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251 Cards in this Set

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  • Back
What does the IWC stand for?
the california industrial welfare commission
What does the IWC do?
they govern wages, hours and working conditions in California, and to investigate the health, safety and welfare of those employees
How many IWC orders are there?
how many members of the CA IWC are there?
there are 5 members appointed by the governor
list all 17 wage orders
1) manufacturing industry
2) personal services industry
3) canning, freezing and preserving industry
4) professional, technical, clerical, mechanical and similar occupations
5) public housekeeping industry
6) laundry, linen supply, dry cleaning and dyeing industry
7) mercantile industry
8) industries handling products after harvest
9) transportation industry
10) amusement and recreation industry
11) broadcasting industry
12) motion picture industry
13) industries preparing agricultural products for market on the farm
14) agricultural occupations
15) household occupations
16) certain on-site occupations in the construction, drilling, logging and mining industries
17) miscellaneous employees
List the two types of IWC orders
1) an industry order
2) an occupational order
what is an industry order?
an order that regulates wages, hours, and working conditions in specific industries
which IWC orders are an industry order?
IWC orders 1, 2, 3, 5, 6, 7, 8, 9. 10, 11, 12 and 13
which IWC orders are an occupational order?
IWC orders 4, 14, 15, 16 and 17
which is the most common wage order?
IWC order 4
what are the key elements of IWC 4?
1. overtime exemptions for employees in the administrative, executive or professional capacities
2. definitions of and rates for daily overtime, minimum wages, employee records, meal and rest periods, make-up time and alternative workweek schedules
where must wage orders be posted?
In an area commonly frequented by employees
what else must be posted along with wage orders?
both federal and state current minimum wage
where can an organization obtain copies of the wage orders?
from the california department of industrial relations
what is the DLSE?
it is the california division of labor standards enforcement
what does the DLSE do?
it enforces provision of the wage orders. They also provide assistance to organizations regartding implementation of wage orders
what are the classifications of exempt employees?
Administrative, executive, professional, computer software
describe the administrative exempt classification
1. primarily performs non-manual work directly related to general business
2. regularly exercises discretion and independent judgment
3. has obtained special training, experience or knowledge
4. earns a monthly salary equal to two times the state minimum wage for full-time employment
5. must have personal effect on policy or general business operations
describe the executive exempt classification
1. primarily manages the business
2. regularly exercises discretion and independent judgment
3. authority to hire/fire and advance/promote
4. monthly salary equal to two times state minimum for full-time employment
describe the professional exempt classification
1. requires license or certification by state of CA
2. law medicine, dentistry, optometry, accounting, etc.
3. requires advanced knowledge, specialized study
4. regularly exercises discretion and independent judgment
5. monthly salary equal to two times state minimum for full-time employment
describe the computer software exempt classification
1. primarily applies systems analysis; designs, developments, documentation, analysis, creation, testing, modification of systems or programs
2. work is intellectual, creative, specialized
3. must use discretion and independent judgement
4. earns no less than $36.00 per hour
5. may pay no less than $75,000 per year, no less than $6,250 a month.
6. incentive compensation not included if paid out less than every month
7. will increase every january based on cost of living changes
What does DLSE stand for?
Division of labor standards enforcement
1. also referred to as the labor commissioner's office
2. division of the department of industrial relations
3. one of six agencies within the labor and workforce development agency
what does the DLSE do?
adjudicates wage claims, investigates discrimination and public works
complaints; and enforces Labor Code statutes and Industrial Welfare Commission
enforces minimum labor standards
ensure that employees are not required or permitted to work under substandard
is there any "administrative exhaustion" requirement for wage and hour enforcements
"No. an employee may file with the labor commissioner or immediately
file a civil lawsuit"
what are the seven units of the DLSE?
1. wage claim adjudication
2. bureau of field enforcement (BOFE)
3. retalation unit
4. public works unit
5. economic and employment enforcement coalition (EEEC)
6. licensing and registration
7. legal
What is the role of the DLSE unit: wage claim adjudication?
Adjudicates wage claims on behalf of workers who file claims for
nonpayment of wages, overtime, or vacation pay pursuant to
California Labor Code Sections 96 and 98. DLSE will hold informal
conferences between organizations and employees to resolve wage
disputes. If a matter cannot be resolved at the informal conference,
an administrative hearing is held to make a final determination on
the matter.
What is the role of the DLSE unit: bureau of field enforcement (BOFE)?
BOFE investigates and enforces statutes covering workers'
compensation insurance coverage, child labor, cash pay, unlicensed
contractors, Industrial Welfare Commission orders, as well as group
claims involving minimum wage and overtime claims.
What is the role of the DLSE unit: retaliation unit?
Investigates complaints alleging discriminatory retaliation in the
workplace on the basis of various Labor Code sections.
What is the role of the DLSE unit: public works unit?
Investigates and enforces application of appropriate prevailing wage
rates for public works construction projects.
What is the role of the DLSE unit: economic and employment enforcement coalition (EEEC)?
A partnership of state and federal agencies that collaborate to target
businesses participating in the "underground economy" historically
abusing the workforce in the garment manufacturing, janitorial,
agriculture, car wash, construction, race track and restaurant
A partnership of state and federal agencies that collaborate to target
businesses participating in the "underground economy" historically
abusing the workforce in the garment manufacturing, janitorial,
agriculture, car wash, construction, race track and restaurant
What is the role of the DLSE unit: licensing and registration?
Issues licenses to farm labor contractors, talent agents,
organizations, transporters and supervisors of minors involved in
door-to-door sales, and industrial homeworkers. Registers garment
manufacturers, certifies studio teachers, and approves permits for
the payment of less than the minimum wage to employees with a
disability and to sheltered workshops. Verifies farm labor contractor
What is the role of the DLSE unit: legal?
DLSE attorneys present civil cases at both the trial and appellate
level. Most cases involve issues of unpaid wages that have arisen
as a result of an appeal taken from an order, decision, or award of
the labor commissioner. DLSE attorneys also pursue cases
involving violations of the prevailing wage provisions of the public
works laws.
Is the employer free to elect whether or not to proceed directly to court?
"No. Although the employee is free to elect whether or not to proceed directly to court,
a recent California appellate case holds that if the employee chooses to pursue
his/her administrative claim with the labor commissioner, the employer must
appear before the labor commissioner, and if the award is unfavorable, appeal to
the Superior Court and therefore be subj ect to the risk of paying attorneys' fees to
the employee. The employer cannot elect to go directly to the trial court. See
Gonzales v. Beck (2008) 158 Cal.App.4'h 598."
Define wages.
wages are defined as "all amounts for labor performed by employees of every
description, whether the amount is fixed or ascertained by the standard of time,
task, piece, commission basis, or other method of calculation."
Define labor.
Labor "includes labor, work or service whether rendered or performed under
contract, subcontract, partnership, station plan, or other agreement if the labor to
be paid for is performed personally by the person demanding payment."
What does the CA labor code say about tips?
The California Labor Code makes special provisions with regard to the payment of
tips. Tips that are left for the employee, whether u.: cash or as an added item on a
credit card charge, are considered to be the property of the employee. The
employer has an obligation to pay over tips received to the employee. Although
the employer can impose a mandatory "tip pool" amongst restaurant workers, the
employer or a manager/supervisor who acts as the agent of the employer cannot
share in those tips. Two California appellate court cases are pending which address
"the ""tip pool"" rules in non-restaurant settings (in those cases, casinos). California laws does not allow for an organization to use an employee's tips as a
credit towards their obligation to pay minimum wage."
What is California's minimum wage?
Gov. Schwarzenegger signed Assembly Bill 1835 on Sept. 12,2006, changing
California's, minimum wage effective Jan. l, 2007. The new minimum wage is
$8.00 per hour.
What is the federal minimum wage?
The federal minimum wage increased to $5.85 per hour effective
July 24, 2007. The rate further increased to $6.55 on July 24, 2008, and will
increase to $7.25 on July 24,2009.
What happens when state and federal minimum wage conflicts?
When state law conflicts with federal law,
employees are paid at the higher minimum wage.
