Al Mohajerian

A person wearing a mask and face shield

Pandemic Challenges Facing Franchises

May 13, 2021

Franchises in the fast-food industry are facing many challenges as the economy begins to recover from the massive set-backs caused by the pandemic. One such challenge is finding adequate numbers of qualified workers. Despite a current unemployment rate of around 6% in the U.S., nearly double the pre-pandemic rate, the labor market remains one of the biggest challenges for fast-food franchises.

In March of 2021, the country added some 280,000 jobs in the leisure and hospitality industry, which includes the restaurant industry, but the hiring rate still was not enough to meet the industry’s need. Some franchises have turned to unconventional methods to try to gain much-needed staff.

In November of last year, Taco Bell held a mass-hiring event in the parking lots of 400 of its locations, in an attempt to fill 2,000 positions. With plans to bring on at least 5,000 new employees by the end of April, Taco Bell held another round of these job fairs at more than 2,000 of its stores this month. Through this hiring blitz, the franchise hopes to make up for the slower rate of hiring that its stores have had due to the pandemic. In truth, the staffing challenges pre-date the pandemic, and many fast-food chains are responding by raising starting pay rates to levels above the minimum wage and by implementing other benefits in an effort to bring in and keep top talent.

Tuition Benefits Shown To Help Retain Employees

More and more franchises are using creative means to attract and retain workers, including offering tuition benefits to their employees. These programs allow employees to pursue college degrees with financial assistance from the company. Many of the leading names in the quick service restaurant field, especially, have added or increased tuition assistance programs for their workers as an added perk to attract top talent. Taco Bell, Chipotle, and KFC are among the growing number of restaurant chains turning to these benefits to improve employee retention.

Overall, companies that have used such programs have seen positive results, including higher retention rates among those who have taken advantage of the education assistance through their workplace. Chipotle has reported that the workers who move forward with their education through its program are more likely to move into management positions with the company, thereby strengthening the internal growth of the company by investing in its current employees.

Supply Chain Challenges Lead To Increased Prices

In addition to labor challenges, many franchise restaurants are struggling with issues related to supply-chain limitations. For example, the pandemic has affected the availability and price of ketchup, a key condiment for a major portion of the industry. With the transition to higher rates of takeout over eating in restaurants, and with the attempt to minimize contact that could spread germs, quick service restaurants turned almost exclusively to using ketchup packets. The increased demand and insufficient availability have caused prices to increase by 13%. Long John Silvers, which has about 700 locations nationwide, reportedly spent half a million dollars more on ketchup packets during 2020 than it had in previous years. Even with higher prices, though, supply is limited. As in-person dining facilities reopen, some business owners have even turned to purchasing ketchup from retail stores to meet the demand.

California Franchise Attorneys

The laws affecting franchisors and franchisees might come off to you as complex and overwhelming. Because of this, it is recommended that you consult with an experienced franchise lawyer to ensure that your business succeeds with its endeavors. Mohajerian Law Corporation is dedicated to helping California franchisors and franchisees with various legal services including the negotiation of agreements and the resolution of disputes. To learn more about how we can help you, touch base with Mohajerian Law Corporation by calling (310) 556-3800 or by contacting us online.

Filed Under: Franchise & Distribution

Coin operated binoculars

Strong Franchise Outlook For 2021

May 13, 2021

While many small, independent businesses struggled to meet the unprecedented challenges of the pandemic in 2020, franchises generally were fortunate to have a support network built into their businesses. Franchises took different approaches to dealing with the pandemic. Businesses in some industries closed completely for many months, while others implemented changes that allowed them to keep providing services while better protecting the health of their customers and employees. These changes may have included going to a fully online presence, increasing home delivery services, or allowing employees to work remotely.

Predicting A Franchise Boom For 2021

Franchise business experts see a potential boom in franchise growth during 2021. With an unemployment rate of about 6 percent, not only is there a surplus of blue-collar workers looking for jobs, but there also is a large number of skilled professionals who have found themselves unemployed due to the pandemic. Many of these unemployed professionals, as well as other professionals who have simply reassessed their employment situations, may want more control over their future career. Purchasing a franchise may allow them this control without requiring them to start from scratch to open a new business.

