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Miriam Schimmel
Miriam Schimmel
Attorney •

Denial of Employees Rights: Stealing the Intangible?

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Recent news stories across the country illustrate how the denial of employees’ rights continues to be a problem, and sadly, it seems that the victims are too often workers who work hard for low hourly pay. Some of the biggest offenses include not allowing employees their legal right to take rest breaks or lunch breaks, or not paying employees properly for overtime or vacation time.

Employers utilize a number of methods to avoid paying employees what they are entitled to, including but not limited to, modifying time cards to show less time worked; requiring employees to agree to perform their job duties during “down time” so that employees are working through their meal and rest breaks; alleging that a commission was not earned in order to avoid paying it; and improperly claiming than an employee is an independent contractor in order to avoid the applicable wage and hour requirements for employees. The ability to right these wrongs, however, rests in the employees’ ability to recognize that they are being denied their rights under California labor law and seek help to correct the situation.

For example, Target Corp. recently agreed to a settlement in a Northern California court in the neighborhood of $10 million for failing to pay its workers their earned vacation days. The federal class-action lawsuit alleged that Target essentially forced its employees to forfeit earned vacation pay, as well as failed to pay its fired employees a pro-rated share of their earned vacation time. While the company denied any wrongdoing, it settled the claim to the potential benefit of more than 250,000 current and former Target employees from 2002 to 2006.

Another common wrongdoing is the mischaracterization of employees as “exempt,” when they are actually “non-exempt”. Exempt employees are typically those who are employed in professional, administrative, managerial/executive or outside sales capacities and who receive an annual salary rather than hourly wage. Because of their job duties, exempt employees are not eligible for overtime pay. Non-exempt employees are usually non-professionals who are paid in hourly wages and are therefore subject to (and protected by) wage and hour laws. However, just because an employee earns a salary does not always mean that he or she is an ‘exempt’ employee and not entitled to overtime pay. California law requires overtime to be paid to anyone who works more than 40 hours a week or more than 8 hours a day, unless the employee falls properly into one of a few exceptions.

Another recent lawsuit was brought against Sony Computer Entertainment America by their “Image Production Employees” for wrongfully classifying them as exempt. The employees alleged that Sony misclassified them to avoid paying overtime. However, the computer programmers argued they were entitled to overtime because their job duties were specifically defined, closely supervised, and they did not have the managerial responsibilities, nor did they exercise discretion or independent judgment in an intellectual or creative manner in doing their job to render them exempt. In that matter, Sony agreed to settle with the employees for $8.5 million.