The Fight Over California’s Gig Economy Law Escalates: Drivers Sue Uber for Back Pay

A group of Uber drivers recently filed a class-action lawsuit. The lawsuit filed against Uber at the end of 2019 seeks retroactive pay, benefits, and overtime for Uber drivers. Pay, benefits, and overtime would be retroactive to April 2018, the time at which the Dynamex ruling was issued by the California Supreme Court that set new standards for when companies are expected to provide benefits to workers.

Uber Drivers Alleged Violations of Labor Law:

The lawsuit was filed in the U.S. District Court for the Northern District of California. In the suit, plaintiffs argue that Uber improperly classifies drivers as independent contractors instead of employees with access to employee benefits and employee protections. The legislation was signed by Gov. Gavin Newsom in September 2019 and codified the Supreme Court ruling into law. Assembly Bill 5 creates an ABC test for contractor-employee distinction based on three factors.

Uber Claims Their Practices Do Not Violate Labor Law:

When asked for a comment on the suit, Uber did not immediately respond, but later stated that they do not plan to make changes to their practices to comply with the law because they maintain their driver classifications are correct. Together with other gig economy powerhouses (Lyft, Doordash, etc.) Uber is also floating a ballot measure that could allow them to continue the practice of classifying drivers as independent contractors.

The suit names three dozen Uber drivers as representatives for current and former Uber employees. Class size is an estimated 50,000 to 75,000 drivers that opted out of arbitration clauses. The plaintiffs claim that drivers should be classified as employees and be eligible for minimum wage, overtime pay, mileage reimbursement, cell phone usage, and additional reimbursement for expenses.

AB 5 Increases Misclassification Lawsuits:

With AB 5 taking effect as of January 1, 2020, more lawsuits are expected throughout the year as workers learn about their newly granted rights. Assemblywoman Lorena Gonzalez, D-San Diego, championed AB 5 and also encouraged California attorneys to file lawsuits over misclassified employees.

In response to the drivers’ fight against the gig economy’s practice of classifying them as independent contractors, two other groups have sued in a challenge to the legal claims insisting that it would dramatically decrease their ability to earn a living.

If you need to talk to someone about misclassification or if you need to file a misclassification lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

$2.75 Million Goes to Temp Nurses in Overtime Case Settlement

In recent news, a group of temporary healthcare providers alleged overtime violations. After filing suit (Dalchau et al v. Fastaff, LLC, N.D. Cal., No. 3:17-cv-01584), and gaining class certification, the overtime class action lawsuit was settled. The class members will split about $1.6 million.

The nursing staff company that allegedly violated overtime regulations, will pay $2.75 million to settle the case. The collective action settlement won final approval from a California federal court. The class members include more than 2,750 nurses and technicians across the nation. The members allege that Fastaff LLC did not include housing stipends in their overtime calculations, which is in violation of the Fair Labor Standards Act and California labor law.

Defining Overtime Pay: Overtime pay is compensation paid to an employee who works more than “full time” hours as defined by federal labor law. The rate of overtime pay is calculated by multiplying the regular hourly rate of pay by 1.5. The amount of overtime pay provided to an employee is the overtime pay rate (as previously calculated) multiplied by the number of hours worked over 40 in one week or over 8 in one day.

$1.7 million of the settlement will be split amongst class and collective members, after necessary deductions. Each of the members will receive a payout of approximately $624.  

Lead plaintiffs in the case, Stephanie Dalchau and Michael Goodwin, will receive $10,000 service awards. Counsel will receive $916,000 in attorneys’ fees and $27,700 for reimbursed litigation costs. The hybrid settlement is seen as fair, reasonable, and adequate by Judge William H. Orrick of the U.S. District Court for the Northern District of California. The settlement was granted preliminary approval May 12th, 2019. Orrick determined that appropriate notice was issued to putative class members and no objections were made to the terms of the settlement.

If you are not being paid overtime or if you need to file an overtime lawsuit, we can help. Get in contact with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Delta Overtime Lawsuit Settled for $3.5 Million

In recent news, Delta Airlines agreed to pay $3.5 million to settle a class action lawsuit including approximately 3,300 former and current Delta employees (Fan v. Delta Air Lines, Inc.). The settlement agreement settles a number of claims made against the airlines including overtime pay violations.

