labor lawAdivision of labor law center

Employers who neglect to pay court-ordered restitution face hefty fines and penalties under both California and federal law.

In a recent California case involving Southern California Cleaning Service, a federal judge ordered the company to pay an additional penalty of $2,400 per day, for each day that the payment is delayed.

Even worse, the court also found the two owners of the company in contempt, and ordered them each to pay an additional $200 per day penalty. Further violations could result in them being jailed for contempt of court.

Both the fines will continue on a daily basis until the employees are paid in full.

In addition, the company was ordered to pay $227,701 in interest – 4.4% — on unpaid back wages of almost $3.5 million, plus $1 million in liquidated damages to workers.

The company’s troubles began in 2007 when the U.S. Department of Labor won a lawsuit against the southern California employer.

The judge in that case determined that Southern California Maid Services and Carpet Cleaning had improperly classified nearly every employee (more…)

The California Industrial Welfare Commission sets the state’s minimum wage, and as of January 1, 2008, California’s state minimum wage jumped 50 cents to $8.00 per hour.

The increase is the result of a two-step process that began in 2006.

 Under pressure from the Democrats to raise the state minimum wage, Governor Arnold Schwarzenegger agreed to bump the minimum by 75 cents from $6.75 to $7.50 on January 1, 2007, and to add an additional bump of 50 cents to $8.00 on January 1, 2008.

The increase in 2007 was the first raise in the California minimum wage since 2002.

In February of 1998, the California minimum wage was on par with the federal minimum of $5.15. In March of 1998, the rate rose to $5.75, then to $6.25 in 2001, and then to $6.75 in 2002.

A minimum wage of $8.00 per hour may seem generous, but California has the highest cost of living and some of the highest real estate prices in the country.

As a matter of fact, California’s minimum wage is not the highest in the nation. Previous to the January 1, 2008 increase, both Oregon and Washington had higher state minimum wages at $7.80 and $7.93 per hour, respectively. These two states also raised their minimums on January 1, 2008. Oregon’s rate jumped 15 cents to $7.95 per hour, and Washington’s increase of 14 cents brought its rate to $8.07 per hour.

Washington now holds the questionable honor of having the highest state minimum wage in the United States.

Like Washington and Oregon, several states have established their own state-mandated minimum wage rates. Other states enacted rates to echo the federal minimum wage. On July 24, 2008, the federal minimum wage will increase, meaning that several more states will raise their minimum wage rates as well.

These increases, both in California’s minimum wage and in the federal minimum wage, will require California employers to update their labor law posters. Legally, an employer who doesn’t display the updated posters can be fined.

The year 2008 has already experienced several changes in state minimum wage laws, and is slated to see several more.

On New Years Day, 2008, Arizona, California, Colorado, Delaware, Florida, Iowa, Massachusetts, Missouri, Montana, New Mexico, Ohio, Oregon, Vermont and Washington, fourteen states in all, enacted raises in their state minimum wage rate.

On July 1, 2008, five more states will follow suit. Michigan and Illinois will each raise its state minimum wage by twenty-five cents. Michigan’s will go from $7.15 to $7.40 per hour. Illinois’s will rise from $7.50to $7.75.

Kentucky and West Virginia, will add seventy cents to their minimum wage rates, resulting in new rates of $6.55 per hour and $7.25 per hour, respectively. Pennsylvania workers will enjoy a 90 cent per hour raise to their minimum wage rate, giving them a new minimum of $7.15 per hour.

Later in July, Utah, Oklahoma and a number of other states will establish higher minimum wage rates, too. These states have enacted laws which tie their minimum wage raises to the federal minimum wage.

On July 24, 2008, the federal minimum wage rate will increase from $5.85 to $6.55 per hour.

President George W. Bush signed the increase into law on May 24, 2006 as part of the Fair Minimum Wage Act of 2007. This Act established a three-tier system to increase the federal minimum wage. The bump on July 24, 2008 is the second step of the system.

