When it comes to problems at work, wage and hour violations are sometimes the most insidious. This is because it’s not always obvious when there’s wage theft. For example, what a worker takes home each pay period will be different from their official pay rate. Overtime, bonuses, payroll taxes, retirement plan contributions, insurance benefits and so on are all potential sources for adjustments to a worker’s paycheck.
If some of these changes are incorrect, it could lead to employees being underpaid, but never realizing it. One way to combat this problem is to have special “wage disclosure laws.” A recent lawsuit brought by flight attendants from United Airlines revolved around alleged violations of these wage disclosure laws.
Wage Disclosure Laws
You’re likely already well aware of federal and state wage laws that give employees specific rights regarding pay. For instance, the Fair Labor Standards Act of 1938 (FLSA) mandates minimum wage and overtime pay for eligible employees. But some laws impose certain requirements on employers concerning information they must provide employees about their pay.
In Virginia, there’s the Virginia Payment of Wage Law (VPWL). It requires employers to provide the following information to their employees in a written statement (like a paystub or online accounting) each pay period:
- Name and address of the employer.
- The number of hours worked during the pay period (if applicable).
- Rate of pay.
- Gross wages earned during the pay period.
- The amount and reasons for any deductions from the employee’s paycheck.
These requirements can help employees understand how the employer calculated their net pay. In a way, it’s like your math teacher from middle or high school not giving you full credit for a math problem unless you not only got the right answer, but showed the steps you took to reach the correct answer (aka: “show your work”).
Virginia isn’t the only state with this type of law on the books. Other states, like California, have similar laws. So having a wage disclosure law is pretty common. But what’s unique is how these laws are sometimes enforced. California is the only (or one of just a few) state that has a private attorney general law to assist in the enforcement of this wage disclosure law.
California Private Attorney General Act
The Private Attorney General Act (PAGA) is a California law that went into effect in 2004 and was created to help enforce state labor laws. The California legislature saw that it had a problem with a growing labor market in the state, but a declining number of staff at labor law enforcement agencies. This could make it difficult to enforce state labor laws.
Some of the state labor laws could be enforced by harmed employees, such as when wage theft occurs. But what happens if the violation is more technical, such as an employer not providing pay stubs that complied with California wage disclosure law (but still paid the employee their proper wages)?
Employees would probably have no standing to sue and even if they did, why would they? They have no damages to recover, so there would be no point in filing a lawsuit. This would mean state agencies would be tasked with dealing with violations. But as mentioned earlier, they wouldn’t have the resources to do so.
The PAGA was the planned solution, where aggrieved employees would act on behalf of the California attorney general to recover civil penalties for labor law violations. And 25% of anything the employee could recover, they could keep, with 75% of recovered money going to the state of California. The recent United Airlines flight attendant case demonstrates how this would work.
Vidrio v. United Airlines Inc.
This case has a long history dating back to 2015, with various legal questions at issue. But the major concern in the case was whether United Airlines complied with applicable provisions of § 226 from California’s Labor Code, which is basically California’s equivalent to the VPWL. Specifically, the question was whether the various wage documents and statements provided by United Airlines gave the United Airlines flight attendants (Plaintiffs) the wage information as required by California law.
Unfortunately, this was a challenging issue to address because of the complex way in which Plaintiffs were paid. For example, due to the Plaintiffs’ collective bargaining agreements (CBAs), the Plaintiffs were paid twice each “bid period,” which lasted about a month. The first payment came on the first of the month and was an advance payment in that it was based on the flight attendant’s anticipated work volume and not actual hours worked.
The second payment arrived about two weeks later and consisted of the flight attendant’s actual earnings, plus per diem payments, but less the advance payment. The actual earnings amount could be calculated by taking the higher of either a “minimum pay guarantee” or the value of the flight attendants “flying activity” during the relevant period.
As if this weren’t complicated enough, the “flying activity” amount was calculated by applying several formulas. Then these formulas were subject to adjustment based on several variables, such as the flight attendant’s seniority, responsibilities on a given flight, when the flight attendant worked and if they held a language-qualified position.
In addition to receiving their pay, flight attendants received multiple documents that contained their wage information. Depending on the employee, these wage documents included:
- Pay advice;
- Pay register; and/or
- Monthly statement of earnings
Recently, both sides filed motions for summary judgment. United Airlines made multiple arguments, but its biggest one was that taken together, these wage documents complied with relevant portions of § 226 of the California Labor Code. Plaintiffs disagreed and sought legal relief on behalf of themselves and as representatives of the California attorney general for this alleged violation.
For the most part, the court sided with the Plaintiffs in their motion for summary judgment and concluded that United Airlines violated certain provisions of § 226. However, the civil and statutory penalties were to be calculated at a later trial.
Summing It Up
Various states, such as Virginia and California, have special wage disclosure laws that require employers to include a minimum amount of information along with their paychecks. These laws exist to make it easier for employees to spot instances of wage theft. But one problem with enforcing these laws is that the burden is often on state agencies and these sometimes technical violations are low on their priority list.
To help address this concern, at least one state (California) has a law that lets private citizens prosecute these civil violations on behalf of the state attorney general. This is exactly what a group of flight attendants did in a California case where they successfully alleged their employer violated California’s wage disclosure law by giving incomplete wage statements.