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California Employment Law

Commentary on Issues Facing California Employers

Should California Employers Stop Providing PTO and Paid Vacation and Just Give Paid Sick Leave?

Posted in Wage and Hour

Beginning on July 1, 2015, California employers will need to provide paid sick leave to pretty much all full-time, part-time, temporary and even on-call employees. As the year end approaches, many employers are revising their vacation, sick, and paid time off (PTO) policies to conform with California’s new requirements. If you haven’t mastered the nuances of California’s new paid sick leave laws, the DLSE’s FAQs provide a pretty good summary. But understanding the requirements is only the beginning. Figuring out how to amend existing policies is more complicated. Here’s why.

Many employers have combined sick and vacation leave into comprehensive PTO policies. Most employers provide PTO to make things simpler, and to prevent employees from having to misrepresent why they are taking time off.

However, adapting PTO policies to meet California’s particular sick leave requirements may result in providing benefits to a much broader group of employees than was originally intended. Providing PTO is more expensive than providing sick time, because PTO is considered wages that must be paid out upon separation from employment, while pure sick leave is not construed as wages and need not be paid out. Also many vacation/PTO policies are reserved for regular full-time employees, and do not apply to part-time, temporary or on-call workers. These differences are leading many employers to reverse the trend towards PTO and to go back to separate vacation and sick policies. That is certainly one option.

Another option is to do away with PTO or paid vacation all together. Many employers forget that there is no legal requirement to have paid vacation time. On the one hand, many employees like it, expect it, and may not choose to work for employers who don’t provide it. On the other hand, for many businesses, PTO/vacation simply isn’t necessary or even productive, because the employees who take vacation/PTO time off don’t bother to log it anyway. Many non-exempt employees simply take unpaid time off, and many exempt employees, tied to their electronic devices, work days they are supposed to be off and never actually use the accrued PTO/vacation time. Such employees wind up with the maximum accrual of vacation/PTO time that amounts to a sort of “bonus” upon separation of employment. Those payouts can be expensive for employers.

As you are considering your policies in light of California’s new sick leave requirements, think about whether your workforce really needs paid time off or vacation above and beyond what will soon be required sick leave. If not, it might be time to just provide sick leave, to allow employees to take other time off when business permits, and to judge employee productivity by accomplishments as opposed to days or hours worked.


Probationary Periods, ACA and CA Law are Back in Sync (SB 1034)

Posted in Employment Litigation

Last year many California employers were forced to adapt their traditional 90-day probationary periods to comport with a state-specific requirement imposing a maximum eligibility waiting period for benefits of 60 days. This created a confusing list of choices for California employers who often like to provide benefits as a “prize” for passing a probationary period. I blogged about this issue last year.

The good news is that Senate Bill 1034 becomes effective January 1, 2015 and repeals the 60-day waiting period limit previously imposed on certain health insurance plans in California. Now employers can go back to the 90-day probationary period with benefits as a reward to employees who “pass” probation. This comes just in time for the year-end employee handbook updates.

That said, terminations during a probationary period can lead to litigation. Therefore, it is still important to hire carefully, to evaluate new hires promptly, to document ineffective performance or misconduct even for employees in the first 90 days, and to terminate quickly when justified.



NLRB Alters Post-Arbitral Deferral Standards

Posted in Labor law

On December 15, 2014, in a split decision along party lines, the National Labor Relations Board (“the Board”) in Babcock & Wilcox Construction Co., Inc., overruled 30 year-old precedent that will needlessly undermine the utility and finality of arbitrations that concerned allegations of retaliation, interference and coercion with employees Section 7 rights. The Board did this by imposing a new standard for when it will defer to arbitration decisions alleging violations of Section 8(a)(1) and (3) of the act.

Under the new test, the Board will defer to an arbitration decision only if the arbitration proceeding was fair and regular; the parties agreed to be bound; the party urging deferral shows that the arbitrator was explicitly authorized to decide the unfair labor practice issue; the arbitrator was presented with and considered the unfair labor practice issue or was prevented from considering the unfair labor practice issue by the party opposing deferral; and Board law reasonably permits the award.