Whenever a change occurs in any labor law, employers must update their labor law posters or face the possibility of a fine. Companies are required to display these posters in prominent spots in the employee work area, and to update for both state and federal law changes. Businesses seeking up to date information can visit www.laborlawcenter.com.

Effective January 1, 2008 the California state minimum wage will increase to $8.00 per hour. This 50-cent increase was part of a minimum wage compromise agreed to in 2006. However, that doesn’t mean that the new California minimum wage will be the highest in the nation.

Currently, the highest state minimum wages are Oregon at $7.80 per hour and Washington at $7.93 per hour. Both Oregon and Washington have provisions in the state statute for automatic increases in the minimum wage due to the cost of living. On January 1, 2008, the Washington minimum wage will increase by 14 cents to $8.07 per hour. On that same date, the Oregon minimum wage will increase by 15 cents to $7.95 per hour.

Since both Washington and Oregon’s minimum wages increase each year, they are likely to quickly outpace the California rate unless new legislation is passed in the Gold Rush State.

The California minimum wage is set by the state’s Industrial Welfare Commission.

In 2006, amid strong pressure by Democrats to increase the state minimum wage, Governor Arnold Schwarzenegger agreed to a two-step increase, with a 75-cent bump from $6.75 to $7.50 on January 1, 2007 and a 50-cent bump on January 1, 2008. 

The 75-cent increase in 2007 was the first hike in the California minimum wage since 2002.

As recently as February of 1998, the California minimum wage was just $5.15 per hour. That’s on a par with the federal minimum, and a low rate considering the fact that California has the highest cost of living – and some of the highest real estate prices – in the nation.

The progression of minimum wage increases in California is:

• March 1, 1998     $5.75
• January 1, 2001  $6.25
• January 1, 2002  $6.75
• January 1, 2007  $7.50
• January 1, 2008  $8.00

A number of other states also have minimum wage increases slated for January 1, 2007. On that date, the Florida minimum wage will increase by 12 cents from $6.67 per hour to $6.79 per hour. The Delaware minimum wage will increase on that same date.

The California minimum wage applies to nearly every worker in the state. There are a very few exception. Outside salespeople are exempt from the state minimum wage law.  In addition, any worker who is the parent, spouse or child of the employer can legally be paid less than the minimum wage. Apprentices under the State Division of Apprenticeship Standards may earn less than the state minimum wage.

California also permits learners to earn less than the state minimum wage, regardless of the learner’s age. To qualify, an employee must be working in an occupation where they have no previous or related experience. These workers must be paid 85% of the prevailing minimum wage, rounded up to the next 5 cents. That’s $6.40 for 2007 and $6.80 for 2008. This rate is only valid for the first 160 hours of employment.

California does not automatically exempt minors from the minimum wage law. Unless a minor meets the requirements for the learner’s rate above, he or she must be paid at least the minimum wage. The minimum wage is a right that cannot be voluntarily waived by employees under a union contract or private agreement.

In some circumstances, workers who are physically or mentally disabled (or both) may be paid less than the state minimum wage by non-profit organizations such as sheltered workshops or rehabilitation facilities. Both the individuals and the employers must be issued a special license by the Division of Labor Standards Enforcement, authorizing payment of a rate lower than the state minimum wage.

California is one of just a handful of states where tipped employees are entitled to the minimum wage, so they must be paid $8.00 per hour beginning January 1, 2008, as well.

The Trans Bay Steel, Inc. of Napa and Los Angeles, California was fined $1 million for slavery and human trafficking. In the suit, the EEOC alleged that 48 Thai welders were exploited and discriminated against due to their national origin. The EEOC took the allegations one step farther, arguing that Trans Bay was actually guilty of slavery and human trafficking. Eventually, the judge agreed.