What wage notice must be posted?
Official Notice of the California Minimum Wage (MW-2007) next to the
appropriate IWC Industry or Occupation Order
Industrial Welfare Commission web site
A discussion ofminimum wage
What is the minimum wage for a salaried employee?
Salaried employees must receive a minimum of two times the state minimum
wage. Due to the minimum wage increase in January 2007, this rate would he a
minimum of $2,600 per month. This amount may not be reduced for poor
performance or lack of productivity.
What are the rules for deducting time from an employee's vacation or sick period?
An organization can deduct time from the
employee's pay for vacation or sick periods that are at least four hours in a
workday. Otherwise, employees who work at least one hour in a workday receive
full pay for that day even if the amount ofwork expected to be accomplished was
not completed.
what are the exceptions to minimum wage?
1. Learners may be paide a reduced rate of 85% of minimum wage for their first 160 hours of work
2. subminimum wage to apprentices or disabled
3. sheepherders minimum wage is $1200 per month. Pay may not be offset by meals and lodging. Check IWC Order 14 for details.
what overrides the California Labor Code?
a collective-bargaining agreement
non-california residents working part time in CA are entitled to:
to be paid overtime as calculated under CA's more generous daily overtime laws for time worked in CA (sullivan v. oracle corp)
describe sullivan v. oracle corp.
the Ninth Circuit Court
rejected Oracle Corp. 's attempt to calculate overtime under federal law or the law
of the state in which the employees maintained their residence and noted that if a
California employer could "import" non-residents into the state and pay them
lower overtime rates under federal law, it would harm the job opportunities for
California residents.
can an employee waive overtime?
"Employees cannot
waive their right to overtime, and an organization must pay an employee for
overtime worked regardless of whether it was authorized"
are hours worked on Sat, Sun & holidays different regarding overtime rules?
Hours worked on
Saturdays, Sundays or holidays are no different frpm hours during the week,
unless the organization has agreed to count them differently.
who defines a workweek?
The organization defines the workweek, and it must be consistent
throughout the year.
who defines a workday?
The organization also defines a workday, and it is to be a
consecutive 24-hour period that is also consistent throughout the year.
can different departments have different time definitions?
It is
permissible for different groups in the organization to have different time
definitions of workdays and workweeks. If the organization does not define its
workweek, the labor commissioner will define it as Sunday through Saturday and
a workday as 12:01 a.m. to midnight.
What is the overtime rate?
The organization must pay employees one and one-half (1 'ii) times their
employee's usual rate ofpay in the following circumstances:
• Any hours worked over eight hours in a workday
• The first eight hours worked for any reason on the seventh consecutive
workday in a given workweek
• Any hours worked over 40 straight-time hours in a workweek
What are the double time rules?
The organization must pay employees two times (double time) the employee's
usual rate ofpay in the following circumstances:
• Any hours worked over 12 hours in a day
• Any hours worked over eight on the seventh consecutive workday in a week
it is possible for an employee to work only one day in a
workweek and still receive pay of time-and-a-half and even double time
An organization does not need to count non-worked hours in the overtime
how do you calculate overtime?
To calculate overtime, the organization must know the employee's regular rate of
how do you determine the regular rate of pay?
For hourly employees, the regular rate ofpay is the employee's hourly wage
plus most other forms ofpayment received by the employee, including the cost of
meals and lodging, piece rate pay, and nondiscretionary bonuses
what can be excluded from calculating the regular rate of pay?
• Reimbursement of expenses
• Payments into a profit-sharing or retirement plan covered by ERISA
• Payments covering an employee's health care benefit premiums
• Discretionary bonuses
• Hours paid for time not worked, such as a holiday, vacation, sick or doctor'svisit
• Gifts for holidays or birthdays
how do you calculate the rate of pay for non-exempt salaried employees?
determine the regular rate of pay by dividing the employee's
annual salary by 52 weeks to determine the weekly salary, and then dividing the
weekly salary by 40, even if the employee works more than 40 hours in a workweek.
This will provide the regular hourly rate ofpay. If this amount is less than minimum
wage, overtime premiums will be calculated based on minimum wage.
can an employee have two rates of pay?
"yes. due to circumstances such as working two different
jobs in the same workweek, travel time pay, or other similar situations"
how do you calculate overtime if an employee has two rates of pay?
employee's regular rate ofpay should be computed by determining the weighted
average of the different rates of pay.
Joaquin Q. Public works eight hours each Monday, Wednesday and Friday as a
part-time accountant for the organization. He earns $25 per hour for this position.
On Tuesday and Thursday he works eight hours each day as an administrative
assistant in the Human Resources department and earns $15 per hour. If Joaquin
worked two hours overtime in the accounting position and four hours overtime in
the HR position in one workweek, the organization would do the following:
26 hours x $25!hour = $650
20 hou~s x $15!hour =$300
$950 total weekly compensation before overtime
$950.00 is diVided by 46 hours to obtain an hourly rate of $20.65
$20.65 is divided by 2 to obtain the overtime premium for the week of $10.33
So Joaquin would be paid the following amounts:
24 hours x $25/hour
2 hours overtime for accountant at $35.33 ($25/hour + overtime premium of $10.33)
16 hours at $15/hour 4 hours overtime for HR department at $25.33
($15/hour + overtime premium of $10.33)
what is a split shift?
A split shift9 occurs when an organization assigns an employee two distinct work
times in one day. An example of this would occur when the employee's schedule
is 7:00 a.m.-9:00 a.m. and then again from 4:00 p.m.-6:00 p.m.
what is the split-shift pay rule?
When there is an
unpaid interruption of more than one hour in the workday, the employee must be
paid an additional one hour ofpay at minimum wage. This "split-shift pay" does
not become part of the calculation for overtime as it was not a payment for time
worked. The one hour of pay is not required if the employee resides at the place of
what if split-shift pay is more than minimum wage?
If the employee is paid more than minimum wage during the hours worked of the
split shift, that pay may be used to offset the one-hour split-shift pay.
is on-call pay required?
An organization does not automatically have to pay an employee for carrying a
beeper, cell phone or Blackberry-type device. Whether or not the on-call time is
compensable will depend on the degree to which the employee is under the
organization's control.
how do you determine if you provide on-call pay?
Factors to be considered include the degree of the
restriction on the employee's freedom, whether the employee is required to be on
the organization's property, and the impact the on-call policy has on the
employee's ability to perform personal business. On-call time may be paid at a
different rate than the employee would receive for working.
Section 5 of Wage Orders 1-16
regulates the pay employees receive when they arrive at work and there is less than a full-scheduled day of work available
what is the employer's legal obligation to an employee if they arrive at work and there is less than a full-scheduled day of work available?
the organization must pay the employee for
half the employee's regularly scheduled hours, with a minimum of two hours' pay,
but never more than four hours' pay. The employee is entitled to reporting-time
pay even if the organization tells the employee to report again later that same day.
what work interruptions are the exceptions to section 5 of wage orders 1-16
1. act of god or civil emergency
2. utility failure as long as failure not remotely within org's control
"3. If the employee is on paid standby and has been called to work outside the
normal work schedule
4. If the organization has been threatened or a member of local or state govcrnment orders a cease of operations"
How does section 5 of wage orders 1-16 apply to employees being terminated?
An employee who is terminated is entitled to reporting time if fired without notice
and provided with less than one-half of the usual scheduled work on the final day.
Do employees have a right to make up time?
No. They can request it. The organization decides if they allow it.
Make up time compliance:
• must be made up in same workweek.
• organization may not encourage or suggest it
has to be completely employee free will
• employee must provide signed, written request
for each occasion
• must not work more than 11 hours on workday
must work no more than 40 hours
no overtime paid as long as the employee does not work more than 11 hrs
make up time documentation
The organization needs to keep detailed records of the request for make-up time
and the actual hours worked of make-up time.
