Header graphic for print

California Employment Law

Commentary on Issues Facing California Employers

Pokémon GO Home

Posted in Advice & Counseling

Since its launch earlier this month, the Pokémon GO app has become the #1 downloaded app and the most searched term on Google.  With as many as 25 million users in the U.S. alone, it has become a bigger distraction than Twitter or Facebook and Forbes says 70% of users admit to playing at work. While I admittedly downloaded the app in my office, I did so purely for professional research.  And while I haven’t noticed any users in my office, here are some issues to watch out for in your workplace:

59371671 - tambov, russian federation - july 13, 2016 person hand starting pokemon go application on apple iphone5s. studio shot.

-There have been dozens of reported injuries (and crimes) suffered by users in California.  Employees injured while using the app at work may qualify for workers compensation coverage or even disability accommodations.

-While its doubtful the CA legislature contemplated such, injuries sustained playing Pokemon Go would qualify for CA paid sick leave.

-Employers who foster use of the app as team-building may also be liable for injuries that may occur off-site in an effort to “Catch ‘Em All”.

-Because users have to keep the app open while playing, focus is easily diverted with pings and pop-ups, so employers may want to consider productivity contests or perks to counter the effects of the app.

-Remind employees of confidentiality policies. Because smartphone cameras are utilized during the game, employees may be inadvertently transmitting confidential information.

-Consider restricting use of the app on Company-provided cell phones to limit distractions and potential liability from injuries.

-Be sure to apply any discipline in a non-discriminatory manner to avoid complaints of favoritism or discrimination.

A welcome summer distraction for some and an annoying media barrage for others, employers are hoping Pokémon GO(es) away by Labor Day!

Wrongful Termination, Harassment and Discrimination Law Seminar in San Francisco

Posted in Discrimination, Employment Litigation, Harassment, Termination

Bridgeport Continuing Education will be hosting a seminar titled: “Wrongful Termination, Harassment and Discrimination Claims” on July 29, 2016 in San Francisco. I will be speaking about Litigating and Defending Discrimination Claims, along with Jocelyn Burton. The program offers 5 hours of Mandatory Continuing Legal Education. You can get details and register here.

I hope to see you there!

Three Things About Los Angeles’ New Sick Leave Ordinance That Will Give You Indigestion

Posted in Advice & Counseling, Wage and Hour

The City of Los Angeles is not making it easy for employers operating within city limits.  First, they rushed through an ordinance implementing new paid sick leave requirements on an urgency basis that became effective July 1st.  And now, they have issued rules and regulations explaining the statute that quite frankly, are partially nonsensical, and leave employers in quite a bind to figure out how to comply.

One troubling issue is that although the ordinance allows employers to either accrue sick leave or front load it, the main benefit of the front load method is diminished.  Under current California law, when an employee front loads 24 hours of sick leave, they don’t have to carry over any days from year to year.  That significantly eases the administrative burden.  One would assume the same applied for Los Angeles sick leave, and that 48 hours could simply be front loaded, and not carried over.  In fact, the language of the ordinance only references carry over as to accrued sick leave.  “Accrued unused paid sick leave shall carry over to the following year of employment and may be capped at 72 hours.”  Yet, the regulations contradict that language, and provide that the 72 hour cap applies whether you front load or accrue.  According to the regulations, even if you front load 48 hours, and only allow 48 hours of use per year, there will still be more time on the books that is not available for use (and would need to be reinstated if the employee leaves and comes back within a year).  Plus, good luck trying to explain to an employee why the paystub says 72 hours, but they can only use 48 (even if your policy is clear on that point).

Another problematic issue is the potential for abuse given the inability to discipline for use of 48 hours of sick time.  The Los Angeles regulations state that an employer can’t deny the request to use sick leave if the “Employee communicates the request more than one (1) hour before the beginning of the Employee’s shift in a manner consistent with the Employers’ normal method of communication.”  But what if the Employer’s policy requires a 2-hour call in?  Apparently that can’t be enforced.  And what about the California law requirement that foreseeable needs for sick leave (like a planned medical appointment) need to be communicated ahead of time with “reasonable advance notification”?  Can that still be enforced in Los Angeles?  Maybe not.  And while you can ask for a doctor’s note, you can only do so after three consecutive days of sick leave.  Oh yes, and you can’t ask in a way that “deters” an employee from taking “a legitimate sick day.”

