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.
Guest post by Los Angeles associate, Connie Chen.
Since Governor Brown signed AB 1897 on September 28, 2014, many businesses are likely wondering whether the new law, California Labor Code § 2810.3, will increase their liability when they subcontract work. The answer depends on whether the work is within the company’s usual course of business.
The new law requires a business 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. Cal. Lab. Code § 2810.3(b). Before this legislation, temporary employees had the burden of proving that the businesses they were assigned to were “joint employers” with the staffing agencies.
However, the new law does not impose liability on a business for using an independent contractor “other than a labor contractor,” nor does it change the definition of independent contractor. Labor Code § 2810.3(o). So what does that mean?
“Labor contractor” is defined as an individual or entity that supplies workers to perform labor “within the client employer’s usual course of business.” Subsection (a)(3). The phrase “usual course of business” is defined as “the regular and customary work of a business, performed within or upon the premises or worksite of the client employer.” Subsection (a)(6).
For example, if a restaurant contracts with a plumbing company to send workers to fix a clogged pipe, the plumbing company would not be a “labor contractor” within the statute, since the restaurant is not in the business of providing plumbing services. The independent contractor exception would apply so long as a bona fide independent contractor relationship exists.
This new law is further reason for businesses to ensure that a bona fide independent contractor relationship exists with each of their contractors/vendors. Moreover, businesses should thoroughly vet their staffing agencies to ensure they are reputable and comply with California wage and hour laws. This blog’s earlier advice is now even more sound: seek to have your staffing agency indemnify your business for any loss or harm (including attorneys’ fees) arising from claims by the agency’s employees. If a staffing agency refuses to sign such a provision, evaluate whether or not to enter into a contract with that agency, and/or to continue to use temporary employees.
I’ve posted before about Fox Rothschild’s dominance of the legal blogosphere. But in this post, I want to highlight the variety of our employment-related blogs. We have:
So whatever your area of interest relating to employment law, we have you covered.
My colleague, Nancy Yaffe, has written two posts (here and here) about California’s newly enacted paid sick leave law – the Healthy Workplace, Healthy Families Act of 2014 (which goes by the phonetically challenging acronym, “HWHF”). Now our colleague, Tyreen Torner, has created a chart comparing HWHF to San Francisco’s Paid Sick Leave Ordinance. This is the same Tyreen Torner who put together a detailed guide on San Francisco employment laws.
You can download the comparison of the two statutes here: Comparing Paid Sick Leave Requirements_ San Francisco v California. The chart identifies some significant differences which will be huge headaches if SF employers are required to comply with both laws. Keep your fingers crossed that developments between now and HWHF’s July 1, 2015 enactment will clarify that issue.
The Los Angeles City Council voted last week to raise the minimum wage for Los Angeles area hotels to $15.37 per hour. The minimum wage will increase for hotels with 300 or more rooms in July 2015, and for hotels with 150 or more rooms in July 2016.
Of note, this minimum wage increase was championed by organized labor. Indeed, the victory is publicized on union websites. So, why would unions want a higher minimum wage at non-union properties? One reason is that hotels with a current collective bargaining agreement in place are exempted from the required wage increase. Therefore, one goal as stated by many pundits is to pressure more hotels to unionize so they have the option to pay less than the required minimum wage.
But why would a hotel worker at a union hotel take less money? Why wouldn’t they just move to another hotel that pays $15.37? The stated theory seems to be that it would be hard for union hotels to justify paying less than the required minimum wage when their contracts come up for negotiation. So, over time, the new minimum wage may become the new floor, and organized labor can take credit for making that happen.
Indeed, news articles report that the ultimate goal is more about expanding the ranks of union members than improving wages for workers. Apparently there are about 60 Los Angeles area hotels that will be impacted. If those hotels feel they can get some concessions from unions and avoid paying the minimum wage (perhaps in exchange for better benefit plans or other negotiated employment terms), or if the wage differential between union and nonunion hotels goes away, then there will be less resistance to efforts to unionize. At least that seems to be what the unions are hoping for.
Will the wage increase mean less workers hired as businesses suggest? Some argue that up to 20% of workers will be laid off. Or can the hotels absorb the wage increases and still make a profit? Will the unions come out ahead as they hope? Will more Los Angeles hotels be unionized a few years from now? It will be interesting to see how this all plays out.
Nothing in California is easy for employers, and California’s new paid sick leave statute (AB 1522) is no exception.
Here is the first challenge. While employers can make employees give notice of paid sick time when foreseeable, they can’t really punish employees who take time off that is not foreseeable, because the statute prevents retaliation against any employee for using sick leave (or even requesting to use it). Employers are also prohibited from requiring employees to find a replacement worker to cover time off.
So, imagine this. Employee is due in at 9 am. Employee wakes up to a suddenly sick child at 7:15 am (not foreseeable). The employer’s policy requires a 2-hour minimum call out for a missed shift. However, the employee misses that window and calls at 8 am (or maybe even at 9 am when expected at work). The employee has not found a replacement to cover the shift. Now what? Can the employee be disciplined for failing to use the employer’s call out procedure? For not finding a replacement? Unfortunately, the answer is very likely – no. The employer is stuck with an absent employee, no one to cover, and no one to hold accountable.
