Barter for Labor: Can employees be paid ‘in-kind’?
CorePower Yoga (CPY) owns a chain of yoga studios throughout the country, including at least thirty-one studio locations in California, and offering yoga classes throughout the day. CPY operated a “Yoga for Trade” (YFT) program where studio managers scheduled yoga students for shifts during which they cleaned and performed other project-based work at the studio each week in exchange for free membership at the studio. The students (i.e., cleaners) were rewarded with free membership to CPY but were not paid any wages for their work.
Each studio used cleaners in shifts throughout the day. At some point in 2013, CPY started to phase out the YFT program but continued to schedule cleaners for regular weekly shifts. This time, the cleaners were paid an hourly wage for their work. However, instead of receiving a free membership, the cleaners were required to apply a large portion of their wages towards the purchase of a discounted membership at CPY. By buying CPY membership, the workers’ hourly pay was reduced to below the minimum wage.
William Walsh worked as a cleaner at CPY until November 2015. He sued CPY for failing to pay him and other like him the minimum wage for all hours worked, and for failing to pay them for wall wages due under the law.
The term wages, as defined under California law, refers to all amounts for labor performed by employees of every description, whether the amount is fixed by time, task, piece, or commission basis. Wages include earnings and fringe benefits compensation for services, commissions, contributions to pension or profit sharing plans, vacation pay, and bonuses.
However, the wage is determined, employers must pay their employees in a form that is negotiable and payable in cash (i.e., money). A check, for example, can be taken to a bank and cashed. A check then is a method of payment that is payable in cash. Employers cannot issue payment that would cause the employee to incur fees when they cash it.
California law also requires that employees are paid at least the minimum wage. The minimum wage cannot be waived by any agreement, including collective bargaining agreements. There is no law that allows employers to fulfill their minimum wage obligations in-kind. Minimum wage payments must be paid in money.
The law requires notice to employees of their rate(s) of pay, designated pay day, the employer’s claimed allowances for meal or lodging as part of the wage, and the basis of wage payment (whether paying by hour or piece), including overtime rates.
If the employer fails to pay its employees at least the minimum wage or all of their hours worked, employees are entitled to recover lost wages. If the employee no longer works for this employer, the employee may also recover a waiting time penalty. Aside from lost wages and penalties, the employee is also entitled to legal interest, costs, and attorney’s fees.
In an effort to resolve its students’ claims, CPY agreed to settle the case and pay the amount of $1,650,000 to the class.
The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com. [C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully recovered wages and other monetary damages for thousands of employees and consumers. He was named Top Labor & Employment Attorney in California by the Daily Journal, consistently selected as Super Lawyer by the Los Angeles Magazine, and is the recipient of PABA’s Community Champion Award for 2016.]
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.