Do you want to know the secret of achieving pay equity in the workplace (at least in the long term)?  Well, it is really about the dads. Yes, that’s right.  The more paid time off given to fathers, the more likely it is the a company will achieve long term pay equity.  Why you ask?

Because when time off for babies and kids becomes a parental issue, and not a women’s issue, then women stop being punished (whether directly or indirectly) for taking time off to give birth and raise kids.  And if you are wondering if women really are set back by being pregnant or active parents, then read this recent article in the New York Times.  Women are set back.  Having kids can be a career killer. There is a documented motherhood penalty.

This is why parental leave policies, as opposed to maternity and paternity leave policies, are the wave of the future.  If your business has not revised its time off policies for all parents (whether female/male, gay/straight, birth parent/non-birth parent), then it is time to consider it.  Otherwise, you just could be the next company in the news (and not in a good way).

Oh, and by the way, having a policy is one thing.  But actually encouraging dads to use it is (instead of punishing them for it, whether overtly or covertly) is another critical step.

Happy father lying on sofa holding baby girl and playingIn honor of Father’s Day (albeit a week late), let’s hear it for the dads! Especially if it ultimately helps the moms get paid the same as those dads!

Whenever a celebrity dies, everyone glorifies their accomplishments. So the eulogies for Koko the talking gorilla aren’t surprising in the least. But those eulogies tend to overlook that Koko’s many accomplishments include having been the first gorilla to be accused of sexual harassment.

As we explained in the story linked to above, two women sued the Gorilla Foundation in 2004 claiming that they were pressured to expose themselves to “indulge Koko’s nipple fetish.” Is it just me or does it sound far-fetched for someone to claim to be sexually harassed by a gorilla? The case settled for undisclosed terms.

Rest in Peace, Koko. It would have been an honor to defend you. I’m sorry that you never got your day in court. Were you even deposed?

Tyreen Torner has again updated this Chart Summarizing CA State and Local Paid Sick Leave Rules. It summarizes the Paid Sick Leave laws for California, San Francisco, Los Angeles, San Diego, Oakland, Berkeley, Santa Monica, and Emeryville.

Man lying with a broken leg in a cast on a sofaAre you curious about how the accrual cap rules in Oakland (where the Golden State Warriors are today celebrating their third NBA title in four years) compare to the accrual cap rules in Los Angeles (where the Lakers weren’t even the champions of LA)? Just look it up. It’s all there. Right at your fingertips. Thank you Tyreen!

To keep employers guessing, not only does the state minimum wage increase every year, but many cities do as well. Currently, California’s minimum wage is $11 per hour (or $10.50 for employers with up to 25 employees).

Red balloons on blue sky spelling "Guess"While state minimum wage goes up in January, some cities like to keep things complicated by increasing their minimum wage as of July 1st.  One such city is Santa Monica, where the minimum wage goes up to $13.25 on July 1st.  The $13.25 rate also applies to Los Angeles as of July 1st for employers with 25 or more employees; those with under 25 employees must pay $12.00.

To keep things really confusing, certain hotel workers in Santa Monica and Los Angeles get even higher rates; on July 1st hotel workers in those cities get an increase to $16.10 per hour.

Yes, California likes to keep employers guessing.  Thankfully you have this blog to keep the guesswork out of your wage and hour compliance.

 

In Epic Systems v. Lewis, the U.S. Supreme Court recently approved the use of arbitration agreements that include class action waivers. So this seems an opportune time to reassess the pros and cons for employers of using mandatory workplace arbitration agreements.

The Pros

  1. There are no runaway, emotion-fueled jury verdicts. Arbitration awards can be high, but they tend to be more closely rooted in reality.
  2. The procedures (including discovery) are more streamlined than cases in court.
  3. Although plaintiffs can still publicize what they want, arbitrations are generally more private than court trials.
  4. The cases settle more cheaply. 
  5. The cases usually resolve more quickly in arbitration than in court.
  6. The attorneys’ fees are usually lower.
  7. If you win, the other side’s opportunity to appeal is very limited.
  8. It is now clear that you can require employees to waive the right to pursue class actions.

