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Opinion

Abuse of PAGA leads to Lawsuit

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By TOM MANZO | President of the California Business & Industrial Alliance 

Dec. 19, 2018

The Private Attorney General Act (PAGA) was signed into law in 2003 by Gray Davis and championed by Senator Joe Dunn. Davis spent 1,778 days as governor and signed 5,132 bills into law and that is an average of 2.89 bills a day. PAGA was approved by Governor Gray Davis on October 12, 2003, just five days after the California electorate voted to recall him from office.

If you are not familiar with PAGA, this law deputizes each and every California employee (and his or her private contingency-fee attorneys) to sue their employers on behalf of the State. The California Labor Laws are composed of myriad rules, standards, and obligations, which touch nearly every aspect of the employment relationship. Many of the California Labor Laws are unclear, cumbersome, counter intuitive and impossible to follow. It is no wonder as the California Labor Law Digest published by the Chamber is over 1,100 pages.

If you are take your lunch later than 5 hours, even a second, it is a violation, or a gift card for the holidays is not put into the overtime rate is a violation. Do you have proper commission agreements? Third break after 10 hours or waived lunch? The list of potential traps just keeps going and it is impossible to follow all of these regulations and many are not appropriate for some industries. The Labor Laws cannot be a one size fits all and I think the only ones who understand these complex laws are the trial attorneys suing businesses daily.

Since this law was enacted over 35,000 PAGA notices have been sent out by the state and most turn into class action lawsuits costing employers millions. PAGA is used by the trial lawyers to start the process and many times settlement amounts going to the state are negotiated in mediation. As a matter of fact what is supposed to go to the aggrieved employees is also negotiated in mediation and what are not negotiable are the trial attorney’s fees thanks to the state.

An employee alleges (without any proof) that for the past year, he has worked 2 minutes of “of-the-c1ock” overtime each pay period attending to miscellaneous tasks related to opening or closing Employer’s place of business. Under the Starbucks decision, discussed supra, the employee has a cognizable claim of failure to pay minimum wages and overtime. Employer has 30 employees and weekly pay periods. Employee’s hourly rate of pay is $ 11.00 per hour, which means the approximate amount of unpaid minimum wages is: $19.07 (2 minutes x 52 pay periods: 104 minutes; 104 minutes / 60 minutes: 1.73 hours; 1.73 hours x $11.00: $19.07), and the approximate amount of unpaid overtime wages are: $9.54 ($19.07 x. 0.5: $ 9.54). So the total approximate amount of wages Employer failed to pay Employee, unknowingly, is $28.61.

Through PAGA, this employee has authority to seek a maximum of $69,508.61 civil penalties and personal damages for the alleged failure of Employer to pay Employee: $28.61, which are 2,430 times the alleged actual damages. With 30 employees your exposure is over 2 million dollars and this does not include employees no longer working for you. Those employees are owed 30 days’ pay and waiting time penalties.

What happens next is where things really go wrong as this employee will never see $ 69,000. All of that is done in negotiations behind closed doors. That Starbucks employee received a check for less than $ 700 and the rest goes to the trial lawyer and the state.

Our organization The California Business & Industrial Alliance filed suit against the State of California on November 28th of this year challenging its constitutionality. The complaint is 54 pages spelling out how this law began and where we are at today. It is time business owners, community leaders, legislators, all learned more about how badly this law is abused and helped facilitate real reform. Employers and employees both lose when it comes to PAGA.

The views expressed above are those of the author and do not necessarily reflect those of the Inland Empire Business Journal.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Opinion

Ontario International Airport Welcomes Avelo Airlines with New Nonstop Service to Sonoma County

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Expansion Connects Southern California Travelers to Northern California’s Premier Wine Destination

Ontario International Airport (ONT) continues its impressive growth trajectory with the recent announcement from Avelo Airlines about their exclusive nonstop service to Sonoma County and Northern California’s renowned wine country. Starting October 10, the service will operate twice weekly on Thursdays and Sundays, connecting travelers directly to the Charles M. Schulz Sonoma County Airport (STS).

Streamlined Travel Experience

Passengers choosing Ontario International Airport are set to benefit immensely, not just from the expanded destination choices but also from the significant time savings associated with flying out of ONT. Known for its convenience and efficiency, ONT offers a more relaxed and hassle-free travel experience compared to larger, more congested airports. The smaller scale and thoughtful layout of ONT allow passengers to navigate check-ins, security, and boarding processes much more quickly, reducing the stress often associated with air travel.