Finally, good luck with figuring out how much sick time accrues if your employees travel in and out of city boundaries.  There are three pages of regulations on that issue alone.  Suffice it to say, you have to have a method to track how much time someone works in the city, even if it is just driving through the city on the freeway!  No joke.  It’s in the regulations.

Pass the antacids.  If you do business in Los Angeles, you are going to need them (and a good lawyer or HR consultant to help you navigate these requirements).

 

Minimum Wage/Salary Requirements for Non-Exempt and Exempt Employees

Posted in Advice & Counseling, Employment Litigation, Wage and Hour

As we’ve blogged about before, many cities in California have increased their minimum wage effective July 1st.  July 1st has come and gone, and just when you think that it is impossible to have another local minimum wage ordinance to keep in mind (given how many there are already), San Diego announced its new minimum wage last Monday.  Here is a handy chart to help you keep track of all these increases (well, until the next minimum wage increase that is).

City Minimum Wage Rate
El Cerrito $11.60/hour
Emeryville $13/hour (55 or fewer employees); $14.82/hour (56 or more employees)
Los Angeles $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
Los Angeles County $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
Pasadena $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
San Diego $10.50/hour
San Francisco $13/hour
Santa Monica $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
Sunnyvale $11/hour

 

Exempt Employees

When we talk about minimum wage, we usually think of non-managerial hourly workers. We sometimes forget that there are minimum wage requirements for exempt employees in the “white collar” exemptions (executive, administrative, and professional employees) as well.  Those requirements are known as minimum salary thresholds under state and federal standards.  The current minimum salary threshold in California is $41,600, twice the state’s current minimum wage of $10 per hour. But effective December 1, 2016, the new minimum salary threshold will be $47,476 under the new Federal Overtime Rule.  In order to be exempt under the “white collar” exemptions, those employees must be paid at least $47,476 by December 1, 2016.

When determining exempt status, employers look at requirements such as whether the employee manages the business, exercises discretion and independent judgment, or whether (s)he has a special state license, and stop there. However, employers often forget to make sure that those employees are paid the minimum salary threshold.  Failing this requirement means that the employee is NOT exempt from overtime provisions, even if (s)he would otherwise be exempt.  In that case, employers will be liable for unpaid overtime, meal and rest breaks, failure to furnish itemized wage statements (Labor Code Sec. 226), and other Labor Code violations.

With the upcoming new minimum salary threshold, now is the time to review your pay policies for both exempt and non-exempt employees. Make sure non-exempt employees are paid minimum wage as set forth above, and that exempt employees are paid a salary of at least $47,476 to best guard against costly litigation.

Layoffs Gone Wrong

Posted in Advice & Counseling, Employment Litigation

I have been waiting for a gap in my practice with no pending claims about a layoff gone wrong.  Honestly, I have been waiting for over two years, and there has been no gap, so I am taking the plunge and writing this blog post now.

Why are there so many claims involving layoffs?  Because employers consistently think that having a legitimate business reason for a layoff is enough to avoid and ultimately win a legal claim.  Well, sorry to be the bearer of bad news.  It isn’t enough to have a good reason (even if it is the real reason) — you have to be in a position to prove it.

So, how do you prove that your layoff is legitimate?  Here are some tips:

  • First, have someone vet the decision to test whether it passes the “smell test.”  That person can be Human Resources, internal legal counsel, or outside counsel, but someone really has to dig into the facts and make sure that the proposed business justification is legitimate.  And by the way, digging into the facts is not just asking the manager; it is making sure that the manager’s reasons are complete and all risk factors are appropriately identified and considered.  I often ask clients:  “What do you expect the employee to say when you inform her of the layoff?” and “How will you answer that question?”
  • Second, document the reasons for the decision at the time the decision is made.  This becomes very important when the decision makers have left the company and taken the thought process behind the business justifications along with them.
  • Third, make sure all layoff documentation clearly states the legitimate business reason.  No subterfuge here.  Don’t say one thing in the layoff meeting and something else on the separation notice for goodness sakes.  Have a script and make sure everyone sticks to it.
  • Fourth, while performance often weighs into a layoff decision, remember this is not a performance based termination.  So, if there is good reason for termination (such as consistent poor performance, policy violations, or bad behavior) document that behavior and call the separation what it is – a termination, not a layoff.  I have been known to say “a pig in a prom dress is still a pig.”
  • Fifth, always (and I mean every time) show the individual a list of open positions at the company, and ask if they are qualified for and interested in any of them.  I don’t care if the positions are for janitorial in San Diego and the person laid off is a manager in San Francisco, show the list.  If they indicate interest, explore that option.  If they decline, document that the position list was provided and they declined.  If you don’t want to do this, then refer back to tip #4 (and this is probably not a layoff and should be a performance based termination).
  • Finally, be kind and empathetic.  It stinks to be laid off.  It hurts to have to leave the office without notice.  Treat the person laid off as you would want to be treated (or how you would want your closest family member to be treated).  Period.  No exceptions.