The pandemic has made it easier for people to get the capital to do this, removing some penalties for withdrawals from retirement accounts and maintaining low interest rates for loans. The larger pool of potential franchisees has created the potential for a growth spurt for franchise businesses.

Even real estate conditions may be ripe for franchise growth. Unfortunately, small businesses are likely to continue to suffer and close before the restaurant industry can recover from the pandemic’s impacts. Experts anticipate that as many as 100,000 businesses will close this year in the restaurant industry. These predicted closures would create a potential abundance of available locations for new franchisees to set up shop.

Recruiting New Talent

Though the pandemic and its effects on small businesses are not in the past just yet, improving market conditions and widespread vaccinations may contribute to ideal conditions for companies that are prepared to seize the opportunity and try to recruit professionals to open new locations for their franchise. In order to be better prepared for the growth to come, experts recommend that these franchisors focus their efforts in the areas of strategic planning, documentation systems, site assessment, marketing, and franchisee standards. To recruit franchisees, franchisors may benefit from emphasizing the support that the company provided to its franchisees through the tough times of the past year, and highlighting improvements in policies and systems that came about as a result.

Continuing Improvements To Business Operations

Specialists in franchising recommend that franchisors use this time to give new thought to their systems and processes in all areas across their businesses. Other experts in the field believe that it is likely that many of the upheavals of the pandemic-time business model will remain and grow as factors in the franchise’s business model. Adjustments that became widespread in 2020, such as adding delivery or curb-side pickup options and improving online ordering and web presence, have revealed unexpected opportunities for growth and development.

Telling Your Company’s Story

Another way that franchisors can capitalize on the outstanding growth opportunities of the coming year is to invest in marketing and customer experience improvement, so as to lure back consumers who have backed away from active support of businesses in the past year. To reconnect with the community, franchisors may focus on clearly and effectively telling the story of their companies’ efforts during the pandemic. They could highlight how they supported franchisees and continued to serve customers throughout the past year. This approach of relating with the public may facilitate a boom in franchises’ business, as businesses and consumers alike begin to return to a semblance of ‘normal,’ or adapt to the post-pandemic ‘new normal.’

California Franchise Attorney

Mohajerian Law Corporation helps California franchisors and franchisees by offering them a wide range of cost-effective and efficient legal services relating to contracts, regulatory compliance and dispute resolution. Reach out to Mohajerian Law Corporation by calling (310) 556-3800 or by contacting us online to learn more.

Filed Under: Franchise & Distribution

Practical Tips to Avoid Retaliation Claims by Employees

April 15, 2021

An employee might complain of retaliation if they face negative consequences after raising a workplace concern or complaint. A retaliation lawsuit might cost you a lot of money in the form of penalties, settlements, and legal fees. Use the following tips to avoid retaliation complaints from your employees.

Keep Complainants’ Identities Confidential

Some of your supervisors or managers might retaliate against an employee who paints them in a bad light. For example, an employee who complains about racial jokes in the cafeteria might face retaliatory actions from the relevant supervisor.

A good way to avoid such retaliation is to keep the employee’s identity confidential. Investigate the complaint and take appropriate action without mentioning the person responsible for the original complaint.

Keep Communication Channels Open

Let your employees know that you are accessible and that they can reach you with any information. Keeping the channels of communication open is especially useful for victims of alleged retaliation. Help the employees understand the company’s anti-retaliation policy. Encourage the alleged victims to report any negative experiences they might have in the workplace.

Explain Disciplinary Actions

Employees who face disciplinary actions sometimes claim retaliation even where retaliation doesn’t exist. Such a complaint is especially likely if an employee faces genuine disciplinary action soon after making a complaint.

In such a case, you don’t have to abandon your disciplinary policy. Rather, go the extra mile to explain to the employee why you are disciplining them. Show any documentary evidence you might have for the employee’s actions.

Watch Out for Red Flags

Some victims of retaliation might not speak up. Some people prefer to handle things on their own. Others might not speak up for fear of worsening their situations. However, retaliation is bad whether someone reports it or not.

Therefore, you should always be on the lookout for signs of retaliation in your workplace. You should be especially keen after an action that might trigger retaliation. For example, pay attention to your workplace when an employee complains about a manager or supervisor. Telltale signs of retaliation include:

  • Increased scrutiny of a complainant
  • Inconsistent documentation of employee conduct
  • Inconsistent review of employees

Don’t jump to conclusions if you suspect something amiss. Investigate further before taking action.

