Perhaps you’ve noticed a certain amount of incivility in political discourse. You may have even noticed that the current U.S. president has a somewhat polarizing effect. Some people love him. Some people hate him. And many hold those who don’t share their beliefs in contempt.

What if that incivility spreads into the workplace? Can employers get sued if employees feel that they’ve been discriminated against for their political views?

California Labor Code § 1101 prohibits employers from having “any rule, regulation, or policy” (1) forbidding or preventing employees from engaging or participating in politics or running for office; or (2) “controlling or directing, or tending to control or direct the political activities or affiliations of employees.” That statute prohibits employers from taking action against employees for their political activities that don’t directly affect their job performance. So employers in California are not allowed to discriminate based on political activities or affiliations. Employers are, however, allowed to take action when employees’ expression of their political views affects their job performance or that of co-workers.

What if employees claim that their co-workers are creating a hostile work environment because of their political affiliation? “Talia poured coffee on my MAGA hat and it wasn’t an accident!” There the law is less clear. (I’m assuming the employee wasn’t wearing the hat at the time – that would be battery.) Political belief is not a protected category under state and federal discrimination laws. There are plenty of reasons why employers want to prevent abusive behavior in the workplace. But unless the employee is advocating on behalf of a protected group (e.g. arguing that the employer underpays workers of  a particular race) or for employee rights (e.g. seeking to organize workers), I see no law that requires employers to prevent political disagreements at work. In other words, California has yet to recognize a claim for a politically hostile work environment.

One thing that is clear is that employee’s told to refrain from political arguments at work can’t turn to the First Amendment’s guarantee of freedom of speech. That guarantee doesn’t restrict what private (as opposed to government) employers can do.

In the past, we’ve done a Halloween post on whether it’s OK to discriminate against monsters. But this subject is much scarier.

The Bar Association of San Francisco is presenting a seminar: 2018 Disability Employment Law Updates. It will take place on December 11, 2018, from noon to 1:15, at the BASF Conference Center, 301 Battery St., 3rd Floor, San Francisco, CA 94111.

Ben Bien-Kahn of Rosen Bien Galvan & Grunfeld LLP will present the plaintiff’s perspective and I’ll present the defense perspective. The program is approved for 1 hour of of MCLE and is sponsored by the Equality Committee on Disability Rights of the Bar Association of San Francisco.

You can register to attend the event in person or to receive the webcast here. I hope to see you there!

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.

Regular readers of this blog may be asking: “Wait. Didn’t she just do an update in June?” Yes, she did! But there have been changes since then in the rules for Santa Monica, San Francisco, and pesky little Emeryville. Keeping this chart current requires constant vigilance, but Tyreen is up to the task.

It’s been nearly six months since the California Supreme Court announced that employers and government agencies were using the wrong test to determine who’s an independent contractor. In Dynamex Operations West, Inc. v. Superior Court, the court declared that employers must meet the three-prong ABC test to overcome the presumption of employment status. But Dynamex left a number of questions unanswered. A decision filed this week,  Garcia v. Border Transportation Group, LLC, takes a tentative initial step to address those open questions.

There, the trial court granted summary judgment for the employer on the basis that Garcia was an independent contractor. Some of those claims (but not all) were based on the IWC Wage Orders, which guarantee employees a minimum wage, maximum hours, overtime compensation, meal and rest breaks, and more. The employee appealed and, while the appeal was pending, the CA Supreme Court issued its opinion in Dynamex.

Since the employer could not show that the plaintiff had an independently established business (part C of the ABC test), the court of appeal reversed the summary judgment on the claims based on the Wage Orders. These included claims for unpaid wages, minimum wage violations, failure to provide meal and rest periods, failure to furnish itemized wage statements, and a claim that the foregoing constituted unfair competition.

The court upheld summary judgment on claims for wrongful termination, waiting time penalties, and an unfair competition claim based on those violations. The court reasoned that, while Dynamex applied to claims based on the Wage Orders, the test for the remaining claims still involved the extent of control the employer exercised over the worker.