Here is a second challenge. Sick pay is paid at the employee’s hourly wage. That’s easy, right? Think again. If the employee has different hourly pay rates or is paid commission in the 90 days before the sick leave is taken, then the rate will fluctuate. In fact, the rate for each paid sick day (or hour) must be calculated by dividing the employee’s total wages (not including premium pay), by the employee’s total hours worked in the full pay periods of the prior 90 days.
So, imagine a retail sales clerk who earns commission, or a hotel steward who also covers as a houseman at a different pay rate, or a server who earns a service charge for banquet functions – the appropriate sick pay rate for each of these employees will need to be calculated each time they use sick leave. Oh, and by the way, sick leave can be used in increments as small as two hours.
At this point, California employers (and those advisors trying to guide them) will need more than aspirin!
If you have unionized workers, you know that a union gets to request information that may be relevant to it its functions. This includes information potentially relevant in deciding to grieve a matter or to assisting with bargaining. Employers must respond to these requests in a timely fashion, even if they think the request is irrelevant or overly burdensome. At times, unions harass employers with burdensome and unnecessary requests to try to achieve some other end. This week, the Board took it one step further and empowered union stewards to make these requests independently.
In a September 17, 2014 decision (Dover Energy, Inc., Blackmer Division and Thomas Kaanta), the Board concluded that an employer violated the National Labor Relations Act by verbally warning a union steward to stop making frivolous requests (in this case, asking for information without the union’s knowledge that was unconnected with collective bargaining or any possible grievance). The warning said that further discipline up to and including discharge could result if the steward continued to make frivolous and unauthorized information requests. An administrative law judge concluded that the employer did not violate the Act because: (1) the steward’s actions were not authorized by the union and (2) evidence was lacking that the steward requested information on behalf of other employees or discussed with other employees the concerns underlying the requests.
The Board reversed the judge, ignoring the unprotected nature of the request, finding that future requests for information could be protected and consequently the steward “would reasonably conclude from the language of the warning that even protected requests could trigger the warning’s threat of discipline.” The Board ignored the warning’s clear direction that the steward refrain from unauthorized and frivolous requests and concluding that the employee would not be intelligent enough to discern the difference between a protected and unprotected request.
This decision serves to emphasize that employers should consult experienced labor counsel in deciding how to treat information requests (even if they appear unauthorized or frivolous) and in taking disciplinary action against union stewards. Thanks to experienced labor counsel Chip Zuver for helping to prepare this post.
If you were worried that California employers weren’t sufficiently regulated, let me calm your fears. Governor Jerry Brown has signed several new bills this month.
Nancy Yaffe already reported on the new paid sick leave requirements that go into effect on July 1, 2015.
On September 9, 2014, the governor signed AB 2053, which requires that mandatory sexual harassment training include information about bullying. More specifically, the training must ”include prevention of abusive conduct as a component of the training.” The bill describes “abusive conduct” as:
conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests. Abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.
I have no objection to employers encouraging employees to behave civilly. But I worry that this is a step towards legislation allowing employees to sue if they aren’t the victim of actionable harassment, but perceive themselves as being bullied. There will always be conflicts in the workplace (and other places where humans interact) and it isn’t hard to imagine some of those involved in these conficts portraying themselves as victims of bullying, especially if there’s financial incentive to doing so.
Also on September 9, 2014, Governor Brown signed AB 1443 extending the Fair Employment and Housing Act’s protections to unpaid interns and those in apprenticeship training programs. Both AB 2053 and AB 1443 take effect on January 1, 2015. So employers should plan to update their employee manuals and harassment training before then.
California is now the second state in the nation to implement paid sick-leave state wide (Connecticut is the other). Thankfully for employers, the Healthy Workplaces, Healthy Families Act of 2014 (“HWHF”) will not take effect until July 1, 2015, giving employers some time to plan ahead.
The HWHF is very broad in scope. It covers all employers regardless of size, with limited exceptions for union employees, construction employees, and providers of in-home support services. There is no small employer exception.
The union exception is limited to employees covered by collective bargaining agreements that expressly provide for: (1) wages, hours of work, and working conditions of employees; (2) paid sick days (with final and binding arbitration for disputes arising from sick days); (3) pay premium wages for all overtime hours worked; and (4) a regular hourly rate of not less than 30% more than the state minimum wage.
Like the San Francisco sick leave ordinance, the HWHF requires employers to accrue sick pay at a rate of “not less than one hour per every 30 hours worked.” The accrual begins on either the first day of work, or as of July 1, 2015 when the law becomes effective, whichever is later. For a full-time employee working 2080 hours per year (or a salaried employee), that would be 69.33 hours (8.66 days) per year.
Employees will be able to use that accrued sick time after 90 days of employment. Accrued sick leave can be limited to six days (48 hours) total, and an employer can limit carryover to three sick days (24 hours) each year.
Sick days can be used for the employee or a family member (defined as parent, child, spouse, registered domestic partner, grandparent, grandchild, or sibling). Time off can be used for illness or preventative care.
Employers with paid sick leave or paid time off policies do not need to change anything if their current policy:
- Makes available an amount of leave that may be used for the same purposes as the new law (i.e. sick/family sick); and
- Satisfies the accrual, carry over, and use requirements of HWHF; or
- Provides for no less than 24 hours (3 days) of paid sick leave, or equivalent paid leave or paid time off per year.
There will be more to come on HWHF. I have a feeling the devil will be in the details. Get out your aspirin!