Labor & Employment Law Blog

In a case of first impression, the California Supreme Court recently decided that an employee cannot sue a payroll company for failing to include the legally required information on the employee’s earnings statements.  The Court held that because a payroll company’s obligations are solely to the employer, an employee cannot claim that they are a third‑party beneficiary of the employer’s contract for payroll services, and cannot maintain a claim for breach of that contract against the payroll provider. (Goonewardene v. ADP, No. S238941, February 7, 2019)

On June 25, 2018, a California court of appeal offered employers who use rounding systems to calculate employee payroll a reassuring ruling, approving a policy that rounded employee’s time to the nearest quarter hour. In AHMC Healthcare, Inc. v Superior Court (2018) No. B285655, the issue arose out of AHMC Healthcare’s use of a payroll system that automatically rounded employee hours up or down to the nearest quarter hour prior to calculating wages and issuing paychecks (instead of using the employee’s exact check-in and check-out times). Emilio Letona and Jacquelyn Abeyta, both employees of AHMC Healthcare, brought a class-action suit against AHMC Healthcare, Inc. for failure to pay wages and failure to furnish timely and accurate wage statements. The plaintiffs claimed this rounding system was in direct violation of the Labor Code, and presented evidence of time records from San Gabriel Valley Medical Center L.P. (where Letona was employed) and AHMC Anaheim Regional Medical Center L.P. (where Abeyta was employed).

The United States Supreme Court recently ruled that an appellate court must review a district court’s decision whether to enforce a subpoena issued by the EEOC under an abuse of discretion standard rather than de novo review which provided no deference to the district court’s decision.  McLane Co. v. the Equal Employment Opportunity Commission, 137 S. Ct. 1159 (2017).

Facts and Procedural Background

In ...

Recently, after years of litigation, the California Court of Appeal published its decision approving See’s Candy Shops, Inc.’s (“See’s”) rounding and grace-period policies.  (Silva v. See’s Candy Shops, Inc. (2016) 7 Cal. App. 5th 235).

The court previously approved See’s rounding policy in 2012, in See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, but left open the ...