Wednesday, July 31, the Retail Litigation Center (“RLC”) sent an amicus letter to the Supreme Court of California in support of a petition for review of a decision placing further super-minimum wage burdens on employers. Taking novel interpretations of California’s laws on employee compensation advanced by lower courts even further, Bluford v Safeway Stores, Inc., significantly alters employer compensation obligations and employee reporting requirements.
The decision by the court in Bluford places significant hardship on the ability of employers to craft compensation systems that fit the industry and are attractive to both employees and employers. Mandating that employers pay an additional hourly rate to workers for breaks, even if they are already compensated for them, creates new reporting requirements that could hamper worker productivity and create costs. The finding by the court fails to take into account precedent, built over a century, supporting the legality and value of productivity based systems.
“California’s judicial branch has no business legislating pay structures for businesses, especially when those structures increase costs and harm productivity,” said RLC President Deborah White. “The Supreme Court of California must step in to alleviate the myriad of practical problems caused by the judicial advocacy of the lower courts.”
From the letter to the Court:
“California has long recognized the legality and value of productivity compensation systems other than an hourly wage, including pay by piece, task, commission, or some other basis. Lab. Code § 200. This policy granting both employers and employees the ability to craft compensation that best fits their industry and mode of work goes back more than a century.”
“Any employer that compensates its employees based on productivity must now pay for rest breaks at an hourly rate equal to or exceeding the minimum wage, regardless of whether employees are already paid for those rest breaks as part of their productivity-based compensation, and regardless of whether an employee’s wages over some period of time (e.g., pay period) exceed the minimum wage for all hours worked.”
The full letter can be found HERE.
The Retail Litigation Center is a public policy organization that identifies and engages in legal proceedings which affect the retail industry. The RLC, whose members include some of the country’s largest retailers, was formed to provide courts with retail industry perspectives on significant legal issues, and highlight the potential industry-wide consequences of legal principles that may be determined in pending cases.