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California Miin Wage Question

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  • California Miin Wage Question

    I understand the anything over 8 hours per day, is overtime.
    anything over 12 per day is double time.

    Min wage is $8, etc

    Is there a daily minimum wage law? or is it Minimum Wage per week

  • #2
    This is maybe complicated.
    - Federal minimum wage law (FLSA) calculates minimum wage on a workweek basis (averaging). And federal law is valid in all states including CA.
    - CA rules are frankly arcane (not just complicated, but IMO deliberately overly complicated). We sort of have several unusual CA rules all comping together at this one point, causing a very oddly written rule set which basically is trying to jam several square pegs into one round hole. The "easiest" place is the CA-DLSE manual, section 44.2.2.x. These rules are written in such a way as to make ones eyes cross, but an English language translation seems to be that each and every hour all by itself must be at least minimum wage. Meaning no averaging like the federal rules support.
    http://www.dir.ca.gov/dlse/Manual-Instructions.htm

    Generally FYI, whenever CA rules start using odd phrases, it is almost certainly a court decision or other regulation behaving in a different way then FLSA. CA basically is trying to merge language from both FLSA and the non-FLSA rule, which tends to generate unreadable gibberish. Section 44.2.2.x in the manual is a good case in point.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Originally posted by DAW View Post
      This is maybe complicated.
      It's California...I can almost guarantee it will be complicated.
      Not everything in America is actionable in a court of law. Please remember that attorneys are in business for profit, and they get paid regardless of whether or not you win or lose.

      I offer my knowledge and experience at no charge, I admit that I am NOT infallible, I am wrong sometimes, hopefully another responder will correct me if that is the case with the answer above, regardless, it is your responsibility to verify any and all information provided.

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      • #4
        OP, are you paid based on a daily rate? I'm a little confused as to the details behind the question.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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        • #5
          actually, to make it even more confusing, my employees are paid a commission, but they are non-exempt due to not reaching earnings threshold.
          so we have to track their hours worked to make sure they earn Min Wage, and for OT purposes.
          I understand the OT and thought I understood Min Wage.
          Then an employee told me,
          " The commissions I earned paid me an average of only $6.00 per hour on Tuesday for the hours I worked, aren't you suppose to make sure I earn at least $8 per hour for each hour I work everyday?"
          So the question is, do I have to guarantee Min Wage per day/hour worked, or is it the average hourly wage for the week that applies?

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          • #6
            Hours worked records must be kept for all nonexempt employees, not just those on commission. They are not nonexempt because they don't meet the "earnings threshhold", they are nonexempt because of their job duties.

            But, per day, no. It's per workweek. As long as the gross pay per workweek, when divided by the total hours worked, average at least minimum wages, you have met the MW requirement of the law.

            Do these employees work overtime? If so, the "regular rste of pay", calculated as described above, is the basis for overtime pay.

            So, let's say Mary worked in the workweek as follows:

            Day 1 - 8 hours (8 hours regular)
            Day 2 - 10 hours (8 hours regular, 2 hours 1.5 overtime)
            Day 3 - 8 hours ( 8 hours regular)
            Day 4 - 13 hours (8 hours regular, 4 hours 1.5 overtime, 1 hour double time)
            Day 5 - 8 hours (8 hours regular)
            Day 6 - off
            Day 7 - off

            That's 40 hours regular, 6 hours 1.5 overtime, 1 hour double time.
            Commissions for the workweek are $600.

            $600 / 47 hours worked = $12.77 regular rate of pay
            6 hours 1.5 overtime = $12.77 * 6 * .5 (premium portion of overtime; straight-time already included in the commission amount) = $38.31
            1 hour double time = $12.77 * 1 * 1 (redundant, I know, but just wanted to show the calculation logic) = $12.77

            Total minimum pay due to meet the MW and overtime requirements = $600 + $38.31 + $12.77 = $651.08.

            Does that help?
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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            • #7
              Yes, it's helps alot! thank you.

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              • #8
                You're welcome.

                Normally, when I've had employees come to me and say "the law says that you must do" XX, I ask them to please provide a copy of or link to the law that confirms what they are claiming, and I'll review it. Haven't been caught yet.
                Last edited by Pattymd; 06-08-2010, 06:16 AM.
                I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                • #9
                  Originally posted by Pattymd View Post
                  But, per day, no. It's per workweek. As long as the gross pay per workweek, when divided by the total hours worked, average at least minimum wages, you have met the MW requirement of the law.
                  Not in CA. That is a federal rule only. In CA each and every hour must be paid at least minimum wage. No averaging allowed. The following is from the CA-DLSE manual. And yes, I know that it is very poorly written. Unlike federal law, CA will actually enforce all unpaid wages, which are legally considered to be "contracts" (not the word choice I would use).