In a footnote, the court also questioned whether the Dynamex decision applies retroactively. The parties had not raised the issue and the court therefore said it would not address it. But in declining to address it, the court noted: (1) the general rule that judicial decisions have retroactive effect; (2) that there could be exceptions where the parties reasonably relied on the previously existing law; (3) that the Dynamex court declined a request to apply its ruling only prospectively; and (4) that Dynamex came as no greater surprise than a number of decisions that routinely apply retroactively. That’s quite a bit for an issue the court said it would not address.

While this decision doesn’t hold out much hope for Dynamex not applying retroactively, it at least says that it may be an open question. The greater value for employers comes in the decision’s reinforcement that (at least in this appellate court on this day), Dynamex is limited to claims under the Wage Orders. As to when we’ll have greater clarity on those issues, that remains to be seen.

No lazy Sunday for Governor Jerry Brown!  Today he signed four new bills into law, taking major steps to combat sexual harassment in the wake of the #MeToo and #TimesUp movements. Here is a brief overview of the new laws and what they mean for California employers:

  • Senate Bill 820 prohibits non-disclosure provisions in settlement agreements related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. The bill expressly authorizes provisions that (i) preclude the disclosure of the amount paid in settlement and (ii) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. Settlement agreements signed after January 1, 2019 should be review by counsel to ensure compliance with the new restrictions.
  • Senate Bill 1300 significantly expands liability under the Fair Employment and Housing Act (“FEHA”).  The law lowers the burden of proof to establish harassment and provides stricter guidance on what constitutes “severe or pervasive” conduct that rises to the level of unlawful harassment (e.g. rejecting the “stray remark” doctrine that previously required more than one offensive remark to succeed on a claim).  It expands FEHA protection to any harassment by contractors, rather than just sex harassment.  It denies a prevailing defendant from being awarded attorney’s fees and costs unless the court finds the action was frivolous, unreasonable, or groundless. This bill also prohibits release of claims under FEHA in exchange for a raise or a bonus or as a condition of employment or continued employment, but presumably not in separation agreements.  These changes take effect at the start of the new year and we will monitor interpretations or guidance of these new and expansive provisions.
  • Senate Bill 1343 expands the requirements relating to sexual harassment training. Current law requires all employers with 50 or more employees to provide two hours of sexual harassment prevention training only to supervisors. The new law now mandates training for all employers with five or more employees and becomes effective in 2020.  In addition, employers must ensure similar training in multiple languages for all workers so they know what sexual harassment is and what their rights are under the law.
  • While not employment-related, Senate Bill 826 requires public companies based in California to have at least one woman on their board of directors by the end of next year. The requirement rises to two female board members by 2021 if the company has five directors, or to three if the company has six or more directors.

Governor Brown did veto one of the most high-profile sexual harassment measure of the year, Assembly Bill 3080, which would have banned mandatory arbitration agreements.  Brown vetoed similar legislation on 2015 and the law, if passed, likely would have faced challenges that it was preempted by the Federal Arbitration Act.

Stay tuned for more in-depth coverage of these new laws.

It is that time of year.  We continue to wait for the Governor to sign or veto some controversial bills such as:

  • The Stand Act (prohibiting confidentiality in harassment and sexual assault settlements); and
  • AB 3080 (prohibiting mandatory arbitration for new and current employees, but presumably allowing arbitration with an opt out, and prohibiting nondisclosure of harassment issues to protect future employees going forward).

As we wait, there was one bill recently passed that clarifies a few things about California’s salary history ban that is worthy of a quick mention.

