California Employers Must Provide Written Notice of Right to Take Domestic Violence Leave

On September 14, 2016, Governor Jerry Brown signed AB 2337 into law which expands the employer notice requirements regarding domestic violence employee protections provided by Labor Code section 230.1. Despite the protections under current law, many employees remain uninformed about their employment-related rights when it comes to domestic violence.  This new bill requires employers of 25 or more to provide written notice to employees of their rights to take protected leave for domestic violence, sexual assault or stalking.  Employers must inform each employee of his or her rights upon hire and at any time upon request.  The Labor Commissioner must develop and post online a form that employers may use to satisfy these new notice requirements by July 1, 2017.  An employer’s obligation to comply with these new disclosure requirements will become effective when the Labor Commissioner posts the new form.

In the interim, employers should review their handbook policies and ensure that employees’ existing rights to take time off for domestic violence, sexual assault or stalking are adequately set forth. This includes notifying employees that are victims of domestic violence, sexual assault, or stalking that they may take time off from work to (1) seek medical attention for injuries; (2) obtain services from a domestic violence shelter, program, or rape crisis center; (3) obtain psychological counseling; or (4) participate in safety planning and take other actions to increase safety, including temporary or permanent relocation. Employers are prohibited from discharging, discriminating, or retaliating against an employee because of the employee’s known status as a victim of domestic violence, sexual assault, or stalking or for taking domestic violence leave.

Ms. Silverman is a volunteer attorney with the San Diego Center for Community Solutions, assisting victims of domestic violence in their efforts to obtain restraining orders against abusive individuals with whom the victims have a relationship.

Avoid These Common Mistakes in Classifying Workers

The Department of Labor (DOL) has made it clear. Regardless of the reason, classification errors can be costly for employers, as the error often affects a number of employees having similar job titles and therefore lends itself to class treatment of the claim.  Furthermore, if you are on the unlucky end of a DOL audit, you will likely be stuck paying payroll taxes, unemployment taxes, overtime, as well as a host of fines, fees and other costs.

The complex details of what you need to know for proper worker classification can be found in the 2016 Employers Supplemental Tax Guide, published by the IRS.  The IRS guide, however, is not only complex, but often times, confusing.  Identified below are the five most common employee classification mistakes.

Mistake 1: Going by the written contract

Despite what the agreement with the individual worker provides, the nature of the work relationship between the company and the worker determines how he or she is classified.  Some employers believe that having a written contract that provides for the independent contractor status supersedes all other considerations. This is untrue.  If the “independent contractor” is doing the same type of work as someone else (who is classified as an employee and is issued a W2), the “independent contractor” is misclassified.  If, however, the worker provides the same or similar services to other companies, they are more likely to be deemed an independent contractor.

Mistake 2: Allowing the Worker to Classify the Relationship

 Even if the worker requests or even agrees to be treated as an independent contractor, this does not mean that it is appropriate, legal or ethical.

 Mistake 3: Trying to Control When and How the Work Gets Completed

A key factor in considering whether a worker is an independent contractor or an employee is the amount of control over the details of the work being performed. If the relationship is intended to be long term and the company tells the worker how to complete the work, the worker is likely an employee, not an independent contractor.  True independent contractors typically perform services for a brief period of time.  True independent contractors are also typically given an objective and then are free to fulfill it using their own tools, methods and where and when they choose.  Generally, if you tell your workers where to work, when to work or to perform the work in a specified manner, you have an employee, not an independent contractor.

Mistake 4: Method of Payment

Independent contractors are typically paid a flat fee for a job, however, confusion arises in situations where independent contractors are paid hourly. Employees are usually offered benefits.  Just because you do not offer a worker benefits (such as sick days, retirement plans, etc.) does not mean they are properly classified.  Some employers mistakenly believe they have the choice (or allow the employee the choice) of providing the worker with benefits and calling them an employee, or not offering benefits, but paying a higher rate and treating the worker as a contractor.

Mistake 5: Improperly defining an investment in job training and equipment

Independent contractors typically have significant investments in both job training, as well as in their equipment. However, employees may also invest to some degree in the tools and materials they use for their jobs.  The difference in classification depends upon the size of the investment and factors such as whether or not the company offers reimbursement of expenses to the worker.  If the company reimburses, the worker is more likely to be deemed an employee.

