California has long been regarded as the epicenter of wage and hour litigation. It is where the most cases are filed. It has the most onerous wage and hour laws. And those laws contain the most draconian remedies. Because of this, California wage and hour claims tend to carry higher settlement value than FLSA claims or wage and hour claims from other states.
We all know that intuitively. But sometimes it takes a stark statistic to drive the point home.
Take, for example, the case of Gonzalez v. Universal Alloy Corp. in the U.S. District Court for the Central District of California. There, plaintiff factory workers claimed that they worked off the clock, missed meal and rest breaks, and did not have bonuses included in the regular rate of pay in the calculation of overtime pay. Last week, the plaintiffs filed a motion for approval of a settlement of up to $4.75 million that would include two sub-classes: 380 FLSA collective action members (who presumably worked for the company outside California), and 390 California settlement class members (who worked for the company inside California).
According to the plaintiff’s motion, the average FLSA collective action member will receive $840. But the average California class member will receive $7,476.
Why does a California employee receive nearly nine times what an employee outside California receives? Each settlement is different and involves various considerations, and we can only speculate about the thought process of both parties. The factors could include:
- California provides for daily overtime. The FLSA does not.
- California’s overtime law contains a three-year limitations period that, under the Unfair Competition Law, is extended to four years. The FLSA’s non-willful limitations period is two years.
- California law defines compensable “hours worked” in a broader manner than the FLSA.
- California requires meal and rest breaks. An employer who fails to provide a required meal or rest break is liable to the employee for an hour of pay. The FLSA contains no equivalent.
- California provides for up to 30 days of pay for late final payments to separated employees. If an employer miscalculates that pay by a penny, it may be liable to the employee for 30 days of full pay. The FLSA contains no equivalent.
- California law also provides for penalties for wage statements that are inaccurate in certain circumstances. Again, if an employer miscalculates that pay by a penny (or doesn’t include all required elements on a wage statement), it may be liable to an employee for wage statement penalties. The FLSA contains no equivalent.