As you may recall, effective this year, employers were prohibited from asking an applicant about his/her salary history.  Employers are also required to provide pay scale information to an applicant on the position applied for upon reasonable request.  Recently, some of those terms have been clarified, as follows:

  1. First, an applicant is now defined as an individual seeking employment who is not currently employed with that employer in any capacity or position.  So current employees are not entitled to pay scale information.
  2. Second, a reasonable request, is now defined as a request made after an applicant has completed an initial interview with the employer.  This would prevent someone not qualified for a position from obtaining salary range information about it.
  3. Third, pay scale is defined as a salary or hourly wage range for the position.  Not quite sure what the confusion was there.
  4. Fourth, as most of us already surmised, it is perfectly acceptable to ask an applicant about his/her salary expectations.
  5. And finally, while prior salary cannot justify any disparity in compensation, an employer can consider current salary as a factor to justify a wage differential as long as it is based on:
    • A seniority system;
    • A merit system;
    • A system that measures quality or quantity of production; or
    • A bona fide factor other than sex, race or ethnicity (such as education, training, or experience).

Now if only the legislature would take up some very serious issues facing employers, especially after Dyanmex (and the resulting war against contractor status), such as my personal favorite idea, to create a new category of workers called “dependent contractors”.  Maybe next term.  One can always hope.

In July, the California Supreme Court announced that various provisions of the Labor Code and the IWC Wage Orders did not incorporate the de minimis doctrine. According to that doctrine, some alleged wrongs are so trivial or hard to measure that courts will disregard them. The de minimis doctrine applies to the federal Fair Labor Standards Act, so under that law, employers can disregard small amounts of time (a few minutes) in calculating what employees are owed. The California Supreme Court announced, however, that that was not the case under corresponding state laws.

On August 29, 2018, the court slightly modified its earlier opinion, stating that:

“The opinion herein is modified as follows: The final paragraph of the opinion … is modified to read: We hold that the relevant California statutes and wage order have not incorporated the de minimis doctrine found in the FLSA. We further conclude that although California has a de minimis rule that is a background principle of state law, the rule is not applicable to the regularly reoccurring activities that are principally at issue here. The relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off the clock without compensation. We leave open whether there are wage claims involving employee activities that are so irregular or brief in duration that employers may not be reasonably required to compensate employees for the time spent on them. The petition for rehearing is denied.” (emphasis added)

The reference to “reoccurring activities” and employees “routinely” working for minutes off the clock indicates that the court is addressing situations where employees are required to perform some off-the-clock work on a repeated or regular basis, such as closing shop or shutting down systems. So a different rule may apply to activities that are more irregular or isolated. In fact, the court said as much in its earlier version of the opinion by noting that there may be employee activities “where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.” The more recent modification simply clarifies that that is still the case. 

Our recommendations for employers remain the same:

  1. Do everything possible to ensure that employees don’t clock out until they’ve completed all work-related tasks. This includes security checks, closing shop, and exiting the work premises.
  2. If you use fixed time clocks, locate them as close as practicable to the exits. Or better yet, look at more advanced systems that employees can operate remotely, The court specifically referred to “advances in technology … shaping our understanding of what fractions of time can be reliably measured.”
  3. Ensure that whatever policy you use to round off workers’ time entries is facially neutral (i.e., you’re just as likely to round up as to round down).
  4. Require non-exempt employees to report any time they work after hours. Seemingly trivial tasks like checking e-mail or an online schedule could be compensable.
  5. Train managers on how and when to communicate with non-exempt staff after hours.
  6. If employees do after-hours work without authorization, discipline them, but pay for the time.

Is this modification good news for employers? No. But it may be slightly less awful than it was before.

All employers face challenges in navigating issues surrounding legalized marijuana. For construction industry employers, the challenges are particularly difficult given the necessary emphasis on safety. Last week, I recorded a 90-minute webinar for Lorman addressing the issues construction employers face in jurisdictions that have legalized medical or recreational marijuana. I discussed developments in state law, conflicts between state and federal laws, drug testing, maintaining a drug-free workplace, and responding to employees’ requests for accommodation of marijuana-related disabilities. You can purchase the webinar here.

ICE workplace audits are on the rise.  And if you didn’t know, the federal government and California are not harmonious in their views on immigration issues.  That means that ICE raids on California employers are likely to continue, especially in target industries such as hospitality, construction, agriculture, tech, and manufacturing.  And if you want to minimize your company’s exposure to massive fines and possible criminal prosecution, this issue should be on your radar.