Consequences for Misclassifying 

If the DOL or IRS performs an audit, you will be required to expend significant and valuable time away from your business to respond to their inquiries. While some leniency may be provided if an honest mistake was made, possible penalties still include significant fines, paying back taxes and wages for the misclassified employees.  In addition, workers that were misclassified can come back after you for unpaid overtime, missed meal and rest breaks, and other benefits.

Farmworkers’ “Phase-In” Overtime Bill Officially Sprouts

Much like the agricultural harvest cycles it may affect, September 12, 2016, marks the planting season for the Phase-In Overtime for Agricultural Workers Act of 2016.

Assembly Bill 1066 (“AB1066”), signed into law by Governor Brown, is an aggressive “phase-in” overtime bill, which will cultivate and change the wage and hour landscape for agricultural workers over the next decade or so.

Current California law exempts agricultural employees from certain typical overtime provisions. In particular, Industrial Welfare Order No. 14-2001 provides that agricultural workers can be paid their regular rate of pay for any hours up to ten (10) in a workday for six (6) days in a week, or sixty (60) hours per week. Overtime rates, paid at one-and-a-half (1.5) times the regular rate of pay in California, only kick in after ten hours in a workday, and for the first eight (8) hours on the seventh day of the workweek. Double-time rates, paid at two times the regular rate of pay, are paid after the eighth hour of work on the seventh day of the workweek.

New AB1066 overtime protections for agricultural workers will sprout up and grow or “phase in” starting next year, providing more and more protections to employees as each year passes.

Below is the schedule that agricultural employers will need to abide by to remain compliant with California law:

  • Beginning January 1, 2017, all other provisions of existing laws regarding compensation for overtime work will apply to agricultural workers.
  • Starting January 1, 2019, any employer with at least 26 employees must pay its agricultural employees overtime rates for any hours worked in excess of 9.5 per day, or any hours worked over 55 in any workweek. (Employers with 25 or fewer employees have until January 1, 2022, to become compliant.)
  • Starting January 1, 2020, any employers with at least 26 employees must pay its an agricultural employees overtime rates for any hours worked in excess of 9 per day, or any hours worked over 50 in any workweek. (Employers with 25 or fewer employees have until January 1, 2023, to become compliant.)
  • Starting January 1, 2021, any employers with at least 26 employees must pay its an agricultural employees overtime rates for any hours worked in excess of 8.5 per day, or any hours over 45 in any workweek. (Employers with 25 or fewer employees have until January 1, 2024, to become compliant.)
  • Starting January 1, 2022, any employers with at least 26 employees must pay its an agricultural employees overtime rates for any hours worked in excess of 8 per day, or any hours over 40 in any workweek. (Employers with 25 or fewer employees have until January 1, 2024, to become compliant.)
  • Starting January 1, 2022, any employer with at least 26 employees must pay double time to any worker in an agricultural occupation who works excess of 12 hours in one day. (Employers with 25 or fewer employees have until January 1, 2025, to become compliant.)

Companies with workers “employed in an agricultural occupation” will need to stay on top of this drastically changing wage and hour landscape. For further information or assistance for developing strategies to remain compliant with California labor laws, please contact the Jackson Lewis attorney with whom you normally work.

Ninth Circuit Finds Uber’s Arbitration Agreements Enforceable After All

On September 7, 2016, the Ninth Circuit Court of Appeals in Mohamed v. Uber Technologies, Inc. largely overturned the District Court’s ruling which had held Uber’s arbitration agreements to be unenforceable.  Last year, the District Court had held that the arbitration agreements were unconscionable due to the inclusion of a waiver of claims brought under California’s Private Attorneys General Act (“PAGA”).  The decision invalidated nearly 250,000 arbitration agreements between Uber and independent drivers, allowing the case against Uber to proceed as a class action in civil court.

Uber appealed the decision, arguing that the District Court should have simply severed the PAGA waiver pursuant to the agreement’s severability provision rather than invalidating the entire agreement. The Court of Appeals agreed, ruling that the PAGA waivers are severed from the arbitration agreements and the agreements are otherwise enforceable.  This decision will allow drivers to pursue their PAGA claims in court, but will allow Uber to compel individual arbitration on all other claims.