How does paid travel time work with a company vehicle?
the travel time to the employee's usual work site is not paid time, even if
the employee is performing small tasks such as refueling the vehicle. An
organization does need to have an agreement with the employee regarding the use
of the vehicle.
when is travel time compensable?
travel to nonusual work site on temporary basis
or when an organization does not allow an
"employee to use their transportation. In California, travel time is compensable if
the employee is subject to the control of the organization"
Morillion v. Royal Packing Co.,
the Supreme Court
held that if an organization provides transportation and requires the employees to
ride that transportation, then the travel time is paid travel time. In this case, Royal
Packing Co. required that employees meet in designated locations from which the
company-provided bus would transport the employees to the fields for the day's
Overton v. Walt Disney Company
Organizations may provide optional free transportation to employees without
having to pay for their travel time.
The California Court of Appeal, Second District, found that Walt Disney was offering,
not requiring, their employees transportation in a company-provided tram.
Employees had the option of meeting the tram at specific sites or using other
methods to get to work. Since transportation on the tram was optional, the travel
time was not to be considered paid work time.
Can travel time pay differ from an employee's hourly wage?
"Nonexempt employees may be paid for their travel time at a pay rate lower than
the usual rate ofpay. This rate may be as low as minimum wage. A few things must be considered."
The following must be considered when paying travel time:
• it must be counted as work time when calculating overtime for
nonexempt employees. If the employee is paid at a lower rate than usual, the
organization must use the weighted-average method of calculating overtime.
• If the nonexempt employee is to be paid at the lower rates, the practice must
be explained to all employees prior to the travel. The travel-time pay policy
should be in the organization's policy manual.
• All the employee's out-of-pocket travel expenses are to be reimbursed by the
what is incentive compensation
employers use modes of compensation
such as commissions and bonuses which are based on the performance of the
individual employee, the work unit or the entire company. Because the amount of
the commissions and bonuses increases for good performance, this is frequently
referred to as "incentive compensation."
must incentive compensation be included in the calculation for regular rate of pay for purposes of overtime?
when the incentive compensation is paid to a
nonexempt employee and is not discretionary (i.e., up to the employer's discretion
as to both whether it will be paid and the amount that will be paid), it may be
included in the employee's regular rate ofpay for purposes of calculating
overtime (see earlier discussion).
Prachasaisoradej v. Ralphs Grocery Company, Inc. (2007) 42 Cal. 4th 217
the California Supreme Court
addressed the enforceability of profit-based incentive compensation plans. The
plaintiff in this class-action case was a produce manager in a Ralphs Grocery
store. The court rejected the employee's argument that the employer's
supplemental profit-based incentive bonus plan violated California labor laws
because bonuses under the plan were calculated after reducing store profits by
costs such as workers' compensation, cash shortage and merchandise losses.
The California Supreme Court found that employees had no expectation of
compensation until after the store profitability had been determined. Accordingly,
calculating a supplemental bonus based upon net profits was not an "unlawful
recovery" ofbusiness expenses from an employee's wages. The Court discussed
that the result might have been different if this was a commission compensation
plan, where commissions constituted the bulk of the compensation paid to the
define an alternative workweek.
employees can
work longer than eight hours a day and be compensated only at their regular rate
ofpay for the extra hours.
Under an alternative workweek program, the alternative workweek may not
require more than 10 hours of work per day and no more than 40 hours of work in
a workweek
what if the alternative workweek exceeds 10 hours per day?
Any overtime between 10 and 12 hours worked above the alternative
workweek must be paid at 1-1/2 times the regular rate ofpay, and any overtime
beyond 12 hours worked must be paid at twice the regular rate ofpay. In addition,
there are special alternative-workweek rules for certain health care workers.
who can have an alternative work schedule?
An alternative work schedule
can be created for any readily identifiable work unit, such as a division, a
department, a job classification, a shift, or a separ~te physical location.
What are the adoption procedures for an alternative work schedule?
1. organization presents written proposal, designate a schedule
2. specify number of regular recurring workdays and hours
3. with options, employees may, with approval, move from one option to another
4. meet with employees at least 14 days before election to discuss effects of proposed alternative work schedule on employees' wages, hours and benefits
5. include written disclosure detailing information in the meeting
6. if at least 5% of affected workers speak another language, provide written info in that language as well as english
7. mail written disclosure to employees who do not attend meeting
8. election must be held on worksite during working hours
9. organization must pay for all associated costs
10. secret ballot with 2/3 vote of employees in work unit
11. election results must be reported by org. to dlse within 30 days after results finalized
12. report includes final tally, size of unit, nature of business of organization
13. then valid and recognized by the IWC
14. then implementation can occur
"15. Employees affected by a change in the work hours resulting from the
adoption of an alternative workweek schedule may not be required to work
those new work hours for at least 30 days after the announcement of the final
results of the election."
can alternative workweeks be repealed?
A group of employees affected by an alternative
workweek may repeal it.
who repeals the alternative workweek?
One-third of the affected employees may petition to
repeal; however, a new secret ballot election shall be held and a two-thirds
vote of the affected employees shall be required to reverse the alternative
workweek schedule.
when must an election to repeal the alternative workweek schedule be held?
30 days after the petition is submitted to the organization.
can the same group of employees vote to repeal (or re-adopt after repealing) an alternative workweek?
the same
group of employees who voted in an election to adopt or repeal an alternative
workweek schedule cannot vote again within 12 months from the last
"If the alternative workweek schedule is revoked, the organization must
within 60 days
why do companies utilize holiday shutdowns?
In order to reduce payroll expenses and reduce the liability on the books for
"accrued but unused vacation time. Some
employers may seek to have the shut-down span parts of two consecutive workweeks,
e.g., shutting down from Wednesday December 25 through Wednesday,
January I."
how are non-exempt employees paid during holiday shutdown?
"they are
simply paid for the hours worked. Further, employees can be encouraged to use
accrued but unused vacation time during the shut-down"
how are exempt employees paid during a holiday shutdown?
exempt employees must be paid a full weekly salary, which cannot be
reduced by days not worked due to the employer's decision to shut down. If the
employer provides not less than 90 days' advance notice, it can mandate the use
of any accrued but unused vacation time to cover the shut-down days and ensure
that the exempt employee receives a full week's pay without reduction. If the
employee does not have adequate accrued but unused vacation, the employer can
advance vacation time.
can an employee on holiday shutdown seek unemployment?
California's Employment Development Department takes the position that a shutdown
exceeding five consecutive working days (assuming it is not taken as
vacation) will trigger the employee's ability to seek unemployment benefits.
when is a rest period required?
All nonexempt employees are entitled to a minimum of 10 minutes of rest for
every four hours worked. If an employee's total hours worked in a day are three
and one-half hours or less, a rest period is not required. The rest period must be
counted as hours worked and not deducted from an employee's wages.
can employees be forced to take their rest periods on site?
If the organization requires employees to take their rest periods on-site, in a
specified area, the period of rest does not begin until the employee arrives at the
rest area. Organizations can require employees to stay on the work premises
during the break.
what if the organization fails to provide a rest period?
in accordance with the applicable wage order, the organization
must pay the employee one hour of pay at the employee's regular rate of
compensation for each workday that the rest period is not provided.
when must an employee have their meal period?
Organizations are required to provide nonexempt employees with a meal period
of no less than 30 minutes for any work period up to five hours, except when the
work period will not exceed six hours and the six hours completes the employee's
must an employee working only six hours take their meal period?
If the employee will not work more than six hours, then the meal period
may be waived by mutual consent of the organization and the employee.
Organizations are strongly encouraged to document employees who meet the
above criteria and wish to waive the meal break.