The Cons

  1. It’s easier for unrepresented parties to bring weak claims.
  2. Forum and arbitrator costs are higher and, in California and many other jurisdictions, the employer bears the vast majority of those costs.
  3. While Epic Systems resolved the issue of class action waivers, the California Supreme Court has said “no” to mandatory arbitration of Private Attorney General Act claims. Eventually, the U.S. Supreme Court may need to address that issue. Also, there have been repeated efforts in Congress to outlaw the practice.
  4. Employees generally don’t like losing access to jury trials. Lately, there have been concerted attempts by some to argue that arbitration agreements protect sexual harassers. However, any remedy that an employee can recover in court against a harasser is available to the same extent in arbitration.
  5. If you lose at arbitration, your opportunity to appeal is very limited.
  6. It can be harder to get cases out on dismissal or summary judgment.
  7. While it hasn’t been my experience, some say that arbitrators tend to “split the baby.” (How I hate that cliche! I don’t like “throwing out the baby with the bath water” either. Leave the poor baby alone!)
  8. As our friends at Wage & Hour – Developments and Highlights point out, plaintiffs’ lawyers who previously filed class actions may now start filing multiple individual arbitrations for wage and hour violations, which could subject employers to burdens and expenses that rival class actions.

The Deciding Factor:

Having tried and arbitrated dozens of cases for employers over the years, I believe that – for most employers – the pros outweigh the cons. Most cases end up settling and cases subject to arbitration tend to settle more cheaply. The fact that there’s no risk of an emotion-fueled jury verdict changes the whole settlement calculation. Employees and their attorneys can’t base their negotiation position on the fact that, if they just get before a jury, they have a shot at a windfall. So if you’re an employer who doesn’t have arbitration agreements with your workers, seriously consider whether it’s time to develop one.

Employers are still reeling from last week’s decision in Dynamex Operations West, Inc. v. Superior Court, in which the California Supreme Court said that employers (and even a state agency that protects workers) were using the wrong standard to distinguish employees and independent contractors under the state’s Wage Orders. A month before that, in Alvarado v. Dart Container Corporation of California, the same court announced a more employee-friendly way of calculating overtime for employees who receive bonuses.

These cases share two things. First, they put big smiles on the faces of lawyers who file wage and hour class actions. Second, both cases premised their decisions in part on California’s goal of protecting workers. In Dynamex, the court relied on the “general principle that wage orders are the type of remedial legislation that must be liberally construed in a manner that serves its remedial purposes.” The court in Alvarado noted that one of the “overarching interpretive principles” to guide its analysis was that “the state’s labor laws are to be liberally construed in favor of worker protection.” No mention was made of the fact that California workers have more far-reaching protections than workers in any other state.

While Dynamex and Alvarado provide examples from the last 45 days, the courts have been interpreting employee protections liberally for many decades. During that time, workers’ rights keep expanding further and further. I am certainly not suggesting that workers should not be protected from unscrupulous employers. But does anyone pay attention to the principle that employers who make every effort to follow the law shouldn’t be subjected to potentially ruinous litigation exposure each time the courts reinterpret the law in a new direction?

Determining whether a California worker is an independent contractor or an employee has always been difficult. Judges deciding the issue have complained that the test used by California courts “provides nothing remotely close to a clear answer.” Then there was the nail salon that was told by one state agency that its workers were employees and by another that they were independent contractors. So there’s no question that the law in this area has been messy.

On Monday, it got considerably messier. That’s when the California Supreme Court issued its decision in Dynamex Operations West, Inc. v. Superior Court. For years — even decades — judges, government agencies, and lawyers have interpreted the law to say that the key to distinguishing between employees and independent contractors was whether the company had the right to control the manner and means by which the worker accomplished the desired result. So if drivers for a gig-economy car service decided what days to work, when to start work on a particular day, where to work, what to wear, when to take breaks and for how long, and when to quit for the day, there was an excellent chance that they’d be considered independent contractors,

Under the California Wage Orders, which guarantee employees a minimum wage, maximum hours, overtime compensation, meal and rest breaks, and more, that is no longer the case. Now, according to the California Supreme Court, companies must meet a three-prong test to establish independent contractor status (“the ABC test”).

