California Employment Law : Employment Lawyer & Attorney : Fox Rothschild Law Firm : San Francisco, Oakland, Los Angeles, San Diego

When I was first writing about new employment laws for 2012, the notice provisions of the Wage Theft Protection Act seemed pretty dull.  After all, what's so exciting about a requirement that employers give newly hired non-union, non-exempt employees written notice of their rate or rates of pay, the basis on which the wages are to be calculated (such as hourly, piece rate, commission, etc.), the applicable overtime rates, the designated regular pay day, and the name and mailing address of the employer. 

But the legislation also said that the notice would need to include: "Any other information the Labor Commissioner deems material and necessary."  That's where the fun started. For one thing, unless you spent the time between Christmas and New Year's Eve scrutinizing the DLSE's website, you would have missed the Labor Commissioner's FAQs and template posted a few days before the statute took effect. These added a number of new requirements, that I wrote about at the time (Beware of Traps in DLSE Template).

Now, on January 23, 2012 (three weeks after the effective date), the DLSE has expanded the FAQs.  You can read about what's new below the picture of how I picture a "wage thief" that the Wage Theft Protection Act presumably protects against.

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I just updated two of our publications that identify the employment law issues that get employers operating in California into the most trouble.  These pdf brochures -- one for employers based outside California and one for those based in the state -- discuss California's unique legal requirements and how employers can protect themselves against serious legal exposure.  I don't want to resort to fear-mongering, but California employment law is scary stuff.  Is your company sufficiently protected?

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As we reported here, a newly enacted California statute (excitingly named "The Wage Theft Protection Act") requires employers to give new employees a written notice specifying the rate or rates of pay, the basis on which the wages are to be calculated (such as hourly, piece rate, commission, etc.), the applicable overtime rates, the designated regular pay day, and the name and mailing address of the employer. The statute also specified that the notice had to contain "any other information the Labor Commissioner deems material and necessary."

Well the Labor Commissioner, through her alter-ego the Division of Labor Standards Enforcement, has taken the ball and run with it.  As the year was winding to a close, the DLSE made a template available here and posted FAQs here that say that all the information included in the template is required in any notice given to employees.   

So in addition to what is specified in the statute, the notice must contain the following:

• The employer's form of business (e.g. corporation, LLC, sole proprietorship);
   
• Whether the employer uses another company to hire employees or administer wages or benefits and, if so, information identifying that company;
   
• The form of the employment agreement (more on this below); and
   
• Information identifying the workers' comp insurer (including the policy number) or, if the employer is self-insured for workers' comp, the "Certificate Number for Consent to Self-Insure."

There are also four paragraphs of language at the end of the DLSE template about the employer's obligation to notify employees of changes, what categories of employees don't need to receive the notice, how to find the complete statute online, and the legal significance of the employee's signature.

There are a number of issues here, but I want to focus on the part of the form that reads:

Employment agreement is (check box):  □ Oral    □ Written        

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The DLSE has issued a template for use by employers in complying with the notice requirements of the Wage Theft Protection Act.  As discussed in a previous blog post, the provision of specific information to each employee at the time of hire will be required beginning January 1, 2012.  In addition, the DLSE has posted an FAQ to assist in implementation of the notice requirements and the use of the template.  The template, available here in both PDF and Word versions, will help employers ensure all the required information is communicated to new employees. 

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On the heels of another favorable appellate decision earlier this year, a recent Court of Appeal decision has held that employees are not entitled to reporting time pay when attending a scheduled staff meeting lasting less than two hours.  In the case of Aleman v. AirTouch Cellular (PDF), decided on December 21, the employee claimed that under the IWC Wage Orders he was owed reporting time pay for attending scheduled staff meetings on days where no other work was scheduled.  These meetings were included in the weekly schedule, posted at least four days prior to the beginning of the work week, and generally lasted an hour to an hour and a half.  In interpreting the Wage Orders, the Court held that, where any work time is scheduled, reporting time pay is only owed when the employee works for less than half of the expected scheduled time.  In this case, the employees expected to work for only an hour to an hour and a half.  So long as the employer provides work for at least half of this scheduled time, no reporting time pay is owed. 