Restaurant Corp. v. Superior Court (4th DCA 2007) (No. D04931)
The flexibility accorded to employers with regard to providing meal breaks, e.g.,
the ability to waive meal breaks or to schedule meal breaks to be taken at the
beginning of the work shift (as opposed to the midpoint of the shift), is subject to
ongoing litigation. In 2008, the Fourth District Court of Appeal in Brinker
Restaurant Corp. v. Superior Court (4th DCA 2007) (No. D04931), held that the
employer's practice of requiring employees to take "early lunches" just an hour
after starting work and then requiring them to work the rest of their shift (often
more than five hours) was permissible, so long as the employee is given a second
meal break if the employee works at least ten hours. The California Supreme
Court granted review of this decision, and so employers cannot rely on the broad
discretion allowed by the Brinker court.
what if the employee is not relieved of "all duty" during their meal period?
meal period must be considered an "on-duty" meal period and counted as time
worked. An "on-duty" meal period is only allowable when the nature of the work
prevents the employee from being relieved of all duty and when there is written
mutual agreement between the organization and the employee. The written
agreement shall state that the employee may, in writing, revoke the agreement at
any time.
what if the employee is required to be at the work site during their meal period?
the meal period must be paid. This is true even
when the employee is relieved of all work duties during the meal period.
If employees are required to eat meals on the organization's premises, then the
organization must designate and provide a suitable place for employees to eat.
"how do meal periods work for employees in the health care industry who work shifts in excess of eight hours in
a workday"
"they may voluntarily waive the right to one of the two meal periods. In
order to be valid, all waivers must be in a written agreement that is voluntarily
signed by both the organization and the employee. The employee may revoke the
waiver at any time by providing the organization at least one day's written notice.
The employee must be fully compensated for all working time, including any onthe-
job meal period, while the waiver is in effect."
what if an organization fails to provide a meal period?
the organization must pay the
employee one hour of pay at the employee's regular rate of compensation for
each workday that the meal period is not provided.13
Define hour worked
Any hour that an employee works on behalf of the organization,
or that the organization knows or has reason to know that work is being
performed by the employee, is compensable time, regardless of where the work is
performed (with some limitations).
"describe the labor commissioner's adoption of the federal regulations permitting the
practice of computing working time"
rounding to the nearest five minutes, or
one-tenth or one-quarter of an hour. This practice is acceptable, as long as it is
applied both ways (for both employee and organization) so as not to result, over a
period of time, in failure to compensate employees properly for all time they have
actually worked.
time records must include:
1. beginning and end of each work period
2. meal period
3. split-shift intervals
4. total hours worked each day
5. applicable rates of pay
6. total hours worked in pay period
7. total wages paid each payroll period
Can employers post work schedule in advance?
Yes, but it is not permissible
under state law to rely on work schedules posted in advance for timekeeping records and pay
where must time-keeping records be stored?
These records must be maintained at a central location in the state or at the plants
or establishments at which employees are employed, and must be available to the
employee to inspect upon reasonable request.
in addition to time keeping records, employers must also keep records showing:
1. names
2. addresses
3. occupation/job titles
4. ssn#
5. date of birth of all minors
payroll records must include:
"1. hours worked daily by and
the wages paid to, and the number of piece-rate units earned by and any
applicable piece rate paid to, employees employed at the respective plants or
who must comply with FMLA requirements?
Organizations with 50 or more employees are required to
make, keep and preserve records pertaining to their compliance with the Family
and Medical Leave Act of 1993.
penalty for not maintaining the required records
Any organization that willfully fails to maintain the required records and
fails to allow any employee or member of the Labor Commission to inspect these
records could be subject to a civil penalty of $500.
Labor Code Section 206.5
Effective January 1, 2009, Labor Code Section 206.5 was amended. With the
amendment, it became unlawful for a company to require, as a condition to
receive a paycheck, an employee to state that the hours recorded on a time sheet
or timecard are accurate, if in fact the employer knows that the hours are falsely
An organization can lawfully make deductions from an employee's wages only under the following conditions: 16
1. by state or federal law
"2. authorized by employee includes wage agreement or collective-bargaining agreement to cover insurance
premiums, benefit plan contributions, union dues, or other deductions not
amounting to a rebate on the employee's wages,"
"3. If the organization can prove an employee's dishonesty, willful
misconduct or gross negligence that caused a loss, damage or shortage.17
See also Kerr's Catering Services v. Department ofIndustrial Relations
(1962) 57 Cal.2d 319."
An organization may not make deductions from employee's wages for these items:
1. Bond fees-The organization is required to pay the cost of a bond.
2. Business expense--An employee is entitled to be reimbursed by the
organization for all expenses or losses incurred while perfonning work
3. Cash shortages-The organization cannot deduct from an employee's
wages, ifby reason of mistake or accident, a cash shortage, breakage, or loss
of company property/equipment occurs.
4. Gratuities-An organization cannot collect, receive or deduct from wages
any gratuity given or left for an employee.
5. Photograph fees-If an organization requires a photograph of an applicant
or employee, the organization must pay the associated costs.
6. Medical or physical exam fees-If an organization requires an applicant for
employment to undergo an examination as a condition of employment or if
an employee must undergo an examination in accordance with federal or
state law or regulation to perform the job duties, then the organization must
pay the costs.
7. Uniform fees-If the organization requires all employee to wear a unifonn
specific to the place of employment, the organization must pay the cost of
the unifonn, as well as the cost to maintain the unifonn.
"Penalities for company whenever an organization has agreed with any employee to make
payments to a health or welfare fund, pension fund or vacation plan, or other
such plan for the benefit of all employees, and the organization fails to pay:"
all payments must be made in a
timely manner. If an organization willfully fails to make the payments, a fine of
$500 to $1,000 may be assessed and any officer, employee or fiduciary can also
be punished by imprisornnent in j ail for up to five years
what is a garnishment?
ajudicial procedure through which an employee's
wages are required to be withheld for payment of a debt.
Organizations are pennitted to make deductions from an employee's paycheck for
the purposes of complying with bankruptcy court orders and garnishment
(generally for child or spousal support). An organization cannot discharge an
employee because a garnishment of wages has been threatened or if the
employee's wages have been subjected to a garnishment for the payment of a
when can an organization withhold or deduct wages?
An organization generally may not withhold or deduct any part of an
employee's wages. Under the following limited circumstances, an organization
may deduct money from an employee's wages:
1. When the law permits or requires deductions (e.g., income taxes and social
security taxes);
2. If the organization can prove that the employee's dishonesty, willful
misconduct or gross negligence caused the loss, damage or shortage; and
3. If the deduction is authorized in writing and the money is conveyed to a
third party for the benefit of the employee (e.g., union dues or health
insurance premiums).
how often must you pay employees?
Most employee wages are required to be paid at least twice during each calendar
month on the days designated in advance as regular paydays?O
requirements of establishing regular paydays
The organization
must establish a regnlar payday and is required to post a notice that shows the
day, time and location ofpayment. Wages earned between the first and fifteenth
of the month are to be paid no later than the twenty-sixth day of the month in
which the employee worked. Wages earned between the sixteenth and last day of
the month must be paid by the 10th day of the following month. A collective
bargaining agreement that provides for different payroll periods and pay dates is
permitted by the Labor Code.
Are alternative payroll periods allowed?
"yes. Payroll periods other than the first through the fifteenth, and the sixteenth through
the last day of the month, such as weekly, biweekly or semimonthly, must be paid
within seven calendar days of the end of the payroll period in which the wages
were earned."
direct deposit authorization
An organization may deposit wages due or to become due or an advance on
wages to be earned in an account in any bank, savings and loan association, or
credit union of the employee's choice, provided that the employee has voluntarily
authorized that deposit.
what are the penalties for failing to pay wages?
Penalty. An organization that fails to pay the wages of an employee can be
subject to a civil penalty. The penalty for the initial violation is $100 for each
failure to pay each employee. Subsequent violations, or any willful or intentional
violations are $200 for each failure to pay each employee, plus 25 percent of the
amount unlawfully withheld.
can an employer pay with payroll debit cards?
On July 7, 2008, the California Labor Commissioner's office issued an opinion
letter which allows companies to utilize payroll debit cards as one alternative
manner with which to pay their employees.
what are the payroll debit card requirements?
• Participation in the payroll debit card program must be optional. Employees
must still be able to receive their pay in the form of a live check. Direct deposit
ofwages may also be offered.
• The payroll debit card must be backed by a bank which has a place of business
in California.
• The total amount of the funds must be accessible to the employee on the
regularly scheduled pay day, and the employee must have access to one
transaction per pay period without being charc~ed any fees to access the funds.