 According to the class action lawsuit, Delta Airlines failed to provide employees with overtime payment as required by California labor law. The employees’ claims were focused around a complicated pay formula that included profit-sharing payments, shift differential pay, non-discretionary bonuses, and the fair market value of employee travel passes.

The Delta overtime lawsuit is a good example of two types of California overtime cases/disputes that have been common recently: 1) claims focused on how hours are counted, and 2) claims focused on how the “regular rate of pay” is determined. The suit also serves as a reminder to employees to check their overtime calculations. Workers should periodically check both elements to ensure they are receiving all the overtime pay they are due. 

Howard Fan, plaintiff, worked customer service for Delta Airlines at the Los Angeles International Airport from September 2010 to August 2018. During his employment with Delta customer service, he regularly paid shift differentials to employees for each hour worked during afternoon and evening shifts. Delta Airlines also provided additional compensation through the company’s incentive program called Shared Rewards. The Shared Rewards program allowed workers to earn cash bonuses if company-wide operations met or exceeded agreed upon goals and metrics in various areas: baggage handling, percentage of scheduled flights that were successfully completed each month, and on-time arrivals. Cash bonuses through Shared Rewards were distributed to employees monthly and were included on wage statements in the pay period during which they were paid. Class members also received compensation from Delta through the profit-sharing plan, and additional compensation in the form of travel pass privileges (Travel Companion Passes for free or reduced-fare travel).

However, shift differentials, incentive program payments, profit-sharing contributions, and the taxable value of any travel passes, were not included when calculating the employees’ regular rate of pay that was used as the basis for overtime pay calculations. According to California law mirroring the federal Fair Labor Standards Act (FLSA), the “regular rate of pay” includes “all remuneration for employment paid to, or on behalf of, and employee.” Employees in the case argued that Delta was violating labor law by failing to include all compensation provided to employees into their regular rate of pay.

If you need to discuss violations of overtime pay requirements or if you need to file an overtime lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Ex-Dancer Sues Strip Club for Misclassification

The misclassification controversy is not exclusive to the gig economy. As the gig economy’s problems seem to escalate, problems are growing in other industries as well. In Daytona Beach, a former dancer at Grandview Live is suing the strip club claiming they owe her back wages because they misclassified her as an independent contractor when she was allegedly an employee.

Brittany Hall, former dancer at Grandview Live in Daytona Beach, claims that due to the club’s misclassification, she allegedly earned less than minimum wage and was not paid overtime. Hall, like the other exotic dancers at the club, was paid strictly in tips from customers. She worked at the strip club for over two years without overtime and receiving less than minimum wage, which attorneys for the plaintiff claim is fairly standard in the industry.

Hall claims Grandview Live owes her money because they violated wage and hour law by paying her less than minimum wage and failed to pay her overtime hours she was due. Hall also alleges that the club took tips from her in addition to their other employment law violations.

California legislature recently passed Assembly Bill 5 which will require companies to treat their workers as employees if they meet certain standards. The bill is set to go into effect January 1, 2020 and will have a massive impact on gig economy companies like Uber and Lyft and DoorDash. But it will also benefit workers like Brittany Hall, working in industries that have been around since before smartphones and apps were introduced.

Sometimes employers misclassify workers unintentionally. In some cases, it is an honest mistake. Other employers actively and purposefully misclassify their employees in order to maximize profits and minimize costs. Employers have major incentives to shift workers off their payrolls due to taxes, unemployment insurance, workers compensation premiums, etc.

If you are misclassified or if you are not being paid overtime wages for all your hours worked, please do not delay. Get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP so we can help.

Quick Dispense, Inc. Faces Allegations of PAGA Violations

A Los Angeles employment lawsuit alleges that Quick Dispense, Inc. violated California labor law by failing to pay non-exempt California employees overtime wages as well as failing to offer legally required rest and meal breaks. Employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP filed the class action lawsuit in September 2019. The class action lawsuit alleges PAGA violations and failure to accurately calculate overtime wages. The lawsuit is pending in LA County Superior Court (Case No. 19STCV29405).