                  44.2.2.1 Federal Enforcement Provision Not Allowed In California. Averaging of all wages paid under a contract within a particular pay period in order to determine whether the employer complied with its minimum wage obligations is not permitted under the circumstances outlined above, for to do so would result in the employer paying the employees less than the contract rate for those activities which the contract requires payment of a specified amount equal to or greater than the minimum wage; such a payment scheme would violate Labor Code ยงยง 221-223.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

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                  • #10
                    Dayum, California. I SO should know better.

                    David, that does say "pay period" though. It prohibits averaging as federal law allows, on a workweek basis as well?

                    The smart employer would set the hourly rate at minimum wage (if MW is required at all, i.e., inside sales) and pay commissions on top of that, even if that meant for profit's sake, reducing the commission percentage).
                    Last edited by Pattymd; 06-08-2010, 08:32 AM.
                    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                    • #11
                      It doesnt seem that clear to me.
                      what is the definition of "pay period" in Ca?

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                      • #12
                        Sort of several different issues here.
                        - Federal law is still federal law. Nothing CA (or anyone else) can do to make federal law go away. Patty is correct that using pay period to determine minimum wage is flat out wrong under federal rules unless we are talking about a Weekly pay period that is also the workweek (no reason to have a Weekly that is not the workweek, but there are some really dumb employers out there). HOWEVER, CA can and does use a more restrictive overtime rule, namely that each and every hour all by itself must be paid minimum wage. Which is NOT what federal law says. It is perfectly legal for CA to have laws that are MORE favorable to the employee then federal law.
                        - Federal law (FLSA) is very clear that minimum wage and overtime are based on the workweek. There is nothing CA (or any other state) can do to make that go away. CA daily OT laws are in addition to, not instead of the federal rules.
                        - Which brings us to pay period. MW and OT are legally unrelated to pay periods. MW and OT are always, always, always based on the workweek in all 50 states. Paying the employee however is NOT federal law however, but solely a function of state law. Different states can and do have very different laws regarding paying employees. Pay periods are state law. If the OP has an actual question related to pay periods not related to MW or OT, I do not mind answering it. But the question as asked implies that the OP is still trying to tie MW and pay periods together, which is legally incorrect. Sort of a "how much dog food does my cat have to eat to turn into a dog?" kind of question.
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

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                        • #13
                          Originally posted by Pattymd View Post
                          The smart employer would set the hourly rate at minimum wage (if MW is required at all, i.e., inside sales) and pay commissions on top of that, even if that meant for profit's sake, reducing the commission percentage).
                          That, or alternatively doing a two-fer.
                          - Calculate commission only.
                          - Calculate MW only.
                          - Pay the greater of the above.
                          - OT calc on the greater of the above.

                          Or as a variant:
                          - Pay MW/OT up front.
                          - Monthly/quarterly see if commissions exceed MW, if so pay the excess, then recalc OT.
                          - I would normally mention the 7(i) variant (Retail/Service establishment exception) about here, but I am fairly sure that CA does not support it.

                          I certainly agree whatever method is used that MW must be paid up front for Inside Sales. Past that, commissions are supposed to "incent" the employee to sell stuff. So any well written compensation plan should accomplish this. Some variation of MW + commissions for good performance only. If someone is just getting by, then MW should be plenty. Ideally one wants the employees getting rich by selling lots and lots stuff. Everyone wins. Conversely employees who sell little get paid as little as the law allows. For as long as they still have a job.

                          But failing to pay MW (especially in CA) is real third rail stuff. Employers not only lose in court, they get hammered. Plus a good chance of some really bad press (which they deserve).
                          "Reality is that which, when you stop believing in it, doesn't go away".
                          Philip K. **** (1928-1982)

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                          • #14
                            Don't forget, California has specifics regarding commission wages that need to be met. The commission must be based on the sale price of the goods and or services sold. Also, commission plans may not involve calculations which includes any costs of doing business. Further information can be found at http://www.dir.ca.gov/dlse/DLSEManua...enfcmanual.pdf

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