Bonuses, Overtime Pay, and Class Actions

Overtime pay, or the alleged lack thereof, is an issue we regularly see pop up in the California courts. While California employers generally recognize that non-exempt employees (e.g. many hourly employees) who work overtime must receive overtime premiums on their base pay, not all are aware that these premiums may also be required on other, “supplemental” aspects of compensation to nonexempt employees. A common example? Bonuses.

PAGA Claims: Arbitration Not Allowed

The California Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for alleged Labor Code violations. In other words, PAGA gives a private citizen the right to pursue fines that would normally only be available to the State of California, thereby allowing a private citizen to act as an “attorney general”. Defending these claims can be time consuming and costly for employers, and a California appellate court recently made things even more challenging for business owners across the state when it affirmed that arbitration is not permitted for PAGA claims. Indeed, arbitration clauses are undergoing a change up in employment agreements across the state, read more here.