each subsequent pay period which would cover all three allegations. By arguing the penalties should be stacked, the plaintiff’s lawyers are arguing there should be PAGA penalties for each violation, multiplying exposure by three times what it should be. We disagree with this argument but it is the type of litigation which employers could face. There also have been some recent cases which employers should try to take advantage of in defending PAGA cases and related wage and hour claims. In Kim v. Reins International California, Inc. (B278642, Cal. Ct. App., December 29, 2017), the Court of Appeal for the Second Appellate District held an employee-plaintiff, who had settled and dismissed his individual claims under the Labor Code, was not able to maintain a PAGA claim on behalf of other “aggrieved employees.” The Court held that because of the settlement and dismissal of his individual claims, the employee-plaintiff was no longer an “aggrieved employee.” Cost of Solutions vs. Possible Exposure In some cases, the cost of avoiding such claims may be incredibly minor versus the potential exposure. For example, increasing the number of time clocks at an employer’s entrance, and also having time clocks at the employer’s break room, may avoid or minimize certain type of wage and hour claims. If an employer has only one time clock at the entrance to its facility and 100 employees who must clock in and out at shift change, there may be a concern the employees must wait in line for five to seven minutes to clock in. It could be alleged the employees are at the control of the employer while working and the employees should be paid for the unusually long wait time. A plaintiff lawyer may allege the employees
should have been paid for the time and could also try to allege related claims like unpaid overtime, incorrect itemized wage statements and, for former employees, violations of Labor Code section 203 dealing with not paying all wages upon end of employment. Here, the employer may consider adding four or more additional time clocks at the entrance and the break room so the employees are not subject to any wait time or minimal wait time to clock in. The cost of these clocks is minor in compared to the possible exposure. Culture of Compliance Can Be a Profit Center We recommend employers invest in their Human Resource function, payroll and time and attendance systems. Employers should consider preventive wage and hour audits to review their systems. It is also helpful to invest in your management team by training and educating members of management regarding the importance of wage and hour compliance and the most common mistakes front line supervisors can make. While changing workplace culture can be difficult, this is one area where the employer will see a return on investment. California employers will likely be faced with wage and hour claims at some point so why not be proactive in compliance initiatives? An employer who is proactive in wage and hour compliance is turning an area of possible exposure into a profit center. Jonathan A. Siegel is a principal at Jackson Lewis P.C., a national law firm with 5 offices throughout California and more than 56 offices across the country dedicated to representing employers with respect to workplace law.
WORKER CENTER & SUPPLY CHAIN PROTECTION
WAGE & HOUR
H-2A / USDOL COMPLIANCE & DEFENSE
WRONGFUL TERMINATION SEXUAL HARRASSMENT
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