Local Impact and Convenience

“Atif Elkadi, Chief Executive Officer of the Ontario International Airport Authority, highlighted the benefits of the new service, stating, “We are thrilled to add Avelo Airlines to our family of air carriers as we continue to provide exciting new destinations and travel options for the millions of Southern Californians who have made ONT their airport of choice.”

ONT’s strategic location and accessibility play a crucial role in its popularity. Situated in the heart of Southern California’s Inland Empire, the airport is conveniently reachable for residents from San Bernardino to Riverside and the surrounding suburbs. The airport’s proximity to major freeways reduces travel time to the airport itself, which is a significant advantage for local residents and businesses.

Enhanced Access to Northern California

Andrew Levy, Founder and CEO of Avelo Airlines, expressed enthusiasm about the new route, saying, “We are thrilled to announce our new nonstop service from Ontario to the Bay Area/Sonoma County, offering travelers a convenient, reliable, and affordable way to one of the most beautiful and vibrant regions in Northern California.”

Jon Stout, STS Airport Manager, also noted the mutual benefits of the new connection, “It’s fantastic to see Avelo connect Sonoma County with Ontario. This new route will bring a new level of convenience for our local residents and our neighbors in the Inland Empire.”

ONT’s continued expansion and the addition of new routes like the one to Sonoma County reflect its role as a pivotal hub in the region. With the airport on track to exceed 7 million passengers this year and recent records showing more than 650,000 passengers in June alone, ONT is setting new benchmarks in serving the community.

A Gateway to Growth

With world-class facilities and a commitment to excellent customer service, Ontario International Airport is rapidly becoming the gateway of choice for travelers seeking both domestic and international connections. Elkadi proudly asserts, “With our world-class facilities, great amenities, and unparalleled customer experiences, we are proud to connect the world to one of the most dynamic population and economic centers in the country.”

As ONT continues to expand its services and streamline travel experiences, it solidifies its position not just as a transport hub but as a significant contributor to the economic vitality of the Inland Empire.

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Opinion

Surge in Unemployment Among California Youth Linked to Minimum Wage Hikes

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“We have to stop touting the minimum wage as a completely harmless policy, or as some kind of remedy for poverty and income inequality… it is neither.” 

In the past 18 months, California’s unemployment rate has jumped to the highest in the nation and a new analysis by Beacon Economics suggests that this peculiar increase could be a direct result of the state’s recent minimum wage hikes. Most concerning, according to the report, is that the current unemployment effect is specifically harming some of California’s most vulnerable residents—the state’s youth.

The new report highlights the fact that 90% of newly unemployed Californians over the past year and a half are under the age of 35 with the hardest hit group being teenagers. “This loss of youth work opportunity carries with it real long-run harm,” said Christopher Thornberg, Founding Partner of Beacon Economics and co-author of the new analysis. “It not only denies younger workers a critical source of income it deprives them of work experience that has been empirically shown to improve their chances of long-run success.” 

While the recent rise in unemployment in California has occurred in tandem with the state’s minimum wage hikes, the relationship likely extends beyond mere correlation. According to the analysis, the jump in unemployment is incongruous with other measures of the California economy, which have continued to expand at a respectable rate. In fact, both output and household income in the state are robust and growing either faster than or similar to the nation overall. Yet, the unemployment rate in the United States as a whole has barely budged in the past 24 months.

And there is yet another anomaly: throughout the recent rise in unemployment, there has been no corresponding increase in unemployment insurance claims. If laid off tech and entertainment industry workers were driving California’s higher unemployment rate, it would almost certainly be reflected, at least to some degree, in UI claims, according to the analysis.

“For far too long, researchers and advocates alike have held up the minimum wage as a harmless and effective policy remedy for poverty and income inequality, but it is neither of those things,” said Thornberg. “Evidence has shown us that minimum wages don’t do much to address the ills they are intended to correct, but carry a substantial cost, particularly for our state’s future workers.”

Although well intentioned, Thornberg, and co-author Niree Kodaverdian, argue that higher minimum wages cause prices to increase, which end up reducing real incomes for lower-skilled workers. Available data and past empirical studies show that wage floors do very little to divert income from higher income workers to lower income ones, which is how minimum wage laws are typically characterized by proponents.

The specific effect on youth is caused because as labor costs go up relative to other inputs, employers who might have used lower-skilled, entry level workers, such as teenagers, move towards hiring older, more experienced workers, according to the analysis. The idea is that if an employer is legally obligated to pay a higher wage, they will naturally hire more skilled and productive workers to offset higher labor costs. Since those under age 25 make up nearly half of minimum wage workers, this restructuring disproportionally affects the state’s youth.

