The California Supreme Court’s Dynamex Decision Impacts Standards

The California Supreme Court’s decision on Dynamex Operations West, Inc. v. Superior Court of Los Angeles is affecting legal standards determining whether a worker should be legally classified as an employee or an independent contractor. The company in the case, Dynamex, put a test in place as a standard determining classification that made it more difficult for businesses to classify workers as independent contractors.

For example, Lawson v. Grubhub, Inc. was a case heard before U.S. Magistrate Judge Jacqueline Scott Corley. It was a closely watched case out of California federal court. The judge on the case noted in a new order that her decision on the case may have been different if the Dynamex opinion had already been recorded. While Judge Corley declined to vacate her earlier finding, it is likely the order will be reversed upon appeal.

In Lawson v. Grubhub, Inc. the plaintiff, Raef Lawson was a GrubHub driver who claimed he was misclassified as an independent contractor. When GrubHub moved to dismiss the suit in early 2018, the district court found the company did not “control” Lawson’s work – siding with the company. Lawson appealed. After the Dynamex decision, Lawson filed a motion. He sought relief from the judgment on record. Lawson argued that his case would have had a different outcome if the California Supreme Court had adopted a new legal standard for use when determining the classification of workers as employee or independent contractor. The court responded by allowing that a careful consideration of the issues and with the benefit of an oral argument, the motion raises substantial issue, but they declined to definitively rule on vacating the judgment. They court noted that deciding whether or not the Dynamex ruling should apply retroactively is a decision to be made by the U.S. Court of Appeals for the Ninth Circuit.

If you have questions about misclassification or if you need to discuss how you can seek justice when your employer refuses to provide you with overtime pay, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Increasing the Threshold and Amending “Exempt Duty” Definitions

Possible changes brought about by the Obama administration have been heavily discussed recently. Experts are expecting a significant number of American workers to be eligible for overtime pay if the proposed changes are to take effect. Changes under discussion are: raising the threshold and amending how exempt duties are defined.

The Economic Policy Institute estimates that increasing the threshold to $42,000 would make 3.5 million more workers eligible for overtime pay and that increasing the threshold to $52,000 would mean 6.1 million workers would qualify for overtime pay. Advocates for a threshold increase like EPI and the National Employment Law Project, would very much like to see the threshold raised to a minimum of $51,168 (which would be $984/week). Doing so would provide overtime eligibility to 47% of workers. Compare that to 12% eligibility according to current employment law and 65% eligibility in 1975.

Advocates would also like to see the Department of Labor include more specifics regarding what makes a position exempt from overtime. As it stands, employment law defines eligibility for classification as an exempt administrative employee as having a primary duty requiring that the worker “exercise discretion and independent judgment with respect to matters of significance.” Advocates for employment law change suggest that this is completely meaningless since any job requires SOME independent judgment. Suggested changes include specifying that more than half of a worker’s time needs to be spent performing “exempt duties” to prevent employers from offering “hollow” promotions with managerial titles, little to no pay increases, and even less managerial power.

Employers are concerned because with more generous overtime pay protections, their payroll costs will increase. The end result from the company’s perspective would be paying time and a half (overtime pay) to more eligible workers or they could potentially decide that it’s more cost effective to hire additional workers to cover the additional work hours needed while preventing current employees from getting overtime hours. Representatives of the U.S. Chamber of Commerce argue against advocate suggestions stating that one income threshold for the entire country is too broad and won’t work. They suggest applying geographically specific thresholds instead.

With big changes to the income threshold as is being contemplated, employers would be required to reclassify millions of salaried workers to hourly. That could result in employees losing benefits. Morale could suffer in the workplace as well. For instance, salaried workers have more leeway regarding their hours. Previously exempt, salaried employees who are changed to hourly as a result of the proposed employment law changes may see their pay docked for midday appointments, or could be required to use a vacation day to cover the absences that used to be a slight adjustment to their schedule of salaried work. Such changes could also negatively affect workers who are accustomed to benefit from merit-based bonuses, salary level vacation day packages, etc.

For more information on what the proposed changes might look like in your workplace, check back soon for up to date employment law news updates at Blumenthal, Nordrehaug & Bhowmik. 

Recruiting Manager Files Overtime Suit Against Robert Half

On September 5, 2014, a California recruiting manager filed an overtime suit against Robert Half International Inc. The recruiting manager, Theresa Daniels, worked at Robert Half as a recruiting manager from January 2014 through June 2014. She filed suit in San Mateo County Superior Court in California.

The suit filed by Ms. Daniels made a number of claims, including:

• The company misclassified her and other, similar employees as exempt from overtime.
• She and other, similarly classified employees, did not have managerial duties that would classify them as exempt from California overtime laws.
• She and other, similarly classified employees, did not have managerial authority.
• She and other, similarly classified employees, had only a minimal role in supervising employees and not authority to make employment related decisions regarding other employees.
• All recruiting managers, Theresa Daniels included, were strictly monitored and tightly controlled by both the company policy and their direct supervisors.

The suit seeks class action status and back overtime pay for unpaid wages.

Robert Half indicated that there are meritorious defenses to the allegations being made by Ms. Daniels and they will be defending themselves against litigation.

If you or someone you know are misclassified as exempt – preventing you from receiving the overtime pay you are entitled to at work, please contact your southern California employment law experts right away: Blumenthal, Nordrehaug & Bhowmik.