A Right to Overtime Depends on Status: ALSO: Employee-Owners Can See Books; Firms Free to Alter Commissions

Q: I was a salaried employee working as a project engineer for a company. I was not in a supervisory position and had no direct responsibility for supervising anybody. To meet certain deadlines, sometimes I had to work more than 40 hours a week. On one project, I worked 50 hours a week and my supervisor (manager) compensated me for the extra 10 hours at my regular rate. Should he have compensated me at 1 1/2 times the regular rate?

When I worked over 50 hours a week on another project, my supervisor did not compensate me at all, saying I am a salaried employee and therefore exempt from overtime requirements. He also said the project I worked on did not have enough budget left. Is this legal?

Since this happened within the last year and I have left the company, is there anything I can do about it?

--A.G., Irvine

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A: I do not have enough information regarding your duties to determine whether or not you were an exempt employee who was not entitled to overtime. Being paid on a salary basis is just one factor in determining whether an employee is exempt. The actual functions and duties of a particular job also must be analyzed. Although the fact that you do not supervise any employees is in your favor, it is not the only factor.

If you were not an exempt employee, your employer was required to pay you 1 1/2 times your regular rate of pay for each hour of overtime worked in an 8-hour day or in excess of 40 hours per week. The lack of money in the budget is not a valid excuse to avoid paying overtime. If the employer failed to account for the overtime in the budget, the employer suffers the loss, not the employee.

At this time, it appears your claim would fall within the statute of limitations. I suggest filing a claim with the California Department of Labor to request the overtime wages. Be prepared to discuss the amount of overtime you are seeking and your job responsibilities.

--William H. Hackel III

Employment law attorney

Spray, Gould & Bowers

Employee-Owners Can See Company Records

Q: I am one of 125 employee-owners of a mid-sized service company. The ownership on my part consists of company stock. There are no guidelines for stock owners to examine documents such as balance sheets, year-end statements, profit and loss reports, etc.

What are my rights as an employee-owner to examine company documents and what company documents do you think should be available for me to examine? Are there any rights listed under federal or state laws?

I would like to obtain this information to make an educated decision to buy or sell the stock.

--R.V., Victorville

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A: California law provides that any shareholder may, on written demand, inspect and copy the accounting books and records, and the minutes of proceedings of the shareholders, board of directors, and board committees of any California corporation. This right also extends to shareholders of a foreign corporation keeping such records in California or having its principal executive office in the state.

The inspection may be in person or by an agent of the shareholder at any reasonable time during normal business hours. The corporation may not attempt to limit or restrict shareholder inspections. If the record requested is not in written form, the corporation, at its expense, must make it available in written form.

An employee’s inspection rights are limited, however, to information related to his or her interests as a shareholder. These include ascertaining the financial condition of the corporation, the propriety of dividends, the value of stock, issues of mismanagement, and as an aid to litigation. Certainly, a request for such information to evaluate a purchase or sale of the stock would be legitimate.

In addition, there are numerous cases that have expanded shareholder inspection rights to include most nonproprietary or non-confidential corporate records.

A shareholder who is refused access to the records may sue in Superior Court. The court may order an inspection by the shareholder, or may appoint an inspector to audit or inspect the corporation’s records or properties. The court also may order the company to reimburse the shareholder for expenses and attorney’s fees.

--Edward G. Coss

business law attorney

Lazof & Coss

Employers Free to Alter Commission Schedules

Q: I was recently offered a promotion from a general sales representative to a corporate sales representative within my organization. After weighing the pros and cons, I accepted the position based on the commission structure that I was shown. Several others in my department were offered similar opportunities and accepted the promotions as well.

A month later, upper management approached us and admitted that they had shown us a commission structure that had not yet been approved. They then distributed the “actual” commission structure, which would substantially cut our potential earnings. I, as well as my colleagues, feel that we were misled into accepting promotions that now appear to be involuntary pay cuts. It is also our opinion that the company did not act in good faith.

Can we sue our company for breach of oral and written contract?

--C.M., Redondo Beach

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A: Probably not. Most companies, when implementing policies such as commission schedules, reserve the right to change them and can change them upon notice to the affected employees. Therefore, unless your employer promised that the commission schedule that you were shown would in fact never be changed, or unless you made it clear that you would not accept the position unless the commission schedule you were shown was the one that would apply to you, you do not have a claim for breach of contract.

If, however, you can establish that the individuals who showed you the commission schedule on which you relied in accepting the promotion never intended to put it into effect, you possibly could have a fraud claim against your employer. However, such claims are very difficult to establish.

--Michael A. Hood

employment law attorney

Paul, Hastings, Janofsky & Walker

If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626 ; dictate it to (714) 966-7873; or, e-mail it to shoptalk@latimes.com. Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice. More on Overtime