Law Requires Prompt Payment to Most Employees for Hours Worked

Q: What recourse do employees have when a construction trade contractor fails to pay for all of the hours that they work for him?

My son feels he has not been paid for many hours he has worked. For example, the contractor had the entire crew working out of town for two weeks on a project. But my son received only four days’ pay, with the balance to be paid at some vague date in the future. He appreciates the job, but the lax payments are having a serious effect on him and his family.

--A.C., Garden Grove

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A: State law requires that most employees be paid wages at least twice each calendar month.

Employees must be paid by the 26th day of each month for work performed between the first and 15th days of that month. They must be paid by the 10th day of the month for work performed between the 16th and last day of the previous month.

Employers who fail to follow these rules can be assessed penalties. Your son should not be penalized when the employer has trouble collecting for work on a construction job. Indeed, the law allows employers in this industry to place a lien on the job if they have trouble collecting payments for work performed.

If the employer does not voluntarily pay the amount due your son, he could file a claim with the California labor commissioner’s office.

It also is illegal for the employer to retaliate against your son by firing him if he complains about the late payments.

--Don D. Sessions

Employee-rights attorney

Mission Viejo

An Oral Promise Is Broken

Q: I am a family physician employed by a medical group. The contract that I signed contained an automatic renewal clause after 12 months.

I had been promised orally that I would receive a raise at the end of 12 months. Now they are refusing to give me a raise and say that my contract has been automatically renewed.

Can this be possible without my signature? What legal recourse do I have?

--K.H., Venice

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A: You may not have much in the way of legal recourse.

Under what is known as the “parol evidence” rule, prior or contemporaneous oral statements may not be used to contradict terms of a written contract. Because your contract apparently specified your salary and stated that the contract terms would automatically renew unless you or your employer gave notice of a desire to terminate (or renegotiate) the contract, your failure to give notice automatically continued the terms for another year.

As a practical matter, depending upon the market for physicians and whether the contract restricts you from practicing for a competing entity during its term, you may still be able to renegotiate now without waiting another year.

Under most circumstances, an employer cannot force an employee to work against his or her will. Although your medical group might be able to prevent you from practicing for a competing entity, the group might have to continue your salary for the contract term in order to enforce that restriction.

Depending upon the supply of physicians available, your medical group may have an incentive to renegotiate with you now to prevent you from leaving.

As this strategy could have a significant negative effect upon your career if unsuccessful, however, you should consult legal counsel before making such a move.

--James J. McDonald Jr.

Attorney, Fisher & Phillips

Labor law instructor, UC Irvine

Cap on Vacation Is Legal

Q: This year, my husband’s company put a limit on accruing vacation time. Once you have built up 160 hours, you simply stop accruing vacation benefits.

Since my husband is an outside sales representative who receives a modest base salary plus commission, it is difficult to schedule vacation because income plummets whenever my husband takes a work break. It is particularly difficult when sales are slow, as they have been recently.

As a result, he has spent the last few months accruing nothing. Is this legal?

--L.M., Ojai

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A: Yes. It is unlawful in California for an employer to have a “use it or lose it” vacation pay policy, which typically provides that an employee who does not take all his vacation in the year in which it is earned loses (or forfeits) it at the end of that year.

However, the California labor commissioner, with the subsequent approval of the California courts, has approved the concept of capping accruals, which is what your husband’s company is doing.

Your husband’s paid vacation account is capped at 160 hours and he will earn no more until he takes some paid vacation time to reduce his balance below the cap. He then will accrue vacation again until he reaches the cap.

Although the difference between a “use-it-or-lose-it” policy and a policy that caps accruals may seem to be only one of semantics, the California labor commissioner and the courts have held that a cap on accruals is lawful because it does not deprive the employee of anything he or she has earned. The employee simply stops earning vacation pay when the cap is reached.

--Deborah C. Saxe

Management attorney

Heller Ehrman White & McAuliffe

Group Health Coverage Lost

Q: I am employed by an entertainment company that has been downsizing over the last year because of financial problems.

Recently, our group health insurance was canceled by the carrier because of nonpayment, leaving me and other employees without coverage. To make matters worse, the policy was canceled retroactively, taking effect three months ago.

Many of the employees have since had medical services performed. Since our employer has just notified us of the problem and subsequent cancellation, what recourse do we have? Can we recoup any medical costs we are sure to be responsible for?

--T.C., Santa Monica

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A: Although the employer is probably not liable for canceling the health insurance coverage, there have been several cases that have held employers liable for failing to notify their employees in a timely manner that the health insurance premiums have not been paid.

If you would like assistance on this matter, you should consider contacting the Pasadena office of the U.S. Labor Department at (626) 583-7862.

--Kirk F. Maldonado

Employee benefits attorney

Riordan & McKinzie

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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.