Sadly, a number of companies have been accused of discrimination recently—but few have been charged with slavery or human trafficking. When the EEOC receives a complaint of discrimination, they launch a full investigation. Only if the investigation turns up evidence of wrongdoing, does the EEOC file a suit. Not surprisingly, most companies choose to settle out of court, rather than fight the lawsuit.

Officials at Trans Bay probably wish that they had settled with the EEOC, but they fought the charges…and lost.

Trans Bay had obtained H2B visas for the employees through a third party agency. The EEOC charged that the employees were held against their will. Their passports were confiscated and their movements were restricted. The employees were forced to work without pay. In addition, some were confined to cramped apartments without electricity, water or gas.

At least 17 of the workers were told that if they attempted to leave, the police and immigration officials would arrest them. The EEOC contends that all the workers were forced to pay enormous fees to the recruiting company, which effectively kept them in involuntary servitude.

Eventually some of the workers escaped the slave-like conditions and were able to alert authorities.

The men were working to retrofit the Bay Bridge under a sub-contract won by Trans Bay, Inc. Trans Bay contracted with Kota Manpower Co. to bring skilled workers from Thailand. Eventually, 9 of the 48 workers were employed by Trans Bay. The remaining workers were forced to work without pay in Los Angles and Long Beach, in Thai restaurants owned by Kota Manpower. Some were also forced to work other menial jobs without pay.

“The issues of human trafficking and slavery are an enforcement priority for the Commission,” said Anna Y. Park, Regional Attorney in EEOC’s Los Angeles District Office, which has jurisdiction for the southern half of California. “The EEOC is committed to the protection of all workers, particularly those most vulnerable in our society. The workers in this case sought out the American dream, but instead faced a nightmare.”

After an extensive investigation, the EEOC won the suit against Trans Bay and was awarded up to $1 million. This award includes a monetary payment to each worker, with guaranteed employment on the Bay Bridge Project.  The company also agreed to provide a housing stipend for workers.

In one of the most comprehensive awards in recent history, the company is required to pay the workers relocation expenses to Napa, California. They will also train and certify the workers as welders.

The company will also pay for tuition and books at a local college for the unskilled workers to train as welders. The company agreed to guarantee minimum pay and a base pay once the claimants complete their training period.

The judgment for the U.S. EEOC vs. Trans Bay Steel, Inc. includes continued monitoring by the EEOC, training of Trans Bay employees on anti-discrimination laws, changes to Trans Bay’s policies and procedures, and developing a company-wide complaint procedure.

EEOC Los Angeles District Director Olophius E. Perry said, “Through the cooperative efforts between the federal government and non-profit organizations, a just resolution was reached that is a win/win for the workers and for the employer.”

The EEOC worked closely with non-profit organizations such as the Thai Community Development Center, the Coalition to Abolish Slavery and Trafficking, and the Legal Aid Foundation of Los Angeles.

While we are on the topic of the new federal minimum wage, it is interesting to also consider another form of wage and hour bill that has been nearly as popular lately on the local level—the living wage. The largest entity recently to pass such a bill was the entire state of Maryland if you remember. But most of time, it is a city or county government that is passing some form of living wage bill.

This time, it is the city of San Leandro in the San Francisco Bay region of California. The living wage bill has not yet passed, though my sources are saying that the right number of city law makers, union organizers and employers are now on board to basically make the deal a reality in the town.

The issue at hand last I checked was that there were two competing versions of the living wage bill in the city. There was one that the city law makers took from a nearby city, called Emeryville, which recently passed a living wage bill within its borders. That city ordinance would increase the town living wage to $12.40 per hour, but there is some concern that this version of the bill has loop holes in it that could be exploited by some less scrupulous contractors and such.

So don’t expect any action on this bill, according to my sources, until at least this July, in a few weeks. That is the next time that the city chamber is going to get together to discuss the living wage law and all of the other items on their plate in San Leandro.

Remember, the difference between, say, the federal minimum wage bill and the living wage bill is that a living wage is set at an hourly pay rate that would put an employee at or above the federal poverty level.