The employer must allow employees access to the funds for a minimum of 30
days following the pay day.
• A wage statement, either printed or electronic, must still be provided to the
are organizations required to provide wage statement/pay stubs?
Every organization is required to provide all employees, at the time ofpayment of
wages, an accurate itemized statement in writing. The statements must be recorded
in ink or other indelible form, properly dated, and show the month, day and year.
Additionally, the organization must keep a copy of the statement on file for at least
three years at the place of employment.
what must be included in the wage statement/pay stub?
• Name and address of the legal entity
• Name of the employee and the employee's Social Security number (NOTE: As
of Jan. 1,2008, only the last four digits of an employee's Social Security number
or employee identification number may be shown on the itemized statement.)
All applicable hourly rates in effect during the pay period and the corresponding
number of hours worked at each hourly rate by the employee
Gross wages earned
Total hours worked for nonexempt employees, or base salary for exempt
Number ofpiece-rate units earned and piece rate, if applicable
Any and all deductions
Net wages earned
Payroll period dates for which the employee is paid
what are the penalties for violating wage-statement requirements?
1. $250 per employee per violation for the first citation, and
2. $1,000 per employee per violation for each subsequent citation
3. employee has a private right of action under the Private Attorneys General Act,
discussed later in this module.
"4. Any organization or any officer, employee or fiduciary who knowingly and
intentionally violates wage-deduction statement regulations may be found guilty of
a misdemeanor, fmed up to $1,000 and/or be imprisoned injail for up to one year."
"5. An employee suffering injury as a result of an organization's intentionally failing to
comply with wage deduction statements may be entitled to recover $50 for the
initial pay period in which a violation occurs and $100 for each violation in a
subsequent pay period, plus attorney's fees. The penalty is not to exceed $4,000."
wage statement burden of proof
If the organization cannot produce wage records and the employee can produce
evidence to create a reasonable inference of the amount of work performed, the
organization must show why the employee's account is incorrect.
payment of final wages rule during employer initiated termination
An employee who is discharged, fired or laid off, must be paid all wages21 due,
including accrued vacation, immediately at the time of termination.
payment of final wages rule during voluntary termination
"employees who quit without giving 72 hours' prior notice must be paid all wages due,
including accrued vacation, within 72 hours of quitting. If an employee quits
without giving 72 hours' prior notice, the employee may request that the final
"employees who quit without giving 72 hours' prior notice must be paid all wages due,
including accrued vacation, within 72 hours of quitting. If an employee quits
without giving 72 hours' prior notice, the employee may request that the final
wages be mailed to a designated address. The date of mailing, or postmark, is"
considered the date of payment. This is important for complying with the
requirement to provide payment within 72 hours of the time of quitting.
where to provide final wages
All final wages due, regardless if the employee gives 72 hours' notice or not,
must be paid at the place of termination, unless the employee has requested final
wages to be mailed to them. Additionally, the organization must pay any final
wages earned and unpaid at the time the employee is discharged or quits by
making a direct deposit, if pre-authorized by the employee.
what is a "waiting time" penalty?
Civil penalty: Any organization that willfully fails to pay any wages due a
terminated employee, whether discharged or quit, in compliance with the law,
may be assessed a "waiting time" penalty, equal to the employee's daily rate of
pay for each day the wages remain unpaid, up to a maximum of 30 calendar days.
An organization's inability
to pay the employee is not a defense to the penalty, nor is ignorance ofthe law.
how does "waiting time" penalty work if the employee is evasive?
NOTE: An employee will not be awarded waiting-time penalties if the employee
how does "waiting time" penalty work if there is a dispute?
"if a ""good faith"" dispute exists concerning the amount of the wages due, no waiting
time penalties will be imposed. However, if there is a dispute, the organization
must pay, without requiring a release, whatever vyages are due and not in dispute.
If the organization fails to pay what is undisputed,23 the ""good faith"" defense will
not be allowed, regardless of the outcome of the disputed wages."
what is Labor Code Section 201.3
Effective January 1, 2009, Labor Code Section 201.3 became effective, which
clarifies the payment of wages to temporary employees. Temporary employees
should be paid at least weekly. If the assignment ends during the week, fmal
wages are not due to the employee on the last day of work but may be made at the
next regularly scheduled pay period.
v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1
California courts have long held that the final paycheck may not be subject to
offset, even for acknowledged debts of the employee to the employer. In Barnhill
v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, the court held that the
employer yould not reduce the employee's paycheck by the amount of an unpaid
loan, even though the employee had agreed in writing that upon termination of
employment the loan would accelerate and the entire amount would be
immediately due
City o/Oakland v. Hassey (2008) 163
Cal.App.4th 1477
The obligation to pay final wages immediately upon termination is also triggered
when an employee is released after completing the specific job assignment or
time duration for which the employee was hired. In Smith v. Superior Court
(2006) 39 Cal.4th 77, the California Supreme Court held that a model hired to
work on a one-day assignment was entitled to be paid for her work immediately
upon the completion of the day.
Schachter v. Citigroup (2d DCA
2008) 159 Cal.App.4th 10
The issue of deductions from fmal wages should be carefully distinguished from
forfeitures of unearned or unvested benefits. In Schachter v. Citigroup (2d DCA
2008) 159 Cal.App.4th 10, the court held that an employee who had not worked
for two years had not vested in an employee stock purchase plan and the unvested
shares and premiums paid to the plan by the employer were rightfully forfeited.
The court distinguished this case from the circumstance where the employee had
contributed to a stock purchase plan via deductions from his own earnings.
Private Attorneys General Act (PAGA)
California's Private Attorneys General Act of 200424 allows employees to act as
private attorneys general on their own behalf and on behalf of other former and
current employees, and to seek civil penalties for California Labor Code violations.
Employees may recover for an organization's failure to provide wages upon
failure to provide itemized wage statements
failure to pay
failure to maintain proper employment records
failure to pay
minimum wage
failure to indemnify an employee for expenses and losses incurred while discharging their duties
Private Attorneys General Act (PAGA)
employee will receive 25 percent of the civil penalty while the state will receive 75
Under the Act, if an employee is successful in an action against an organization
percent of the penalty. Before the Act was created, civil penalties could only be
assessed by state agencies, while employees could directly recover statutory
penalties. The distinction between the two is at times narrow. When an
organization fails to pay all wages due to an employee upon termination, both
statutory and civil penalties are due.
Private Attorneys General Act (PAGA). What is the statutory penalty?
An organization that willfully fails to pay wages due must pay
the employee an additional 30 days' waiting-time pay?l
Private Attorneys General Act (PAGA). What is the civil penalty?
If the labor commissioner initiates an action against the organization
for unlawfully withholding wages, the organization must pay to the state a civil
penalty of $100 per employee for the first violation and $200 per employee for each
subsequent violation (in addition to any other penalty that may be assessed)32 The
labor commissioner may also impose a civil penalty of 30 days' waiting-time pay.33
How does an employee initiate action under the Private Attorneys General Act?
To initiate an action under the Act, an employee must exhaust administrative
remedies by providing notice of the claim to the organization and to California's
Labor Workforce Development Agency (LWDA). Once this notice is provided, the
employee must wait 30 days for the LWDA to decide whether to conduct an
investigation and, if so, then wait 120 days for LWDA to complete the
What are the key pieces of legislation regarding employee benefits?
• The California Domestic Partner Rights and Responsibilities Act of 2003
• The California Continuation Benefits Replacement Act (Cal-COBRA)
• Health and Safety Code
The California Domestic Partner Rights and Responsibilities Act of 2003 (AB205)
became effective on Jan. 1,2005. An employee's registered domestic partner has
the same rights as an employee's spouse for benefits provided under California
Some examples of domestic partner rights:
An eligible employee would be entitled to up to 12 weeks ofleave under the
California Family Rights Act to care for the employee's registered domestic
• These rights extend to the use of paid leave, sick time, and kin-care time to
take care of a domestic partner or children.
• The coverage under an organization's health insurance.
• The availability ofunemployment insurance, if an employee quits to move
with the domestic partner due to employment.