Take Action If Retaliation Occurs

Employers who look the other way when retaliation occurs in their workplace encourage the vice. Take relevant action if an employee complains of retaliation. Taking action may include:

  • Preserving evidence, such as emails or documents, related to the complaint
  • Conducting an internal investigation
  • Warning or disciplining the perpetrators as the circumstances demand
  • Consulting legal counsel if necessary

Taking action will also encourage future victims to speak up.

Establish a Clear Anti-Retaliation Policy

Every company should have an anti-retaliation policy from its conception. Establish such a policy as soon as possible if you don’t have one. Your policy should have:

  • A definition of what constitutes retaliation
  • Actions to take (such as who to inform) on suspicion of retaliation
  • Red flags that might constitute retaliation

Review and update the policy as necessary. Ensure your policy is consistent with relevant employment laws.

Provide Relevant Training

Your anti-retaliation policy might not help much if your employees don’t understand it. The people in charge, especially managers and supervisors, should especially understand how to avoid retaliation or its appearance. Provide training, for example, in the form of workshops to ensure everyone understands your anti-retaliation policy.

The above tips should help you avoid retaliation complaints. However, you have to deal with all retaliation complaints, whether they are genuine or not. Contact Mohajerian Law Corp if an employee has raised a retaliation complaint. We will review your case, advise you, and help you defend your rights.

Filed Under: Class Action (Employment)Litigation

Employers cannot engage in the practice of rounding time punches.

March 7, 2021


Opinion of the Court by Liu, J.
Under California law, employers must generally provide employees with one 30-minute meal period that begins no later than the end of the fifth hour of work and another 30-minute meal period that begins no later than the end of the tenth hour of work. (Lab. Code, § 512, subd. (a); Industrial Welfare Commission (IWC) wage order No. 4-2001, § 11(A) (Wage Order No. 4).) If an employer does not provide an employee with a compliant meal period, then “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 . . . period is not provided.” (Lab. Code, § 226.7, subd. (c); Wage Order No. 4, § 11(B).)

In this case, we decide two questions of law relating to meal periods. First, we hold that employers cannot engage in the practice of rounding time punches — that is, adjusting the hours that an employee has actually worked to the nearest preset time increment — in the meal period context. The meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding is incompatible with that objective. Second, we hold that time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.

Filed Under: Class Action (Employment)Labor & Employment

The First Coronavirus Response Act

March 19, 2020

On March 18, 2020, President Trump signed into law H.R. 6201, the Families First Coronavirus Response Act.  The main provisions of the Act that will have the greatest impact on employers will be in effect within 15 days (no later than April 2nd) and will remain in place through December 31st, 2020.

There are new requirements for Paid Sick Leave and expanded FMLA provisions.  The paid sick leave requirements are in addition to those already in effect at the state or local level and the new FMLA provisions apply to almost all employers (not just those with 50 or more employees within 75 miles).

The highlights of the Act:

The Act Applies to companies with fewer than 500 employees.

There is no requirement for tenure of employment and the leave is a grant (not accrued) so the appropriate full amount is available immediately.

Full-time employees must be provided with 80 hours of paid sick leave and part-time employees are eligible for paid sick leave equivalent to the average number of hours they work over a two-week period.

The paid sick leave is for COVID-19-related issues.  There are six designated justifications for an employee using the leave and they have differing pay requirements as indicated below:

• The employee is subject to a federal, state, or local quarantine or isolation order for Coronavirus – paid at the regular rate of pay capped at $511 per day and/or $5,110 in the aggregate;

• The employee is advised by a health care provider to self-quarantine due to Coronavirus concerns – paid at the regular rate of pay capped at $511 per day and/or $5,110 in the aggregate;

• The employee is experiencing symptoms of Coronavirus and seeking a medical diagnosis – paid at the regular rate of pay capped at $511 per day and/or $5,110 in the aggregate

• The employee is caring for an individual who is under a quarantine or isolation order or has been advised to self-quarantine – paid at 2/3 of the regular rate of pay and capped at $200 per day and/or $2,000 in the aggregate;

• The employee is caring for a child whose school or child care has been closed due to Coronavirus – paid at 2/3 of the regular rate of pay and capped at $200 per day and/or $2,000 in the aggregate;

The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services – paid at 2/3 of the regular rate of pay and capped at $200 per day and/or $2,000 in the aggregate.