The Board’s new approach places the burden on the employer to ensure either that the arbitration agreement incorporates the statutory right at issue in the unfair labor practice allegation or that the parties explicitly agree to address the issue; that the arbitrator considered and addressed the issue in rendering the award. This framework will likely undermine the finality of arbitrations as it provides the Board considerable discretion in determining whether an award/decision is “reasonable.” It also may give unions a second bite at the apple if an arbitrator denies a grievance in an arbitration that deals with allegations such as unlawful/unjust discharge or discipline.

NLRB Finalizes “Quickie Election” Rules

Posted in Labor law

We’ve been expressing concern about the National Labor Relations Board’s efforts to implement “quickie election” rules for over a year. Well, the rules are now in place and they’re part of a double-whammy for employers. First, the NLRB reversed course to decide that unions can require employers to turn over employees’ e-mail addresses. Now, under the new rules, an election can be held as soon as 14 to 21 days after a petition is filed, drastically reducing the time the employer has to educate its workforce about whether the benefits or organizing outweigh the detriments.

Marv Weinberg and Chip Zuver explain the new rules in more detail here. Is there anything employers should do now other than wring their hands and lament their situation? Absolutely. They should:

  • Expect more organizing activity since elections will be easier for unions to win. So they need to realistically evaluate their susceptibility to an organizing campaign and work to identify and eliminate weaknesses. If they wait until a petition is filed to justify unpopular policies, it may be too late.
  • Reconsider whether collecting personal email addresses and cell phone numbers for employees is advisable.
  • Review their nonsolicitation and access policies to see if they’re still enforceable under the new rules.
  • Consider implementing “open door” policies to encourage employees to bring issues and concerns directly to management. Start telling and showing them that they don’t need a union for them to have their voices heard.


The Bay Area Urban Debate League: Step Up and Support Diversity

Posted in Articles

Fox Rothschild LLP is a proud sponsor of the Bay Area Urban Debate League. So am I. BAUDL helps to establish and maintain competitive debate leagues in under-resourced public high schools, through which under-served youth are taught to research and advocate positions on complex policy issues. Its participants are overwhelmingly students of color (98%) and low income (66%). Our program has a direct, measurable impact. The young people who participate see their literacy scores increase 25% per year and their odds of going to college increase 30%.

If you believe in equality of access to education, if it bothers you that the gap between the “haves and have nots” continues to widen, if you believe that there are young people in the poorest parts of the Bay Area who deserve a chance to succeed (and have much to contribute), please support BAUDL.

BAUDL currently serves 14 high schools locally, principally in San Francisco and Oakland. Our goal is to expand to reach more kids, in more schools, in more cities. To do that, we need your help. If you’re moved to donate, or would like to read more about how our organization is literally changing people’s lives, you can do so here.

BAUDL fight! BAUDL win!

U.S. Supreme Court Asked to Grant Writ in Iskanian

Posted in Class Actions, Employment Litigation, Wage and Hour

Last June, the California Supreme Court in Iskanian v. CLS Transportation, 59 Cal. 4th 348, decided that the waiver of class action participation in an arbitration agreement was enforceable, but the waiver of a representative action under the Private Attorneys General Act (“PAGA”) was not. This later carve-out for PAGA, based on what the Court deemed “public policy,” was very troubling to employers who fear, with good reason, that PAGA will now become the plaintiffs’ lawyers’ preferred vehicle for wage and hour cases, despite a clear waiver of representative actions in an arbitration agreement.

CLS Transportation, the employer in the case, has filed a Petition for a Writ of Certiorari with the United States Supreme Court seeking review of that portion of the California decision dealing with PAGA. (Fox Rothschild LLP represents CLS Transportation).

The Petition argues that the California high court was simply wrong when it found that PAGA was somehow special, and thus exempt from the preemptive effect of the Federal Arbitration Act (“FAA”), which the U.S. Supreme Court has said, in several prior decisions, requires that an arbitration agreement be enforced “according to its terms”, and that state “public policy,” however noble, is irrelevant.

CLS Transportation is supported by friend-of-the-court briefs filed by the California Chamber of Commerce, the Civil Justice Association of California, the Employers Group, the Pacific Legal Foundation, the National Federation of Independent Businesses, and the California Employment Law Council. Briefing is now complete, and we understand the case will be “distributed” to the Supreme Court Justices in early January. Your California Employment Law blog will be the first to know whether the U.S. Supreme Court will agree to hear the appeal.

