HK School Law Newsletter – October 2017 Wage and Hour Alert
California Charter Schools Are Not Immune From Labor Code Provisions Governing Timing of Wage Payments for Non-Exempt Employees
We are aware that many of our clients – and many charter schools in California – have historically paid their non-exempt employees on a monthly basis. The practice is not uncommon because these charter schools follow the practices of traditional school districts where monthly pay for non-exempt employees is perhaps more common than not.
Historically, Labor Commissioner rulings have been divided over the applicability of the Labor Code sections governing the timing of wage payments to non-exempt employees at charter schools. The recent decision in Gateway Community Charters v. Heidi Spiess (2017) [2017 WL 912073] effectively settles those divisions.
The Third District Court of Appeal held that charter schools are not “other municipal corporations” for purposes of Labor Code section 220(b). As a result, Labor Code sections 200 to 211, inclusive, and Sections 215 to 219, inclusive, DOapply to charter schools.
Of particular importance are Labor Code sections 204 and 210. We encourage you, however, to discuss the applicability of ALL the Labor Code provisions cited above to your school.
Labor Code section 204 states, in part, that wages paid to non-exempt employees are “payable twice during each calendar month, on days designated in advance by the employer as the regular paydays.” More specifically, hours worked between the 1st and 15th days of a calendar month must be paid between the 16th and the 26th day of that same month. Similarly, hours worked between the 16th and the last day of a calendar month must be paid for between the 1st and 10th day of the following month.
Labor Code section 210 imposes significant penalties for failing to pay wages in accordance with Section 204 (among other Sections not discussed here). More particularly, each initial violation is a $100 fine and each subsequent violation (or any willful or intentional violation) is a $200 fine PLUS 25% of the amount unlawfully withheld.
The fines are excessive and can amount to a significant and catastrophic penalty for employers. Plaintiffs can file class action claims on behalf of all similarly situated employees and seek attorneys fees in addition to the already stiff statutory penalties.
Bottom Line: The recent Court ruling yet again denies charter schools some of the significant protections afforded to public school districts. We urge you to review your payroll practices to ensure they conform to the applicable Labor Code provisions immediately.
Your Team at Hansberger & Klein, PLC