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Monetary PAGA Penalties Appy to Violation of Wage Order Working Condition Provisions -- Bright v. 99 Cent Only Stores

In Bright v. 99 Cent Only Stores, the Second Appellate District reversed the dismissal of a cashier's claim for penalties because her employer failed to give her a place to sit while she was working.  One unfamiliar with California's unique employment law enforcement scheme may be excused for reacting along the lines of "so what? that sounds like no big deal." 

Au contraire gentle reader. In fact, this may be a very big deal and may signal a whole new wave of employment litigation in California.

The reason is that providing "suitable seats" to employees is one of the many "working condition" provisions contained solely in the administrative Wage Orders.  These requirements generally provide no express remedy or private right of action.  To the extent employers have even been aware of these administrative working condition provisions at all (which most aren't) they have generally been ignored on the assumption that they could be enforced only through a governmental prosecution for injunctive relief.  And given budget restrictions and the lack of any realistic monetary penalty these "Wage Order only" regulatory requirements have gone essentially unenforced. 

By contrast, since the advent of the Labor Code Private Attorney General Act of 2004 ("PAGA"), violations of the Labor Code have triggered penalties of at least $100-200 for each pay period that the violation continues.  In a class or collective action on behalf on an entire workforce these penalties can add up very quickly indeed.  By its terms, however, PAGA applies only to violations of the "Labor Code." 

The great innovation of Bright v. 99 Cent Only Stores, is that it extends PAGA remedies to the violation of obligations which are contained solely in the administrative Wage Orders and which are not independently set forth in the Labor Code.  It does this with an assist from Labor Code section 1198, which states that:

'The maximum hours of work and the standard conditions of labor fixed by the commission shall be the maximum hours of work and the standard conditions of labor for employees. The employment of any employee for longer hours than those fixed by the order or under conditions of labor prohibited by the order is unlawful.'             

The Court in Bright reasoned that Labor Code section 1198 effectively incorporates the provisions of the Wage Orders and converts them into a separate violation of Labor Code section 1198 itself.  Once converted to a "Labor Code" violation, the non compliance now triggers the scary penalty and collective action remedies set forth in PAGA.

For example, by failing to provide a chair at its cashier stations 99 Cent Only Stores could owe $200 per month to every cashier in California for the entire limitations period -- which could certainly equal many million of dollars in the aggregate.    

Cataloging the previously unenforced Wage Order provisions which are now enforceable under PAGA is probably worthy of a separate blog post.  But the Bright decision noted that these obligations may include topics as diverse as keeping adequate records of hours worked, supplying tools and uniforms, providing changing rooms and rest facilities, providing adequate seating, and maintaining an appropriate workplace temperature.  

In light of the Bright decision, employers would be well advised to familiarize themselves with the more obscure Wage Order working condition requirements that they have probably been ignoring and to begin aggressive compliance efforts.    

    

Full post as published by California Labor & Employment Defense Blog on November 17, 2010 (boomark / email).