Ashley Milano  |  July 21, 2016

Category: Labor & Employment

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costcoA former Costco employee’s proposed class action lawsuit over alleged paycheck violations has reached the Ninth Circuit, requesting that a lower court reverse its decision to deny certification to a class of Costco workers who received wage and hour statements that were confusing.

Plaintiff Loretta Apodaca, a former bakery manager, brought the suit against Costco in 2012 claiming paycheck violations on her electronic wage statements.

According to Apodaca, Costco wage and hour statements include a line for “vacation pay/non-exempt salaried vacation or float overtime.”

The hours listed on this line item do not represent hours actually worked. Rather, they represent the eight hours of “vacation pay” and the one hour of “float overtime” Costco provided for each vacation day taken, according to the complaint.

Specifically, Apodaca claimed the phrase “float overtime” made it confusing to discern which hours on her paycheck were compensated at her regular pay rate or were for overtime pay.

She alleges that Costco knew of the paycheck violations since they later changed them to comply with California state law.

In 2013, a lower court dismissed her complaint and denied class certification, ruling that Costco’s evidence made it clear that “float overtime” does not refer to hours worked, but to overtime compensation for vacation days taken and that Apodaca offered no evidence to the contrary to establish if the paycheck violations were “knowing and intentional”

In the June 1 appeal, attorneys for Apodaca told the Ninth Circuit that the lower court erroneously denied class certification, arguing that some Costco employees did find the line item confusing.

“You don’t have the applicable hourly rates shown with respect to the float vacation and overtime, you have a combined rate,” the plaintiffs stated.

The appellate panel asked the plaintiffs’ attorneys for clarification whether confusion over the wage statements affected Apodaca’s actual pay. The attorney stated that her actual pay was correct.

“We’re not arguing in this part of the case that she was shorted because of the wage statement,” Apodaca’s attorneys said. “But the legislature has stated that you have to show the total hours worked and you have to show all applicable hourly rates, so that employees can easily determine whether or not they have been paid correctly.”

Apodaca is seeking to re-certify the class and is requesting a new trial alleging she was not compensated properly for overtime pay or given meal and rest breaks.

California Law Specifies Paycheck Violations

California Labor Code sets stringent requirements for employers with regard to employee wage statements or paystubs.  These documents we are all accustomed to receiving are heavily regulated and many employers willfully commit paycheck violations by failing to comply with these requirements.

Under California law, ten specific pieces of information are required to be included on every payroll paystub or wage statement for each employee. Pursuant to California Labor Code:

“Every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement electronically or in writing showing:

  1. Gross wages earned
  2. Total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from overtime under Labor Code Section 515(a), or any applicable order of the Industrial Welfare Commission
  3. All deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item
  4. Net wages earned
  5. The inclusive dates of the period for which the employee is paid
  6. The name of the employee and the last four digits of his or her social security number, or an employee identification number other than a social security number
  7. The name and address of the legal entity that is the employer
  8. All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee
  9. The amount of accrued paid sick leave
  10. If applicable, the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis

Employers who fail to adhere to California paycheck laws may be subject to paycheck violations and penalties.

Filing a Lawsuit for Employer Paycheck Violations

If you believe your employer has engaged in paycheck violations by failing to provide you with accurate wage statements, you are entitled to damages under California labor law. An experienced wage and hour attorney can represent your interests and pursue these claims on your behalf.

The Costco Paycheck Violations Class Action Lawsuit is Loretta Apodaca v. Costco Wholesale Corp., Case No. 14-56126, in the U.S. Court of Appeals for the Ninth Circuit.

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2 thoughts onCostco Paycheck Violations Class Action Goes Before Ninth Circuit

  1. Mike Pellegrino says:

    I have a question concerning age discrimination concerning my employment with costco

    1. Top Class Actions says:

      The case is still moving through the courts and has not yet reached a settlement. Claim forms are usually not made available to consumers until after a court approved settlement is reached. We recommend you sign up for a free account at TopClassActions.com and follow the case. We will update the article with any major case developments or settlement news! Setting up a free account with Top Class Actions will allow you to receive instant updates on ANY article that you ‘Follow’ on our website. A link to creating an account may be found here: https://topclassactions.com/signup/. You can then ‘Follow’ the article above, and get notified immediately when we post updates!

      You can contact class counsel with any questions. Counsel is listed in the article and can be Googled for contact information.

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