• The access to continued state health insurance coverage if an employee of the
state retires or dies.
the Defense of Marriage Act
It is important to note that under federal law, specifically, the Defense of Marriage
Act, a domestic partner does not qualify as the employee's spouse. One way this
distinction manifests itself is in health continuation coverage. Under COBRA, a
domestic partner is not entitled to COBRA benefits by means of their partner's
coverage. However, under California law, a domestic partner is eligible for CalCOBRA
benefits if the organization has fewer than 20 employees.
FMLA and The California Domestic Partner Rights and Responsibilities Act of 2003 (AB205)
Since domestic partners are
not recognized under federal law, an employee's use of 12 weeks for CFRA to
care for a registered domestic partner does not affect the employee's FMLA
Organizations need to check their employee handbooks, insurance contracts and
leave policies to ensure compliance.
Assembly Bill 17
Assembly Bill 17 also became effective in 2005. Any organization that is granted
a contract with the state of California for $100,000 or more must offer the same
benefits to domestic partners as the organization offers to spouses. This applies to
organizations based in and out of California, regarding the labor on that contract,
and becomes effective for contracts that begin on or after Jan. 1,2007.
California Insurance Equity Act (AB2208)
Under the California Insurance Equity Act (AB2208) California insurance
providers and HMOs that provide medical coverage must treat registered domestic
partners of covered employees the same as spouses in all aspects of insurance
coverage. This law does not apply to organizations that self-insure, and that are
not required to provide equal domestic partner coverage to their employees.
Domestic partners and local laws
Organizations that contract with certain California counties and cities may need to
comply with local laws regarding the rights extended to domestic partners.
In re Marriage Cases (2008) 43
Cal.4th 757, 829
On May 15,2008, the California Supreme Court held that under the California
Constitution, same-sex couples have the right to enjoy "all of the
"constitutionally-based incidents ofmarriage"". Since mid-June, in counties throughout the state, same-sex
couples have availed themselves of this right, and employers are legally
obligated to treat the resulting spouses, marital relationships, and children of
spouses no differently for purposes of administering benefits. This can have farreaching
impacts on issues such as marital status discrimination under FEHA
and protected leaves under FMLA."
controversy of CA supreme court decision regarding same sex marriage
There is currently pending a ballot proposition to amend the California
Constitution to effectively invalidate this Supreme Court decision. Even if it
passes, the courts will have to resolve the impact of such amendment of the
Constitution on the marriages that legally occurred prior to the November 2008
California Continuation Benefits Replacement Act (Cal-COBRA)
"was passed in the State Assembly in 1997. This law affects non;povernment organizations, with
two to 19 eligible employees, who offer group health insurance coverage, but
who are not covered by COBRA.34"
Every health care service plan that provides coverage under a group benefit plan
must provide continuation coverage to the employee and/or qualified dependents
once a qualifying event occurs.
timeline for the processing of Cal-COBRA applications
• The employee or employee's spouse/registered domestic partner and
dependent children are participating in a group health plan the day before the
qualifying event occurs.
• The employee has a qualifying event. These are similar to the COBRA
qualify,ing events, such as death of an employee, termination of employment
or reduction in hours, divorce or legal separation, the covered employee
becomes eligible for Medicare or a dependent loses their dependent status.
• If the organization would have no reasonable way of knowing about the
qualifying event, such as divorce or legal separation, the employee must tell
the organization or insurance carrier of the qualifying event within 60 days of
the event.
• The organization must notify the insurance carrier within 30 days of the
qualifying event.
• The insurance carrier is responsible for administering Cal-COBRA.
• The employee/former employee has 60 days in which to decide if CalCOBRA
is an appropriate choice for insurance coverage.
• If the employee/former employee andlor eligible beneficiaries elect CalCOBRA,
coverage will last no more than 18 months. The exception to this is
if the employee/former employee or eligible beneficiary is disabled by
definition ofthe United States Social Security Act Title II or Title XVI, then
the Cal-COBRA coverage can be extended through 29 months.
• If the employee/former employee elects Cal-COBRA coverage, the cost will
be no more than 110 percent of the regular premium for the first 18 months,
and then no more than 150 percent of the regular premium for months 19
through 29.
• Anyone electing Cal-COBRA insurance must pay premiums monthly. If a
participant fails to make a payment on time, there is a onetime grace period of
30 days in which a payment can be made. Failure to make the payment within
the grace period will result in cancellation of the policy.
Cal-OSHA: what triggers a qualifying event?
death of an employee
termination of employment
reduction in hours
divorce/legal separation
Medicare eligibility
loss of dependent status
how much time does the employee have to notify us of an event?
If the organization would have no reasonable way of knowing about the
qualifying event, such as divorce or legal separation, the employee must tell
the organization or insurance carrier of the qualifying event within 60 days of
the event.
when must the organization inform the insurance carrier of an event?
The organization must notify the insurance carrier within 30 days of the
qualifying event.
who administers cal-cobra?
the insurance carrier is responsible for administering Cal-COBRA.
How long does the employee have to sign up for Cal-cobra?
The employee/former employee has 60 days in which to decide if CalCOBRA
is an appropriate choice for insurance coverage.
how long does Cal-cobra coverage last?
coverage will last no more than 18 months. The exception to this is
if the employee/former employee or eligible beneficiary is disabled by
definition ofthe United States Social Security Act Title II or Title XVI, then
the Cal-COBRA coverage can be extended through 29 months.
how much does cal-cobra cost?
no more than 110 percent of the regular premium for the first 18 months,
and then no more than 150 percent of the regular premium for months 19
through 29.
how often are cal-cobra payments made?
Anyone electing Cal-COBRA insurance must pay premiums monthly. If a
participant fails to make a payment on time, there is a onetime grace period of
30 days in which a payment can be made. Failure to make the payment within
the grace period will result in cancellation of the policy.
what is Cal-COBRA Extension?
Labor Code Section 2806.2 requires organizations with insurance to offer a
COBRA extension to retirees and their beneficiaries. This extension is to last for
five years.
who qualifies for cal-cobra extension?
Former employees must be at least 60 years old and have worked for at
least five years at their last organization.
how is cal-cobra extension coordinated?
Coverage is coordinated directly with the
HMO or insurance company.
cal-cobra extension must continue until:
• The individual accepts coverage with another group health plan;
• The individual ceases participating in any health plan;
• The individual accepts coverage with Medicare; and
• The individual reaches age 65.
Any plan that meets the Cal-COBRA and COBRA plan requirements is affected
by this law. An amendment in 2004 changed the law to apply only to those who
qualify for continuous coverage before Jan. 1, 2005. (Health and Safety Code
Section 1373.631(b)(2) and Ins. Code Section 10116.5)
1. Under DLSE Labor Code, which of the following employees MUST be paid overtime?
( ) a. A CEO who worked 80 hours per week
(X) b. A nonexempt employee who worked 46 hours per week
( ) c. A server who worked 30 hours and was paid for 10 hours ofjury duty
( ) d. A driver that worked from 8:00 a.m. to 10:00 a.m. then returned and worked 4:00
p.m. to 9:00 p.m.
If an organization wanted to implement an alternative workweek, which of the following
would it need to do?
( ) a. Survey employees on what type of schedule they would like.
( ) b. Review a list of approved DLSE work schedules.
(X) c. Obtain an approval by at least two-thirds of the affected employees.
( ) d. Offer the same schedule to all employees in all departments.
If an organization wanted to implement an alternative workweek, which of the following
would it need to do?
c. Human Resource Generalist
( ) b. Review a list of approved DLSE work schedules.
(X) c. Obtain an approval by at least two-thirds of the affected employees.
( ) d. Offer the same schedule to all employees in all departments.
3. When calculating overtime, the organization MUST include time for an employee who
( ) a. arrives an hour early to work and waits in the br;eak room.
( ) b. carries a pager on weekends.
( ) c. commutes to work from 40 miles away.
(X) d. comes into work on hislher day off to attend mandatory training.
Which of the following describes an alternative workweek?
