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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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i wrote up an employee who was insurbordinante she refuse to

Customer Question

i wrote up an employee who was insurbordinante she refuse to sign and next day bringing up that she dont get her rest periods and her meal period once a week. rest periods they are free to take whenever they want. It is true that one day a week they work alone and i thought a working lunch was legal as long as they were paid and not deducted for a lunch. Now i am learning that i cant do that and now having them close the store on that one day a week. my question is i cant keep this employee the way she is acting and know she definantly will sue if i fire her.

If i get a lawsuit i have no choice but to close the business. I actually have a buyer. my question is should i fire this employee? and if i close the business and disolve it can i be personally liable?

Also i give my employees bonuses when they close title loans and i dont tax them but i give on seperate check when they make mistake from their drawer i take it out of their bonus is that legal. i dont garnish their pay and i dont have anything in writing about bonuses they are intitled to
Submitted: 4 years ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 4 years ago.
Hello and thank you for entrusting me to answer your question.

While I can't tell you what to do because I am not your attorney, I can provide you with relevant legal information that will help you make a decision. I hope that is okay.

Although you have legitimate reasons to fire your problem employee, they would almost certainly sue for "retaliation" if you terminated them shortly after they had made a complaint about not being paid for lunches and rest breaks. The Department of Labor Standards and Enforcement typically presumes that retaliation has occurred when an employee is terminated shortly after reporting or threatening to report a wage violation.

Whether you would be personally liable for the debts of the business is an extremely complex and fact-dependent question that has no easy answer. You should consult with an attorney regarding this matter, but generally an individual can be held liable for the debts of a corporation or business entity that would normally insulate them from liability if the creditors can demonstrate that there is (a) a unity of interests, meaning that the owners in question have treated the corporation as their “alter ego,” rather than as a separate entity; and (b) inequitable result, meaning that pholding the corporate entity and allowing for the shareholders to dodge personal liability for its debts would “sanction a fraud or promote an injustice.” (See e.g. Automotriz del Golfo de California v. Resnick (1957))

The bonus issue is also difficult. Most likely it is illegal to deduct from the bonuses because California law expressly prohibits employers from "mak[ing] or tak[ing] any deduction from the earnings of any employee, either directly or indirectly, to cover the whole or any part of the cost of [workers'] compensation." The issue would be whether the bonus had already "vested" and become guaranteed at the time the deductions were made. If the bonuses had vested, they would be wages and you cannot deduct from the wages. If, on the other hand, you retained full discretion to award the bonuses, not award them, or award some amount in between, the deduction would probably be permissible because the bonuses are not yet wages earned and you can do with them as you please.

If there was a fixed bonus plan, or a guaranteed bonus if the employees hit certain numbers, this would tend to indicate that the bonus vests upon performance. If, on the other hand, the employer retains discretion to award bonuses and chooses to award or not award on them based on subjective criteria, this would tend to indicate that the bonus is not a wage until it is actually paid, in which case a deduction may be permissible.

I sincerely XXXXX XXXXX this information helps you and I wish you the very best of luck. Bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

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