensation for Labor Code violations.  That makes sense because the purpose of PAGA was to provide an additional remedy, not take them away.  Note that initiating a PAGA investigation is distinct from filing an administrative claim with the Labor Commissioner.  The former is aimed at giving the State a chance to step in and issue citations.  The latter involves aggrieved employees who voluntarily submit to the jurisdiction of the Labor Commissioner to decide a Labor Code dispute outside of court.  Lab. Code § 98 et seq.

Government Code § 12926(l) defines “physical disability” as including, but not limited to “having any physiological disease, disorder, [or] condition . . . that . . . affects one or more of the following body systems: neurological, immunological, musculoskeletal . . . [and] digestive [and] limits a major life activity.”  “Limits a major life activity” just means that it is “difficult to achieve” the major life activity.  Id. at subd. (B)(ii).  “’Major life activities’ shall be broadly construed and includes physical, mental, and social activities and working.”  Id. at subd. (B)(iii).  Gov. Code § 12926.1(c) emphasizes that “disability” is to be broadly construed, in contrast to the federal Americans with Disabilities Act:

“[T]he Legislature has determined that the definitions of “physical disability” and “mental disability” under the law of this state require a “limitation” upon a major life activity, but do not require, as does the federal Americans with Disabilities Act of 1990, a “substantial limitation.”  This distinction is intended to result in broader coverage under the law of this state than under that federal act.  Under the law of this state, whether a condition limits a major life activity shall be determined without respect to any mitigating measures, unless the mitigating measure itself limits a major life activity, regardless of federal law under the Americans with Disabilities Act of 1990.  Further, under the law of this state, “working” is a major life activity, regardless of whether the actual or perceived working limitation implicates a particular employment or a class or broad range of employments.”

Mitigating measures such as medications can themselves give rise to a qualifying disability.  Id. at § 12926.1(m)(1)(B)(i).  A condition does not have to be permanent or chronic in order to qualify as a disability under the Fair Employment and Housing Act (“FEHA”).  Rather, a condition can qualify as a disability even if it is only temporary.  See, e.g., Diaz v. Fed. Express Corp. (C.D. Cal. 2005) 373 F.Supp.2d 1034, 1048–53 (rejecting contention that temporary condition was not a disability as a matter of law); Sanchez v. Swissport, Inc. (2013) 213 Cal.App.4th 1331, 1340 (finding “[b]eing unable to work during pregnancy,” a temporary condition, to be a disability under FEHA); Criado v. IBM Corp (1st Cir. 1998) 145 F.3d 437 (employer failed to provide reasonable accommodation to employee when it fired employee who was out on temporary stress leave).

Employers who are aware of an employee’s disability have an affirmative obligation to make reasonable accommodations for such disability.  Prilliman v. United Air Lines, Inc. (1997) 53 Cal.App.4th 935, 949–950.  This duty arises even if the employee has not formally requested any accommodation.   Id. at 954.  In Prilliman, plaintiffs were pilots who had been grounded by the FAA after testing positive for HIV/AIDS.  Id. at 942.  United Airlines knew of the pilots’ disability, but the pilots did not formally request any accommodation.  Id.  The California Court of Appeal held that the statute did not require the plaintiffs “to speak any magic words” or mention accommodation in order to state a disability claim under the FEHA.  Id. at 954.  To the contrary, the court found that the airline’s failure to gather sufficient information about a pilot’s limitations and explore alternative jobs to accommodate his HIV status made it liable for a FEHA claim.  See also Gelfo v. Lockheed Martin Corp., supra, 140 Cal.App.4th at 62 fn. 22 (“Although it is the employee’s burden to initiate the process, no magic words are necessary, and the obligation arises once the employer becomes aware of the need to consider an accommodation.”).  Notice to the employer about the employee’s disability need only be “sufficient to cause a reasonable employer to make appropriate inquiries about the possible need for an accommodation”.  Colwell v. Rite Aid Corp. (3d Cir. 2010) 602 F.3d 495, 506.  “[I]f it appears that the employee may need an accommodation but doesn’t know how to ask for it, the employer should do what it can to help.”  Id. at p. 507.