One of the biggest recent traps of late seems to be the I-9 form.  Under federal law, all employers in the US are required to complete the I-9 in order to verify the identity and employment eligibility of new hires.  Employers are required to have a completed I-9 on file for every employee.  The employee must complete Section 1 of the I-9 at the time of hire (and absolutely not before acceptance of a job offer).  The employer must complete Section 2 of the I-9 within three business days of the hire date.  I-9s must be retained for three years after the date of hire, or one year after the date employment ends, whichever is later.  Failure to abide by these rules can lead to very severe penalties and fines.

When ICE wants to examine your workforce, it provides a Notice of Inspection that gives you just three days to get your I-9s and payroll records ready for review.  Once that happens, it is very hard to fix any problems you may have.  There just isn’t time and ICE has discretion to disregard any remediation efforts after the service of the NOI.

What can be wrong with an I-9 you ask?  Well if our audits of I-9s are indicative, close to 50% if not more, usually have problems, including:

88144554 – hand with pen fills in a paper form us immigration visa
  • Incomplete, with information, signatures, and dates missing.
  • Incorrect information, such as a document for List B or C in the List A column.
  • Signatures that don’t match the names on the documents.
  • Blank Section 2 with the List A or B and C documents simply attached.
  • Documents that don’t match the names on the form.
  • Older or incorrect versions of the I-9 used.
  • And on and on and on….

The I-9 may look like a simple form, but it is not and can cost the employer significant cash in fines … and possible criminal prosecution!  So if the person completing your new hire paperwork isn’t skilled or trained on how to complete this form, chances are your I-9s are imperfect.  It is not uncommon when we perform I-9 audits to see the same mistake(s) repeated over the course of thousands of I-9s!  That means risk, and these days, big risk.

The other problem is that you can’t just ask specific employees to re-verify their status, for example if there is a rumor that the employee may be undocumented, because that can lead to claims of discrimination.  Remember national origin and citizenship status are protected categories.  So the only way to fix the I-9s is to audit all of them, fix all of the mistakes that you can, and do it before any audit or notice of inspection from a government agency.

Oh, and please do not audit without the attorney-client privilege protection.  The last thing you want are emails indicating that your I-9s are wrong, or your employees are illegal, and you knew about it and didn’t fix it.  Knowingly employing, hiring, or continuing to employ undocumented workers is a crime.  Employers are subject to criminal prosecution—yes, that means possible jail time.

This is budget planning season for many employers.  Our advice is to add an 1-9 audit to your budget for 2019.

Many thanks to Ali Brodie for her assistance with this post!

Guest Blog Post by Summer Associate Josie Lopez

As the millennial generation becomes the majority of the workforce, the composition of the workplace is changing significantly, and companies are starting to realize they are going to have to keep up with the times. Growing up in the age of social media, information and feedback have become instantaneous, and no one expects continuous feedback more than millennials. Not only do they expect it, they need it. That’s why so many companies are moving away from the annual employee review, and opting to get in touch with their employees more often. The Gap, for example, does monthly coaching sessions between employees and management—known internally as “GPS” (Grow, Perform, Succeed)—instead of annual reviews. These more frequent meetings allow managers to give better feedback with real examples and solutions that can be implemented immediately.

It’s also time to ditch the old-school rating systems. Asking managers to rate employees on a 1 to 5 scale focuses on what the employee has done wrong, instead of focusing on who the employee is and how they can improve. To get better insight into its employees, companies are now using multi-rater feedback systems, which gather the input of managers, peers, coworkers, and clients. These questionnaires are also getting a more holistic view of employees by asking more in-depth questions. For example, instead of asking whether Sam “exceeded expectations,” individuals are being asked to rate a statement like, “I can always go to Sam for creative input.”

As the workforce changes, so too must the workplace. As we pass the mid-point of 2018, now is the time to revamp your old-school performance reviews and adopt a more continuous system that gives millennial employees what they want and what they need to stay engaged and successful in the workplace.