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Most California Employees Are Entitled to Overtime - the Penalties for Failing to Pay Are Expensive

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Raul and his fellows worked long hours without overtime pay. They wanted it, but the company wouldn't pay. The penalties for failure to track time, provide itemized wage statements and pay overtime are a lot more than the cost of paying overtime as the law requires

Raul and his coworkers put in long hours just a couple of days a week. Because the newspapers were delivered only twice a week, drivers had to work 10 to 20 hours each of those two days. The Bay Area Journal Tribune didn't pay overtime. Raul believed he was entitled to overtime and asked us what we thought.

Some drivers are not entitled to overtime, but those who are employed by a motor carrier and only if they operate motor vehicles weighing 10,000 pounds or more. Raul and the other drivers delivered newspapers in ordinary vans that weighed less than 10,000 pounds and required no special driver license. California Labor Code Section 1198 requires employers to pay overtime. Employers must pay workers entitled to overtime 1.5 times their regular hourly rate for hours worked in excess of eight hours in one day and in excess of forty hours in one week. But the employer need not pay overtime twice for the same hour if it was more than eight in one day and more than 40 in one week. Employers must pay two times the employee's regular rate for each hour over 12 worked in one day.

The Bay Area Journal Tribune did not track hours, did not maintain time sheets and did not pay overtime. After receiving a demand letter, the company asserted that it "often" paid Raul and his coworkers for more hours than they worked and this "made it all even out." The company refused to settle.

Sean likes to be reasonable. Raul and his coworkers wanted to claim that they were not permitted to take meal and rest breaks and sue for damages for those lost rest periods. Because Raul and his workers drove vans by themselves and were away from the office for 10 to 20 hours at a time, Sean told them that it was almost impossible to believe that there was some mean supervisor following them around the Bay Area keeping them from taking their breaks. After some discussion, they admitted that no one stopped them from taking their breaks, but that they often felt so busy that they didn't feel like they had time to take a break. Ultimately, Raul and his coworkers agreed those claims were inappropriate.

California law requires employers to keep payroll records showing the hours worked by employees. If the employer failed to keep accurate records of hours worked, the employee's reasonable estimate is sufficient to establish the actual hours worked and the regular and overtime damages that the employer must pay. Lab. Code Section 2703. And an employer that fails to provide accurate itemized wage statements with each paycheck is subject to liability of $50 for the first violation and $100 for each subsequent violation up to a maximum of $4,000 per employee. Lab. Code Section 226(a). An employer must pay an employee all wages due immediately upon terminating the employee, or within 72 hours of the employee quitting. Failing to pay wages due promptly upon termination results in "waiting time penalties" equal to the employee's daily rate of pay multiplied by the number of days the employer delayed payment up to 30 days. Lab. Code Section 203. An employer's ignorance of the law is insufficient to avoid waiting time penalties. Barnhill v. Robert & Saunders Co., 125 Cal.App.3d 17 (1981).

The Bay Area Journal Tribune hired a law firm that took the depositions of Raul and his coworkers. Sean defended the depositions and his clients testified well in part because Sean prepared them for depositions and explained how important it was to be honest and reasonable - to not claim injuries and damages that they weren't entitled to. After depositions and some discussion, both sides agreed to mediation. The mediator was tough, but the law undeniably entitled Raul and his coworkers to overtime, compensation for the employer's failure to provide itemized wage statements, waiting time penalties, and prejudgment interest of 10 percent.

In lawsuits claiming unpaid wages, California law requires employers to pay the employee's attorney fees if he prevails. That meant that the longer the litigation took, the higher The Bay Area Journal Tribune's ultimate cost would be if they lost. In some cases where the evidence is clear that an employer is liable for failure to page wages or overtime and the employer unwisely decides to litigate the case through trial, the attorney fees portion of the employee's award is several times the unpaid wages.

The Bay Area Journal Tribune settled at mediation and Raul and his coworkers got their overtime and penalties. Tracking time is not difficult. It's the law.

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