LOS ANGELES — A group of at least 50 current and former employees filed a class action suit against Loews Hotel Hollywood LLC alleging violations of California labor laws governing overtime and minimum wage. According to the suit, the class members were hourly nonexempt employees who earned and were paid portions of “service charges” that were not factored into their regular rate for calculating overtime compensation. Although the employees were paid at the California minimum wage as base compensation, they also earned mandatory service charges that could make up the majority of their pay for certain shifts. Additionally, the suit alleges that the hotel required employees to work through legally required meal or rest breaks, and under California labor code, the hotel was required to pay these employees a wage penalty equal to an hour of regular compensation, which it failed to do. Finally, the suit claimed that the employees who were terminated were not compensated at all for overtime pay they should have received during their employment.
Service Charges
Under California law, a mandatory service charge is an amount that a patron is required to pay based on a contractual agreement or a specified required service amount listed on the menu of an establishment. These charges are considered as amounts owed by the patron to the establishment and are not gratuities voluntarily left for the employees. Therefore, when an employer provides all or part of a service charge to its employees, this is done at the employer’s discretion. The service charge would be similar to a bonus and should be included in the regular rate of pay when calculating overtime payments. In the suit against Loews, the plaintiff claims that the hotel failed to include the charge in the calculation for regular rate of pay to determine overtime payments.
Meal and Rest Breaks
The plaintiff in the suit against Loews claimed that the hotel failed to pay a mandatory penalty wage for requiring employees to work through meal or rest breaks. California employers are required to make meal periods available to employees, during which they relieve employees of all duties, relinquish control over their activities, give them a reasonable opportunity to take an uninterrupted 30-minute break, and must not discourage employees from taking their meal period. If not, employers must pay employees one hour of pay at their regular rate of pay for each workday that the meal period is not provided.
If you or someone you know is not being paid minimum wage or overtime as required by state laws, or you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our top rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing so it is important that you call our experienced attorneys today.