For employees that do not have a set schedule, paid sick leave is based on the average number of hours the employee was scheduled per day over the six-month period prior to the use of the leave

Because the federal paid sick leave is in addition to other statutory paid sick leave, an employer cannot incorporate it into an existing PTO policy.  The additional time off must be separate.  Further, the employer cannot require an employee to exhaust other forms of paid sick or PTO before utilizing the new leave.

Guidelines for calculating the amount of sick leave pay are to be provided by the Secretary of Labor within 15 days.

The ability to use this new leave ends when the qualifying event ends.  It does not carry over to the next year and is not payable upon termination.

The bill ensures employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are provided with leave.

Employers are required to post a notice informing employees of their expanded sick leave rights.  This notice is scheduled to be published within seven days.

Leave will be in place through December 31, 2020.

The Families First Coronavirus Response Act also includes a temporary expansion of the Family and Medical Leave Act (FMLA) through December 31, 2020

The expanded FMLA leave entitlement only applies to employers with fewer than 500 employees.  At the time of signing, the Act does not exempt businesses with fewer than 50 employees (those normally not subject to FMLA), but the Secretary of Labor has authority to issue regulations to provide an exemption.  This will be an important follow up item for employers with under 50 employees.

The expanded FMLA is specifically intended for childcare-related issues and has pay implications significantly different from the regular FMLA:

Allows FMLA leave (up to 12 weeks) to be used for a qualifying need related to a public health emergency concerning Coronavirus, as declared by federal, state, or local authorities.  

A “qualifying need” is limited to circumstances where the employee is unable to work or telework due to the need to care for a child under 18 if the child’s school or childcare is closed due to a Coronavirus-related public health emergency.  

Employees are eligible for the leave if they have worked for the employer for at least 30 calendar days.  Note that this is a considerably wider eligibility rule that existing FMLA.

The rules for when this Coronavirus-related FMLA leave is paid versus unpaid differ greatly from existing forms of FMLA leaves, all of which are unpaid: 

o   If an employee takes leave to care for a child due to a Coronavirus-related school closure, the first 10 days of the leave may be unpaid.  The employee may elect (but may not be required) to use accrued vacation or sick leave during this time;

o   After this first 10 days, the employer must provide PAID leave of no less than 2/3 of the employee’s regular rate of pay, capped at $200 per day and $10,000 aggregate.

An employee who uses this FMLA leave is entitled to reinstatement to the same or equivalent position UNLESS the employer has fewer than 25 employees, the position held by the employee at the time the leave started no longer exists due to economic conditions or other operating condition caused by the public health emergency, and the employer has tried to restore the employee to an equivalent position.  If there is no position available, the employer still must make reasonable effort for one year to contact the employee if an equivalent position becomes available.

Employers of health care providers and emergency responders may elect to exclude such employees from the provisions of this law.

Payroll Tax Credits are available to employers that provide paid sick leave or paid family leave to employees for the specific Coronavirus-related purposes defined by the Act. Employers will be entitled to a payroll tax credit for each calendar quarter in an amount equal to 100% of the qualified paid sick leave wages paid by the employer in the quarter, and the amount of qualified family leave wages paid by the employer, not to exceed $200 per day and $10,000 aggregate per employee.

The Act also provides for $1 billion in 2020 for emergency grants to states for activities related to unemployment insurance benefits.

The Act requires private health plans, Medicare, Medicaid, CHIP, TRICARE, Coverage for Veterans and Coverage for Federal Civilians to provide coverage at no cost sharing for COVID-19 testing and additionally provides for reimbursement by the National Disaster Medical System to reimburse testing costs for uninsured individuals. American Indians and Alaskan Natives are also entitled to testing without cost sharing including when sent for care away from the tribal health care facility.

The information presented in this email is provided for informational purposes only and does not constitute as legal advice.

Filed Under: Labor & Employment

Labor Code 12750.3 Takes Effect On January 1, 2020

October 13, 2019

“Under the ABC test, a worker is presumed to be an employee, unless the hiring entity establishes each of the following:

“(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.” (Dynamex, supra, 4 Cal.5th at p. 957.)”

Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5th 558, 569.
A plumber hired by a retail store would not be considered an employee; by contrast, a cake decorator servicing a bakery for custom cakes, or an at-home seamstress sewing dresses from patterns supplied by a clothing manufacturer, would. (Id. at pp. 959–960.) Garcia, supra, 28 Cal.App.5th 558, 569-570.

Because “a hiring entity’s failure to satisfy any one of the three parts itself establishes that the worker should be treated as an employee for purposes of the wage order, a court is free to consider the separate parts of the ABC standard in whatever order it chooses.” (Dynamex, supra, 4 Cal.5th at p. 963.) Garcia v. Border Transportation Group, LLC, supra, 28 Cal.App.5th 558, 569.

Dynamex applies to wage order claims. Dynamex did not purport to replace the Borello standard in every instance where a worker must be classified as either an independent contractor or an employee for purposes of enforcing California’s labor protections. Garcia v. Border Transportation Group, LLC, supra, 28 Cal.App.5th 558, 570.
“The [Dynamex] court cites with approval a Utah case that explained, “‘the appropriate inquiry under part (C) is whether the person engaged in covered employment actually has such an independent business, occupation, or profession, not whether he or she could have one.’” (Dynamex, supra, 4 Cal.5th at p. 962, fn. 30, quoting McGuire v. Department of Employment Security (Utah Ct.App. 1989) 768 P.2d 985, 988. .)” Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5th 558, 573. the third prong, it is not enough to show that the individuals are free to engage in similar activities for others or work as employees for others.” Garcia, supra, at 573.

New Labor Code 2750.3

The ABC test has been codified in the new Labor Code § 2750.3 which is effective January 1, 2020. Labor Code § 2750.3(a) states, inter alia:
“(1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”

New Labor Code 2750.3 also lists occupations that are exempt.

“(b) Subdivision (a) and the holding in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), do not apply to the following occupations as defined in the paragraphs below, and instead, the determination of employee or independent contractor status for individuals in those occupations shall be governed by Borello.

(1) A person or organization who is licensed by the Department of Insurance pursuant to Chapter 5 (commencing with Section 1621), Chapter 6 (commencing with Section 1760), or Chapter 8
(commencing with Section 1831) of Part 2 of Division 1 of the Insurance Code.

(2) A physician and surgeon, dentist, podiatrist, psychologist, or veterinarian licensed by the State of California pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, performing professional or medical services provided to or by a health care entity, including an entity organized as a sole proprietorship, partnership, or professional corporation as defined in Section

(3) An individual who holds an active license from the State of California and is practicing one of the following recognized professions: lawyer, architect, engineer, private investigator, or accountant.

4) A securities broker-dealer or investment adviser or their agents and representatives that are registered with the Securities and Exchange Commission or the Financial Industry Regulatory Authority or licensed by the State of California under Chapter 2 (commencing with Section 25210) or Chapter 3 (commencing with Section 25230) of Division 1 of Part 3 of Title 4 of the Corporations Code.

(5) A direct sales salesperson as described in Section 650 of the Unemployment Insurance Code, so long as the conditions for exclusion from employment under that section are met.

(6) A commercial fisherman working on an American vessel as defined in subparagraph (A) below.
(1) Subdivision (a) and the holding in Dynamex do not apply to a contract for “professional services” as defined below, and instead the determination of whether the individual is an employee or independent contractor shall be governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:

(A) The individual maintains a business location, which may include the individual’s residence, that is separate from the hiring entity. Nothing in this subdivision prohibits an individual from choosing to perform services at the location of the hiring entity.

(B) If work is performed more than six months after the effective date of this section, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in their profession.

(C) The individual has the ability to set or negotiate their own rates for the services performed.

(D) Outside of project completion dates and reasonable business hours, the individual has the ability to set the individual’s own hours.

(E) The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.

(F) The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.

(2) For purposes of this subdivision:
(B) “Professional services” means services that meet any of the following:

(ix) Services provided by a still photographer or photojournalist who do not license content submissions to the putative employer more than 35 times per year….. For purposes of this clause a “submission” is one or more items or forms of content produced by a still photographer or photojournalist that: (I) pertains to a specific event or specific subject; (II) is provided for in a contract that defines the scope of the work; and (III) is accepted by and licensed to the publication or stock photography company and published or posted. Nothing in this section shall prevent a photographer or artist from displaying their work product for sale.”

