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California Employment Law

Commentary on Issues Facing California Employers

Where Things Stand Now With Suitable Seating Claims

Posted in Advice & Counseling, Class Actions, Wage and Hour

Most of the California Wage Orders say that: “All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.” The problem with that requirement is that no one knows how to define “suitable seats,” “nature of work,” and “reasonably permits.”

As we wrote in March 2014, the Ninth Circuit Court of Appeal had some suitable seating class action cases when it asked the California Supreme Court to clarify what those terms mean. Then last week, as reported in Law360 (subscription), the California Supreme Court invited the Division of Labor Standards Enforcement to file by August 21, 2015 an amicus brief expressing its view on how to define those terms. After that, the parties will have 20 days to respond.

The only thing that’s remotely close to clear at this point is that California employers are facing class action exposure for not following a law that no one knows how to follow. Employers who don’t provide seats for employees should consider doing so if it’s feasible given the job and work environment. On the other hand, given studies showing that sitting is bad for you, it’s may be just a matter of time before employees start suing employers for making them sit.

Happy 25th Birthday Americans With Disabilities Act. Now Go Find a Job.

Posted in Advice & Counseling, Disability Discrimination, Employment Litigation

July 26, 2015 will mark 25 years since George H.W. Bush signed the Americans With Disabilities Act. Has the ADA behaved like many 25 year olds by moving to Brooklyn and refusing to compromise its creativity and individuality to find a job that it’s sure it will hate? Is it sprawled out in front of the TV, drinking your beer and scowling when you gently question its grooming choices? No. It’s been working since its infancy to help people with disabilities participate meaningfully in the workforce and society, in general.

President Bush acknowledged at the signing ceremony the concern “that the ADA may be too vague or too costly, or may lead endlessly to litigation.” The concern was justified. Last year, 28.6% of all charges filed with the EEOC included claims of disability discrimination. Employers wanting to avoid becoming part of that statistic need to understand the following:

  • The breadth of impairments that qualify as disabilities. The Act begins with a finding that “some 43,000,000 Americans have one or more physical or mental disabilities.” Between the aging of the population and amendments that expanded the definition of disability, that number is presumably higher now.
  • The extent of employers’ obligations to accommodate disabled workers. This is not like other discrimination laws that require you to treat everyone the same. Employers are expected to accept certain expenses, inefficiencies, and disruptions to enable disabled individuals to work.
  • The interactive process, i.e. the steps employers are required to go through to identify possible accommodations. You can access a presentation I did on that topic here.

When in doubt, get qualified legal advice. It’s much cheaper than waiting to get sued.

“That’s How We’ve Always Done It” Is Not a Defense to Wage Claims

Posted in Advice & Counseling, Class Actions, Wage and Hour

If you follow employment law (and who the heck doesn’t?), you’ve seen recent lawsuits alleging wage and hour violations by interns, cheerleaders, minor league baseball players, and a host of others. In each of these, I’m sure that the employers at some point told their lawyers that they’ve always done it this way.

As the title of this post points out, that isn’t a defense. It’s more like an admission.

Managers are busy with a million different things. Evaluating whether pay practices are consistent with current legal requirements is usually treated as a fairly low priority. That is, until someone files a claim, then more people file claims or maybe a government agency starts investigating. Then it becomes a huge priority.

If you want a brief summary of the laws that most often trip up employers with operations in California, we’ve prepared this guide. If you’re an employer and you’re not in compliance, it’s far cheaper, less stressful, and less time consuming to fix the problem before you’re involved in adversarial proceedings.

Is California Paid Sick Leave Giving You Indigestion? A Few Issues Clarified in AB 304

Posted in Wage and Hour

California paid sick leave became effective on July 1st.  The Governor signed a new bill (AB 304) on July 14th (effective immediately) to clarify a few issues:

First, the bill provides some clarity on how to calculate the pay rate for sick leave (an issue that was proving very challenging to implement).  Employers now have two options for non-exempt (hourly) employees, as follows:

  1. Calculate paid sick leave in the same manner as the regular rate of pay for overtime purposes is calculated for the workweek in which paid sick time is used, whether or not the employee works overtime in that workweek.  Therefore, employers who are already set up to include all forms of non-discretionary compensation (such as commissions, shift premiums and service charges) into the overtime rate, can simply use those calculations for the sick pay rate.
  2. The prior option, which is to divide the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.  If employers have already figured out a formula for this option, they can continue to use it.

For exempt (salaried) employees, the bill clarifies that the sick pay rate shall be calculated in the same manner as the employer calculates other forms of paid leave time.

Second, the bill provides for alternate accrual methods other than one hour for each thirty hours worked, provided that the accrual is on a regular basis and the employee will have 24 hours of paid sick leave available by the 120th calendar day of employment.  Presumably, this is to give employer’s some latitude to accrue with less math involved, and another alternative to the 24 hour upfront method.

