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Lagarias & Boulter L.L.P. has represented franchisees and dealers in hundreds of different franchise and distribution systems including:

Arco, Athlete’s Foot, Avis, Baskin Robbins, Blimpie's, Burger King, Century 21, Chrysler, Choice Hotels, Denny’s, Dominoes, Duxiana, Liberty Tax, Mail Boxes Etc., McDonald's, Quiznos, Sears, 7-Eleven, Service Masters, Snap-on Tools, Shred-it, Subway, 1-800 Radiator, and many more.

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Roberts/McKay v C.R. England

Latest Blog Entries.

Friday, September 30, 2011 7:13:26 PM
The Case for More, Not Less, Franchisee Protection
Current franchise laws and regulations do not go far enough to protect the interests of franchisees against often times overreaching franchisors.
Friday, September 30, 2011 7:10:28 PM
Support the Arbitration Fairness Act of 2009 (House Bill 1020)
Federal appellate courts continue to put their full weight behind arbitration and erode the flexibility of judges to set aside or at least limit one-sided arbitration schemes and results.
Friday, September 30, 2011 7:08:48 PM
Welcome to Franchisee Law Blog
Lagarias & Boulter, L.L.P. devotes itself to keeping up-to-date on issues important to the franchising community and to franchisees in particular.

Employment Law

Rest Periods

Rest Breaks

Under California law every employer shall authorize and permit all employees to take off duty rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 1/2) hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages. Failure to comply with the rest break laws subjects the employer to liability for one hour of pay for each violation.

Click here for more information about rest breaks.

Deductions

Under California law, it is illegal for an employer to make deductions from an employee's wages due to a mistake or accident resulting in cash shortages, property damage or breakage. According to California courts, mistakes are inevitable and businesses have to bear such losses as normal business expenses. Therefore, if an employee drops a tray of wine glasses or a customer walks out without paying a check, the employer cannot deduct the loss from an employee's paycheck. In addition, it is also illegal for an employer to deduct expenses such as workers compensation, insurance or claims from an employee's check. Some other illegal deductions are listed below:
 

Gratuity - An employer cannot take gratuity that was left for an employee. However, tip sharing or tip pooling is allowed if it is pooled by the employees who directly support customers.

Uniforms - If a uniform is required for employees, the employer must cover all costs of the uniform. So if the employer is a clothing retailer and it requires employees to purchase and wear the retailer's clothes at work then the employer must cover the cost of those clothes.

Business Expenses - An employee is entitled to be compensated for any and all expenses incurred while serving the business.

Medical or Physical Examinations - If a medical or physical examination is required for employees before they are hired, it is illegal for the employer to deduct the costs of the examination for the employee's wages. The employer must bear all costs associated with pre-employment medical or physical examinations.

Click here for more information about deductions.


Independent Contractors

It is common for employers to improperly classify employees as independent contractors. Some employers do this in an attempt to avoid certain wage and hour law requirements such as payroll taxes, minimum wage or overtime, meal periods or rest breaks, workers compensation insurance, and payments in relation to social security and unemployment or disability insurance.

California Law provides a "multi-factor" or "economic realities" test to determine whether an employee is properly classified as an independent contractor. The most important factor in the test is whether the person who is requiring the service (employer) has control or the right to control the employee as to what work they perform and how it is carried out. An employee/employer relationship will be found if the employer oversees the operation in its entirety, the work performed by the worker is an essential part of the operation, and if the nature of the work itself makes detail control unnecessary. Many other factors that may be considered are listed below:

  1.  Whether the employee is engaged in an operation or a business that is distinct from that which he is contracted to do work.

  2. Whether the work contracted is part of the regular business operations of the employer.

  3. Whether the employer supplies the materials and the work-site for the employee.

  4. The employee's level of investment in the materials used during the contracted work.

  5. Whether a special skill is needed for the contracted work.

  6. Whether the employee's occupation is a specialization and the employee works without supervision.

  7. What opportunity the employee has for profit or loss depending on his or her own managerial skill.

  8. The length of time the employer is to be contracted.

  9. The level of permanence for the employee in the contracted work.

  10. Whether the employee is paid by the job performed or by hours worked.

The courts look beyond written agreements that purport to establish an independent contract relationship. The existence of such documents is not determinative of whether an employee is an independent contractor or not.

Click here for more information about independent contractors.


Reporting Time Pay

California law provides protection for nonexempt employees who report to work expecting to work a certain number of hours and are deprived of those hours due to the employer's improper notification or scheduling errors. Under such circumstances, employers are required to pay employees not just for the hours they work, but also regularly scheduled hours. This type of pay is considered "reporting time pay." Reporting time pay is not considered wages, and isn't taken into consideration while determining overtime owed. Reporting time pay specifics are listed below:
 

  1. If an employee reports to work expecting to work a certain number of hours, but is released without working any hours or working less than half the hours scheduled, the employer is required to pay the employee for half of the hours scheduled. This cannot exceed 4 hours of pay, but also must be at least 2 hours of pay at the employee's regular rate. For example, if an employee reports to work a scheduled 8 hour shift, but is sent home after working only 2 hours then that employee is required to be paid 4 hours of pay at their regular rate of pay, however only 2 of these hours count as actual hours worked.

  2. If an employee reports to work for the second time in any workday and works less than 2 hours on the second shift, the employer is required to pay that employee 2 hours of pay at their regular rate.

Click here for more information about reporting time pay.


Waiting Time Penalty In California

Under Labor Code Section 203, employers are required to promptly pay employees all wages owed at the conclusion of the employment relationship. Failure to do so results in penalties owed to the employee. Penalties are measured by taking the employees regularly daily rate and multiplying it to the number of days the employee was not paid, up to a maximum of 30 days.

For example, if an employee was not paid until the 8th day after the employee relationship concluded and the employee's daily rate equaled $75.00, then the employee may be entitled to $525.00 (7 days multiplied by $75.00) worth of penalties.