We’ve written throughout the year about new employment laws that take effect in California in 2015. But as the year winds down, here’s a handy list of the most significant ones (with links to our earlier entries).
- Many California employers will be required to provide Paid Sick Leave starting July 1, 2015. We wrote about the law generally here, about some specific challenges it imposes here, and about how it compares to a similar law in effect in San Francisco here.
- California Labor Code § 2810.3 will require businesses to automatically share liability with a “labor contractor,” such as a temporary staffing agency, if the agency fails to pay wages or provide workers’ compensation insurance to its employees who are assigned to work at the business.
- Expanding the definition of “national origin” under the Fair Employment and Housing Act to include the circumstances under which someone got their driver’s license (i.e. if they got a type of license provided to undocumented workers).
- AB 1443 extends the protections under the FEHA to interns.
- AB 2503 requires that mandatory sexual harassment training include information on bullying.
- AB 2617 prohibits mandatory arbitration agreements from including claims for violations of certain civil code sections dealing with violence or threats of violence based on sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation or political affiliation. It seems to us to be a clear violation of the Federal Arbitration Act, but California courts and legislatures have been fighting that battle for years.
- AB 326 – Sometimes technology advances more quickly than legislation. Employers must report workplace deaths or serious illnesses or injuries to Cal OSHA immediately. That’s not changing. But where the old law says the reports must be made by telephone or telegraph, the new law says by telephone or e-mail. Who knew that the job outlook for telegraph operators could get any bleaker?
- New minimum wages in San Francisco ($11.05 effective January 1, 2015), Oakland ($12.25 effective March 2, 2015), San Jose ($10.30 effective January 1, 2015), and San Diego ($9.75 effective January 1, 2015).
Here are steps employers can take to better protect themselves:
- Make sure personnel policies and handbooks are up to date;
- Train managers to understand that certain issues, such as requests to accommodate a disability, leave requests, deciding who’s exempt from overtime requirements, etc., should be escalated to someone with specialized knowledge;
- If you use labor contractors or temporary employment agencies, consider the steps outlined here; and
- Most importantly, continue following our widely acclaimed blog for further updates on California employment law.
In the meantime, we’ll wait to learn which employment laws are being taken off the books to make room for these new ones.
It’s harder to determine whether employees are exempt from overtime requirements under California law than under federal law. Under federal law, exempt status depends on an employee’s primary duty and the time spent performing that duty is not dispositive. But California uses a “primarily engaged” test where how the employees spend their time is entirely dispositive. So the question becomes whether the employees spend more than half their time performing duties that meet the test of the exemption like “exercising discretion and independent judgment.”
Hundreds of millions of dollars have been spent litigating how to apply that standard to various categories of employees. A big chunk of that has been spent litigating just whether insurance adjusters are exempt. So by this point, there must be a well-developed body of law on that issue, right? Wrong.
As Daniel Siegal reported last week in Law360 (subscription required), LA Superior Court Judge John Shepard Wiley is trying to decide whether to certify a class of claims adjusters in a case that’s been going on for over seven years. Judge Wiley denied class certification, but in doing so bemoaned the fact that the law had been unsettled for so long.
As quoted in Law360, Judge Wiley said:
This is discreditable for the legal system to fail to resolve an issue going for such a duration, over such a span of time. So I am imploring whatever court reviews this to put a fork in it, and let’s get no more rulings that say, ‘Well whatever that court below did was error, but we’re not going to offer anything more.’
- Copyright: theblackrhino / 123RF Stock Photo
So pay attention appellate courts! Even if you won’t give guidance that enables employers to avoid potentially ruinous class action lawsuits, won’t you at least help out a fellow judge?
In the meantime, employers need to be very careful in determining which employees to treat as exempt from California overtime requirements. Getting professional guidance in making these determinations is far cheaper than getting sued.
With Republicans taking control of the Senate, an increase in the US minimum wage ($7.25) seems unlikely anytime soon. However, California’s minimum wage stands at $9 and will increase to $10 on January 1, 2016.
On a local level, voters in Oakland approved a measure to increase its minimum wage from $9 to $12.25 effective March 2, 2015. Subsequent annual increases will be tied to the Consumer Price Index.
Not wanting to be outdone, voters in San Francisco approved further increases in its minimum wage. Currently, $10.74, the rate increases to:
- $11.05 on January 1, 2015;
- $12.25 on May 1, 2015;
- $13 on July 1, 2016;
- $14 on July 1, 2017; and
- $15 on July 1, 2018.
