FRIDAY FLURRY: UPDATES ON NEWS FROM THIS WEEK

Posted in: Creditor's Rights by Dowling Aaron on

Trader Joe’s Can’t Trade Liability

 By: Rebecca Schach

This week the California Labor Commissioner’s Office hit Trader Joe’s and Grocery Outlet with fines in excess of $825,000 each for minimum wage and overtime violations. Both Trader Joe’s and Grocery Outlet obtain labor from an Anaheim-based subcontractor Inventory Professional Inc. Through agency investigation, the Labor Commissioner’s Office found unpaid wages for approximately 65 hours during a three-year period and violations of child labor laws. The Labor Commissioner’s Office held the companies responsible per California’s client-employer statute, Labor Code §2810.3, in effect since 2015. In total, the Labor Commissioner’s Office issued citations for wage theft violations totaling $1.6 million. The Labor Commissioner’s Office continues to use the client-employer statue to hold employers responsible for violations by labor contractors.

Mann Packing Co. Issues Voluntary Recall of Vegetable Products Due to Potential Health Risks

By: Manuel Ignacio

Mann Packing Co. announced a voluntary recall on November 3, 2019, of various vegetable products sold in the United Stated and Canada.  Both the Food and Drug Administration (FDA) and the Canadian Food Inspection Agency notified Mann of potential Listeria monocytogenes contamination.

According to a Public Service Announcement (PSA) released by the FDA, public health officials have not reported any illnesses associated with any of the affected products to date, but the company is issuing the recall out of an abundance of caution.  The recalled products have “Best If Enjoyed By” dates ranging from October 11, 2019 to November 16, 2019.

According to the PSA, consumers who believe that they are in possession of any products affected by the recall should dispose of the products.

A link to the FDA’s Public Service Announcement is located here. A complete list of the products affected by the recall can be viewed here.

Employees Cannot Supersize Meal Period Penalties

By: Adrian Hoppes

California Labor Code §226.7 requires that, “If an employer fails to provide an employee a meal or rest or recovery period in accordance with state law … the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided,” but how should an employer calculate what the employee’s “regular rate of compensation” is?

In Ferra v. Loews Hollywood Hotel, LLC, No. B283218, the Court of Appeal evaluated the meaning of “regular rate of compensation” as used in the statute. Ferra argued that even though the Defendant-employer paid her meal and rest period premiums when appropriate, the rate of those premiums was not correct. Specifically, the Defendant-employer paid the premiums at each employee’s base rate of compensation (hourly wage.) Plaintiff argued that the premiums should have been paid at her higher Regular Rate of Pay or “RROP.”

RROP is calculated by adding all eligible payments an employee receives over the course of a week (e.g. bonus, commission or in-kind payments + hourly wages) and then dividing this total by the number of hours worked in that week. If an employee receives additional wages in a work week other than his/her normal hourly rate, the RROP will be higher than the employee’s normal hourly rate. The court sided with employers holding that  the phrase “regular rate of compensation” in the statute was not intended to mean the RROP, and that the premium for missed meal and rest periods is the employee’s base hourly wage. This is a long-awaited clarification and a win for employers.

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