Questions and Answers

Q: I don’t have any employees, this Plaintiff was an independent contractor.

A: In May 2018 the “ABC Test” of independent contractor qualification superseded common law tests of the relationship. This was codified by the AB5 bill in late 2019. After these changes it has become very difficult to have the Labor Commissioner accept a relationship with a worker as one of contractor – independent contractor. Most of the time they will be defined as an employee.

Q: Why is there a claim being filed against me?

A: The most likely answer is that a former employee has discovered how favorable the labor code is toward employees.

Q: This is a false claim. How can they just make up a claim?

A: Ex-employees can and do make up false claims on a regular basis. If the claim is not found viable there is no penalty; they just do not collect on the claim. Labor code section 1174 requires that employers to maintain extensive documentation on each employee. If there is a gap in that documentation it can leave an employer vulnerable to a false claim, because that claim requires the required documentation to refute it.

Q: Why am I on the claim personally? – The Plaintiff was working for a corporation.

A: Labor code section 558.1 allows the Labor Commissioner to impose personal liability on an owner, director, officer or managing agent of the employer. This also applies to anyone who pays the worker in cash.

Q: I didn’t know I had to pay:

A: Sick time- Since 2015 sick time has been required under labor code section 246. There are treble damages for any legitimately claimed sick time that is unpaid, as well as further penalties up to $4,000 for not listing available sick time on the pay stub. Overtime- Labor code section 510 defines overtime as hours worked in excess of 8 hours a day, 40 hours a week or more than 6 days in a row. Rest periods on piece rate- Since 2016 labor code section 226.2 requires that employees working by the job or “piece rate” receive paid rest periods on the same schedule as a worker on an hourly shift, which is twice within an eight hour shift. The rest periods must be at least at a minimum wage rate and usually higher. Reporting time pay- California Wage Orders require that an employee must be paid for at least half of their usual shift just for showing up, unless told not to come to work that day. The amount will be not less than two hours and not more than four hours, in accord with their usual shift. Split shift premium- California Wage Orders require that a minimum wage employee must be paid a split shift premium if they are on an unpaid break longer than one hour for the employer’s convenience. A lunch break should be not less than 30 minutes nor greater than 60 minutes. However if the day’s pay equals at least minimum wage for all hours including the break, no premium is owed.

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