Third, the bill clarifies that an employer may limit an employee’s use of paid sick days to 24 hours or 3 days either: (1) in each year of employment (i.e. by anniversary year); or (2) in each calendar year; or (3) in any specified 12-month period.

Fourth, the bill permits employers who provide unlimited sick leave to satisfy notice requirements by indicating “unlimited” on the paystub (instead of having to show the number of hours accrued).

Fifth, the bill states that sick pay need not be reinstated to an employee rehired within a year if it was paid out as PTO at the time of separation, and that the amount reinstated need only be the minimum amount accrued under the statute (i.e. no more than 48 hours or 6 days).  Therefore, if the employer had a larger cap, the entire balance need not be restored.

Sixth, the bill clarifies that an employee must work for 30 days with the same employer (not just within California) to be eligible for paid sick leave.

Seventh, the bill includes a complicated grandfather clause for employers who provided paid sick leave or paid time off before January 1, 2015, and used a different accrual method than one hour in every 30 hours worked.  This clause allows for a slower accrual as long as the employee accrues eight hours of paid sick leave in the first three months of employment and was eligible to earn 24 hours of sick leave or paid time off within nine months of employment.

Finally, the bill provides that the record keeping requirements do not include maintaining documentation of the purposes for which an employee uses paid sick time.

A few issues on my wish list that were not addressed include:

  1. Whether the 24 hour minimum can be pro-rated for employees who work much less than an 8 hour day so that sick time is three days of their normal shifts (it would be great if they could but for now employers are stuck with 24 hours);
  2. Whether the 24 hour minimum needs to be adjusted up for employees who typically work over 8 hours per shift (an interesting question and the safe answer is likely that the hours need to be adjusted up);
  3. Why sick leave must be available in two hour increments to exempt employees, and can’t be limited to use in either half or full days (to me this seems to undermine exempt status); and
  4. Why these issues weren’t clarified before the July 1st rollout deadline!

Should Justice Scalia’s “Parade of Horribles” Now Include Vampire-Americans??

Posted in Discrimination

Adding to our earlier discussion of discrimination against monsters, here’s another post from Summer Associate Keith Yetter:

Apparently a small number of Americans identify as actual vampires! A recent Newsweek article profiles the work of DJ Williams, director of the social work program at Idaho State University, researching these Vampire-Americans.

In the ongoing evolution of individual identity rights, the article makes the predictable comparison between people who identify as vampires and the LGBT community. “The [discussion of individual rights] is prescient in a time when how one self-identifies is a topic of national conversation—from the Supreme Court ruling on gay marriage to Caitlyn Jenner’s coming out as a woman and appearing on the cover of Vanity Fair,” the article said.

In his dissent in Lawrence v. Texas, Justice Scalia famously argued that if the court was not prepared to uphold laws based on moral disapproval then “state laws against bigamy, same-sex marriage, adult incest, prostitution, masturbation, adultery, fornication, bestiality, and obscenity” would also have to be struck down.  Justice Scalia must have forgotten to include vampires, werewolves, and fairies.

Taking moral disapproval off the table, the state could make different arguments for having a rational basis to regulate vampirism. Public health concerns immediately spring to mind that might support laws regulating the transfer of blood in order to prevent disease. Or, perhaps, consenting adults should be left alone to live their lives as long as they do not impact anyone else.

A vampire rights movement sounds like something out of a fantasy novel and is unlikely to catch fire anytime soon. However, as our society moves beyond accepting moral disapproval as appropriate motivation for government action, we would do well to consider whether we might have more legitimate reasons for rejecting some “alternative lifestyles.”

Are Minimum Wages to Blame for Over-Priced Burritos?

Posted in Wage and Hour

One of our ongoing themes has been the consequences for California’s economy of having laws that are so protective of employees. See this one, for example. With a fresh take on this issue, here’s a post by Summer Associate Keith Yetter.

The impact of higher wages has been hotly debated across the country as many localities pass big increases in their minimum wages. Locally, San Francisco and Oakland recently passed minimum wage hikes up to $15 (effective July 1, 2018) and $12.25 an hour (effective now), respectively.

Debates surrounding these measures often forget the ripple effect that raising the minimum wage can have on the number of available jobs and on the price of everyday consumer goods. As one post from Forbes rather sardonically pointed out, “there is no such thing as a free lunch.” According to the article, the San Francisco minimum wage increase is to blame for Chipotle’s decision to raise its prices in the Bay Area by 14%, as opposed to the 4% increase in most other markets.

Nationally, advocates of a higher minimum wage argue that the current minimum of $7.25 an hour is actually significantly lower than its peak, adjusted for inflation, of $10.34 an hour in 1968.  However, this argument looks to the past rather than the future when it ignores the actual impact a higher minimum wage would have on the economy. The California Department of Finance just released a report describing the impacts of proposed legislation that would raise the minimum wage statewide. “For the economy, losses from higher production costs to businesses would . . . lead to slower employment growth,” the report said.

Lawmakers must remember that raising the minimum wage does not just increase wages.  Higher wages increase prices for the goods that we all buy, and having to pay higher wages constricts employers’ ability to hire more people.