Increases after that in SF will also be tied to the Consumer Price Index. This follows on the heels of LA’s adoption of a “living wage” ordinance for hotel workers.
Both Bay Area measures passed overwhelmingly. So it’s obviously a pretty popular idea. But when workers cost more in one city or state, no one should be surprised if employers look to move their businesses elsewhere.
It would be reassuring to know that someone was looking for ways to make the state and its various subdivisions more attractive to employers, which would also lead to increased wages. Because if these laws induce employers to move elsewhere, they’ll hurt most the people they’re intended to help.
Starting January 1st, employers in California will be on the hook when labor contractors (including temporary staffing agencies) they use fail to follow the law. Before, the employer was responsible if it was deemed a joint employer or it was paying the contractor so little that it should have known laws were being violated. That’s about to change.
If an employer gets employees from a labor contractor for use “within the client employer’s usual course of business,” the employer will share with the labor contractor “all civil legal responsibility and civil liability for all workers supplied by that labor contractor” who are paid incorrectly or are not provided workers comp insurance. (We described AB 1897 more generally here.) So if, for example, the contractor deems workers to be independent contractors and a government agency deems them employees, the client employer will be jointly responsible.
Under this law, what the client employer knew or did is irrelevant. Apparently, it isn’t enough to create a maze of legal requirements that is almost impossible to navigate. Now just being an employer doing business in California is sufficient to justify imposing liability.
Here are 6 steps employers can take to try to mitigate this risk:
- Include a provision in the contract allowing the employer to audit the contractor’s records regarding compliance with wage and hour laws and workers’ comp insurance coverage. At the very least, require the contractor to prove that it has workers’ compensation insurance and who’s covered.
- Pay close attention to whether the contractor is and remains financially viable.
- Include strong indemnification language. The contractor should acknowledge that it is solely responsible for compensating its employees correctly and for providing their workers’ compensation coverage and that it will hold the client employer harmless if it fails to do so.
- If you have contracts going back years with the same labor contractor, they often become a mass of agreements, amendments, and addendums that make it hard to determine what terms apply. Clean those up so that someone can determine each party’s obligations more easily.
- Consider requiring the contractor to purchase employment practices liability insurance and name the client employer as an additional insured.
- Consider requiring the contractor to be bonded.
Since the client employer will be strictly liable for the labor contractor’s mistakes, it will be vitally important to try to (1) ensure that the contractor is following the law and (2) require the contractor to indemnify the client employer against these types of claims.
As I have blogged about previously, on October 10, 2014, the Los Angeles City Council passed the “Citywide Hotel Worker Minimum Wage Ordinance” (Ordinance). Last week I participated in a panel discussion for the Los Angeles Hotel Human Resources Association (LAHHRA) about the Ordinance, the nuances of its requirements, and possible legal challenges.
Even though much of the press attention has been devoted to the increase in minimum wage (up to $15.37), the Ordinance requires much more. The Ordinance has detailed provisions requiring both paid time off and unpaid time off. There are rules about service charges and how they must be distributed. There are also employee notice requirements. Some of these provisions into effect on either July 1, 2015 or July 1, 2016 depending on the hotel’s number of rooms, but other requirements go into effect on November 10, 2014 (30 days after the Ordinance was passed).
Therefore, if you are a hotel in the Los Angeles area, or you are interested in the latest developments in minimum wage and other pay requirements for hotels, take a look at this alert to learn all about the Ordinance’s provisions, and to review a detailed hotel to-do list.
A Silicon Valley-based printing technology firm brought over employees from India and paid them their normal wages for the work they did in California. As reported on BBC News, Electronics for Imaging brought over 8 employees, worked them 122 hours in a week, and paid them $1.21 per hour, with no overtime. Plus it paid them in rupees.
This isn’t the first time that a company brought employees into California and paid them as if they were back home. But it may be the most egregious. Working even one day in the Golden State can bring the employee within the protection of California’s employment regulations.
We have two publications that identify the employment law issues that get companies with California employees into the most trouble. These pdf brochures — one for employers based outside California and one for those based in the state – summarize California’s unique legal requirements and how employers can protect themselves against serious legal exposure.
Spending a little time to determine if your company is sufficiently protected is a lot quicker and cheaper than waiting to find out why California is rated as the #1 judicial hellhole.
Digging into the old trick or treat bag, we found this old goody from years past:
California discrimination laws protect a wide variety of individuals. So it’s perfectly understandable if you lay awake at night thinking about monsters and wondering whether employers are allowed to discriminate against them. Well finally, here are the answers to your questions about what types of monsters are protected from discrimination.