Recent Case Shows Lengths CA Employers Must Go to Accommodate Disabled Employees

Posted in Disability discrimination, Discrimination

One of our ongoing themes has been the extent of an employer’s obligation to accommodate disabled employees. A recent unpublished court of appeal decision – Swanson v Morongo Unified – illustrates this point.

Swanson, an elementary school teacher, had recently been treated for breast cancer. She asked to be assigned to teach 2nd grade, as she had recently done, instead of being assigned to work with 5th graders. Her fragile health, she said, made it difficult to do the added work a new assignment entailed.

But the school district assigned someone else to teach 2nd grade and assigned Swanson to teach kindergarten. She had not taught kindergarten in 30 years and expressed concern that, since the cancer treatments depleted her immune system, it would be dangerous for her to work with kindergarteners and the various illness they carried. The district, however, refused to change the assignment.

Swanson sued claiming the district failed to accommodate her disability. The district argued that it fulfilled its obligation to offer reasonable accommodation, even if it wasn’t Swanson’s preferred accommodation.

While the trial court granted the employer’s summary judgment motion, the appellate court reversed. It said that the district violated the Fair Employment and Housing Act by not giving Swanson preference for the 2nd grade position and not going far enough to find a workable accommodation. You can read the decision, which was reported in the BNA Labor and Employment Report (subscription), here: Swanson v Morongo (pdf).

Here are your takeaways:

  • Disabled employees get preference for open positions, as long as they’re qualified and it doesn’t violate an established seniority system. This is true even if a nondisabled candidate may be more qualified.
  • In the vast majority of cases, an employee will be viewed more sympathetically than an employer. If the employee is a cancer survivor, that advantage can be huge.
  • The obligation to reasonably accommodate a disabled employee is an ongoing one. If an accommodation proves ineffective, the employer needs to resume the interactive process to identify other possible accommodations. Getting qualified legal guidance on this process is a lot cheaper than getting sued.

California Issues Paid Sick Leave Poster

Posted in Wage and Hour

Paid Sick Leave becomes mandatory in California on July 1, 2015. We’ve discussed the general requirements here and here. The law requires that employers display a poster stating that:

  1. Employees are entitled to accrue, request, and use paid sick days;
  2. The number of sick days provided to employees;
  3. The terms for using the sick days; and
  4. Retaliation or discrimination against employee who request or use paid sick days is prohibited and employees can complain of that conduct to the Labor Commissioner.

An employer willfully violating the posting requirement is subject to a $100 fine for each offense.

The Division of Labor Standards Enforcement has issued this poster for use by employers. While they make lovely holiday gifts, employers who have more generous policies will want to create their own posters containing the necessary information.

DLSE Issues New Mandatory “Wage Theft” Notice

Posted in Wage and Hour

“Wage Theft” is the term used now for employers who fail to understand all the nuances of California’s ridiculously complicated payroll laws. Mischaracterize an employee as an independent contractor (an issue state agencies can’t even agree on) and you’re a wage thief. Miscalculate an employee’s regular rate of pay? Ditto.

The Wage Theft Protection Act requires that all non-exempt, non-union employees be given a specific form at the time of hire. The DLSE just updated that form to include information about paid sick leave. You can download the new one here. You should start using it by January 1, 2015.


OSHA Warns Retailers: Control Your Crazed Customers

Posted in Employment Litigation

One of the lesser known holiday traditions is the Occupational Safety and Health Administration‘s annual reissuance of its Crowd Management Safety Guidelines for Retailers. OSHA warns retailers dealing with crowded sales events to take steps that include (at a minimum):

  • On-site trained security personnel or police officers;
  • Barricades or rope lines for pedestrians that do not start right in front of the store’s entrance;
  • Implementing crowd control measures well before customers arrive at the store;
  • Emergency procedures in place to address potential dangers;
  • Methods to explain approach and entrance procedures to the arriving public;
  • Observing maximum occupancy levels and;
  • Not blocking or locking exit doors.

If you’re a retailer, it provides useful guidance on planning, setting up, and conducting crowded sales events, as well as proper emergency responses. If you’re not, consider making a dramatic reading of the Guidelines a part of your Thanksgiving tradition. It’s never too soon to start teaching your kids about bureaucracies and government regulation.

Happy Thanksgiving.