The California Supreme Court issued a decision Monday in a case that is sure to cause headaches for employers when compensating employees through flat sum bonuses. In Alvarado v. Dart Container Corporation of California (S232607) the Court held that for purposes of calculating the regular rate, a flat sum bonus is to be allocated only to the nonovertime hours worked. This holding departs from the calculation methods broadly considered compliant outside of California under the Fair Labor Standards Act (“FLSA”) and regulations issued by the U.S. Department of Labor.
The new year brings new laws for California employers to grapple with. Below we highlight the most significant new employment laws affecting California employers as of January 1, 2018. Companies based in California or with operations in California are encouraged to review their policies and procedures in light of these developments.
California’s Fair Employment and Housing Commission recently amended its regulations to the state’s Pregnancy Disability Leave Law. The new regulations provide expanded protections and clarifications with regard to employer obligations related to Pregnancy Disability Leave (“PDL”). The regulations take effect on December 30, 2012.
A 2-1 California Court of Appeal held on October 17 that drivers for a food service provider did not have to arbitrate their state statutory claims brought under the California Labor Code despite a binding arbitration agreement covering the “application or interpretation” of the driver agreements. The drivers alleged that their employer, Mike Campbell & Associates, misclassified them as independent contractors, denying them wage law protections under the California Labor Code, and was thus liable for nonpayment of wages, illegal deductions, and recordkeeping violations. Rather than challenge the trial court’s ruling that they were bound by the arbitration clause, the drivers argued that their statutory claims did not arise out of the arbitration agreement and thus did not require an interpretation of the arbitration clause.
The Bright v. 99 Cents Only Stores decision, issued by the California Court of Appeal for the Second Appellate District last November, illustrates a recent wage and hour class action litigation trend against retail employers in California over lack of “suitable seating” for their employees. The California Supreme Court denied review of this case in February 2011.