Question: I have learned that there are many differences between California wage and hour laws and the federal wage and hour laws. Am I correct in assuming that so long as we comply with one or the other, we are compliant? Answer: Your question is a common one that I hear regularly, as is your assumption. Unfortunately, your assumption is incorrect. In most cases, California’s employment laws are more burdensome (for employers) than the federal counterparts. For example, effective January 1, 2008, California’s minimum wage was increased to $8.00 per hour. The federal minimum wage is $5.85 per hour until July 24, 2008, at which time it will increase to $6.55 per hour. As a California employer, since California’s minimum wage is higher, and thus more restrictive, you must comply with California’s minimum wage laws for California-based employees. Compliance with the lesser federal minimum wage laws get you nothing. Beyond this minimum wage discrepancy, keep in mind that there are many other significant differences between California and federal labor and employment laws (e.g., overtime rules). California employers must comport with the more restrictive requirement (which 9 out of 10 times will be the California rule). Q: We have commissioned outside sales people throughout the West. They are all W-2 employees. For budget purposes, we are considering asking these sales people to attend our annual sales meeting at our corporate home office here in the Valley on their own nickel. Other than the possible negative hit to morale, is there anything else we should be thinking about? A: Yes; not doing it. Why? Other than the first very good reason (which you have apparently already taken into consideration the certain negative hit to morale), requiring employees to dig into their own pockets to pay for required work-related expenses (e.g., travel and lodging to attend a mandatory out-of-town meeting) violates Section 2802(a) of California’s Labor Code which provides that an employer “shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequences of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.” The same section goes on to state that “necessary expenditures or losses” includes all reasonable costs, including but not limited to, interest and attorney’s fees incurred by the employee enforcing his rights granted by this Section. Though you might consider scaling back on the expenses associated with the meeting by conduct the meeting via teleconference or conference call, as opposed to in-person, or even skipping this year altogether, you should certainly scrap your current plans to force your staff to pay their own way to attend a mandatory meeting. Q: We are a party to a contract that has no term. The relationship is pretty new and it is not going as well as we expected. I assume since there is no specific term, we can terminate the contract immediately if we choose. True? A: Actually, that is not necessarily the case. Generally speaking, courts apply a three-step analysis in determining how long a contractual term runs: first, courts will look for an express term (e.g. ” this agreement shall remain in force for a period of one year from its effective date “); if one is absent (as it appears it is in your case), the court determines whether one can be implied from the nature and circumstances of the contract (the court will look at other provisions in the agreement, and perhaps even the parties’ course and scope of dealing in determining if the parties anticipated that the agreement could be terminated by will or not); if neither an express nor an implied term can be found, the courts will generally construe the contract as terminable at will. Since the answer to your question can’t be answered without first reviewing the agreement itself (e.g., a lawyer would look for other relevant provisions such as if there is a right to cure, if projections speak to multiple years, etc.) and exploring the context of the negotiations and relationship (e.g., if the relationship contemplated a significant up front investment by one party), I would suggest you consult a business lawyer for advice prior to choosing a route you might otherwise regret. This column contains general information and under no circumstances constitutes legal advice. This information is not provided in the context of an attorney-client relationship and nothing herein creates an attorney-client relationship. Readers should not act upon this general information without first seeking professional advice. Ira Rosenblatt is a business and corporate lawyer and a co-founder and Director of Stone, Rosenblatt & Cha, a business law firm in Warner Center. Rosenblatt has earned Martindale-Hubbell’s highest rating (“AV”) for legal ability and ethics and is listed in Martindale-Hubbell’s National Bar Register of Pre-eminent Lawyers. He can be reached at [email protected] .
