Employment Law

“Employee” Versus “Independent Contractor” (Misclassification)

The Labor Code defines “willful misclassification” as “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.” See California Labor Code § 226.8(i)(4).

Workplace obligations arise from the employment relationship. The existence of an employer-employee relationship is a prerequisite to wage and hour protection under California law. In creating statutes governing wages, hours, and working conditions, the legislature intended to defer to the Industrial Welfare Commission’s definition of the employment relationship. “Employ” means to engage, suffer, or permit to work. “Employer” means any person who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person. 

California courts have long used a “right of control” test when evaluating whether a worker is an “employee” or an “independent contractor.” The California Supreme Court’s decision in S.G. Borello & Sons v. Department of Indus. Relations is considered the lead case addressing this issue. The central inquiry is whether the employer possesses a right to the “control of details.”  

The failure to properly classify employees may subject an employer to liability for minimum wage and overtime pay, denied rest and meal period compensation, expense reimbursement, and all other wage and hour violations. Misclassifying employees as independent contractors can also result in criminal and tax liability. Additionally, misclassifying employees as independent contractors can be regarded as an unfair business practice in California. The employer can be assessed amounts due for unemployment insurance contributions, training taxes, and disability insurance contributions. State income tax withholding amounts can also be assessed, unless the employer can show that the income was reported and all taxes due were paid by the employee.

Has your employer classified you as an “independent contractor?” If you suspect you’ve been misclassified, call our San Francisco employment lawyers today for a free consultation and case evaluation.

Rest Periods – Breaks

Employers must “authorize and permit” nonexempt employees to take a 10-minute rest period for every 4-hour work period or major fraction thereof.  Although an employee is not required to take these rest periods, employers must “authorize and permit” them. As such, employers have “a duty to make a good faith effort to authorize and permit rest breaks in the middle of each work period, but may deviate from that preferred course where practical considerations render it infeasible.” Brinker Restaurant Corp., 53 C4th at 1031. Failing to account for these rest periods when scheduling and assigning tasks to employees may be deemed “a failure to permit” the rest periods. 

An employer is obligated to provide rest periods for every 4 hours worked (or major fraction thereof) except if an employee works fewer than 3.5 hours, in which case no rest period is due. The term “major fraction” means more than half of 4 hours.  As a result, one rest period is due if an employee works from 3.5 hours up to 6 hours in a day; a second rest period is due if an employee works more than 6 hours up to 10 hours; a third rest period is due if an employee works more than 10 hours up to 14 hours; etc.

Are you an hourly employee who was not provided with adequate rest breaks? Contact San Francisco’s premier employment firm today for a free employment law consultation.

Meal Periods – Lunches

Employers may not employ employees to work a period of more than 5 hours a day without providing the employee with a meal period of at least 30 minutes, except that if the total work period per day is no more than 6 hours, the meal period may be waived by mutual consent of both the employer and employee. Similarly, employers may not employ employees for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived. California Labor Code 512(a).

Are you an hourly employee who was not provided with adequate lunch breaks as required by the California Labor Code? Contact San Francisco’s premier employment law firm today for a free employment law consultation.

Overtime / Doubletime

California overtime law differs from federal law in that it provides for daily overtime as well as weekly overtime. Generally, any work in excess of 8 hours in 1 workday, 40 hours in any 1 workweek, and 8 hours worked on the seventh consecutive day of work in a workweek must be compensated at a rate of at least one and one-half times the employee’s regular rate of pay. California Labor Code §510.  Any work in excess of 12 hours in 1 workday and 8 hours on the seventh consecutive day of work in a workweek must be compensated at a rate of at least twice the employee’s regular rate of pay.

Are you working long hours? Are you not being paid what you’re owed for your overtime and/or doubletime periods? Call San Francisco’s top employment lawyers today for a free case evaluation and employment law consultation today. 

Failure to Timely Pay Wages

California has strict requirements regarding the manner and time for payment of an employee’s final wages. An employee who is involuntarily terminated must immediately be paid all wages “earned and unpaid” at the place of discharge. California Labor Code §§201, 208.

The California Labor Commissioner takes the position that an employee who is laid off without a specific return date within the normal pay period has been effectively terminated and must immediately be paid all wages due and payable. If there is a return date within the pay period, the wages may be paid at the next regular pay day. 2002 Division of Labor Standards Enforcement Policies and Interpretations Manual §3.2.2 (rev 2009). According to The Labor Commissioner, the sale of a business effectively terminates the company’s employees, all of whom must be paid any earned wages, along with any accrued vacation. DLSE Manual §3.2.2.1.

An employer’s obligation to pay an employee’s final wages who does not have a written employment contract for a definite period of time (e.g., a contract for one year of employment) and who voluntarily quits his or her employment depends on the timing of the resignation. If the employee gave at least 72 hours’ prior notice of his or her intention to quit, the employee must be paid his or final wages on the final day of employment. If the employee gave less than 72 hours’ prior notice of his or her intention to quit, the final wages are due 72 hours after notice of the resignation was provided. California Labor Code §§201.

Are you an hourly employee who was is entitled to wages the employer failed to pay? Contact San Francisco’s premier employment lawyers today for a free employment law consultation.

Itemized Wage Statements

Under California law, at the time wages are paid, employers must give each employee an itemized written statement (either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash) showing the following 11 items:

1. Gross wages earned;
2. Total hours worked by each employee (and their exceptions);
3. The number of piece-rate units earned and any applicable piece rate, as well as:
4. The total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period; AND
5. Except for employers that pay—in addition to any piece-rate compensation—an hourly rate of at least the minimum wage for all hours worked, the total hours of other nonproductive time, the rate of compensation, and the gross wages paid for that time during the pay period;
6. All deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item;
7. Net wages earned;
8. Inclusive dates of the period for which the employee is paid;
9. The name of the employee and the last four digits of his or her Social Security number (or an employee identification number);
10. The employer’s name and; and
11. All applicable hourly rates in effect during the pay period and the corresponding number of hours worked.

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