According to the California class action, Quick Dispense, Inc. violated numerous labor laws by:

1.    Failing to provide non-exempt employees with fair payment for all hours worked

2.    Failing to provide non-exempt employees with accurate overtime wages

3.    Failing to provide legally required meal and rest breaks

4.    Failing to provide employees itemized wage statements with accurate listings of hours and wages

5.    Failing to provide payment of wages in a timely manner

6.    Failing to pay minimum wage

7.    Failing to reimburse employees for necessary business expenses

PAGA (the Labor Code Private Attorneys General Act) authorizes aggrieved employees to file lawsuits to seek recovery of civil penalties on behalf of themselves, other employees and the state in response to Labor Code violations. PAGA enables California to enforce state labor laws by allowing the employee experiencing the violation to file suit to recover civil penalties as an act of protecting the public from companies and entities in violation of employment law.

If you need more information about filing a class action lawsuit in California or if you have questions about what an experienced employment law attorney can do for you, please get in touch with one of Blumenthal Nordrehaug Bhowmik DeBlouw LLP’s offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside or Chicago.

California’s Expanded Definition of “Employee”

As of September 18, 2019, AB-5 codified the California Supreme Court’s Dynamex v. Superior Court decision in which the California Supreme Court adopted the “ABC” test for use when determining coverage under the Industrial Welfare Commission (“IWC”) Wage Orders. Under the new California law, the application of the ABC test is expanded to the entire California Labor Code. It takes effect in 2020.

According to the ABC test, the law assumes that any individual who is performing a service for someone else is an employee. The hiring individual or the one receiving the benefit of the service must prove that the worker is an independent contractor if they want to rebut the basic assumption of employment. To be successful, the “hiring” entity would need to meet each one of three different ABC test requirements:

1.    The “worker” must have freedom in connection to the performance of their job duties; the hirer must not maintain control/direction of the worker while they are on the job.

2.    The worker must perform work that falls outside of the hirer’s usual or typical business.

3.    The worker must be shown to be engaged in independent and established trade or business of the same nature as the work they are performing for the hirer.

Determining if a worker is an employee or an independent contractor carries great significance. If the worker is classified as an employee the employer bears responsibility for paying numerous taxes, providing worker’s compensation insurance, and complying with the various state and federal statutes governing employment issues like overtime pay, minimum wage, working conditions, etc. When an employee is misclassified on the job, the hirer can be sued for unpaid wages and overtime, etc.  

The second part of the ABC test is particularly troublesome for employers in the gig economy. It can be taken as a direct challenge to the fundamental business model on which the gig economy thrives. Companies will need to look to the court to determine what is and is not “outside” their usual course of business. Some companies may be able to persuade the judge to make a favorable distinction, but many fear the effect of the new law. Some companies are actively lobbying California legislators for statutory exemptions under AB-5. Occupational and industry exemptions will remain subject to traditional common law definitions of employment.

If you need more information about misclassification in the workplace and what it means to be denied an overtime wage, please get in touch with the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP at one of their law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside and Chicago.

Adventist Health System/West Faces California Overtime Lawsuit

According to the class action lawsuit filed in Sacramento, California in September 2019, the Adventist Health System/West violated various California Labor Code provisions when they did not provide their non-exempt employees with the required amount of overtime pay. Class members in the case are represented by Sacramento employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP. The class action lawsuit alleges that the Defendant not only failed to provide non-exempt employees with the required overtime wages, but that they also failed to provide legally required rest and meal breaks. The overtime class action lawsuit is currently pending (Case No. SCV0043607).

According to the complaint filed by the Sacramento employment law attorneys, the company is still in violation of overtime wage requirements for non-exempt employee who are working overtime hours, above and beyond the 40 hour/8 hour “full time” definition provided by law. The lawsuit also includes allegations that the company acted on both company policy and standard operating procedure when they knowingly failed to provide the accurate rate of pay for overtime hours that their employees completed on the job. Adventist Health System/West is also accused of failing to provide non-exempt employees with legally mandated off-duty thirty-minute meal breaks without interruption as well as legally mandated on-the-clock rest periods.

The class action lawsuit was filed seeking one hour of pay for every workday during which the employee missed their off-duty meal period (required for every 5 hours worked), and one hour of pay for each workday during which a second meal period was not provided when an employee completed ten hours on the job.

Please get in touch if you would like to know more about addressing overtime violations in the workplace or if you need assistance filing an employment related lawsuit. The experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP can assist you in one of their law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside and Chicago.