( ) a. An employee who works four hours per day for seven days
( ) b. An employee who works 10 hours as a receptionist and five hours as a server
( ) c. An employee who works each day from 2:00 p.m.-4:00 p.m., then 8:00 p.m.-
10:00 p.m.
(X) d. An employee who works four, lO-hour days
Which statement regarding payroll is correct?
( ) a. Organizations are not required to pay employees minimum wage.
( ) b. Unemployment taxes are paid by the employee.
(X) c. Organizations must retain copies of all payroll records.
( ) d. Employees must authorize all deductions from their paychecks.
Which employee would typically be considered exempt?
( ) a. Waitress
(X) b. Chief Financial Officer
c. Human Resource Generalist
d. Shuttle Driver
Which of the following statements regarding paying employees is true?
( ) a. Nonexempt employees can be paid once per month.
( ) b. Employees cannot be paid in cash.
(X) c. An employee's final paycheck can be submitted via direct deposit.
( ) d. Organizations can deduct overpayments without the employee's permission.
Organizations cannot make a deduction from an employee's paycheck for
(X) a. a tip left by a customer.
( ) b. contributions to a 401(k) plan.
( ) c. childcare support orders.
( ) d. union dues.
Which compensation system pays an employee based on the number ofunits produced?
( ) a. Bonus plan
( ) b. Merit pay
( ) c. Hourly rate
(X) d. Piece rate
An organization that offers health insurance benefits to its employees MUST offer its laid off
employees which benefit?
( ) a. Unemployment benefits for each employee
( ) b. A severance package with two months pay
( ) c. Continued long-term disability insurance
(X) d. COBRA health care continuation
Which of the following payroll-related documents must be regularly distributed to
( ) a. Notice of holidays with double-time pay
(X) b. Pay stubs
( ) c. Proof of employment
( ) d. Value of their Social Security benefits
Nonexempt employees have the ability to:
( ) a. combine their morning and afternoon rest periods, in order to leave work early.
( ) b. not take a second meal break when working a 12-hour shift.
(X) c. waive their meal period if they will work less than six-hours in the workday.
( ) d. work an "on-duty" meal period whenever they would like
Which domestic partner benefits are organizations required to offer?
( ) a. Additional time off to register as domestic partners
(X) b. Up to 12 weeks ofleave under CFRA to care for a registered domestic partner
( ) c. COBRA health care continuation benefits
( ) d. Relocation costs for the domestic partner of a new employee
An organization is required to comply with which of the following requests for garnishment?
( ) a. A letter from a past organization detailing payroll overpayments.
(X) b. A tax lien from the Franchise Tax Board.
( ) c. A certified letter from a landlord for past-due rent.
( ) d. A stop order for a child support garnishment.
The Industrial Welfare Commission governs which of the fgpowing?
( ) a. Minimum vacation days each employee is to receive.
( ) b. Minimum number of hours that each employee can work.
(X) c. Minimum wage that each nonexempt employee can be paid.
( ) d. Minimum number of positions that each employee can hold in one company
California has created an additional COBRA program which extends benefits up to
( ) a. six months extension for an employee who is terminated for misconduct.
(X) b. 36 months.
( ) c. 10 months for an employee with a spouse who is employed.
( ) d. 60 months
Which of the following notices is an organization required to post?
( ) a. Designate,d smoking areas
(X) b. Rights under Family Medical Leave
( ) c. Number of paid days for serving as a juror
( ) d. The process for obtaining a new time badge
Upon tennination of employment, an organization is required to give each employee which
of the following?
( ) a. A letter of reference
(X) b. A booklet explaining state unemployment benefits
( ) c. Final pay in cash
( ) d.. A listing oflocal employment opportunities
When an employee gives two weeks' notice of intention to resign, [mal pay must be
( ) a. the day the notice is given, with an estimation of the final hours worked.
( ) b. on the predetennined pay date closest to their last day.
( ) c. within 72 hours of receipt of the notice.
(X) d. on the final day of employment for the employee.
A job candidate completes an application, is interviewed but not hired. The application must
be retained for
(X) a. two years from the action regarding the applicant.
( ) b. zero months as retaining applications is not necessary for candidates not hired.
( ) c. seven years from completion of the application.
( ) d. only one year, if the applications are electronic.
Which division ofthe DLSE would handle a wage claim against an organization?
( ) a. Fair Employment and Housing Division
(X) b. Wage Claim Adjudication
( ) c. Department of Labor
( ) d. Labor commissioner
How many days does an employee have to file a claim with the DLSE if the employee feels
that they have not been paid properly?
(X) a. One year from the date of improper payment
( ) b. Sixty days from when the employee notified the organization
( ) c. Six months from when the employee ends employment
( ) d. There is no time limit
Organizations that do business in a city/county with a "living wage" are required to
( ) a. pay only the state minimum wage.
( ) b. pay a wage between the minimum wage and the living wage.
(X) c. pay the living wage.
( ) d. pay more than the living wage.
Which of the following statements is true?
( ) a. Organizations are required to have the same pay periods and pay dates for all
(X) b. Organizations can have separate pay periods for exempt and nonexempt
employees, as long as they comply with the labor code.
( ) c. Organizations can have no more than two separate and distinct pay periods.
( ) d. Organizations in multiple states can not have multiple pay periods.
Split-shift pay refers is owed to employees who
( ) a. work two part-time jobs for two separate organizations.
(X) b. work a shift in the morning, leave, and then return to a shift in the afternoon for
the same organization.
( ) c. are called in on their day off to attend a meeting.,
( ) d. leave the organizations premises during their lunch hour to run errands.
An organization requires employees to meet at a Park & Ride to take the shuttle to work.
How should the employees be paid?
( ) a. Overtime pay for the entire travel time
( ) b. Regular pay for the entire travel time
( ) c. An average ofminimum wage and regular pay
(X) d. At least minimum wage for the entire travel time
Which of the following is NOT regulated by Wage Orders?
( ) a. Exempt status
( ) b. Minimum wage
( ) c. Meal peri9ds
(X) d. Unemployment tax
The state's minimum wage is $7.50 and the federal minimum wage is $6.75. An organization
must pay employees
( ) a. $6.75
(X) b. $7.50
( ) c. an average of the two amounts
( ) d. any amount over $6.75
An employee classified as exempt under the "Professional" exemption MUST meet which of
the following requirements?
( ) a. Must have a four-year degree from an accredited university.
(X) b. Perform primary duties requiring a license or certification by the state.
( ) c. Earn no less than $41.00 per hour.
( ) d. Regularly direct the work of two or more people.
For private-sector nonexempt employees, overtime MUST be paid
(X) a. at a rate of 1 1/2 times the employee's regular rate of pay
( ) b. in compensatory time, at the employee's regular rate of pay
( ) c. in compensatory time, at 112 times the employee's regular rate ofpay
( ) d. The employee can choose not to receive overtime pay
A new employee wishes to add a domestic partner to health insurance benefits. The
organization must
( ) a. decline the employee's request.
(X) b. allow the employee to add the domestic partner, similar to a spouse.
( ) c. list health insurance options other than the company's HMO plan.
( ) d. purchase a separate insurance plan for the domestic partner.
A nonexempt employee traveling to a meeting on behalf of the organization is entitled to this
type of pay:
( ) a. Split-shift pay
( ) b. Double-time pay
( ) c. On-call pay
(X) d. Travel-time pay
A nurse works a regular 40-hour week Monday through Friday, then covers an eight-hour
shift on Saturday and a 10-hour shift on Sunday. At which point must the employee be paid
( ) a. First eight hours worked on Saturday
(X) b. All hours worked over the first cight hours on Sunday
( ) c. No double-time pay is required
( ) d. All hours worked on Sunday
Split-shift compensation is paid to employees at
( ) a. two times their hourly rate.
( ) b. one hour of pay at their current hourly rate.
(X) c. one hour of pay at the state minimum wage.
( ) d. one hour ofpay at the federal minimum wage.
Organizations are required to provide employees with itemized wage statements that MUST
( ) a. phone number of the organization.
(X) b. all applicable hourly rates during the pay period.
