Transportation Brief: Key Cases Addressing the Reach of California’s Strict Wage and Hour Laws
August 6, 2020
The California Supreme Court recently decided a pair of cases addressing critical questions facing out-of-state companies operating in California.
In Oman v. Delta Air Lines, Inc. and Ward v. United Airlines, Inc., the Court concluded that California’s wage statement and wage payment laws only apply when the employee’s principal place of work is in California. For interstate workers whose work is not primarily performed in any single state (i.e., more than 50%), the Court held these laws will only apply if the workers have their base of work operations in California. The Court did not specifically define what constitutes “base of work operations,” but suggested that designating an employee as assigned to or associated with a particular terminal or location in California would suffice.
Notably, the Court did not create any exceptions for nonresident employees or companies based outside California. Therefore, all employers must provide California-compliant wage statements and wage payments to any employee whose principal place of work is California.
The Court’s analysis could also help carriers avoid the application of California’s misclassification laws to independent contractors based outside of California. The Court decided to limit the application of California’s wage statement and payment laws to workers who principally work in California based, in part, on its desire to avoid conflicts with other states’ laws. Imposing California’s misclassification law on an independent contractor’s work that is not principally performed inside California would arguably create the conflict the Court sought to avoid in the Airline cases.
The Court also provided helpful guidance on when an activity-based pay system complies with California’s minimum wage laws. Importantly, the Court held that California’s minimum wage laws gave employers and employees the flexibility to broadly define the work covered by the piece-rate pay, subject to two requirements. First, the average rate for the piece-rate work must meet or exceed the minimum wage. Second, under California Labor Code § 226.2, the employer must still pay piece-rate employees separate wages for “non-productive time” (i.e., work that is not directly related to the activity paid by the piece). Carriers that pay drivers on a piece-rate basis and dispatch those drivers to and from California should review their compensation policies to ensure they comply with the Court’s interpretation of how California’s minimum wage laws may apply to those drivers.
Transportation Brief: COVID-19 and Workplace Liability
by Shannon M. Cohen , Gregory M. FearyAs companies reopen, a primary concern is liability for workers or customers who may claim to have been exposed to COVID-19 in their business. This may arise as a workers’ compensation claim, a claim for negligent sanitation or failure to implement or enforce social distancing measures. Read more about these evolving pandemic-related issues.
Transportation Brief: Plaintiffs Unmask Reimbursement Claims for Personal Protective Equipment
by James A. Eckhart , E. Ashley PaynterSeveral states require employers to reimburse employees for expenses incurred on the job. In the wake of the COVID-19 pandemic, several class action law suits have already been filed seeking to recover costs related to personal protective equipment (PPE) workers have purchased for use while on the job. Read more about what transportation companies operating in states with reimbursement statutes should do to ensure compliance.
Transportation Brief: PPP and Beyond: Where Can I Turn For Additional Help?
by Steven A. Pletcher , Prasad SharmaThe Paycheck Protection Program (PPP), although credited with helping the economy stay afloat and keeping workers employed, has not been a model of clarity. A constant drip of new rules and guidance, leaves many questions unanswered. Read the latest.
Transportation Brief: Department of Labor Activity
by David D. RobinsonThe U.S. Department of Labor has been active through a tumultuous first half of 2020. While the Department’s response to the COVID-19 crisis has garnered most of the attention, there have been important developments in other areas. Read more related to employment perks and benefits, and determining joint employment, the Final Rule updating the Retail and Service Worker Exemption.
Transportation Brief: Circuit Courts Grapple with the “Transportation Worker” Exemption
by Braden K. Core , Prasad Sharma , Ryan W. WrightThe Supreme Court’s holding in New Prime has not been the death knell for the transportation industry’s efforts to enforce arbitration agreements under the FAA. Instead, the fight has moved to another element of the exemption, namely, whether the individual belongs to a class of workers engaged in interstate commerce. Read more about the First Circuit's ruling, unsettled questions on this topic, and the potential for transportation arbitration cases to appear on the Supreme Court's docket in the future.
Transportation Brief: Spotlight on Cargo Claim & Freight Charge Practice — Managing the Expected & Unexpected in the COVID-19 Era
Tyler P. Biddle , Craig J. Helmreich , Kathleen C. Jeffries , Andrew F. Marquis , Gregory A. Ostendorf , Michael J. TauscherWhen COVID-19 struck, shippers, brokers, and carriers had to stay focused on the immediate challenges of the pandemic. However, as we settle into the current “new normal”, cargo claims are back on everyone’s radar. Read more about expecting the unexpected to minimize your exposure to cargo claims, customer bankruptcies, and other collection issues.
Transportation Brief on the Record: News from Scopelitis - Eckhart Passes California Bar
Christopher J. EckhartPartner Chris Eckhart has passed the California Bar. Learn more about Chris and his work in Scopelitis' Class Action Practice.
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