Nike Faces Class Action Wage Lawsuit in Orange county

Nike Retail Services Inc. is facing a labor law class action lawsuit filed by store workers in California who allege that purchasing Nike-branded apparel on their own dime was a condition of employment. According to a news report on Law360, the class action lawsuit was filed by Nike store employee and California resident Omran Hamid, who worked at the San Clemente store in Orange County. He amended it seven days later to allege 14 claims against Nike Retail Services including unlawful collection of receipt of wages due and illegal terms of employment.


The complaint features several claims against Nike including that the required purchases of the uniform was a mandatory condition of employment. It also alleged other labor law violations including failure to provide itemized wage statements and failure to tell the proposed class the amount of paid sic leave available to them or the amount of paid time off Nike would provide in lieu of sick leave.


Mandatory Purchase of Uniforms


The complaint stated that the plaintiffs had to purchase the uniforms an average of four times a year and on an ongoing basis and pay taxation on their value, despite being minimum wage earners. Hamid’s lawsuit seeks to represent all current and former nonexempt employees who worked as sales associates at Nike retail stores in California over the last four years.


Hamid alleged that Nike’s mandatory uniform policy violated California’s labor code, which provides that employers who require their workers to wear uniforms must provide and maintain those uniforms. In addition, this Nike policy also required employees to pay income tax on about 50 percent of the retail value of the uniforms, which wasn’t reimbursed by the company.


The workers were required to wear the Nike-branded clothes during working hours and were required to maintain “an up-to-date apparel of each season’s product line,” according to the lawsuit. The complaint stated that employees were manipulated to serve as “walking advertisements” of the store, at their own expense. Also, because they had to pay tax on these mandatory uniforms, their wages fell below the required state or local minimum wage for each pay period in which the uniforms were purchase, the lawsuit stated.


Types of Wage Violations


California law imposes stiff penalties on employers who violate its wage and hour laws. An employee who wins a lawsuit or wage claim filed with the California Labor Commission may be awarded not only back wages, but also penalties for the employer’s violations of the law. Here are some of the most common types of wage violations in California.


Minimum wage violations


California just raised its minimum wage requirement this year and individual cities and jurisdictions in California such as Los Angeles and San Francisco have their own minimum wage laws. Employees are entitled to receive the highest applicable minimum wage whether that is the federal, state or local rate. For example, if you work in Los Angeles where the minimum wage is $15, that’s what you are entitled to receive, even if the minimum wage in California is only $10.50 per hour.


Employers often violate minimum wage rules by paying employees the federal minimum wage rather than the higher amount; paying an employee a “salary” that averages out to less than the minimum wage per hour; or by failing to pay employees for all hours worked by, for example, requiring them to work “off the clock” or work through their lunch breaks.


Paying Tipped Employees


Under federal law, employers are allowed to pay a lower minimum wage to employees who get tips, such as waiters. This is known as a “tip credit.” However, if employees don’t earn enough, their employers must make up the difference. California does not allow employers to take this tip credit. Instead employers must pay tipped employees the full minimum wage in addition to their tips. California employers who take these tip credits are violating the law. Other common violations involving tips under California law include deducting a portion of an employee’s tips to pay credit card processing fees and requiring workers to share tips with their managers.


Overtime Violations


Both California and federal law requires overtime pay if employees work more than 40 hours a week. In addition, California employees are entitled to earn regular overtime, which is time and a half or 50 percent on top of their regular hourly rate, if they work more than eight hours a day. California law provides double time to employees if they work more than 12 hours in a workday. When employers fail to pay overtime, they are violating the law. Some employers also violate the law when they pay time and a half when they should be paying double time.


Meal and Rest Breaks


There is no federal requirement for rest and meal breaks. However, California law has this requirement. Under state law, employers must give employees a 30-minute unpaid meal break after they work five hours in a day. A second meal break is required if employees work 10 hours.


Misclassification of Employees


Since wage and hour laws don’t protect independent contractors, some employers misclassify their full-time employees as independent contractors. They do this to avoid complying with minimum wage laws, overtime, meal and rest breaks and other laws. This is because in general, independent contractors are individuals who are in business for themselves. They usually determine what to charge for their work, the time they want to spend on the work and how they would get it done.


Typically, contractors work for multiple clients, have their own office space, charge by project and are free to accept or reject work. Employees on the other hand typically receive a salary or hourly wage, work on location and receive training and supervision. They are also subject to much more control by the employer. Employees also typically get benefits such as medical and/or dental insurance, vacation, holiday and sick pay.


Have Your Rights Been Violated?


If your employer has violated Orange County’s wage laws, it is crucial that you speak to an experienced employment lawyer in the OC who can review the facts and tell you if you a strong claim against your employer. If you have questions regarding a potential claim, call Haeggquist & Eck at (949) 724-9200 for a free consultation and case evaluation.