Litigating California Wage & Hour and Labor Code Class Actions

also apply to non-resident employees who perform work in California for California
employers. 7
Individual employees have a private right of action for unpaid overtime. Typically, a plaintiff
invokes a private right of action by alleging violation of Labor Code Section 510 or a
provision of the governing IWC order. Such a claim does not depend on the Fair Labor
Standards Act (“FLSA”) or other federal law. A prevailing plaintiff may recover attorney’s
fees for an overtime claim, 8 but California law, unlike the FLSA, does not provide a remedy
of double damages for willful overtime violations. 9 In a private action for unpaid overtime
compensation under the Labor Code, the statute of limitations reaches back to three years
before the date the lawsuit is filed in court. 10
B. The Executive (Managerial) Exemption
One issue frequently raised in misclassification class actions is that a proposed class of
exempt managers—most often “working managers” in a retail establishment—do not
qualify for the “executive” (aka “managerial”) exemption. The FLSA and California law
contain similar executive exemptions, but California’s is more restrictive in key respects.
California requires that an “executive” employee be paid a higher level of compensation
than required under the FLSA. 11 The salary must be set at a level at least twice the
minimum wage, which is currently $8.00 per hour in the State of California. 12 Accordingly,
to qualify for the exemption, a manager must now be paid $33,280 per year. A manager
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The California Supreme Court in Sullivan v. Oracle, 51 Cal. 4th 1191 (2011), held that California overtime laws apply to
out-of-state employees who perform work within the state. The Court also held that overtime work performed by out-ofstate
employees within California can serve as the basis for a claim under California’s unfair competition law. Cal. Bus.
& Prof. Code § 17200 (“UCL”). However, the Court also held FLSA violations as to out-of-state employees outside
California cannot serve as the basis for a California UCL claim. Although the Sullivan court explicitly limited its decision
to “the circumstances of this case,” plaintiff’s bar may argue its reasoning suggests that similar conclusions may result
for non-California-based employers. The Sullivan court declined to opine on the different burdens that a non-Californiabased
employer may face in applying California overtime laws to nonresident employees working in California, but the
plaintiff’s bar will undoubtedly seek to obtain judicial rulings that the California Supreme Court’s conflict of laws analysis
suggests no reason for why a different conclusion would result for non-California-based employers.
The California Court of Appeal has held that only the prevailing employee, and not the prevailing employer, may recover
attorney’s fees in an action for overtime pay or for unpaid minimum wages. Early v. Superior Court, 79 Cal. App. 4th
1420 (2000).
But see Lab. Code § 1194.2 (providing double damages for minimum wage violations).
As explained infra, this statute of limitations can be extended to four years through the pleading of a companion claim
under the state Unfair Competition Law, Bus. & Prof. Code § 17200, et seq.
The revised FLSA regulations that went into effect on August 23, 2004, increased the minimum salary from $250 per
week to $455 per week. Even under this revised minimum, California’s minimum remains higher than the FLSA’s
minimum.
The federal minimum wage is currently $7.25; employees working within California are generally subject to the higher
state minimum wage.
Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 6