Employers who follow this six simple steps will be well positioned to defend a layoff claim.  If not, well, more business for us lawyers.

EEOC Identifies Risk Factors for Workplace Harassment

Posted in Advice & Counseling, Discrimination, Harassment

Last month, the Select Task Force on the Study of Harassment in the Workplace issued a report. Among other things, it identified risk factors that can lead to harassment. They are:

  1. Homogeneous workforces – In other words, those that lack diversity.
  2. Workplaces where some workers don’t conform to workplace norms – This would include, for example, a man who’s perceived as overly feminine or a woman perceived as overly masculine.
  3. Workplaces with cultural and language differences – So too much homogeneity can be a problem, but so can too much diversity. Got it!
  4. “Coarsened Social Discourse Outside of the Workplace” – If people are crude outside of work, it’s more likely to spill over to the work environment.
  5. Workplaces with many young workers – According to the EEOC, young people are less aware of the laws and workplace norms. This makes them more likely to cross the line themselves and more likely to accept behavior that older workers know is over the line.

  6. Workplaces with large power disparities – The workers with less power are more vulnerable and the higher power ones “may feel emboldened to exploit them.”
  7. Workplaces that rely on customer service or client satisfaction – The key here is whether compensation is tied to customer satisfaction. If so, employees may be willing to put up with inappropriate conduct since it costs them money to object.
  8. Places where the work is monotonous or easy – “Idle hands …”, you know?
  9. Isolated workplaces – Fewer people around means fewer witnesses.
  10. Workplace cultures that tolerate or encourage alcohol consumption – Let’s all drink to that!
  11. Decentralized workplaces – If senior management is far away, lower levels of management may feel less accountable.

So the answer is simple. To minimize the risk of harassment claims you need to make sure that your workforce is diverse, but not too diverse; that everyone conforms to the same norms; that people behave appropriately even when they’re not at work; that you don’t hire those pesky young people; that you eliminate hierarchies; that you stop paying attention to customer service; that you make all the work interesting; that you have everyone work at one location; and that you discourage drinking.

If you’re not able to run your business that way, we’ve identified 6 questions employers should ask before receiving a harassment complaint.

California Fair Pay Act Seminar in San Francisco on July 20, 2016

Posted in Advice & Counseling, Employment Litigation, Wage and Hour

We’ve written extensively about California’s Fair Pay Act, which requires equal pay for “substantially similar” work. (Think, I’m exaggerating? We wrote about it here, here, here, here, here, here, and here.) On July 20, 2016, we will be presenting a one-hour briefing on what employers should be doing to comply with the law. We’ll start at 8:30 a.m. at our offices at 345 California Street, 22nd Floor, San Francisco, CA 94104. You’ll hear from lawyers (Jade Buttman and me) and an economist (Dr. Hyowook Chiang of Welch Consulting) about concrete steps you can take to protect your company. 

You can register here.

The Fair Pay Act puts serious and, in some ways, unprecedented burdens on employers. Is your company protected?

New CA Budget Will Make PAGA Claims Harder to Settle

Posted in Employment Litigation, Wage and Hour

We’ve made no secret of the fact that we’re not big fans of the Private Attorneys General Act (PAGA). Our gripes include the following:

  • PAGA drastically expands the ways that employers can be sued, because employees can sue for violation of statutes that previously provided no private right of action.
  • PAGA expands potential liability for employers, since employees can sue on behalf of themselves and other aggrieved employees.
  • PAGA claims are exempt from arbitration agreements.
  • The procedures that apply to PAGA actions are ill-defined. While a class action plaintiff has to satisfy specific requirements to represent a class, it’s unclear what, if anything, a PAGA plaintiff must show to bring a representative action.