Class and Collective Action Waivers

Requiring class and collective action waivers as a condition of hire or continued employment violates the National Labor Relations Act (“NLRA”), the Ninth Circuit Court of Appeals ruled on August 22, 2016.

In April 2011, the U.S. Supreme Court ruled that class claims can be waived in a valid arbitration agreement under the Federal Arbitration Act (“FAA”). Many employers have since entered into such agreements with their employees. The National Labor Relations Board, however, takes the position that prohibitions against class or collective proceedings violate an employee’s rights to engage in protected concerted activity for mutual aid and protection under Sections 7 and 8 of the NLRA.

Essentially following the Seventh Circuit’s reasoning in a decision earlier this year, and deferring to the NLRB’s interpretation of the NLRA, the Ninth Circuit has now held that employees have a substantive right to pursue work-related legal claims and to do so together. It also concluded that employers cannot defeat such rights by requiring employees, as a condition of employment, to agree to pursue claims on an individual basis. Other courts, however, including the Second, Fifth and Eighth Circuits, have concluded that class and collective action waivers do not violate the NLRA.

The future of class, collective, and representative action waivers is uncertain. Within the Ninth Circuit (which has jurisdiction over Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington), it remains to be seen whether the matter will be heard en banc by the full Ninth Circuit Court of Appeals. If the decision stands, the split on this issue is significant, and the matter is ripe for U.S. Supreme Court review. Many of the Supreme Court’s decisions regarding class action waivers have been based on five-to-four rulings, where the late Justice Antonin Scalia represented one of the five votes favoring class waivers. Accordingly, the Supreme Court’s composition likely will affect the fate of class action waivers and the outcome of the dispute among the circuits.

Jared Bryan is a Principal in the Orange County office of Jackson Lewis, an AmLaw 100 firm dedicated to representing management exclusively in workplace law.

California Court of Appeal Finds Employer’s Denial of Accommodation to a Nondisabled Employee May Be Evidence of an Associational Disability Discrimination Claim

On August 29, 2016, the California Court of Appeal for the Second Appellate District reversed summary judgment earlier awarded to the employer in Castro-Ramirez v. Dependable Highway Express, Inc. In its reversal, the court found that an employer’s denial of accommodation to a nondisabled employee may be evidence of associational disability discrimination under the Fair Employment and Housing Act (“FEHA”).

The Facts

Plaintiff Luis Castro-Ramirez (“Plaintiff”) began working for Dependable Highway Express (“DHE”) in 2010. At that time, Plaintiff notified DHE that he had a disabled son who required dialysis on a daily basis.  He requested work schedule accommodations that allowed him to administer dialysis to his son in the evenings and was given such a schedule.  Plaintiff’s typical schedule was from 9:00 or 10:00 a.m. until 7:00 or 8:00 p.m.

In March 2013, Plaintiff’s supervisor was promoted to operations manager, and his new supervisor, Boldomero Munoz-Guillen (“Junior”) changed Plaintiff’s work schedule. That same month, Plaintiff complained to the operations manager that Junior had changed his hours, such that he was unable to attend to his son’s daily dialysis needs.

Plaintiff told Junior, “Please, I need to have my job like always. I’ve always had help from everyone except you.”  The next day, Junior assigned Plaintiff to a shift starting at 12:00 p.m., and due to the route Plaintiff’s supervisor assigned to him, he could not get back in time to administer dialysis by 8:00 p.m.  Plaintiff requested the day off or an alternative shift, and reminded Junior that the operations manager had told Junior about Plaintiff’s needs.  Junior laughed, “[Plaintiff’s former supervisor] doesn’t work here anymore.  Now it’s me.” Junior told Plaintiff that if Plaintiff did not handle the route, he would be terminated.  Plaintiff refused, and DHE terminated Plaintiff’s employment.

The Decision

The Court of Appeal noted that Plaintiff had abandoned his claim for failure to provide reasonable accommodation, and thus, declined to decide whether FEHA provided a duty to accommodate associational disability. However, the Court of Appeal explained that the FEHA creates an associational disability discrimination claim.  The Court of Appeal opined that FEHA makes it unlawful to discharge a person from employment based on physical disabilities or other characteristics, which include “a perception that the person. . .is associated with a person who has, or is perceived to have, any of those characteristics.”  Cal. Gov. Code § 12940(a), § 12940(o).