Central to the Court's decision was the interpretation of subdivision five of Wage Order 4, language common to all the Wage Orders.  Subdivision 5 states that employees are owed reporting time pay if they report for their usual or scheduled shift and work less than half of the usual or scheduled day's work.   The employee relied on the term "usual" from the Wage Orders, claiming that since his usual shift was longer than two hours, anytime he worked for less than two hours, he was owed reporting time pay.  The Court disagreed, holding that the term "usual or scheduled day's work" includes a pre-scheduled staff meeting with an established duration.  So long as the employee worked at least one-half of the scheduled time, reporting time pay was not owed.  The Court also disregarded the employee's attempt to point to the DLSE's Enforcement and Policies Manual as supporting his position, stating that the DLSE's position in the manual was unclear as applied to these facts, and that the Court was not bound by a DLSE interpretation regardless.  As I looked over the FAQ on the DLSE's website however, it seems that the DLSE's guidance is in line with the Court's opinion. 

What does this mean for employers in California?  This ruling should provide much more flexibility to employers in scheduling staff meetings or any work period of less than two hours.  So long as the employer establishes what the expected duration of work will be, and the employee works at least one-half of that time, no reporting time pay will be owed. 

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Patience is a virtue. I get that. It’s just not one of my virtues. That’s why I wrote here and here and here about wanting the California Supreme Court to hurry up and give us a decision in Brinker Restaurant Corp. v. Superior Court. We’ve been waiting more than 3 years for a decision from the court in a case that will define the scope of an employer’s obligation to provide meal periods to non-exempt employees (and thereby all but determine the outcome of hundreds of pending cases).

Well the latest word is that we’ll have a decision in April 2012. But I’m done stressing about it. California Supreme Court Justices take your time. I’m going to work on being in the moment. OOOOMMMMMMMMMM.

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If you’ve been involved in litigation for a while, it’s easy to be cynical about expert witnesses. Before I get myself in too much trouble, let me say that I know people who serve as expert witnesses whose integrity is beyond reproach and whose opinions can’t be bought for any amount. But I see many others whose opinions invariably support the side that’s paying them. In fact, it’s not unusual to see a party in litigation disclose an expert to support its position before it has provided the expert the information to review. They just know that the expert will say what they want him or her to say.

You could make a similar argument about lawyers – how we argue our clients’ positions regardless of what we personally believe to be right. But we don’t make any secret about the fact that we’re advocates. Experts, in contrast, hold themselves out as being impartial. 

Experts in human resources pose a more acute problem because their area of “expertise” is not well-defined. A recent case out of the federal court in Alaska (reported on by Patrick Dorrian at BNA – subscription required) illustrates the issue. In Blakeslee v. Shaw Infrastructure, the plaintiff offered an expert to testify that a reduction in force did not follow the “Golden Rules” articulated in a college textbook – Human Resources Management (by C. Fisher, L. Schoenfeldt, J. Shaw; published by Houghton Mifflin Co., 1996). 

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The issue of providing protection for the unemployed from discrimination in hiring has been discussed by my colleagues on this blog previously.  It continues to be discussed both in California and Washington D.C., and last week the U.S. Senate held a hearing on the barriers the jobless face in trying to become re-employed.  Christine Owens from the National Employment Law Center testified that the principal reason for our current high unemployment is a lack of jobs.  A real revelation, right?  She also stated that while there is no data on how often it occurs, the next most important factor in continuing unemployment is discrimination against a person's status as unemployed when employers make hiring decisions.  Support for legislation making it illegal to discriminate in this manner was voiced by additional speakers and members of the committee.  Several pieces of legislation have been introduced in Congress over the past six months, culminating in President Obama submitting to Congress in September a bill prohibiting discriminating in hiring based on a person's status as unemployed.  The bill also allows aggrieved individuals to file suit , provides for damages of up to $1,000 each day of a violation, and allows for recovery of attorney's fees and costs. 

