"Explicit Mutual Wage Doctrine" Barred Janitor's Claim For Additional Unpaid Overtime

Arechiga v. Dolores Press, Inc., 192 Cal. App. 4th 567 (2011)

Carlos Arechiga worked as a janitor for Dolores Press for almost seven years at which time his employment was terminated. Although Arechiga filed a complaint alleging various causes of action, only his claim for violation of the Unfair Competition Law went to trial. Arechiga, a non-exempt employee, claimed the $880 that he received per week was not a salary (as the employer contended) but was the amount he was to be paid for 40 hours of work per week (i.e., $22 per hour) and did not include payment for his regularly scheduled 26 hours of weekly overtime. The employer argued that under California’s “explicit mutual wage agreement” doctrine, an employer and a non-exempt employee may lawfully agree to a guaranteed fixed salary so long as the employer pays the employee for all overtime. The trial court determined that the $880 weekly payment lawfully compensated Arechiga for both his regular and overtime work based on a regular hourly wage of $11.14 and an overtime hourly wage of $16.71. The Court of Appeal affirmed, holding that Labor Code § 515(d) did not “outlaw” explicit mutual wage agreements such as the one proven in this case, rejecting the Labor Commissioner’s contrary interpretation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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