Based on that framework, the Court of Appeal opined that a jury could reasonably find that Plaintiff’s association with his disabled son was a substantial motivating factor in Junior’s decision both to deny an alternative work schedule and to terminate Plaintiff. “[T]hese facts may give rise to the inference that Junior acted proactively to avoid the nuisance plaintiff’s association with his disabled son would cause Junior in the future.”

The Court of Appeal also held that reasonable juror could find Plaintiff’s repeated complaints about the sudden changes to his schedule represented a protected activity, especially given the proximity of time between Plaintiff’s complaints and the termination. The Court of Appeal found Plaintiff did more than simply request an accommodation; he expressed a degree of opposition to the DHE’s failure to provide the altered schedule and thus there is a triable issue of fact as to retaliation.

The Dissent

The Court of Appeal’s dissenting opinion disagreed with the majority’s statement that it declined to decide whether FEHA establishes a separate duty to reasonably accommodate associational disabilities. Rather, the dissent believes the majority did just that.  Effectively, the employer either must provide accommodations to employees associated with disabled persons, or face liability for associational discrimination for failure to provide such accommodations.

***

The Castro-Ramirez v. Dependable Highway Express ruling finds that an employer could be liable for discrimination and retaliation for adverse employment actions substantially based on associational disabilities.  The decision also asserts that employer denial of accommodation requests by employees associated with disabled persons may be evidence of an associational disability claim.  Accordingly, employers should review their policies and practices regarding responding to disability accommodation requests in light of this decision.  Please contact Jackson Lewis with any legal questions about disability accommodation related issues.

“Ban the Box” – California Employers Are Cautioned When Using Criminal Records in Hiring Decisions

By now, California employers are probably aware of the “Ban the Box” movement sweeping the nation. Lawmakers and government agencies aim to provide applicants with a fair chance at employment by eliminating conviction history inquiries in background checks, interviews, and applications.  Over 100 cities and counties nationwide have adopted similar initiatives to prevent employers from inquiring about and then rejecting applicants from positions based on their criminal history.  President Obama has even endorsed the hiring reform, requiring that federal agencies delay inquiries into criminal records.

Earlier this year, the Department of Fair Employment and Housing proposed regulations, adding section 11017.1 to Title 2 of the California Code of Regulations, which will limit the use of criminal history as a consideration in employment decisions. The California Fair Employment and Housing Act (“FEHA”) currently prohibits harassment and discrimination on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, and military and/or veteran status of any person.  The proposed amendments consider that inquiries into criminal history in employment decisions may constitute a violation of the FEHA if it adversely impacts a person on the protected categories above.

The proposed types of prohibited criminal history inquiries include: (1) An arrest or detention that did not result in conviction (Labor Code section 432.7); (2) Referral to or participation in a pretrial or post-trial diversion program (Id.); (3) A conviction that has been judicially dismissed or ordered sealed pursuant to law (Id.); and (4) A non-felony conviction for possession of marijuana that is two or more years old (Labor Code section 432.8).

Understandably, California employers may have reasons for looking into an applicant’s criminal history. For example, employers may wish to prevent fraud or theft, and they will want to prevent negligent hiring liability.  The proposed text would require employers to establish that consideration of criminal convictions is justifiable because it is job-related and consistent with business necessities.  As with most background searches and hiring practices, employers will be required to provide adequate notice of any background inquiries and a reasonable chance to dispute any factual inaccuracies.

San Francisco employers are already prohibited from asking questions about an applicant’s criminal records, including the following: arrests that did not result in conviction, unless charges remain pending; completion of a diversion program; sealed or juvenile offenses; offense that are more than seven years old from the date of sentencing; and offenses that are not misdemeanors or felonies, such as infractions.

For further information or assistance in developing strategies and policies, please contact the Jackson Lewis attorney with whom you regularly work.

California Cities and Counties Can Now Join the Effort to Enforce State and Local Wage Payment Laws

California S.B. 1342 is a new law which allows cities and counties to work with the California Division of Labor Standards enforcement (“DLSE”) to enforce wage payment laws. The new measure was intended to give local enforcement programs the tools required to conduct wage claim investigations in order to recover unpaid wages including the ability to issue subpoenas. The law encourages cities and counties to develop specific measures to target and remedy wage theft. Many cities have already adopted city minimum wage and paid sick leave laws and the list is growing.

