Calif. Employers Lose on Back-Pay Ruling
In a move that settles years of legal wrangling between employers and employees who were denied lunch breaks, the California Supreme Court handed down a ruling on April 16 siding with employees.
The unanimous ruling in a San Francisco case gives workers a three-year statute of limitations to file a complaint and allows workers who worked through their lunch breaks to seek up to three years of back-pay compensation. Employers had petitioned for a limit of one year in back-pay liability.
California labor laws established in 2000 stipulate that employers who deny employees a 30-minute lunch break must pay one hour’s wage to workers. Federal laws do not require a lunch break.
The ruling could spell trouble for California apparel manufacturers and retailers. Greg Weisman, a partner at the law firm of Silver & Freedman in Los Angeles and head of the firm’s Apparel Industry Practice Group, said the state’s increasingly stringent and complicated labor laws have the potential to push businesses out of state. “This could be a watershed moment,” Weisman said. Jack Kyser, chief economist and senior vice president of the Los Angeles Economic Development Corp., agreed. “This is going to hurt. For employers, especially small employers, the complicated laws can make for a constant headache. Business owners need to be on their toes and keep good records,” Kyser said.
Wage and hour employment lawsuits are the litigation du jour in California in all industries, Weisman said. “And they will likely be much more so after and due to this case.” To protect themselves, Weisman recommended employers arm themselves with information and consult with knowledgeable humanresources and labor-law professionals.
Stan Levy of the law firm Manatt, Phelps & Phillips said he and the California Fashion Association will host a seminar on the topic in the coming weeks. —Erin Barajas