PAGA is based on the pretense that employees are bringing these claims on behalf of the state of California, which lacks the resources to pursue every non-compliant employer. Keep in mind that non-compliant employers, in this context, includes those that don’t put the inclusive dates of the pay period on the wage statement or who put the employer’s address on the paycheck, but not on the attached pay stubs. Pretty heinous stuff, right?

In keeping with this pretense that plaintiffs are acting for the state, 75% of the penalties go to the Labor and Workforce Development Agency (LWDA) and 25% goes to the “aggrieved employees.” That means that, for every dollar an employer pays in PAGA penalties, an employee shares 25¢ with all other aggrieved employees. When it comes time to settle cases, the parties decide what part of the settlement to designate as PAGA penalties and what part goes directly to the employees. Invariably, plaintiffs want more to go to them directly because they and their attorneys get all of that. Employers will go along with that because they get more bang for their buck.

Now, as part of the state’s new budget:

  • The LWDA will take 60 days to review proposed PAGA claims to decide if it wants to bring an action itself (previously 30 days).
  • The plaintiff cannot file the action until 65 days after submitting information to the LWDA (previously 33 days).
  • Any proposed settlement needs to be sent to the LWDA and approved by the Court (previously, you only needed court approval).

The fact that the LWDA will be more active in reviewing proposed PAGA settlements means that more money will need to be earmarked for PAGA penalties. More money going to PAGA penalties, means less going to plaintiffs directly. Since employees see just a fraction of those penalties, it will be more expensive for employers to settle lawsuits that include PAGA claims. You can add that to our ever growing list of reasons why, for employers and their counsel, “PAGA” is a four-letter word.

All of California’s State and City Paid Sick Leave Rules in One Chart!

Posted in Advice & Counseling, Disability Discrimination, Wage and Hour

Trying to keep track of all of California’s paid sick leave requirements is a daunting task. The state has its own rules and then so do seven municipalities, with Los Angeles joining the list July 1, 2016. Wouldn’t it be great if there was a single chart that contained all the requirements? Well now, thanks to Tyreen Torner, there is. Click on the link to download a PDF of the California Paid Sick Leave Rules Chart.

Are you curious about how the accrual cap rules in Oakland compare to the accrual cap rules in Santa Monica? Of course you are! Don’t be afraid to admit it. Are you wondering how the definition of sibling in San Francisco compares to the definition of sibling in San Diego? Just look it up. It’s all there. Right at your fingertips. Thank you Tyreen!

What’s Unfair About California’s Fair Pay Act?

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

The Fair Pay Act (codified at Labor Code § 1197.5) has been in effect in California for almost six months. Despite the fact that it has the word “Fair” prominently in the title, I think the statute is decidedly unfair. The problem with this new law isn’t that it prohibits discriminatory wage practices. Paying someone less because of gender is unquestionably offensive.

But while other laws require the employee to prove discrimination, the Fair Pay Act puts the burden on the employer to disprove discrimination. The plaintiff just has to point to two people in similar (not identical) jobs who earn different amounts and the employer then has prove that the difference is based on one or more legitimate factors, that the factors relied on are applied reasonably, and that those factors account for the entire wage disparity.

To make matters worse, in many cases, employers will need expert testimony to meet this burden. I don’t know how you show that legitimate factors account for the entire wage disparity without a statistician or economist. This is more than just a significant expense. It also means the cases will be harder to defeat short of trial. Because if the employer gets an expert to opine on what causes a wage disparity, you know the plaintiff can find an expert to give a contrary opinion. So winning on demurrer or summary judgment becomes that much less likely.

In almost every other type of lawsuit, the burden of proof is placed on the plaintiff. If you’re going to succeed in claiming that you’re entitled to damages, it’s on you to prove by a preponderance of the evidence that the defendant has wronged you. Putting the burden on the employer to prove that it didn’t discriminate is fundamentally unfair. Requiring employers to hire experts to meet that burden makes matters worse.

We’ll be conducting a breakfast seminar where we’ll offer concrete advice on steps employers can take to protect themselves. Here are the details.