Legal Question in Employment Law in California
The situation actually one that applies to my boyfriend, not me, but for various reasons, I need to be the one to ask this. My boyfriend works at a small software development company and is currently owed A LOT of back pay. It's a little long to explain, please bear with me.
A little less than a year ago, my boyfriend's company was in talks with a very large software development company that would bring in a lot of money on a regular basis. Basically the deal was the goal they were aiming for after the culmination of 4+ years of hard work at this company, but in order to make the deal work, they'd have to dedicate a lot of time and energy towards developing specifically for this large company and stop working on all the small sales that brought in their regular revenue. Knowing there was a chance they'd run out of money before the deal was sealed and money was brought in from it, the company CEO informed his company and they, as a team, agreed to buckle down for the long haul. The economy was making it difficult for them to make the small sales anyways since many potential clients had a buying freeze and there were many layoffs in the software industry at the time. The CEO also asked anyone able to to take partial paychecks, with the understanding that they would get whatever they are owed back later, to help them get through the deal. My boyfriend felt comfortable at the time because his grandmother had just past away and left him some money, so he agreed to take partial paychecks. The first part of my question is if it is legal to have a verbal or written agreement asking for employees to take part or no pay in the first place?
The situation gets a little more complicated since it has been so long since this all started. My boyfriend is now owed a sizable chunk of his year's salary and they have not been keeping track of all the over time he and his co-workers have been putting in. I know in California computer programmers are considered scientists and exempt from the law that says they do not get paid overtime unless they make a certain amount, I think $80k-$100k is the cut off, which he does not make. That alone I know if illegal and should be addressed.
I'm unsure however how any of the back pay might actually be paid out regardless. The deal is signed but the terms are not yet fulfilled on my boyfriend's company's end and any money coming in would not come in until next year in February, after the large company has time to go over their quarterly sales and cut them a check. If he stays he has the chance at his back pay and possibly a bonus and a raise. However, we will have probably run out of all the money in our savings before then and might loose the home we just bought. (Hence the reason I'm stepping in.) Nothing is in writing by the way about what sort of bonuses are being planned and my boyfriend's attempts to get the information from his boss have only resulted in evasive and vague answers.
My boyfriend obviously feels horrible and responsible for staying so long and that if he left now, he'll be leaving his co-workers to struggle alone and that he won't see any of his back pay since his boss says they are basically out of money. He's one of only 3 developers so if he left, there's a good chance the deal will fail and the company will fold entirely and declare bankruptcy. The company is family owned too so their HR is basically the wife of the CEO, who I doubt has my boyfriend's best interest at heart since the CEO used a lot of his own money to start up the company.
What the company actually has left financially, I'm not sure. His boss is trying to get outside investment but has been having a lot of trouble. I do know that they are paying mortgage on the office building so that could be collateral. However, bringing in any sort of financial investigation down on the company would in all likelihood make the large company back out of the deal and if his current company declares bankruptcy, it's a lose-lose situation.
Please help. My boyfriend and I are both still very young and inexperienced and both in our first jobs out of college. We are unsure of what options we have or if there's anything we can do to make the situation work.
3 Answers from Attorneys
He could file a claim with the Labor Commissioner or file a suit in Superior Court. Contact me directly.
Your boyfriend should immediately consult with an attorney who represents employees in wage disputes. His failure to do so now could result in a loss of his rights, depending in part on how far back he is owed wages. He may contact my office if he is interested in that consultation.
It doesn't need a long explanation or the facts. If he is owed unpaid compensation for wages, overtime, leaves, etc.together with interest and penalties, then he can file a claim with the Labor Commissioner. The claim can look back either 3 or 4 years, depending. He is entitled to hire an attorney to represent him in the hearings and trial of the matter, if the employer contests the claim. If he wins, he is entitled to also recover his attorney fees. If he is serious about doing so, feel free to contact me. I've been doing employee rights law for over 20 years.
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