California Employer Wage and Hour Legal Issues

California Employer Wage and Hour Legal Issues

There have been substantial changes in San Diego employer wage and hour legal issues and all employe-related litigation in Southern California. Employers must stay abreast of all changes in Federal, State and Local laws, regulations and ordinances to protect their legal and financial interests.

Wage and hour litigation has substantially increased over the past few years across Southern California. Plaintiff’s attorneys are advertising heavily for disgruntled current and former employees in search of a potential class action or PAGA lawsuit. What are some of the issues you need to be concerned about?
A wage and hour claim can arise out of many issues including, but not limited to unpaid overtime claims, minimum wage claims based upon straight commission or piece-rate compensation, tips, bonuses and compliance with Federal statutes such as FMLA and ADA as well as California’s Fair Pay Act.

Recent major developments at the Supreme Court of the United States have overturned California’s aggressive laws regarding the requirement of arbitration agreements from all employees. A policy regarding arbitration agreements is not only now completely legal again, but also imperative to reduce or eliminate expensive employee-related litigation and PAGA actions.

The misclassification of employees as independent contractors continues to gain steam in Southern California. A recent decision by the California Supreme Court established an “A-B-C Test” for employers who wish to classify a worker as an independent contractor. The major takeaways are these:

It is now the law of California that all workers are legally presumed to be classified as employees unless the employer can prove that the classification of an independent contractor meets the following criteria:

• “that the worker is free from control and direction over performance of the work both under the contract and in fact.” and

• “that the work provided is outside the usual course of the business for which the work is performed,” and

• “that the worker is customarily engaged in an independently established trade, occupation or business.”

The legal burden of proof falls upon you as an employer to prove each of these. In essence, if any independent contractor contributes in any way to your company’s central focus including the production and/or delivery of products and services or that generates profit for your business they will fail the above A-B-C test.

California’s minimum wage, as of 2023 is $15.50 per hour. In San Diego the minimum wage is $16.30 per hour in 2023. These rates increase every year and Southern California employers must stay abreast of these and all changes in order to avoid harsh penalties and financial exposure in the hardest state of the union in which to be an employer: California.

Look for employer defense attorneys with extensive experience in representing and protecting Southern California employers in wage and hour disputes and litigation, as well as the development, implementation and consistent updating of crucial employment documents such as an arbitration agreement, policies and procedures and the employee handbook.

Plaintiff’s attorneys, the IRS and State Agencies such as the EDD, the FTB and CDTFA are constantly looking for sources of new revenue and opportunity. You, as an employer, are one of the primary targets to raise revenues, settlements and financial damages.

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