A federal district court in California recently awarded Wal-Mart employees $102 million in damages and penalties for missed meals and insufficient wage statements. The class action claim was divided into three parts: missed meals, wage statements missing hourly rates, and final pay statements without pay period start and end dates. A year ago, the court ruled that the company clearly failed to list all hourly rates in wage statements and to include pay period dates in the final pay statements. Now the court has ruled on the missed meals and liability for the wage statement errors. The court found that, based on some of the employee-entered codes for the missed meal periods, the company didn’t fully “relinquish control of the employee” and therefore owed an additional one hour of pay for each violation. For these missed meals, the court also found that the company incorrectly calculated the rate owed because it didn’t include an incentive bonus. Here’s the kicker: even though the court decided the original claimant didn’t actually miss any meal periods and the court decertified the class, it still assessed the company $70,000 in penalties under the California Private Attorneys General Act (PAGA).
The second half of the trial focused on whether the company knowingly and intentionally provided wage statements that were insufficient and whether employees were harmed by the lack of information. The court found the disclosure requirements of Labor Code 226(a)(6) and (a)(9) were abundantly clear, the employees’ need for detailed pay information was essential, and the company’s failure to change its pay statements since the court’s decision a year ago was damning. As a result, the court assessed the company $48 million in statutory damages and another $48 million in PAGA penalties for regular wage statement errors, as well as $5.8 million in PAGA penalties for final paycheck wage statement errors (Magadia v. Wal-Mart Associates, Inc., ND Cal, May 2019).
Tips: Ensure that you fully relinquish control of nonexempt employees for unpaid meal periods. If you’re unable to do so and you have to pay the additional one hour of wages required under California law, be sure to include commissions, incentives, and bonuses on top of the base pay. For details, see our Legal Guide, Breaks and Meal Periods—California. Also, compare the list of required disclosures in Labor Code 226(a) to the information on your ongoing and final wage statements to make sure all information is included. If you have any questions members should contact their Vigilant employment attorney.
Wage and hour issues are complex, especially in California. If you need ongoing help with this and you aren't yet a member, contact us to learn about our flat fee employment law advice.