Meal & Rest Breaks

If you run a business in California, you already know the Private Attorneys General Act (PAGA) can turn routine payroll mistakes into staggering liability. A single missing line item on a wage statement, repeated across hundreds of pay periods for employees can generate a penalty with five, six or even seven figures attached. What a lot of employers don’t realize is how much control they still have over that number. A recently published decision is one of the clearest illustrations yet of that principle in action.

As previously reported, just over a year ago, the California Supreme Court issued a sweeping decision instituting a new test, called the “ABC test,” to determine whether a worker is properly classified as an independent contractor instead of an employee. On May 3, 2019, the California Department of Labor Standards Enforcement (DLSE), issued an opinion letter providing California employers with further insight on how the Labor Commissioner’s Office plans to apply the ABC test.

I was recently retained by a new client to defend the company against wage and hour charges brought by a former employee that were filed with the California Labor Commissioner’s office. As I do whenever I get a new client, I asked if they had an employee handbook or other written personnel policies. Unfortunately, they did not. This makes it much more difficult to defend against employment claims brought by employees. The failure to have written policies may be taken as evidence that you do not comply with your legal obligations.