California law trumps federal law averaging minimum wage

In a case of first impression, the California Court of Appeal has ruled that even though federal law permits an employer to use the "averaging" method to determine if an employer has met its minimum wage obligations, California wage and hour law does not permit such "averaging."

In Armenta v. Osmose, Inc. (Dec. 29, 2005), plaintiffs were union members subject to a collective bargaining agreement that provided that employees should be paid hourly wages ranging between $9.08 to $20.00 per hour. The employer Osmose, Inc. was a business relating to the maintenance of utility poles. The plaintiffs' work time was classified as either "productive" or "nonproductive." "Productive" time was time directly related to maintaining utility poles in the field. "Nonproductive" time was all other time including, but not limited to, time maintaining and cleaning the trucks used during "productive" time, repairing tools, driving to and from job sites, preparing paperwork, and the like.

The plaintiffs claimed that, while they were paid for their "productive" time at their regular hourly rate of pay, they were not paid at all for their "nonproductive" time. Osmose claimed that when the number of hours the employees worked per week was divided into their wages for that time period, it "averaged" out to more than the minimum wage.

The trial court found that Osmose violated California's minimum wage laws by using the "averaging" method of determining minimum wage compliance. The Court of Appeal affirmed the trial court's decision. In so holding, the court explained that, while the "averaging" method is acceptable under the federal Fair Labor Standards Act (FLSA), it is not acceptable under California wage and hour law. The FLSA requires payment of the minimum wage to employees who "in any work week" are engaged in commerce. By contrast, California law requires employers to pay employees wages not less than the minimum wage "for all hours worked" in the payroll period. The court explained that this language requires employees to be paid for each hour worked.


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Sexual harassment can put damper on Christmas parties

From the Bakersfield Californian:

The two most worrisome terms a company personnel manager can string together in a sentence might be these: open bar and office Christmas party.

One employee’s idea of dance-floor enthusiasm might not agree with that of the co-worker he has just coaxed under the disco ball. One employee’s willingness to set aside his 9-to-5 inhibitions might not jibe with that of his more discreet associates. Add a half-dozen vodka tonics to that imbalance and it only gets worse.

Meet AB 1825, which becomes law Jan. 1. If you run a company with more than 50 employees or contract workers, you should already have been introduced. The new law, signed into law in September 2004 by Gov. Arnold Schwarzenegger (who, I’m told, knows a thing or two about sexual harassment allegations), requires employers to provide training for supervisors every two years.

Sexual harassment isn’t just an appropriate topic now because the law is about to take effect. It’s appropriate because we’re moving deeper into that most treacherous of potential sexual-harassment minefields, the company Christmas party.

“You get it all this time of year,” said Bakersfield attorney Daniel Klingenberger. “Employees need to remember that just because it’s outside of normal work hours, they still need to treat each other with respect. A lot of these issues have to do with respect. And hopefully people will show respect even after a couple martinis.”

Sexual harassment has been in the workplace vernacular for years but, even with companies paying plaintiffs sizable liability damages in court, some supervisors still don’t seem to get it.

“In some ways things haven’t changed much as far as the complaints I get,” Klingenberger said. “The jokes. The sexual innuendo. There’s probably less of that than there was. More and more people realize that’s off limits, but it certainly still happens.”

Bakersfield attorney Thomas Anton says that a company’s demonstrated level of commitment can mean almost as much as the actions of its employees.

“What’ll happen is, one of the plaintiff’s lawyers will say, ‘Wait a minute, has anyone taken a look at whether you’ve conducted your training?’” Anton said. “If you have, that’s one thing. But if you haven’t, that’s an indication you didn’t follow the law and you don’t care. Now we’re looking at punitive damages.”

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