 Specifically, the law will add Section 53060.4 to the Government Code. Government Code Section 53060.4 will read:

(a) The legislative body of a city or county may delegate to a county or city official or department head its authority to issue subpoenas and to report noncompliance thereof to the judge of the superior court of the county, in order to enforce any local law or ordinance, including, but not limited to, local wage laws.

(b) The Legislature finds and declares that these provisions do not constitute a change in, but are declaratory of, existing law.

 The California law states the law does not constitute a change in the law but clarifies existing law. It is another reminder for employers to review whether the new local city minimum wage or paid sick leave laws cover any of their facilities. If you have any questions, please feel free to contact the Jackson Lewis attorney you normally work with or Jonathan Siegel at siegelj@jacksonlewis.com.

 

California Assembly Bill 2535 Further Limits the California Pay Stub Requirement for Reporting Total Hours Worked

On July 22, 2016, the Governor approved California Assembly Bill 2535 (“AB 2535”), which relates to itemized wage statements (more commonly known as pay stubs). Specifically, AB 2535 revises California Labor Code Section 226. The prior version of Labor Code Section 226 required employers to include on a pay stub total hours worked by the employee unless the employee was paid a salary and exempt from overtime. AB 2535 expands on Labor Code Section 226 and alters reporting requirements by asserting that employers do not need to report total hours worked on a pay stub for employees who are “exempt from the payment of minimum wage and overtime” under specified statutes or any applicable order of the Industrial Welfare Commission.

In sum, AB 2535 adds an additional subsection to Labor Code Section 226, which reads in pertinent part as follows:

“(j) An itemized wage statement furnished by an employer pursuant to subdivision (a) shall not be required to show total hours worked by the employee if any of the following apply:

(1) The employee’s compensation is solely based on salary and the employee is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission.

(2) The employee is exempt from the payment of minimum wage and overtime under any of the following:

(A) The exemption for persons employed in an executive, administrative, or professional capacity provided in any applicable order of the Industrial Welfare Commission.

(B) The exemption for outside salespersons provided in any applicable order of the Industrial Welfare Commission.

(C) The overtime exemption for computer software professionals paid on a salaried basis provided in Section 515.5.

(D) The exemption for individuals who are the parent, spouse, child, or legally adopted child of the employer provided in any applicable order of the Industrial Welfare Commission.

(E) The exemption for participants, director, and staff of a live-in alternative to incarceration rehabilitation program with special focus on substance abusers provided in Section 8002 of the Penal Code.

(F) The exemption for any crew member employed on a commercial passenger fishing boat licensed pursuant to Article 5 (commencing with Section 7920) of Chapter 1 of Part 3 of Division 6 of the Fish and Game Code provided in any applicable order of the Industrial Welfare Commission.

(G) The exemption for any individual participating in a national service program provided in any applicable order of the Industrial Welfare Commission.”

“DFEH Now Authorized To File Civil Suits On Behalf Of Victims Of Human Trafficking”

On July 7, 2016, Assembly Bill No. 1684 (“AB1684”)[1], introduced in support California’s anti- human trafficking laws, passed both the Senate and the House of Representatives and was ordered enrolled.

Originally introduced earlier this year by Assembly Member Mark Stone, AB1684 amends the current law to expressly allow the Department of Fair Employment and Housing (“DFEH”) to receive, investigate, conciliate, mediate, prosecute and bring civil actions for and on behalf of victims of human trafficking against the perpetrator.

AB1684 allows any damages in a civil action brought by the DFEH to be awarded directly to the victim.   Specifically, in a civil suit brought by the DFEH, a successful plaintiff may be awarded the following:

  • Exemplary damages (punitive damages) to be awarded by the jury or court;
  • A civil penalty of $25,000 to be awarded to the individual human trafficking victim; and
  • Attorney’s fees and costs as may be determined by the court, which will be awarded to the DFEH for bringing the claim.

The bill will now be delivered to the Governor to sign into law.

[1] http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160AB1684

 

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