Julie Su, California Labor Commissioner issued citations against O & K Apparel Inc., a Los Angeles based wholesale woman’s clothing company, to pay $113,785 in overtime wages for 110 employees, plus penalties of $61,450 for failing to pay proper overtime and $307,250 for issuing improper itemized deduction statements.
“Employers must pay workers the wages they have earned,” said Christine Baker, Director of the Department of Industrial Relations (DIR). The Labor Commissioner’s office is a division within DIR. “And the Labor Commissioner’s office will protect their rights, as well as the rights of honest businesses and taxpayers.”
According to the DIR, O & K Apparel Inc. makes women’s garments and pays its employees by the piece. Under California Employment law, garment contractors are required to provide accurate itemized statements to employees showing total hours worked and if employees are paid by the piece, they must show the number of pieces produced for specific manufacturers and the rate of pay for each piece in addition to the total hours worked.
Labor Commissioner Julie A. Su stated, “There is no place for sweatshop conditions in our 21st century economy. Piece rate payment cannot be used as an end-run around the basic requirement that all workers in California receive a just day’s pay for a hard day’s work, including overtime pay for overtime hours worked. In addition, California law requires itemized wage statements so employees know how much they worked and what they earned. In this case, the pay stubs did not include any of that information, which makes it hard for workers to know when their wages are being stolen right out from under them.”
According to the DIR, overtime is based on the regular rate of pay, which is the compensation employees normally earn for the work they perform. The regular rate of pay may NOT be less than the minimum wage, which in California is currently $8.00 per hour.
If an employee is paid by the piece, either of the following methods are acceptable methods for determining the regular rate of pay for purposes of computing overtime:
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- The piece rate is used as the regular rate and you are paid 1 1/2 this rate for production during the first 4 overtime hours in a day, and double time for all hours worked beyond 12 in a day.
or
- Divide the total earnings for the week, including earnings during overtime hours, by the total hours worked during the week, including the overtime hours. For each overtime hour worked the employee is entitled to an additional 1/2 the regular rate for hours requiring time, and to the full rate for hours requiring double time.
