CWS 3.0: April 5, 2011 - Vol. 3.9

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Legal Eagle: Seeking Overtime Pay

In January, the California Superior Court certified a class action suit against two staffing firms from IT temps seeking overtime. The suit represents around 150 temporary employees who were placed in nonexempt project manager, business analyst and consultant roles at Cisco Systems Inc. by staffing firms Collabrus Inc. and M Squared Consulting Inc. Cisco was not named in the suit.

The court certified plaintiff allegations of unpaid overtime and violations of the California Labor Code, violations of the California Business and Professions Code, and violations of the California Private Attorney General Act. The court declined, however, to certify a class regarding meal-break and waiting-time provisions of the California Labor Code and the record-keeping provisions of California Wage Order No. 4.

While Cisco was not named as a defendant in this action, the case is an important reminder to companies concerning their staffing providers' payment practices. It would not be surprising for a company to be included in such a lawsuit, depending on the nature of the work performed and the supervision provided.

The payment of overtime depends on whether or not a job is exempt. Staffing companies use the job descriptions provided by the hiring companies as a basis for setting contingents' exemption status. Companies should be sure to provide their staffing partners with clear and accurate job descriptions, and work closely with their providers to ensure contingents' exempt/nonexempt status is properly assigned. Companies should also work with hiring managers to ensure contingents are being treated in accordance with the job description and the resulting exempt/nonexempt status.

If temporary workers are not paid in accordance with all state and federal wage and hour laws -- including for all overtime worked -- companies can be exposed to lawsuits and potential liability. Further, most insurance policies do not provide coverage for this type of lawsuit.

For more information on exempt/nonexempt status in the contingent arena, see Employment Law, in CWS' Winter 2010 issue.

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