determiningcoverage

Information on the coverage and exemptions in both California Law and the FLSA is one of the major concerns of this area of law and should be covered in whatever treatise you settled upon. Chapter 11-B of The Rutter Guide discusses Coverages and Exemptions. After reading this section, I put together this chart to help me navigate and to use as the basis for further research. Though I will likely refer back to The Rutter Guide for more specific information, the chart will serve as my initial outline for determining the rights of a specific worker.

Browsing through the practice guide also helped me to discover what information I need to know about a worker to determine coverage. I put together the following list of questions that will need to be answered:

1. What type of employer does the worker work for, i.e., federal, state or local government or privately owned business?

2. What type of industry does the worker work in?

3. What is the worker's relationship to the employer?

4. What types of duties does the worker perform?

5. Where does the worker fit in the company hierarchy, i.e., who supervises him and who does he supervise?

6. What is the worker's rate of pay and how is the worker compensated?

7. Is the worker subject to a collective bargaining agreement?

Some of these questions are readily answerable by the worker, others require some interpretation and poking around.

Let's use a couple examples as we move forward..

GAVIN

Gavin lives in San Francisco and works as a driver/tour guide for a company that provides bus tours within the city and to many locations in the state. All the tours originate in San Francisco and return there the same day. Most are between four and six hours long, but one, to Yosemite, can last between 10 and 15 hours, depending on traffic.

The company is owned by a private individual. He has 10 employees working for him as drivers/tour guides, all working out of a single office in San Francisco. He is required to obtain a Motor Carrier Permit for each vehicle, and each driver is required to get a commercial license. All employees report directly to the owner.

Gavin works a schedule that changes on a weekly basis and is determined by the owner. He can request days off, but those requests are subject to the number of tours scheduled and drivers available. He does not set his own schedule, nor does he determine which tours he is conducting on a given day. He does, however, largely determine the content of his commentary while driving.

Gavin makes $20.00/hour and usually works between 25-45 hours per week. He does not receive a overtime pay on the days he works more than 8 hours, nor the weeks he works more than 40.

SUMMER

Summer lives in Concord, CA and works as an escrow assistant at the local office of a nationwide title company. She does not have her own files but works with an escrow officer, assisting her in the processing of paperwork for real property purchases and refinances. She has a notary license but no escrow license.

Summer knows her job well and is good at it, so she knows what to do on each file and does it with little to no direction. However, she does not have any ultimate say on decisions affecting the files.

Summer does not set her own schedule. She is required to be at work during normal, day-time business hours because this is when the company's clients (real estate brokers, mortgage brokers, buyers, sellers) are available to be contacted. She is also often expected to work late when the office is busy or facing a deadline.

During the busiest times, Summer often ends up working through her lunch and rest breaks because she feels that, as part of the team, she cannot leave her coworkers in the lurch while she goes off for an hour. Her coworkers seem to feel the same way, as lunches are often eaten at desks, between phone calls.

Summer makes $40,0000/year and has been told to note her overtime and schedule comp time as it accrues.

Determining Coverage

Both these lovely people want to know their rights. To find that out, we must first determine which laws apply to each of them. We will start with the chart.

"Employee"

Both the FLSA and the California Laws apply only to employees. Rutter provides the sites for the definition each law gives to "employee." FLSA defines employee at 29 U.S.C. 203(e)(1), and California Law defines it at Cal.Lab.C. § 350(b).

FEDERAL LAW

29 U.S.C. 203(e)(1) "Except as provided in paragraphs (2), (3), and (4), the term 'employee' means any individual employed by an employer." Paragraphs (2), (3), and (4) discuss government employees, agricultural workers and volunteers.

This definition is not overly helpful, but the Rutter Guide indicated that it has been interpreted in case law. Donovan v. Sureway Cleaners, 656 F.2d 1368, 1370 (9th Cir. 1981) notes that FLSA covers employees, as distinct from independent contractors, and lays out several factors courts should consider when determining whether a worker is an employee. These include

"1) The degree of the alleged employer's right to control the manner in which the work is to be performed;

2) the alleged employee's opportunity for profit or loss depending upon his managerial skill;

3) the alleged employee's investment in equipment or materials required for his task, or his employment of helpers;

4) whether the service rendered requires a special skill;

5) the degree of permanence of the working relationship;

6) whether the service rendered is an integral part of the alleged employer's business." Id.

Both Summer and Gavin fit within this definition; they are employees in the classic sense. Both have the time and manner of their work laid out for them and their materials provided for them. Both work in permanent, at-will positions, which are integral to their employers' businesses.

The FLSA has an additional coverage requirement: the employee must work in commerce or in a business in commerce. Both fit squarely within this condition. Both are therefore covered by the FLSA, at least as an initial matter.

In addition, a quick perusal of the other federal wage and hour laws to see if any apply to the industry or situation in question is advisable.

CALIFORNIA LAW

Cal.Lab.C. § 350(b) "'Employee' means every person, including aliens and minors, rendering actual service in any business for an employer, whether gratuitously or for wages or pay, whether the wages or pay are measured by the standard of time, piece, task, commission, or other method of calculation, and whether the service is rendered on a commission, concessionaire, or other basis."

Rutter additionally provides the cite to an interpretive regulation: 8 Cal.C.Regs. 11010, ¶ 2.E. In Westlaw, this can be found as the California Administrative Code. The official print source for California Regulations is Barclays Official Code of California Regulations. The official source online is www.calregs.com.

Section 11010 is the first of 17 Industry Wage Orders promulgated by the Industrial Welfare Commission (IWC) of the California Department of Industrial Relations. Many of the provisions (and almost all that this pathfinder will be concerned with) are the same from Wage Order to Wage Order.

FINDING THE RIGHT WAGE ORDER

It is still, however, important to look at the correct Wage Order for the industry in which you are researching. The proper industry, however, is not always easy to determine. For this reason, the IWC provides a document,"Which IWC Order?," that will help you determine which Wage Order is correct.

If after looking at the list of Wage Order Industries either here or in the table of contents to the California Code of Regulations (Administrative Code), it appears the job could fit in more than one category, "Which IWC Order?" describes the coverage of each order, beginning on page 10, and provides an index of businesses and occupations, beginning on page 33.

Based on the names alone, Gavin could be covered by the transportation order or the recreation order. "Which IWC Order?," though, lists Tour Buses under Wage Order #9 - Transportation.

As there is no specific industry order covering title or real estate, Summer is likely covered by Wage Order #4: Professional, Technical, Clerical, Mechanical and Similar Occupations. "Which IWC Order?" confirms this, as Wage Order #4 covers secretaries not covered elsewhere, real estate offices and insurance companies. Her job is at the intersection of these three.

INTERPRETING THE WAGE ORDER

The Wage Orders for both our hypothetical workers contain the same definition of "employee." Essentially, an employee is any person suffered or permitted to work by someone (an "employer") who "exercises control over the wages, hours, or working conditions" of that person. IWC Wage Order #4 § 2(G) and (H) (8 Cal.C.Regs. §11040 ¶2(G) and (H)); IWC Wage Order #9 § 2(E)-(G) (8 Cal.C.Regs. §11090 ¶2(E)-(G)).

This definition is similar to the federal one, and the case cited by Rutter, S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations, 48 Cal.3d 341, 351, lists similar factors for determining whether a worker is an employee. Thus, both our workers are covered, at least initially, by both the California and Federal Wage and Hour Laws.

Our determination of coverage, however, is not complete until we have determined whether any exemptions to either of the laws preclude coverage for our workers.