Daily Archives: September 30, 2019

2 posts

What Are Waiting Time Penalties?

When an employee is fired, all of his earned and unpaid wages must be paid immediately at the time of termination. When an employee quits without notice, his wages are due within 72 hours of quitting. However, if he gives more than 72 hours notice of his departure, his wages are due on the last day of employment.

Failure to pay the full amount of wages due when the employee stops working can give rise to “waiting time” penalties under Labor Code section 203, which provides:

If an employer willfully fails to pay, without abatement or reduction… 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.

This means that the regular daily wage of the former employee shall continue as a waiting-time penalty for up to 30 days when the employer fails to pay all wages due at termination or when the employee quits. For a minimum wage employee who works 8 hour days, the waiting time penalty would be $96 per day ($12/ hr x 8), and the maximum penalty for this employee would be $2,880 ($96/day x 30 days). As the employee’s wage increases so too does the amount of the penalty.

Even a small amount of unpaid wages can trigger the penalty. This includes unpaid vacation wages, overtime pay, and premium wages for missed breaks. Often an employee will only have a few hundred dollars in unpaid wages, but when waiting time penalties are added, the claim can exceed $5,000.

In order to recover waiting time penalties, the employee must prove the employer’s failure to pay the wages was “willful.” This means the employer intentionally failed to pay wages that were due. The term “willfully” does not require a showing that the employer knew of its obligation. An employer may act willfully even if it did not know it was required to pay some category of wages. However, a good faith dispute that the wages are due will preclude a finding of willfulness.

If you are facing a wage claim with waiting time penalties, you should have an experienced lawyer protecting your business. I have successfully defended these claims and I can help you avoid paying more than the law requires.

Did California Make It Illegal For Truck Drivers To Be Independent Contractors?

California’s governor, Gavin Newsom, recently signed into law AB 5 – the bill that would codify the “ABC test” and make most workers employees if they perform the same services for a business that the business provides to its customers. For example, Uber and Lyft drivers perform the transportation services those companies provide to their customers. Under the ABC test, these drivers must be classified as employees. [UPDATE (11/2020): Following passage of Prop 22 drivers for app based driving services, including Uber and Lyft, will be independent contractors]

This is, of course, a major concern for trucking companies that hire owner-operator drivers as independent contractors. If you are a trucking company, the people that drive trucks for you will be your employees under the new law. So does that make the owner-operator model illegal? Not necessarily.

In Alvarez v. XPO Logistics Cartage, (C.D. Cal. Nov. 15, 2018), the defendant challenged the ABC test on the grounds that it was preempted by the Federal Aviation Administration Authorization Act (“FAAAA”). The FAAAA provides that states “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier.” The Federal District court agreed, and found the ABC test preempted.

Here, the question is not whether the FAAAA preempts California wage orders; rather, it is whether the ABC test—used to interpret the wage orders—is preempted. … [W]hile the Ninth Circuit declined to affirmatively address whether the ABC test was preempted by the FAAAA, it nevertheless distinguished the two standards, noting that “the ABC test may effectively compel a motor carrier to use employees for certain services because, under the ABC test, a worker providing a service within an employer’s usual course of business will never be considered an independent contractor.” The Court agrees with this dicta and finds that the ABC test—as adopted by the California Supreme Court—”relates” to a motor carrier’s services in more than a “tenous” manner and is therefore preempted by the FAAAA.

So does that settle the matter? Unfortunately, no. Other Federal courts have come to the opposite conclusion on the same issue, and it will thus need to be resolved by the Ninth Circuit and possibly the U.S. Supreme Court.