California Division of Labor Standards Enforcement Issues New Wage and Hour Guidelines
The California Division of Labor Standards Enforcement (“DLSE”) is the regulatory agency that enforces California’s wage and hour laws. The DLSE’s enforcement positions are available online in its “Division of Labor Standards Enforcement Polices and Interpretations Manual.” (click here to view the DLSE Manual). Because these interpretations affect its own enforcement actions and also single plaintiff and class action wage and hour lawsuits, the DLSE Manual should be required reading for all human resource executives and California labor attorneys (even if you don’t agree with it).
On May 2, the DLSE made some very important changes to the Manual to reflect its view of Murphy v. Kenneth Cole Productions, Inc. The two most important changes are: (1) Meal period and rest period pay, split-shift pay, and reporting time pay are wages like overtime and therefore may support claims for statutory attorneys’ fees and interest. DLSE Manual § 2.4.1.1; and (2) California Labor Code section 203 waiting time penalties of up to 30 days of wages may be imposed on employers for failing to provide owed meal or rest period pay, split-shift pay and reporting time pay at termination of employment. DLSE Manual § 4.3.4.1. The DLSE is continuing its position that employers must pay one hour’s wage for any meal period violations in a single day and an additional one hour’s wage for any rest period violations in a single day. DLSE Manual §§ 45.2.8; 45.3.7. This issue (whether a missed meal period and missed rest period in the same day requires one or two hours of pay) has yet to be interpreted by the courts.
While we are on the topic of DLSE Manual revisions, we should note a couple other relatively recent revisions that have not received a lot of press. First, in November 2005, the DLSE revised its position on vacation accrual caps. The DLSE’s position once was that all employers had to give employees nine months after the end of the year to use vacation (without supporting legal authority). This effectively created an accrual cap for vacation equal to 175% of each employee’s annual vacation. Former DLSE Manual § 15.1.4.1 (Revised Nov. 22, 2005) While this requirement has been withdrawn, the DLSE has, unfortunately, not yet provided guidance regarding what cap it views as acceptable.
In December 2006, the DLSE revised section 54.8.1 regarding the professional exemption. The DLSE, without supporting legal authority, formerly had made the “learned” professional exemption only applicable to those individuals who had a degree above a BA or BS. With that requirement deleted, this exemption may now be available to a number of engineers, chemists, biologists, researchers, medical professionals, and other employees who otherwise were previously nonexempt in California. The DLSE also expanded its “artistic” professional exemption to include artistic endeavors using “evolving media such as music synthesizers and computer graphic and art design programs. DLSE Manual § 54.10.1.
Although the DLSE’s interpretation of Murphy adds more disappointment for employers, the DLSE appears to be taking a more reasoned approach to some of its other, more vexing, interpretations. Hopefully, that is a trend that will continue.