Joint Employment

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I am both proud and excited to be featured in two new training videos for workplace supervisors and human resources representatives handling California-specific and federal wage and hour issues.

Developed and produced by Kantola Productions, “California Wage and Hour Laws: What You Need to Know” is designed to help companies train their supervisors and human resources representatives to become better, more legally compliant managers.  The video consists of modules that break down the complex requirements regarding a variety of wage and hour matters including:

  • Exempt vs. Non-Exempt Employees
  • Employee vs. Independent Contractor
  • Overtime
  • Meal & Rest Breaks
  • Hours Worked

There is also a federal version of the video.

Both videos are available for purchase in several formats:  DVD, online training for up to 25 viewers, or instant streaming for a single user.  To receive a 20% discount, Fox Rothschild clients and their contacts can enter Fox20 in the “catalog code” box when filling out the online purchase form.

Take a look at a clip from the video below.  Enjoy!

I am looking forward to the California HR Conference sponsored by PIHRA (Southern California’s SHRM) coming up on August 29-31st in Long Beach.  If you haven’t registered, take a look at the three day list of speakers and networking events.

2016 California HR Conference

I will be speaking on the Top 10 Trending Issues for California HR on Monday, August 29th at 1:30 pm.  The session will provide a fast paced summary of the hottest issues facing HR professionals in California, including essential and practical tips for compliance.  I will cover many of the issues we have blogged about here, including the Fair Pay Act, joint employment, independent contractors, wage-and-hour trends, local minimum wage ordinances, PAGA considerations, and more.  If you attend, you will get an overview of the key legal issues facing California HR professionals in one session.

I hope to see you there!

If you are a professional in the hospitality industry, please join me for a presentation on the top Ten Legal Issues Facing HR Hospitality Professionals in 2016.   The event is sponsored by the Los Angeles Hotel HR Association and will be held on Thursday, February 25th at 6:00 pm at the Hollywood Roosevelt Hotel.  You can find out more information about it here. 

Not only will I review new laws and legal issues, but I will provide practical advice and specific guidance on how to remain compliant.  Topics will include:  the Fair Pay Act, other types of wage claims, minimum wage ordinances (including the LA Hotel Minimum Wage Ordinance), updates on PAGA (the Private Attorney General Act), joint employment, and independent contractor status.  If you work in Human Resources, Risk Management, Operations or Administration in a hotel in Los Angeles you won’t want to miss it.  I hope to see you there!

Copyright: iqoncept / 123RF Stock Photo
Copyright: iqoncept / 123RF Stock Photo

 

 

I just returned from the Cornell HR in Hospitality Conference in Las Vegas with my partner Carolyn Richmond.  I participated in the Executive Summit and shared ideas with some of the most progressive minds in the hospitality industry.  Here is my top ten list of take-aways:

  1.  Once a year performance reviews are backwards looking, and millennials (soon to be 50% of the workforce) want consistent feedback.  As one panelist put it “you can’t drive looking through a rear view mirror.”  It is time to re-think how you provide feedback.
  2. Similarly, once a year employee engagement surveys can have limited value, especially when the management team has learned how to manipulate results (such as by scheduling the employee appreciation party right before the survey goes out).  Plus, if you aren’t going to fix the issues identified in the survey, conducting one can do more harm than good.
  3. While California law still allows employers to terminate (or not hire) for a positive marijuana test – be careful – if the drug is taken for a disability, the applicant/employee could assert a disability claim.  Do you want to be the test case?  Most employers do not.
  4. Do not assume your paystubs are compliant; paystub class actions are here to stay so audit them in each jurisdiction.
  5. When negotiating vendor agreements (an issue I have blogged about before), add a provision about ACA compliance and make the vendor take full responsibility for it.  Plus, specify that you are not joint employers, and the vendor will indemnify you for any assertions of joint employment status.
  6. Scrutinize your background check vendor, and carefully weigh the risks of getting the process wrong versus the risk of a negligent hiring claim.  Some jobs and industries warrant (or require) background checks, but many do not.
  7. Do not assume that pay equity exists just because employees with the same job title are in the same “salary band.”  If all women are at the bottom of the band, then you will need to justify why or rectify.  Moreover, the rationale that the men were better negotiators upon hire is not a viable defense to a pay equity claim.
  8. Be careful before you offer to pay a departing employee’s Cobra as part of a separation agreement; you could inadvertently mess up their ability to get coverage on the exchange.
  9. When hiring part-timers (who may not work enough hours to get health coverage), specify in the offer letter that they will be working “variable hours.”
  10. While documentation of performance deficiencies is still critical to defending claims, often it makes sense to move people out quickly and pre-empt a retaliation claim; as a presenter put it “be slow to hire but quick to fire.”
Copyright : Vedran Vukoja (Follow)
Copyright : Vedran Vukoja

Every employer in California needs legal help at some point. The laws are too complex and the penalties too severe for employers to figure it all out on their own. Even the courts and government agencies can’t decide what some of these laws mean.