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Under the recently enacted AB 469, discussed on this blog previously, the Labor Commissioner must provide a template that employers can use in providing the required notice.  The Labor Commissioner has recently announced on the DLSE home page that this template will be available and posted in mid-December.  They will also be providing an FAQ to guide employers in complying with this new law.  

This new law shouldn't be too burdensome for employers already providing an offer letter to new hires, which likely includes even more information that what is required under the law.  Properly phrased offer letters can do more than just help employers comply with this law, but can also reinforce assertions that employment was at-will, set performance expectations, and set in place conditions for employment such as successful background checks (subject to the requirements of AB 22 of course, discussed previously here).  Offer letters can help set these expectations and conditions without the feel and formality of an employment contract.  Sure it's a little bit awkward to say to a new employee, "Congratulations on your new job!" while a paragraph later carefully explain how their employment is at-will and they can be fired at any time.  But the benefits outweigh this and people are getting more and more used to this language.  I'll provide an update here when the DLSE posts the promised template and FAQs. 

Update:  12-27-11  As of today, the DLSE still has not posted the promised template.  As soon as I hear anything more, I will be sure to post it.   

Update:  12-29-11  The DLSE has posted both the template and an FAQ on their website.  They are linked here.

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We've been waiting (forever it seems) for the California Supreme Court to issue its decision in Brinker Restaurant Corp. v. Superior Court. Based on oral argument last month, things look relatively promising for employers who've taken the position that they're only required to make meal periods available to employees (as opposed to ensuring that they actually take them).

But another issue is lurking out there and, recognizing its significance, the Court has taken the unusual step of accepting briefing on an issue after the case was argued. The issue involves how to interpret the requirement in the wage orders that "no employer shall employ any person for a work period of more than five (5) hours without a meal break of not less than 30 minutes . . . ." [Let's ignore for now the exception for work that's completed in six hours.]

Most employers and their lawyers (and commentators and just about everyone else who's addressed the issue) interpret that to mean that employees who work more than 5 hours get a meal period and employees who work more than 10 hours get a second meal period.  But an issue arose at the Brinker argument about whether an employee can ever be required to work more than five consecutive hours without a meal period.

Take the example of an employee who works from 8:30 a.m. to 5 p.m. with a 30-minute meal period from 11:30 a.m. to noon. Let's assume that the employee occasionally works 10 minutes past 5 p.m., for which the employer properly pays overtime. The Brinker plaintiffs are arguing that the employee worked a period of over 5 hours (noon to 5:10 p.m.) and is therefore entitled to a second meal period.  If the employer, like the overwhelming majority, didn't provide a second meal period in that situation, the the employee would be entitled to a one-hour penalty for each occasion when that occurred.   

This so-called "rolling 5" interpretation is the subject of the post-hearing briefing in Brinker. As reported by Ben James in Employment Law 360, the California Employment Law Council sought and obtained permission to file a brief on the issue. In doing so, it warns that "a tsunami of massive class actions will descend on California's already hard-pressed employers" if the Court adopts such an interpretation and makes it retroactive. 

The plaintiffs will also get a chance to brief the issue. Eventually, in theory, we'll get a decision. But until then, the uncertainty that affects thousands of employers and hundreds of pending cases remains.

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My colleagues and I have written about many of the new employment laws that take effect in California in 2012.  But so you don't have to dig around, here's a handy-dandy list of the most significant ones (with links to our earlier entries).

• AB 22 -- which restricts use of consumer credit reports.  Read about it here.
   
• SB 459 -- imposing new penalties for misclassifying employees as independent contractors.  Read about it here.
   
• AB 887 -- formalizing the prohibition against discrimination based on gender identity and gender expression.  Read about it here.
   
