Employer Required to Pay Minimum wage?

Today, I’d like to discuss some esoteric issues regarding the overall national debate on minimum wage. Our firm represents only California employees throughout the state. in all matters of discrimination, wrongful termination, harassment and retaliation. We have an active false claims practice as well. While California has raised the minimum wage over the next two years to $10, the implications of this on California’s workforce have not always been clearly debated. Many of our California employees in San Francisco, Sacramento, Los Angeles, Pasadena, Santa Rosa, San Bernardino, Irvine and Orange County, and San Diego work in the fast-food industry. Nationally, this represents about 7 Billion (with a “B”) in public benefits given to these low wage earners to supplement their meager income. (Study recently released by University of California, Berkeley and University of Illinois). We estimate that California’s share of this cost is approximately 1 Billion. 52% of California fast food workers receive public benefits, the 5th highest after Wisconsin, Washington, Pennsylvania and New Jersey. This represents 227,000 workers.

Here are some questions about raising the minimum wage.

Will employers automate job functions and/or totally eliminate jobs if minimum wages are raised?

Would some benefits remain payable to workers even at higher pay scales?

While 7 billion sounds like alot, is it really significant in light of our overall total benefits paid out under four programs providing aid to workers? Further, this amount includes payments to family members of fast food workers, which might well continue even if the bread winner’s wages are increased.

At the end of the day, however, researchers and prognosticators believe that increased use of tablets for diners to order foot might eliminate tens of thousands of fast-food jobs, making too much stress over the cost of supplementing low income workers somewhat irrelevant.

Another “take” on the minimum wage laws was recently discussed by the court of appeals in Vasquez vs. Franklin Management, which I”m pleased to report,  the plaintiff was represented by my former partner and his associate. In that case, the plaintiff, a maintenance worker, was required to drive his Ford F150 pickup truck 30 or more miles per day. The employer refused–despite numerous requests and pleas–to reimburse for mileage. The Court held that Labor Code 2802 (which requires the reimburlsement of expenses necessarily incurred in work), states a fundamental public policy of California and when failure to pay those wages makes the situation intolerable, that employee may quit and sue for termination in violation of public policy. I’m adding this case to this blog because the court also stated that failure to reimburse for miles was the equivalent of lowering the employee’s wages to below minimum wage.  Thus, the requirement that the employee reimburse himself out of ;his wages caused a reasonable employee to feel forced to resign.

This holding is not surprising given a prior, “gold standard” case of Gould held that failure to pay overtime wages also violated a substantial public policy of this state. 31 Cal App 4th at 1148. There, the court held that duty to pay overtime is imposed by the state; wage and hour laws concern the health and welfare of workers but also of the public health generally; creates a stable job market and (as with reimbursement under LC 2808) criminalizes (misdemeanor) the failure to pay overtime.

This was a fun blog to research as we represent low income wage earners in class actions in several industries (though not yet in fast food). California employees working at a minimum wage are entitled to overtime if they work in excess of 8 hours in a day or 40 hours in a week; a 10 minute paid rest break every four hours and a 30 minute unpaid meal break after the fifth hour of work. Working longer than 12 hours entitles employees to two unpaid lunch breaks. While working 7 consecutive days is illegal, should a worker do that, he/she is entitled to double time for anything in excess of 8 hours on the last day.