Henning v. Industrial Welfare Com'n

• Decision Date: 16 June 1988
• Docket Number: No. C004101,C004101
• Citation: 202 Cal.App.3d 210,247 Cal.Rptr. 902
• Court: California Court of Appeals Court of Appeals
• Parties: Previously published at 202 Cal.App.3d 210 202 Cal.App.3d 210 John F. HENNING, as Executive Secretary-Treasurer, etc., et al., Petitioners, v. INDUSTRIAL WELFARE COMMISSION, etc., et al., Respondents, California Restaurant Association et al., Interveners.

Page 902

247 Cal.Rptr. 902

Previously published at 202 Cal.App.3d 210

202 Cal.App.3d 210

John F. HENNING, as Executive Secretary-Treasurer, etc., et al., Petitioners, v. INDUSTRIAL WELFARE COMMISSION, etc., et al., Respondents California Restaurant Association et al., Interveners.

No. C004101.

Court of Appeal, Third District, California.

June 16, 1988.

Review Granted July 27, 1988.

See 252 Cal.Rptr. 278, 762 P.2d 442.

Dennis W. Hayashi, of Asian Law Caucus, Inc., Oakland, Shauna Marshall of Equal Rights Advocates, Inc., John M. True, Patricia Shiu, and Christopher Ho of Employment Law Center, San Francisco, Kathryn Grannis and Fran Bernstein of the Legal Aid Foundation of Los Angeles, Los Angeles, Charles P. Scully II and Donald C. Carroll, of Law Offices of Charles P. Scully, Inc., San Francisco, Mark D. Rosenbaum of ACLU Foundation of Southern California, Los Angeles, Mark Greenberg and Carmen Estrada of Western Center on Law and Poverty, Inc., Los Angeles, Patrick O. Patterson, and Julius L. Chambers, James M. Nabrit, III, John Charles Boger, New York City, and Jon C. Dugan for petitioners.

Jan T. Chilton, Donald J. Querio and John H. Feldman, III, of Severson, Werson, Berke & Melchior, San Francisco, for respondent Industrial Welfare Com'n of the Dept. of Industrial Relations of the State of Cal.

H. Thomas Cadell, Jr., Chief Counsel, San Diego, for respondent, Div. of Labor Standards Enforcement of the Dept. of Industrial Relations of the State of Cal.

Alan S. Levins, Michele J. Silak and Jeffrey M. Tanenbaum of Littler, Mendelson, Fastiff & Tichy, San Francisco, for intervenors California Restaurant Ass'n and California Hotel and Motel Ass'n.

PUGLIA, Presiding Justice.

The Industrial Welfare Commission (IWC) of the Department of Industrial Relations has promulgated its Order No. MW-88, which mandates in part that, effective July 1, 1988, the standard minimum wage will be $4.25 per hour for employees other than employees customarily receiving tips or gratuities of not less than $60.00 per month who may be paid not less than $3.50 per hour. Petitioners seek a writ of mandate directing respondent IWC to vacate and treat as void so much of its Order No. MW-88 as purports to fix or allow a different minimum wage for certain tipped employees, and directing respondents Department of Industrial Relations and Division of Labor Standards Enforcement of the Department of Industrial Relations to give effect to Order No. MW-88 as to all affected employees without regard to the purported exception for tipped employees. " '[T]he issues presented are of great public importance and must be resolved promptly[,]' " and we shall therefore exercise our original mandamus jurisdiction. (California Educational Facilities Authority v. Priest (1974) 12 Cal.3d 593, 598, 116 Cal.Rptr. 361, 526 P.2d 513, quoting County of Sacramento v. Hickman (1967) 66 Cal.2d 841, 845, 59 Cal.Rptr. 609, 428 P.2d 593; see also Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 699-700, 166 Cal.Rptr. 331, 613 P.2d 579; Rivera v. Division of Industrial Welfare (1968) 265 Cal.App.2d 576, 581, 71 Cal.Rptr. 739.)

The Legislature has delegated to the IWC the duty to review and fix the minimum wage. Labor Code section 1173 provides that "[i]t shall be the continuing duty of the [IWC] to ascertain the wages paid to all employees in this state, and to ascertain the hours and conditions of labor and employment in the various occupations, trades, and industries in which employees are employed in this state and to investigate the health, safety, and welfare of such employees."

Section 1173 further states that the IWC "... shall conduct a full review of the adequacy of the minimum wage at least once every two years. The [IWC] may, upon its own motion or upon petition, amend or rescind any order or portion of any order or adopt an order covering any occupation, trade, or industry not covered by an existing order pursuant to the provisions of this chapter."