Mohajerian Law Defends Employers throughout California

Filed Under: Class Action (Employment)Labor & Employment

July 1, 2019 Minimum Wage Increase

June 18, 2019

On July 1, 2019, a series of local minimum wage increases will take place in California. Below is a short list of cities and counties subject to minimum wage increase on July 1, 2019.

Bay Area

Alameda: $13.50

Berkeley: $15.59

$16.30 (all employers except small independent restaurants)
$15.00 (small independent restaurants with 20 or fewer global locations)

Milpitas: $15.00

San Francisco: $15.59

San Leandro: $14.00

Los Angeles Region

City of Los Angeles
26 employers or more: $14.25
25 employers or less: $13.25

County of Los Angeles (only applies to unincorporated areas)
26 employers or more: $14.25
25 employers or less: $13.25

26 employers or more: $14.25
25 employers or less: $13.25

26 employers or more: $14.25
25 employers or less: $13.25

Santa Monica
26 employers or more: $14.25
25 employers or less: $13.25

Filed Under: Class Action (Employment)Labor & Employment

CBD Products & USPTO

May 14, 2019

The United States Patent and Trademark Office recently issued a new Examination Guide relating to trademarks for cannabis and cannabis-related goods and services.

This guide comes after the December 20, 2018 enactment of the Farm Bill.

Filed Under: Trademark

Dynamex applies retroactively!

May 9, 2019

In May 2019, the 9th Circuit issued a ruling in Vazquez v. Jan-Pro Franchising International, Inc. No. 17-16096 (9th Cir. 2019). In Vazquez, the 9th Circuit analyzed whether Jan-Pro’s franchisees were in fact employees, as opposed to independent contractors. The 9th Circuit held that the California Supreme Court’s intervening decision in Dynamex Ops. W. Inc. v. Superior Court of Los Angeles, 4 Cal.5th 903 (2018) is controlling and applies retroactively.

Filed Under: Class Action (Employment)Labor & Employment

The trial court ruled that YRC did not violate section 226(a)(8) by providing its fictitious business name as the employer name on its wage statements or by providing an employer address that did not contain a mail stop code or ZIP+4 Code.

May 8, 2019


Court of Appeals of California, First District, Division Three.

Filed April 10, 2019 (2019 DJDAR 3087).

The trial court ruled that YRC did not violate section 226(a)(8) by providing its fictitious business name as the employer name on its wage statements or by providing an employer address that did not contain a mail stop code or ZIP+4 Code. The Court decided in favor of YRC’s position, but refused to rule on whether strict compliance, rather than substantial compliance, is required by LC §226(a)(8).

Vaiula Savea (“Savea”) has been an employee of YRC since 1998. During his employment, he and other employees received wage statements from YRC that listed the employer’s name as YRC Freight and the employer address as 10990 Roe Avenue, Overland Park, KS.   Savea filed a complaint against YRC alleging YRC failed to provide the correct employer name and address on its wage statements as required by LC, § 226(a)(8). The trial court sustained YRC’s demurrer to the complaint without leave to amend; Savea appealed. He contended the court erred by: (1) determining that the wage statements—which listed YRC’s fictitious business name as the employer name and listed an employer address that did not contain a mail stop code or ZIP+4 Code—a plain violation of section 226, subdivision (a)(8); and (2) the trail court should not have considered supplemental evidence that YRC presented in a request for judicial notice.

Section 226, subdivision (a) requires an employer to provide employees with “an accurate itemized statement” that includes nine specific categories of information: (1) gross wages earned; (2) total hours worked; (3) certain information for employees paid on a piece-rate basis; (4) all deductions; (5) net wages earned; (6) the pay period; (7) the employee’s name and identifying information; (8) the name and address of the legal entity that is the employer; and (9) all applicable hourly rates.

An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000); further the employee is entitled to an award of costs and reasonable attorney’s fees. (§ 226(e)(1).) Injunctive relief and civil penalties are also available. (§§ 226 (h), 226.3).YRC demurred to Savea’s complaint on the ground that the complaint failed to state a claim because the employer name and address on its wage statements were accurate.

Filed Under: Class Action (Employment)Labor & Employment