The Santa Cruz Seaside Company, which operates the Santa Cruz Beach Boardwalk, has settled a class action lawsuit and agreed to pay nearly $6 million to current and former employees for unpaid minimum wages, rest periods, and overtime.
According to a report in the Mercury News, the lawsuit was filed in July 2023 in Santa Cruz Superior Court and included allegations that the company failed to provide meal breaks or overtime pay. A significant settlement totaling about $5.9 million has now been agreed upon to resolve the case.
Several Labor Code Violations Alleged in Unpaid Wages Class Action
Employees accused the company of rounding hours to avoid paying them. The company has agreed to pay the settlement while denying all worker allegations. The settlement is expected to be finalized in January. According to reports by The Santa Cruz Sentinel, the settlement has received preliminary court approval.
The money is expected to be paid to those who worked at the Santa Cruz Seaside Company between July 25, 2019, and Aug. 11. In addition to unpaid wages, the lawsuit also alleged that the company failed to pay all wages upon termination of employment, did not provide accurate wage statements, and failed to reimburse necessary business-related expenses. These are all violations of the state’s labor code.
Common Wage Violations in California
Wage violations are a common problem in California workplaces, in spite of the state’s robust labor laws designed to protect workers. These violations undermine fair labor practices and often adversely affect vulnerable populations such as low-wage workers and immigrants. Here are some of the most common wage violations in California:
Minimum Wage Violations
California has one of the highest minimum wages in the United States. As of 2024, employers with 26 or more employees must pay $15.50 per hour, while smaller employers have a slightly lower rate. In some counties and cities, the minimum wage requirement is higher. In such cases, employers must pay the higher minimum wage. However, many employers fail to comply, paying workers less than the mandated amount.
Some employers misclassify workers as independent contractors to evade minimum wage obligations. Workers are often required to perform tasks before clocking in or after clocking out, effectively reducing their hourly wage below the legal minimum. Although California law mandates that tips cannot be used to meet minimum wage requirements, some employers illegally count tips as part of wages.
Overtime Pay Violations
Under California law, non-exempt employees are entitled to overtime pay at 1.5 times their regular rate for hours worked over eight in a day or 40 in a week. Double-time pay applies after 12 hours in a single workday or after eight hours on the seventh consecutive workday. One of the most common ways in which employers attempt to dodge paying overtime is by misclassifying workers as exempt. Other common violations include employers manipulating time records or discouraging employees from reporting overtime hours.
Meal and Rest Break Violations
California law mandates that employees are entitled to a 30-minute unpaid meal break for every five hours worked and a 10-minute paid rest break for every four hours worked. Many employers, however, fail to comply. Here are common examples of meal and rest break violations:
- Missed breaks: Workers are not given the opportunity to take legally required breaks.
- Interrupted breaks: Employers require employees to remain on call or perform tasks during breaks.
- No premium pay: When breaks are missed, interrupted, or delayed, employers often fail to provide the required extra hour of pay.
Wage Theft
Wage theft is a broad term that encompasses a range of practices where workers are denied their rightful earnings. In California, it is one of the most egregious labor violations. Common forms of wage theft include:
- Failure to pay all hours worked: Employees are not compensated for time spent on preparatory or closing duties.
- Illegal deductions: Employers deduct costs like uniforms, tools, or cash register shortages from employee wages.
- Paycheck irregularities: Employers issue incomplete paychecks or delay payments, violating California’s timely payment laws.
Misclassification of Workers
Worker misclassification occurs when employers label employees as independent contractors to avoid paying wages, benefits, and payroll taxes. California’s AB 5 law clarifies the distinction between employees and independent contractors using the “ABC Test.” However, many employers continue to exploit this gray area. As a result of misclassification, workers lose out on minimum wage and overtime protections. Many also experience a lack of access to key benefits such as health insurance and workers’ compensation.
Failure to Provide Wage Statements
California law requires employers to provide accurate itemized wage statements, detailing hours worked, pay rates, and deductions. Non-compliance is a common issue. When workers are not provided accurate wage statements, they are unable to verify if they are paid correctly. It also becomes more challenging to identify wage violations or pursue legal remedies.
What Can You Do About Wage Theft in California?
Wage theft is a serious issue in California. However, workers have rights and remedies to address it. Here is what you can do if you believe you’ve experienced wage theft:
- Document everything. The first step is to gather evidence of the wage theft. Keep detailed records of hours you have worked, including overtime, break times, pay stubs, timesheets, and any communications you may have had with your employer regarding pay. Keeping accurate and detailed records can help strengthen your case and ensure fair compensation.
- Speak to your employer. Sometimes, wage theft arises from a misunderstanding or an error. Communicate with your employer or human resources department to see if you can resolve the issue. Make sure that your concerns are documented in writing to create a paper trail.
- Know your rights. Familiarize yourself with California labor laws, including minimum wage requirements, overtime laws, and meal and rest break regulations. California has strict protections under the Labor Code and the Fair Labor Standards Act (FLSA).
- File a wage claim. If informal resolution fails, you can file a wage claim with the California Division of Labor Standards Enforcement (DLSE). The DLSE investigates claims and holds hearings to resolve disputes.
- Contact an experienced employment lawyer. Consulting with an employment attorney can help clarify your rights and options. Attorneys can also help you file lawsuits for unpaid wages, penalties, and damages. You may also be able to form a class if more employees have been affected, which is often the case.
Choose the Right Attorney
Bisnar Chase has a dedicated department that handles employment law violations. We work with employees to ensure they are treated fairly, and to hold employers accountable. Contact us for a free consultation to find out if you have a case.
Source: https://www.mercurynews.com/2024/11/04/santa-cruz-beach-boardwalk-parent-company-settles-class-action-lawsuit-for-5-9-million/