If the IWC "... finds that in any occupation, trade, or industry, the wages paid to employees may be inadequate to supply the cost of proper living, or that the hours or conditions of labor may be prejudicial to the health, morals, or welfare of employees, the [IWC] shall select a wage board to consider any of such matters...." (Labor Code, § 1178; all further statutory references to sections of an unspecified code are to the Labor Code.) The wage board shall be "... composed of an equal number of representatives of employers and employees, [and] shall consider the findings of the [IWC] and such other information it deems appropriate and report to the [IWC] its recommendation of a minimum wage adequate to supply the necessary cost of proper living to, and maintain the health and welfare of employees of this state, and its recommendations on such other matters related to the minimum wage on which the [IWC] has requested recommendations." (§ 1178.5, subd. (a).) "Prior to amending or rescinding any existing order or adopting any new order, and after receipt of the wage board report and recommendation, the [IWC] shall prepare proposed regulations with respect to the matter under consideration. The proposed regulations shall include any recommendation of the wage board which received the support of at least two-thirds of the members of the wage board. A public hearing on the proposed regulations shall be held in each of at least three cities in this state, except when the proposed regulations would affect only an occupation, trade, or industry which is not statewide in scope...." (§ 1178.5, subd. (c).)

"After receipt of the wage board report and the public hearings on the proposed regulations, the [IWC] may, upon its own motion, amend or rescind an existing order or promulgate a new order. However, with respect to proposed regulations based on recommendations supported by at least two-thirds of the members of the wage board, the [IWC] shall adopt such proposed regulations, unless it finds there is no substantial evidence to support such recommendations." (§ 1182, subd. (a).)

The standard minimum wage is currently set at $3.35 per hour. Pursuant to the statutory directives contained in section 1173 et seq., on April 18, 1986, the IWC initiated formal review of the minimum wage. Public hearings on the adequacy of the minimum wage were conducted in San Diego, Los Angeles and Fresno in August of 1986, and in Sacramento in October of 1986. On November 21, 1986, the IWC determined that the minimum wage may be inadequate to supply the proper cost of living.

On April 10, 1987, the IWC issued a charge to the 1987 Minimum Wage Board, directing the board, inter alia, to study, consider and make recommendations "... as to the dollar amount of a minimum wage 'adequate to supply the necessary cost of proper living to, and maintain the health and welfare' of an employee in California, ..." and as to "whether or not tipped employees should remain subject to the current minimum wage of $3.35 per hour if and when there is an increase in that dollar amount...." The chairman of the wage board submitted a report to the IWC, reflecting the board's unsuccessful attempts to obtain majority approval of any recommendation on the minimum wage for tipped employees. Wage board representatives of employers and labor submitted separate reports and recommendations to the IWC.

On September 11, 1987, the IWC adopted proposed regulations for altering the minimum wage. Public hearings were conducted in Los Angeles, San Francisco and Sacramento in October, November and December of 1987.

On December 18, 1987, the IWC adopted its "Order No. MW-88 Regulating the Minimum Wage," which provides in part that: "Every employer shall pay to each employee wages of not less than four dollars and twenty-five cents ($4.25) per hour for all hours worked, except: [p ] Tipped employees may be paid not less than $3.50 per hour. A tipped employee is an employee who is engaged in an occupation in which he or she customarily receives gratuities, as that term is defined in Labor Code Section 350(e), of not less than sixty dollars ($60.00) per month." Order No. MW-88 is effective July 1, 1988.

On January 22, 1988, the IWC adopted a "Statement as to the Basis upon which Industrial Welfare Commission Order No. MW-88 Regulating the Minimum Wage, is Predicated." In compliance with sections 1182.1 and 1183, Order No. MW-88 and the Statement were published in newspapers of general circulation and mailed to all California employers.

Pursuant to section 1188, an application for rehearing was submitted to the IWC, seeking reconsideration of the decision to establish an alternative minimum wage for tipped employees. The IWC voted against rehearing, and the application was deemed denied as of March 20, 1988.

On March 23, 1988, the instant mandamus petition was filed in this court, praying for a writ directing the IWC to vacate and treat as void so much of Order No. MW-88 as purports to fix or allow a different minimum wage for certain tipped employees and directing the Department of Industrial Relations and the Division of Labor Standards Enforcement to give effect to Order No. MW-88 as to all affected employees without regard to the purported exception for tipped employees. On April 21, 1988, the Supreme Court denied a petition for transfer of the proceeding to that court. On April 28, 1988, we notified the parties we were considering issuing a peremptory writ in the first instance, and that any opposition to the petition was to be filed on or before May 13, 1988. The IWC, the Department of Industrial Relations and the Division of Labor Standards Enforcement timely filed answers to the petition. A reply to the answer of the IWC was filed on May 11, 1988. On May 18, 1988, we granted IWC leave to file additional authorities, and granted an application to intervene brought by the California Restaurant Association and the California Hotel and...