• AB 469 -- the dramatically named Wage Theft Protection Act requires employers to give newly hired non-exempt, non-union employees a notice with information regarding wages and pay practices. Specifically, this notice must include the rate or rates of pay, the basis on which the wages are to be calculated (such as hourly, piece rate, commission, etc.), the applicable overtime rates, the designated regular pay day, and the name and mailing address of the employer.  Employers must also notify employees within seven days of any changes to this information. The law includes new penalties, as well, and increases the statute of limitations for the DLSE to collect statutory penalties from one to three years.  [Read an important update on this statute here.]
   

• New Wage Requirements for Computer Professionals and Physicians to Be Exempt -- to qualify as exempt under California law, certain computer professionals and licensed physicians must earn above a specified level.  Effective January 1, computer professionals must earn either $38.89/hr, $6,752.19/mo, or $81,026.25/yr.  Licensed physicians must earn at least $70.86/hr. 

• SB 559 -- prohibiting discrimination based on genetic information.  Read about it here.

• SB 117 -- requiring businesses with contracts with the state of California for more than $100,000 to provide equal benefits for an employee's same-sex spouse or registered domestic partner.

• SB 299 -- requiring employers to maintain group health benefits for employees on pregnancy disability leave.

• AB 1146 -- requiring hospitals to maintain safe patient handling policies and train staff on safe lifting techniques.

No word yet on which employment laws are being taken off the books to make room for these new ones.

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We employment defense attorneys are especially fond of the minefield analogy.  You get over a million hits if you Google: "California 'employment law' minefield."  So no matter how fitting the analogy may be, it's overused.  We need to come up with something new.  It's time to move on.  I propose a tightrope analogy.

A recent case involving NASA's Jet Propulsion Laboratory illustrates the analogy particularly well.  Managers at JPL were concerned that an employee was persistently proselytizing by engaging co-workers in arguments about "intelligent design" and even distributing documentaries on the subject.  They accused him of creating a hostile work environment for co-workers and ultimately demoted him.

The employee sued, claiming that this was discrimination against him based on his religion.  JPL moved for summary judgment and the trial judge (Judge Ernest M. Hiroshige in LA Superior) denied the motion.  According to the court, a jury should decide whether JPL acted based on the plaintiff's religious beliefs as opposed to his persistence in espousing them to co-workers.  That's a pretty fine line to draw and illustrates how employers dealing with these issues are walking in a mine . . . er, I mean on a tightrope. 

The case (Coppedge v. NASA JPL) is discussed in Law 360 (subscription required), which included a copy of the order (pdf). 

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I've written before about San Francisco's high minimum wage.  Well, it's going up.  Effective January 1, 2012, the San Francisco minimum wage goes from $9.92 to $10.24 per hour.  According to the Office of Labor Standards Enforcement, which enforces the minimum wage ordinance, this figure applies to anyone who, in a particular week, performs two hours of work within the city limits.

I don't begrudge anyone their right to earn a decent living.  But if a business that relies on unskilled labor has a choice where to open, wouldn't it avoid a location where it has to pay entry-level employees 28% more than the state minimum wage?  For an earlier discussion of jobs leaving the state as a whole, read this.

Update -  Here's a December 1, 2011 Huffington Post article about SF's minimum wage and studies discussing the effects of such increases.

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Most of us have seen our fair share of Halloween revelers dressed up as cops or other law enforcement types.  But people disguising themselves as representatives of the Division of Labor Standards Enforcement?

According to this press release, some group calling itself the California Labor Compliance Bureau is issuing what appear to be citations demanding payment of a $275 fee in exchange for updated labor posters.  The DLSE wants you to know that they aren't affiliated with this group and that employers need "to be vigilant about scams." 

I don't care how realistic the costume is.  It can't be as scary as actual DLSE personnel showing up unannounced at your workplace.

And before anyone scams you into paying $275 for workplace postings, check the DLSE's website, where it lists the required postings and lets you download them for free.

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