So the only question for employers is whether you’re going to take preventive steps to avoid legal issues or wait for the legal issues to arise. The former course can be way less expensive, disruptive, and damaging to your reputation. With that in mind, my colleague Nancy Yaffe and I put together a list of 10 things California employers can do to protect themselves in 2015. You can access it here.

And yes, that’s the same Nancy Yaffe who was recently selected by L.A. Biz to receive one of its inaugural Women of Influence Awards. The program honors women business leaders in the LA area who stand out both for their achievements in the marketplace and their commitment to community and mentoring. Way to go Nancy!

On July 30, we blogged about the recent efforts of the National Labor Relations Board to hold corporate  franchisors, such as McDonald’s, liable for the acts of individual franchisees toward employees under the theory that  the “parent” company is a “ joint employer.”  We opined that this effort was a “stretch” to deviate from traditional principles on the part of the federal agency, and which threatened the viability of franchising as a business model.

On August 28, 2014, the California Supreme Court provided a dose of fresh air, clarity, and common sense to this issue by holding that Domino’s Pizza could not be the joint employer of a worker who accused a franchisee operator of harassment. The opinion upheld the granting of summary judgment in favor of Domino’s. It also reaffirmed the decades-old analysis which focuses on the degree of real control the corporate franchisor may exercise over the employment practices of the franchisee in  light of the “totality of the circumstances.”

The Supreme Court reversed the opinion of the Court of Appeals (which we lamented in this June 2012 post), and sent a clear message to trial courts that it’s permissible to summarily dismiss claims of “joint employment” where the plaintiff lacks sufficient facts to demonstrate “control” on the part of the franchisor parent. As the court stated:

A franchisor [may] impose comprehensive and meticulous standards for marketing its trademarked brand and operating its franchises in a uniform way. To this extent, the franchisor ‘controls’ the enterprise. However, the franchisee retains autonomy as a manager and employer.  It is the franchisee who implements the operational standards on a day-to-day basis, hires and fires store employees, and regulates workplace behavior.

This sensible opinion from the high court of California will likely influence other state and federal courts, including those federal circuit courts that may hear appeals from the NLRB on the issue of “joint employment.” You can read the opinion here (pdf).    

           In the quest to expand liability for real and imagined violations of employment laws, and to find more and deeper pockets, the latest target for plaintiffs’ lawyers and unions is the “joint employer.” The joint employment concept is a decades-old doctrine that applies where two companies are so intertwined and jointly involved with the employment policies and the supervision of employees that both companies can be liable violating employment laws such as wage and hour, wrongful discharge, or discrimination. The application of “joint employment” can also vastly increase the pool of employees in class actions and for union organizing.

            The newly constituted and highly politicized NLRB is currently reviewing its standards for finding “joint employers” in a case involving Browing Ferris Industries of California and a staffing agency. Employers fear that the Board will take a radical turn toward making joint employment much easier to establish.

            On July 29, 2014, the NLRB’s general counsel ominously ruled that unfair labor practice charges can proceed against McDonald’s franchisees and the franchisor, McDonald’s Corp. as a joint employer. The Board is thus backing the SEIU, and the employee advocacy group Fast Food Forward, in an attempt to organize and raise wages for fast food restaurants around the country. The union hopes to get neutrality agreements from parent companies that will make it easier to organize one franchise store after another.

           A spokesman for the International Franchise Association said, “Ruling that franchises are joint employers will be a devastating blow to…the franchise model.” This development could affect fast food restaurants, hotels, and convenience stores and other retailers in California. The NLRB’s aggressive stance is sure to be litigated in the courts, but look for other agencies and plaintiffs’ lawyers to be pressing the issue of “joint employment.”

When you outsource certain functions at your company, do you actually know what the terms of the vendor contracts say?  Or do you just assume that because the employees work for the vendor that you are protected from liability?  Well, assume no more. Without a contractual provision for indemnity from your vendor, you are likely to be held responsible for your vendor’s misdeeds.

Let’s say you use a company for night cleaning or other janitorial services.  And let’s also say that the only contract you have with that entity is the fine print on the back of each purchase order.  If one of those janitorial employees gets hurt on your premises, or does not get paid overtime worked, can that employee come after you?

Or let’s say you hire a staffing agency to provide temporary workers.  And let’s also say that one of those workers complains a lot on the job, or is often late, or has called in sick too many times.  And let’s say that you call up your contact at the staffing agency and ask for that temporary worker to be taken off of your account.  When that employee sues for retaliation or disability discrimination, can that employee come after you?

In both cases, the answer is “Yes, they can.”  More importantly, yes they do.  In the reality of litigation from the plaintiff’s perspective, the more pockets the merrier.  When that employee sues the vendor and your company, the best leverage you will have for an expeditious exit is an indemnity provision.

So take a look at your vendor contracts.  Make sure they include terms to explicitly provide that the workers are solely employees of the vendor and not employees of your company.  Also make sure that the vendor indemnifies your company for any loss or harm (including attorneys’ fees) arising from claims by its employees.  If the vendor won’t sign such a provision, at least you can decide whether to enter the relationship with open eyes and can adapt your behavior accordingly.  Or better yet, you can engage a different vendor.