Employment Law (In)Justice in California

October 26, 2009

I have some experience with employment law in California, particularly with wage and hour law (overtime requirements, minimum wage, work schedules, etc.).  In California, the system could not be more askew against employers than it is right now. 

In the first place, employers are subject to a myriad of draconian laws that unjustly punish innocent mistakes.  For example, if a retail store or fast food restaurant is especially busy and short-handed and cannot provide a paid ten-minute rest break to a part-time employee (above and beyond bathroom breaks), or provides a five-minute rather than ten-minute break, the employer owes the employee an entire extra hour of wages for the day.  If the employer fails to pay the extra hour of wages, whether because of ignorance of the rule or otherwise, penalties rack up swiftly.  Upon the employee’s departure, if the employer does not pay every dime that is due to the employee (including that extra hour of pay), the employer must pay an entire day’s wages (8 hours worth) for each day until full payment is made, up to 30 days.  So that means the five or ten minute mistake could turn into big money for the employee.  An employee earning minimum wage ($8 per hour in California) on a part-time job could nevertheless gain $1,928 (including $8 for the extra hour of pay) for the five or ten minute error.  Assuming the hypothetical part-time employee worked 20 hours per week, the employee would get the same amount that he earned in the previous 12 weeks combined for one five-minute mistake. 

Something similar recently happened to a friend of mine who owns a small business.  He intended to pay all wages upon an employee’s departure, but made an honest and innocent calculating error.  Rather than advise the business of the error, the former employee went and filed a complaint with the Labor Commissioner some time after his departure.  Upon learning of the error, my friend immediately paid all wages that were due to the employee.  The law with the forementioned 30-day penalty (Labor Code Section 203) states that “willful” failure to pay will be penalized (though ignorance of the law will be no excuse).  It seems to me that an unintentional miscalculation is not “willful,” especially when the employer immediately pays the employee as soon as the error is brought to its attention.  My friend explained everything that had happened to the Deputy Labor Commissioner.  Nevertheless, the Deputy Labor Commissioner held my friend’s feet to the fire, stating that if the employee wanted to pursue the penalties, the employer will have to defend a lawsuit, so it’s best if the employer goes ahead and pays the employee something to go away. 

Note, it wasn’t the small business’ attorney or the employee’s attorney that told him this, it was the California Labor Commissioner, i.e. the government.  The government of California advised a business to pay off an employee even though the employee had a very suspect claim.  Remarkable. 

According to the Labor Commissioner’s website, “The mission of the Division of Labor Standards Enforcement (DLSE) is to vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions, and to protect employers who comply with the law from those who attempt to gain competitive advantage at the expense of their workers by failing to comply with minimum labor standards.”

Notice that there is nothing in there about protecting employers from unscrupulous employees with false claims; only indirectly “protecting” employers from other employers that supposedly cheat their own employees.  It would be putting it kindly to call this “protection” mere lip service.  The Labor Commission really has one mission: to stick it to employers “vigorously.”

Justice should be the pursuit of government.  The government should discourage false claims, not reward them.  What message do we send to businesses and departed employees when this sort of thing happens?  We teach employees that they can make a fast buck off their former employer with dubious claims, and we teach businesses that doing business in California is more risky than anywhere else, at least from an employment law perspective.  I have actually seen a business close its California operations because California law was more difficult than anywhere else in the country.  I presume that company is making a profit elsewhere.

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