The report firmly acknowledges the need for policies to help alleviate the strain on lower income households in pricey California but argues that this particular policy remedy doesn’t work as intended, and when pushed too far, can inflict real harm on some of the state’s most vulnerable residents. Better policy options, according to the authors, include the Earned Income Tax Credit, early childhood education, and increased training for lower-skilled adults.

The full analysis can be found here.

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Health & Wellness

Conquering Hanger: Smart Strategies for Balanced Blood Sugar

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Stay Energized and Focused with These Proactive Tips for Managing Hunger and Mood

Wellness Tips By Sarah Goudie, Nutrition Expert & Guest Writer for IEBJ

We’ve all been there: mornings rushed, constant pivots throughout the day, and suddenly it’s 7 pm with no thought given to food. Looking back on those moments, we all know what we resort to when we’re hangry.

Irritable. Scatterbrained. Shaky. Weak. Reduced impulse control. Tanked.

It’s simply the connection between our stomach and brain, as blood sugar levels can affect the release of hormones like adrenaline and cortisol, the fight or flight and stress hormones.

So, let’s address this blood sugar regulation/hangry cycle by taking care of ourselves in a few different ways.

  1. Prioritize Protein and Fat Before Your Morning Coffee: Your first meal sets the tone for the day ahead. Starting with protein before your coffee or favorite pastry can help stabilize blood sugar levels and provide satisfaction and sustenance. A handy tip: prepare a batch of hard-boiled eggs or protein pancakes on your day off for convenient grab-and-go options before you head out. Trust me, cold protein pancakes make for a quick and nutritious bite on your way to work!
 (Try the recipe below!) 
  1. Opt for Balanced Meals: When you have a chance to eat, even if it’s not your ideal meal, prioritize finishing your protein first, followed by your veggies and fruits. If you’re including simple carbohydrates, save those for the end of your meal. This meal sequencing helps regulate blood sugar levels and mood.

  1. Plan Ahead—Even Days in Advance: Sometimes, waking up 15 minutes earlier isn’t enough to ensure a nourishing breakfast and packed lunch. However, planning earlier in the week can alleviate the morning rush before you start your day. I often create a menu tailored to my work week, carefully considering seasonal foods and my personal goals. While meal prepping is fantastic if you have the time and enjoy leftovers, simply having a plan and doing the shopping can empower you and reassure you that your kitchen is stocked and ready.

  1. Slow Down: The quality of the foods we eat is important (think locally sourced, sustainable, clean), but so is the timing of our meals, as well as our mood and our focus while eating. Be intentional about meal times—sit down, step away from your desk, TV, or phone, and fully immerse yourself in the experience of eating. Many times, we eat quickly without being mindful. If you must eat on the go, find a quiet spot, whether it’s a park bench or pulled over in your car. Take the time to see, smell, and taste your food.

  1. SNACK SMART: This last tip is bolded for good reason—it has been a lifesaver for me countless times. Pack snacks. Every day. ESPECIALLY WHEN TRAVELING. We never know what the day will bring, so we must be prepared when we can’t access a full meal. Some of my favorite go-to snacks include “That’s It” bars, “RX” bars, a handful of macadamia nuts, or Paleo Valley protein sticks…not to mention my favorite reusable water bottle (complete with a straw designed to fit perfectly in my car cup holder). Being armed with snacks containing essential nutrients (fat, carbs, protein, and fiber) will help you navigate those moments when you’re tempted to make a fast food run.


*On the topic of fast food: Stay tuned for next month’s article, where I’ll unveil my top picks for healthier alternatives on those unavoidable drive-thru days!

Leaning into these proactive steps can revolutionize your approach to mindful fuel for your body. Embracing protein-rich breakfasts, balanced meal strategies, proactive planning, mindful eating habits, and smart snacking choices nourishes your body. It cultivates a deeper connection with your food and overall well-being. You can take charge of your dietary journey, one thoughtful bite at a time, and savor the rewards of a healthier, more vibrant life.

Check out my favorite protein pancake recipe!

  • Servings: 6 small pancakes
  • 1 large banana
  • 2 large eggs
  • 1/2 tsp cinnamon
  • 1 tablespoon coconut oil for pan
  • 1 scoop of your preferred protein powder
  • 1. Preheat skillet
  • 2. Blend ingredients above
  • 3. Use the coconut oil to prep the pan
  • 4. Cook till golden brown
  • 5. Serve warm, and add some fun toppings! My go-to toppings are hemp seeds, fresh seasonal fruit, a scoop of almond butter, and a drizzle of honey.
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