  • A) The company must not be able to control or direct what the worker does, either by contract or in actual practice. This is similar to the test used in the past.
  • B) The worker must perform tasks outside of the hiring entity’s usual course of business. So if you’re a driver for a ride service, a delivery person for a delivery service, or a seamstress for a clothing company, you can’t be an independent contractor no matter how little control the company has over you.
  • C) The worker must be engaged in an independently established trade, occupation, or business. It’s not enough that the company doesn’t prohibit the worker from having his own business or working for others. Instead, the court will look at factors such as whether the business is incorporated or licensed, whether it’s advertised, and whether it offers services to the public or other potential customers.

It is the employers burden to satisfy all three prongs to establish that the worker is an independent contractor. If it fails to establish one, the worker is entitled to be treated as an employee under the Wage Orders. (The Wage Orders themselves are not particularly helpful in this regard. For example, they circularly define “employee” as ” any person employed by an employer.”)

The Court spent 80+ pages explaining its rationale. Nowhere in that lengthy analysis was any recognition of the upheaval this opinion will cause. Millions of workers in the state that were considered independent contractors will now be deemed employees. This will require employers who have done everything they could to follow the law as it was then understood to reevaluate the nature of the relationship with many of their workers and either modify the relationship or provide them the pay and treatment required by the Wage Orders. They also face litigation, including potential class actions, from workers complaining that they were misclassified. And since this case only addresses the wage order definition, they need to apply different standards (which can lead to different conclusions) in deciding how to characterize workers for purposes such as workers compensation and payroll taxes. As I said, a messy situation just got messier.

It happens more often than you think.  An employee in good standing is “outed” as being listed on a sex offender registry.  His/her coworkers are up in arms.  Now what?  Can he/she be fired?

Given California’s relatively new “ban the box” law, employers are limited in how they can use criminal history in employment decisions.  For current employees, once a conviction is uncovered, you can’t automatically fire someone for it.  Rather, employers must make an individualized assessment to determine if the conviction has a direct and adverse relationship with the actual job.  To do so, employers must consider:

  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense or conduct and the completion of the sentence; and
  • The nature of the job held or sought.

This also means the employer must talk to the employee and get his/her side of the story.

For example, if the offense was 20 years ago, and the employee is long-tenured without any formal discipline as to any inappropriate conduct (such as harassment), a termination would not be justified in most workplaces.  However, if the workplace involves children, or law enforcement, or positions that require certain licenses, then that is a different story.

There are other avenues to address the situation, such as lying on an employment application.  An employer with a well-worded employment application, where the conviction was omitted at the time of hire, could justify termination (especially if others have also been terminated for material misrepresentations on the application).  In addition, dishonesty (or lack of candor) in the investigation process once commenced can also justify termination.

While many coworkers might not want to work with known sex offenders, the flipside is that there are over 100,000 registered sex offenders in California.  And the trend in California is to give more rights to those who want to work, not less.  And yes, that applies to sex offenders.

This Tuesday, on April 24, 2018, Emily Yukich and I will be hosting a business and HR boot camp for emerging and growing companies.  This practical presentation will emphasize best practices for partnerships and newly formed corporations, with a focus on hiring, onboarding, performance management and wage and hour advice.

Register here for complimentary breakfast and networking on April 24th from 8:30 a.m until 10:00 a.m. at our Fox Rothschild offices in Century City or contact me via email to dial in by phone.

 

Digital On Air sign, indicating broadcastingOn Fox’s entertainment industry-focused Pay or Play blog, associate Laurie Baddon wrote a post covering recent reports on employment agreements signed by news anchors working at television stations owned by Sinclair Broadcast Group. Laurie breaks down the controversial elements of the agreements, and examines them in the context of California employment law.

To get a better sense of the legal aspects of this national news story, we invite you to read Laurie’s post on Pay or Play.