California’s strict regulations regarding meal and rest periods and wage statements continue to plague business owners of all sizes. These regulations can cross over each other and can be confusing for employers. Most employers know that they have to factor nondiscretionary bonuses into the regular rate when calculating overtime rates – and show those rates on the wage statement – but it’s also necessary to factor bonus payments when calculating meal premium payments for missed meal periods. Not doing so can result in penalties from the labor board and costly Private Attorneys General Act (PAGA) lawsuits.
PAGA was originally enacted to help the state regulate businesses that operate unlawfully outside of tax and licensing requirements, but with the growing list of Labor Code provisions and plenty of attorneys who are eager to take any error or omission to court, employers who aren’t careful can find themselves making a very expensive mistake.
Walmart recently found themselves on the receiving end of this type of lawsuit after neglecting to factor bonus payments into an employee’s meal premium payments. That employee filed suit against Walmart, alleging the company failed to pay adequate compensation for missed meal breaks or provide adequate wage statements and subsequently sought penalties under PAGA for those violations. A District Court judge reviewing the case found multiple wage statement violations and turned the claims into a class action lawsuit against the company. Some of the employee’s claims were not able to be proved, but the judge still hit the company with a $102 million verdict.
Employers have to make compliance their number one priority in order to protect themselves against PAGA judgments and settlements that can easily reach into the millions of dollars. Doing so, however, can make it difficult to focus on growing the business itself. Partnering with a Professional Employer Organization (PEO) with expertise in compliance with California labor regulations is a great way for California business owners to bring themselves up-to-date and remain compliant as the state laws continue to update and change.
Since 1995, Emplicity has provided a smarter, more secure, and integrated platform of employer services to its 300 business clients and their 8,500 employees. As a Professional Employer Organization, or PEO, the California-based HR outsourcing firm simplifies the compliance, administration, and support businesses need in the areas of employee benefits, payroll, and human resources technology.
NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of its clients.