CA Court Says Employers Must Withhold Taxes from Settlements of Lost Income Claims

Posted in Employment Litigation, Wage and Hour

While we all know that employers are required to withhold taxes from employees’ pay, it’s been unclear in California how that applies to settlements. Must the employer withhold taxes from payments for lost income (back pay or front pay)? Or can it pay the settlement proceeds without withholding and have the plaintiff take responsibility for tax payments?

A 1992 state court of appeals opinion, Lisec v. United Airlines, said that an employer isn’t required to withhold taxes from a payment to a former employee. But many federal cases and IRS interpretations since then have reached the opposite conclusion. Then, on June 26, 2015, a different state court of appeal joined that chorus in saying that payments to departed employees for lost income were subject to withholding. While that case, Cifuentes v. Costco Wholesale, dealt with payment of a judgment, the court said that the same rules applies whether the case is resolved by litigation or settlement.

Going forward, employers who settle employment claims should designate a portion of the settlement as lost wages and withhold taxes from that portion. Will this make cases harder to settle? Yes. It’s another issue to haggle over and it results in settling plaintiffs seeing less money in their pockets in the short term. But many employers have been doing this for years and they still manage to settle cases. Also, employers who fail to withhold taxes can be liable for penalties and taxes or even jailed! So if you pride yourself on giving employers advice that doesn’t get their managers sent to prison, it’s time to start withholding taxes from lost income settlements.

New Labor Department FMLA Forms Ask for Information Prohibited by CA Law

Posted in Advice & Counseling, Disability Discrimination, Discrimination

The US Department of Labor has revised the forms to be given to employees requesting leave under the Family and Medical Leave Act. There’s a form to use when the leave is for the employee’s own medical condition and one to use when the employee is caring for a relative.

But if California employers use the form for employees requesting leave for their own health conditions, they’re violating California law. While the California Family Rights Act parallels the FMLA in many respects, it does not allow you to ask an employee’s diagnosis, which the FMLA forms ask in section A(4).

Here’s a list of six other ways that following federal employment law causes you to violate California law.  Ignore them at your peril. In case you hadn’t noticed, we do things a bit differently out here.

 

Would US Dept. of Labor’s New Overtime Rule Affect CA Employers?

Posted in Advice & Counseling, Wage and Hour

The Department of Labor has proposed a rule to raise the minimum salary workers must earn to qualify for “white collar” exemptions from $23,660 per year to $50,440 per year. According to the announcement, the proposed rule would move nearly 5 million workers from exempt (i.e. salaried) to non-exempt status (i.e. hourly and overtime-eligible). In California, employers typically ignore the DOL overtime rules since the CA requirements are more demanding. If you comply with the state rules, you more than satisfy the federal requirements. Will this new rule change that?

The answer is an unequivocal “maybe.” CA is considering increasing the state minimum wage to $13 per hour effective July 1, 2017. The bill, SB 3, has passed the Senate and is being considered by the Assembly. If it passes and becomes law, the minimum salary for exempt status in California would increase to $54,080 (2 times the state minimum wage).

So if the DOL’s proposed rule takes effect before SB3, you could have a situation where employees meet the state exemptions test, but not the federal. If that happens, employees making less than $50,440 would be non-exempt, those making over $54,080 could be exempt, and those in between could be in a hybrid class where the state exemption applies and the federal does not. Employees in the last category would presumably be entitled to weekly, but not daily overtime and would not be entitled to meal and rest periods. What could be simpler?

Finally Some Good News From the Labor Board

Posted in Advice & Counseling, Labor Law

At least some good has come out of the Supreme Court’s finding that President Obama’s recess appointments were invalid in Noel Canning. By virtue of the Supreme Court’s  decision, the Labor Board reconsidered its decision in Fresenius USA (pdf) and concluded that an employer acted lawfully when it discharged a union supporter for lying during an internal investigation into who scribbled vulgar, offensive, and arguably threatening statements on union newsletters in the employer’s break room.

Before you get too excited, the Board took pains to point out that it assumed the employee’s vulgar statements were protected.  Additionally, the Board noted that it will find that an employee is privileged to lie during internal investigations where the employee has a legitimate interest in shielding his section 7 activity from his employer. But the Board said it will recognize an exception to the right to lie about section 7 activity where the questioning and lie relate to the employee’s job performance or the employer’s business.

In this case, the Board found the discharge permissible because the investigation had a legitimate business interest. Specifically, the employer received a number of complaints from female employees that the statements were intimidating, vulgar and offensive and its investigation of those complaints was consistent with its anti-harassment policy and with federal law. The board also noted that the investigation did not pry into the employee’s support for the union, but questioned him solely on the handwritten comments the allegedly harassing comments. Also, the employer’s discharge was consistent with the employer’s past practice.

Takeaways: The Board’s decisions on where to draw the line between permissible and impermissible employee speech are anything but clear. Employers should get experienced legal advice before addressing these issues.