California Labor and Employment Defense Blog

California Minimum Wage Law Applies to State Employees -- Sheppard v. North Orange County Regional Occupational Program

On December 23, the Fourth District Court of Appeal gave an early Christmas present to government employees by holding that they are covered by the same California minimum wage laws as private employees. 

The Court reached this conclusion in Sheppard v. North Orange County Regional Occupational Program, through its interpretation of the plain language of Wage Order 4-2001, which generally applies to all Californians employed in white-collar, "clerical," or "office" jobs.  

The Court's textual analysis centered on the qualified nature of the Wage Order provision that exempts government employees from most of its protections:  i.e., the language in Section 1(b) stating that “Except as provided in Sections 1 [‘Applicability of Order’], 2 [‘Definitions'], 4 [‘Minimum Wages'], 10 [‘Meals and Lodging’], and 20 [‘Penalties'], the provisions of this order shall not apply to any employees directly employed by the State or any political subdivision thereof, including any city, county, or special district.” 

The Court interpreted this language as creating a limited exception to the general exclusion of government employees from the protections of the Wage Order.  As a result, the Court held that "we interpret the language of Wage Order No. 4-2001, by its terms, to impose the minimum wage provision as to all employees in the occupations described therein, including employees directly employed by the state or any political subdivision of the state."  (Emphasis added).

This is a very big deal for state workers because California's minimum wage law is far more liberal than federal law.  In particular, California law does not allow employers to average wages over an entire work week in order to determine if the minimum wage threshold (currently $8.00 per hour) has been met.  Instead, California employers must ensure that their compensation plan guarantees that "each hour" is separately and independently compensated at the minimum rate.  Thus, regardless of a workers overall level of weekly or monthly compensation, any amount of unpaid work during the week will trigger a claim for unpaid "off the clock work."  

(This requirement of separate compensation for each hour is sufficiently important to warrant its own separate blog post, so watch for that coming out soon).      

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