4 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com Code itself.7 Under Labor Code Section 510, employees are entitled to one and one-half times the regular rate8 of pay when they work more than eight hours in a single day, more than forty hours in a workweek, or during the first eight hours of the seventh consecutive day of a single workweek.9 Employees are entitled to double time when they work more than twelve hours in a single day or more than eight hours on the seventh consecutive day of a single workweek.10 They can also apply in certain situations to non-resident employees who perform work in California for California employers.11 Individual employees have a private right of action for unpaid overtime. Typically, a plaintiff invokes a private right of action by alleging violation of Labor Code Section 510 or a provision of the governing IWC order. Such a claim does not depend on the Fair Labor Standards Act or other federal law. A prevailing plaintiff may recover attorney’s fees for an overtime claim,12 but California law, unlike the FLSA, does not provide a remedy of double damages for willful overtime violations.13 In a private action for unpaid overtime compensation under the Labor Code, the statute of limitations reaches back to three years before the date the lawsuit is filed in court.14 B. The Executive (Managerial) Exemption One claim frequently made in misclassification class actions is that a proposed class of exempt managers—most often “working managers” in a retail establishment—do not qualify for the “executive” (aka “managerial”) exemption. The FLSA and California law contain similar executive exemptions, but California’s is more restrictive in key respects. California requires that an “executive” employee be paid a higher level of compensation than required under the FLSA.15 7 Collins, 105 Cal. App. 4th at 178-80 (Wage Orders and Labor Code should be read together to understand scope of wage and hour regulation of California employees). 8 The Ninth Circuit held that per diem payments to employees must be factored into calculating an employee’s regular rate of pay for purposes of overtime compensation. Clarke v. AMN, 987 F.3d 848 (9th Cir 2021) 9 Note that employers may assign employees to work schedules that differ from company’s designated workweek or workday and base overtime calculations on the designated workweek or workday as long as the schedule is not established for the purpose of evading lawful overtime requirements. Seymore v. Metson Marine, 194 Cal. App. 4th 361 (2011). 10 Previously, employees and employers could agree in advance to a “specific mutual wage agreement” that provided a guaranteed salary covering both base hours and a specific number of overtime hours. Archiega v. Dolores Press, Inc., 192 Cal. App. 4th 567, 571 (2011) (quoting Ghory v. Al-Lanham, 209 Cal. App. 3d 1487, 1491 (1989)). But then the Legislature amended Labor Code section 515 to preclude the use of such agreements. Lab. Code § 515(d) (2). 11 The California Supreme Court in Sullivan v. Oracle Corp., 51 Cal. 4th 1191 (2011), held that California overtime laws apply to out-of-state employees who perform work “entirely in California” for extended periods of time–“entire days and weeks.” See Section XXII. 12 Only the prevailing employee, not the prevailing employer, may recover attorney’s fees in an action for overtime pay or for unpaid minimum wages. Earley v. Superior Court, 79 Cal. App. 4th 1420 (2000). 13 But see Lab. Code § 1194.2 (providing double damages for minimum wage violations). 14 As explained in Section XIV and in the appendix of Statutes of Limitations for Selected California Wage and Hour Claims, the limitations period can be extended to four years by pleading a companion claim under the state Unfair Competition Law, Bus. & Prof. Code § 17200, et seq. 15 FLSA regulations set the salary threshold at $684 per week ($35,568 annually). Employers can use commissions and nondiscretionary bonuses to satisfy up to 10% of the salary threshold. In 2023, the DOL issued a Notice of Proposed
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