( ) c. listing of all pay periods during the year. --~':
( ) d. vacation and sick leave balances.
An employee arrives at work for their scheduled shift and informs the supervisor that they
are quitting. When MUST the organization provide the final paycheck?
(X) a. Within 72 hours of being notified
( ) b. The check must be provided immediately
( ) c. As soon as administratively possible for the organization
( ) d. On the next scheduled pay date
Claims of retaliation against employees who report illegal activities of an organization are
investigated by the
( ) a. Department of Justice.
( ) b. labor cOll1J:Ilissioner.
( ) c. Office of the lnspector General.
(X) d. Division of Labor Standards Enforcement.
Which of the following is not considered "wages"?
( ) a. Commission
( ) b. Bonus
( ) c. Overtime
(X) d. Mileage reimbursement
A qualifying event under Cal-COBRA does NOT include
( ) a. termination of employment.
( ) b. reduction in hours.
( ) c. death ofthe employee.
(X) d. better benefit coverage under a spouse's health plan.
Which of the following is true of exceptions to minimum wage?
( ) a. Organizations with five or fewer employees are not required to pay minimum
(X) b. Disabled employees with special classification from the labor commissioner can
be paid less than minimum wage.
( ) c. Dairy farmers in rural areas with labor shortages are exempt from paying
minimum wage.
( ) d. No hourly employee is exempt from minimum wage.
According to the Private Attorneys General Act, employees may recover for an
organization's failure to
( ) a. offer holiday pay.
(X) b. maintain proper employment records.
( ) c. provide dedicated locker rooms.
( ) d. notify employees ofpotential hazards in the workplace.
A firefighter stays at the fire house in-between emergency calls. The city will pay the
firefighter for the time spent at the fire house. This is an example ofwhat type ofpay?
( ) a. Preparation time
( ) b. Reporting time
(X) c. On-call time
( ) d. Call-in time
Advanced-Tech Security Services, Inc. v.
Superior Court (Roman) (2d DCA 2008)
Cal.App.4th ,77 Cal.Rptr.3d 757
employer who pays premium wage of 1.5
times regular rate of pay for holidays may
credit the extra holiday premium towards
overtime under both Federal and State law)
Barnhill v. Robert Saunders & Co. (1981)
125 Cal.App.3d 1
reimbursement of
employer may not be made by set-off
against final paycheck)
Brinker Restaurant Corp. V. Superior Court
ofSan Diego (Hohnbaum) (4th DCA 2008)
165 Cal.App.4th 25
employer required to
provide meal and rest break, but given
flexibility with regard to scheduling and
employee waiver. Review granted by the
California Supreme Court, 10/22/08; this
opinion decertified
City ofOakland v. Hassel (2008) 163
Cal.App.4th 1477
contract to repay training
costs is enforceable; withholding of training
costs against final paycheck which reduced
pay for final period worked below minimum
wage and constituted an impermissible setoff)
Eicher v. Advanced Business Integrators,
Inc. (2007) 151 Cal.App.4th 1363
who is eng~ged in the core day-to-day
business arid has no personal effect on
policy or general business operations was
not exempt)
Gattuso V. Harte-Hands Shoppers, Inc.
(2007) 42 Cal.4th 554
employee mileage
expenses may be reimbursed by anyone of
three means: 1) IRS rate; 2) actual expense;
3) lump sum method)
Gonzales V. Beck (2008) 158 Cal.App.4th
(if employee chooses to pursue
administrative claim with the Labor
Commissioner, the employer must appear
before the Labor Commissioner, and cannot
elect to go directly to Superior Court)
Harris v. Superior Court (Liberty Mutual)
(2007) 154 Cal.App. 4th 164
claims adjusters engaged predominantly in
day to day production, therefore not exempt)
Jameson v. Five Feet Restaurant, Inc.
(2003) 107 Cal.App.4th 138
tips belong to
employees; manager who acts as agent of
employer cannot share in tip pool)
Morillion v. Royal Packing Co. (2000) 22
Cal. 4th 575
time spent traveling from
required meeting place to actual place of
work where employee required to use
employer's bus, is considered time worked)
Murphy v. Kenneth Cole Productions, Inc.
(2007) 40 Cal. 4th 1094
meal and rest break
premium of one hour's pay at the regular
rate for each missed meal or rest break
constitutes a wage, subject to a three year
statute of limitations)
Pracasasioradej v. Ralphs Grocery Co.
(2007) 42 Cal. 4th 217
Reynolds v. Bement (2005) 36 Cal.4th 1075
incentive compensation plans upheld)
individual managers and supervisors are not
liable for the failure to pay overtime under
Labor Code section 210)
Schachter v. Citigroup (2d DCA 2008) 159
Cal.App.4th 10
forfeiture of "unvested"
shares and premiums to purchase shares by
employees through employee stock purchase
plan was permissible as premiums had never
been earned by employee)
Smith v. Superior Court (2006) 39 Cal.4th 77
employee hired to work on a j ob
assignment of short duration is entitled to be
paid wages immediately upon discharge
which occurs when assignment is
Suastez v. Plastic Dress-Up (1982) 31
Cal.3d 774
Sullivan v. Oracle Corporation (9th Cir.
11/6/08)__F.3d. (No. 06-
accrued paid vacation is
earnings and cannot be forfeited)
alifornia employer required to pay
non-resident employees under California
daily overtime laws for time worked in
Alternative workweek
Any regularly
scheduled workweek requiring an employee
to work more than eight hours in a 24-hour
Money promised to an
employee in addition to the monthly
salary, hourly wage, commission or piece
rate usually due as compensation.
Bonuses are in addition to any other
regular compensation and are usually
based on performance.
California Division of Labor Standards
Enforcement (DLSE)-
provisions of the wage orders. The DLSE
also provides assistance to organizations
regarding implementation of wage orders.
Collective bargaining agreement-
agreement negotiated between a labor
union and an organization that sets forth
the terms of employment for the
employees who are subject to the
agreement. This type of agreement may
include provisions regarding wages,
vacation time, working hours, working
conditions, and health insurance benefits."
Compensation any
person for services rendered in the sale of
the organization's property or services and
based upon the amount or value thereof. If
the employee's compensation is based on a
percentage of the cost or sale price of the
product or service, then the compensation
plan is a commission.
Domestic partners-
Two adults who have
chosen to share one another's lives in an
intimate and committed relationship of
mutual caring.
Ajob classification in which the
employee is not eligible for overtime
A court-mandated
deduction from an employee's paycheck.
Examples are child or spousal support, tax
lien, or any other payment mandated by a
state or federal court.
Any tip given to or left for an
employee by a patron of a business over and
above the actual amount due to the business
for services rendered.
Industrial Welfare Commission (IWC)
commission made up of five members
appointed By the governor with the consent
ofthe Senate that is responsible for setting
the wages, hours of work, and working
conditions of California employees.
Industrial Welfare Commission Wage
Orders, which regulate the wages,
hours and working conditions in certain
industries or occupations.
Labor, work or service whether
rendered or performed under contract,
subcontract, partnership, station plan, or
other agreement if the labor to be paid for is
performed personally by the person
demanding payment.
Living wage-
A wage on which it is
possible to live at least according to
minimum customary standards.
Minimum wage--
The minimum hourly rate
of pay an organization is required by law.
A job classification in which
the employee is eligible for overtime
Protected activity-
The engaging in or
exercising of a right that is protected by law,
such as serving on a jury or complaining
about safety conditions.
Registered domestic partners-
persons who are either in a same-sex
partnership, or are members of the opposite
sex where at least one of the members is
over age 62 and is eligible for Social
Security old-age benefits.
The designated hours of work for an
employee, with a designated beginning time
and quitting time.
"all amounts for labor performed
by employees of every description, whether
the amount is fixed or ascertained by the
standard of time, task, piece, commission
basis, or other method of calculation."
"any consecutive 24-hour period
beginning at the same time each calendar
Any seven consecutive days,
starting with the same calendar day each
week beginning at any hour on any day, so
long as it is fixed and regularly occurring.