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II. JUDICIAL UPDATE California Wage and Hour Compliance Cicairos v. Summit Logistics is a reminder of the importance of complying with California’s wage and hour laws. The case involved five former employees (“the Employees”) of Summit Logistics, Inc. (“the Employer”) who sued based on alleged violations of the Labor Code and Industrial Welfare Commission Wage Orders relating to meal periods, rest breaks, and itemized wage statements. While the trial court granted summary judgment in favor of the Employer, the court of appeal reversed that decision. The Employer ran a warehousing business that delivered groceries. The Employees were truck drivers. Critical to the court of appeal’s decision was the fact that the Employer maintained a computerized on-board system on each truck which recorded various factors such as speed, starts, stops, and driving time. The Employees were required to input factors manually so the on-board computer system could accurately keep track of activities. Absent one of the designated reasons for a delay, a trip that took longer than expected resulted in a wage loss to the Employees because they were not paid for the extra time. Moreover, the Employer did not schedule meal periods or include an activity code for meal periods on the on-board computer system. Further, there was no activity code for rest breaks which were not on the list of “acceptable delays.” The earnings statements the Employer provided to the Employees did not list the actual hours worked per pay period and did not provide an accurate statement of hours worked. No matter how many hours the Employees worked, the statements always listed 40 hours per week. The court of appeal first determined the Division of Labor Standards Enforcement’s (“DLSE”) interpretation that the motor carrier exception only applies to overtime provisions was correct. The court specifically decided that “truck drivers are not exempted from the other requirements of Wage Order No. 9.” The court then found that the Employer violated California’s itemized wage statement, meal period, and rest break laws. First, the court found that the Employer did not comply with Labor Code section 226 because the wage statements it supplied were “confusing” and did not clearly reflect “accurate information.” Specifically, the Employer did not state how many “actual” hours the Employees worked each day or during the pay period. The Employer’s wage statements were also deficient because they did not list the Employer’s name and address. Second, the court found that the Employer did not meet its burden to establish that it provided the Employees adequate meal periods by simply stating it “assumed” that the meal periods were taken. The court adopted a DLSE opinion letter that states employers have “an affirmative obligation to ensure that workers are actually relieved of all duty during meal breaks.” The court also highlighted an employer’s duty, pursuant to Wage Order No. 9, to record employees’ meal periods. Finally, the court concluded that the Employer did not provide sufficient evidence to demonstrate that it provided the Employees with proper rest breaks. The court again adopted a DLSE opinion letter which stated that although an employer need not keep records of its employees’ rest periods, it still could be liable if “as a result of employer coercion or encouragement,” the Employees did not take their full 10-minute rest period. In Cicairos, the Employees testified that they felt pressured not to take their rest breaks because rest breaks “were not on the list of delays that were paid.”
If you would like to discuss these or any
other employment law matters, please do not hesitate to contact any member
of Klinedinst's Employment Law
Department.
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