Hourly workers in California who are not fully compensated for meal and rest breaks now have grounds to recover that shortfall following a recent California Supreme Court ruling. 

On July 15, the California high court unanimously ruled in Ferra v. Loews Hollywood Hotel, LLC that workers who are not given meal or rest breaks during their shifts are entitled to premium payments that factor in all non-discretionary payments they receive, not just their hourly wages. 

The lead plaintiff in the case, Jessica Ferra, worked as a bartender for Loews. The hotel paid her hourly wages as well as quarterly non-discretionary incentive payments. 

California state law requires that employers  provide their hourly employees meal and rest periods. Section 226.7(c) of the California Labor Code requires employers that do not provide compliant meal or rest breaks to pay their employees for one additional hour of premium pay at the employee’s “regular rate of compensation.”

In Ferra’s case, Loews paid workers who did not receive meal or rest breaks an additional hour of pay according to their hourly wage.  However, the  company did not factor in any non-discretionary payments in addition to the workers’ hourly wages, leading Ferra to file a class-action lawsuit against the hotel. She alleged the hotel violated state law by failing to pay for her noncompliant meal or rest breaks in accordance with her “regular rate of compensation,” which includes her bonus payments.

The trial court granted Loews summary adjudication after finding the hotel’s practice of calculating premium pay was proper. The Court of Appeal affirmed the ruling. Ferra appealed to the Supreme Court, which overturned the Court of Appeal’s decision. 

The main question before the Supreme Court was whether the state legislature intended the phrasing “regular rate of compensation” under Section 226.7(c) to have the same meaning as the phrase “regular rate of pay” under another statute governing overtime payments, Section 510(a) of the California Labor Code. 

Loews asserted that the language in Section 226.7(c) does not have the same meaning as the overtime provision, and only requires employers to pay an employee’s base hourly rate.  The court disagreed, holding that the terms are synonymous, and that the phrasing “regular rate of compensation” “encompasses all non-discretionary payments, not just hourly wages.” 

“This interpretation of section 226.7(c) comports with the remedial purpose of the Labor Code and wage orders and with our general guidance that the ‘state’s labor laws are to be liberally construed in favor of worker protection,’” said Justice Goodwin H. Liu, who wrote the opinion. 

The court also determined the ruling should apply retroactively — leaving the door open for claims from workers for past improper payments. 

If you need help understanding your legal options and protections in this area, contact Keller Grover for a free consultation. In more than 25 years litigating fraud and employment cases, the lawyers at Keller Grover have recovered hundreds of millions for clients and class members.

Office costs, not surprisingly, took a dive during the pandemic-driven work-from-home era.

Looking ahead, if U.S. employers embraced remote work just half the time for workers who are both able and willing to work from home, they could collectively save more than $500 billion a year, according to an estimate from Global Workplace Analytics. The firm predicts at least a quarter of the workforce will work from home for multiple days a week post-pandemic.

That means workers should be informed and prepared to negotiate should their employer require some remote work.

So how does this situation pan out for workers? 

Under California law, companies must cover all reasonable costs directly related to an employee’s work. Utility bills, paper and printers, computers, Internet and phone service, and workspace accommodations are just some of the costs that may arise when working from home. Obviously, specific needs can vary based on industry and role.

According to the data from Global Workplace Analytics, outfitting an employee with a home office costs an average of just $670 annually; by contrast, not having that worker in the office saves about $11,000 a year.

That may sound straightforward, but the calculations get complicated. How much of a utility or Internet bill is the company’s responsibility? What if you have to get better Internet for all those Zoom calls? And how about ergonomically correct office furniture? 

Much of this requires open communication with an employer — know your expenses and be prepared to make your case. Some employers try to come up with a flat sum that seems fair. When it comes to office necessities, if a company buys it, the desk or computer or fill-in-the-blank probably goes back to the company should you switch jobs. Costs such as your mortgage (which you would have paid anyway) or your favorite kind of coffee (not strictly a necessity) most likely don’t count. 

But with such a dramatic shift in working environments, many disputes are likely to be settled in court as we hash out the nuances under the law.

If your employer isn’t footing its part of the bill for your remote work, reach out to us for a free consultation. In more than 25 years litigating fraud and employment cases, the lawyers at Keller Grover have zealously advocated for workers, recovering hundreds of millions of dollars for clients and class members. 

A new California law takes a giant step toward helping employees who have faced workplace discrimination. In a state that has more than 12.1 million workers — with 5.54 million of them women and 7.67 million non-white, just to name a couple of categories — the issue has broad implications.

Discrimination is pervasive but often underreported. During the past year, many companies have been grappling with varying concerns related to that very issue, including Pinterest, Facebook and even Airbnb. 

The law, A.B. 1947, took effect on Jan. 1, and it could make a real difference for many who have been wronged by businesses and who may find themselves tangling with an opponent that has outsized influence and resources. A.B. 1947 applies to anyone who reasonably believes he or she has been fired or faced other types of discrimination in violation of state labor laws. 

First and foremost, the new law doubles the amount of time during which a person can file a complaint with the California Division of Labor Standards Enforcement. Previously, victims had six months from the time of the incident; now, it’s a full year. With the angst and second-guessing that can accompany conflict at work, that additional time can prove vital.

Secondly, if a court sided with the employee, affirming discrimination, the court also could choose to award reasonable attorney’s fees to the employee. This potential financial help can give victims the courage to come forward with discrimination allegations.

A common concern among victims is that they’ll face a backlash if they speak out. Importantly, California law prohibits retaliation against employees who exercise their rights to report activities that they reasonably believe violate the law — or who refuse to do something that they believe violates the law. It also prohibits employers from enforcing rules that would keep workers from providing information to authorities. 

Keller Grover offers free consultations to advise workers about their specific situations. In more than 25 years litigating fraud and employment cases, the lawyers at Keller Grover have recovered hundreds of millions of dollars for clients and class members.