Zombies – Not protected. As I’ve previously explained, being dead is not a disability.
Werewolves – Not protected. While lycanthropy may be the type of impairment that otherwise qualifies as a disability, employers are not required to employ a creature who is “unable to perform his or her [or its] essential duties . . . in a manner that would not endanger . . . the health or safety of others even with reasonable accommodations.” And don’t think chaining employees up during full moons is a reasonable accommodation. Employers who chain employees to their work stations even figuratively face serious exposure to missed meal and rest period claims.
Swamp Monsters – Don’t be ridiculous. I think we all know that swamp monsters aren’t real.
Ghosts – Not protected. See Zombies.
Vampires – Not protected. You can again rely on the exception for those who can’t perform their jobs without endangering the health or safety of others. If the job requires someone to work during daylight without burning up, you’re especially safe.
Aliens – Not protected. I’m not talking about those from other countries. I’m talking about those from other planets. You may not discriminate based on national origin. But you may discriminate based on planetary origin.
Mutants – PROTECTED. Both California and federal law prohibit discrimination based on genetic information. So you may not discriminate against mutants.
So while most monsters aren’t protected against discrimination, mutants are. Happy Halloween!
October is a busy month for presentations on new legal developments and you have a couple of opportunities to hear me speak.
If you work in the hospitality industry and are following the Los Angeles City Council’s recent vote to increase the minimum wage for hotel workers to a whopping $15.37 per hour next July, you can see me speak at the Los Angeles Hotel Human Resources Association (LAHHRA) meeting on October 29th. I will be speaking on a panel with the Executive Director of the Hotel Association of Los Angeles (HALA) and a union expert to explore this very hot topic for Los Angeles hotels (and hotels in surrounding areas also likely to be impacted). This is an issue I recently blogged about and was quoted in Law360 about. This LAHHRA event is by invitation only, but if you email me I am happy to connect you with the event organizers.
I am also speaking at the Employment Round Table of Southern California at their 31st Annual Employment Conference at the Biltmore Hotel on October 28th on a panel entitled “Labor Pains: Expanding Developments in Pregnancy, Lactation and Related Disability Accommodation Issues.” You will hear an awesome hypothetical with every twist and turn you can imagine. Then see how the facts are interpreted by me (on behalf of employers) versus a plaintiff’s lawyer (on behalf of employees). This is a reprise of a popular presentation we did for the Los Angeles County Bar Association earlier this year. You can expect a few sparks!
Fourth quarter is always an interesting time for labor & employment new developments. Please come hear me speak to learn about new legal issues that may impact your business in an entertaining way, and to do a little networking. I hope to see you!
Chapman University’s Nexus Journal of Law and Policy is presenting a symposium entitled: Regulating California Businesses: Are Current Laws Best Serving the State’s Economic Interests or Has the Sun Set on California? The symposium will be on Friday, October 24, 2014 at Chapman’s Dale E. Fowler School of Law in Orange, California (details here).
I’ll be on a panel discussing “Do Laws that Favor Employees Drive Business Away?” Having written for years on topics such as Driving Jobs from California, you may be able to guess my perspective.
California just added the circumstances under which an individual was issued a driver’s license to the list of categories protected by the Fair Employment and Housing Act. What’s that you say? You were unaware of rampant driver’s-license-issuance-circumstance discrimination? Well join the crowd.
On September 19, 2014, Governor Brown signed AB 1660. The statute, which takes effect on January 1, 2015, amends the FEHA to say:
“National origin” discrimination includes, but is not limited to, discrimination on the basis of possessing a driver’s license granted under Section 12801.9 of the Vehicle Code.
Pursuant to Section 12801.9, the DMV must issue a license to people who are not in the country legally if they’re otherwise qualified for the license. Those licenses indicate on their face that the holder is allowed to drive, but the license ”does not establish eligibility for employment, voter registration, or public benefits.” Now it’s a violation of the FEHA for employers to discriminate against employees because they hold such licenses, or even to ask to see the license.
This last requirement comes from language in the bill making it an FEHA violation:
for an employer or other covered entity to require a person to present a driver’s license, unless possessing a driver’s license is required by law or is required by the employer and the employer’s requirement is otherwise permitted
Using driver’s licenses to confirm eligibility to work upon hiring is presumably still OK, since it’s permitted by federal law. Also, if an employee has to drive as part of the job, checking a driver’s license is obviously appropriate. But beyond that, employers need to review under what circumstances they ask California employees or applicants to show their driver’s licenses.