“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

 

Employers Subject to California Prevailing Wage Beware! California Will Resume Enforcement of The Requirement To Electronically Submit Certified Payroll Records

On July 20, 2016, California Department of Industrial Relations (“DIR”) issued a press release stating DIR enforcement of a contractor and subcontractor’s requirement to submit certified payroll records(“CPRs”) using DIR’s online system will resume on August 1. DIR clarified that the requirement to keep CPRs has not changed. Previously, DIR suspended enforcement of filing CPRs electronically because of problems with the system and improvements. However, employers should have continued to maintain CPRs and the ability to file them electronically was operational. The key difference is now DIR will enforce the filing requirement effective August 1st. See press release

California prevailing wage requirements are complicated and we recommend you consult with the Jackson Lewis attorney you normally work with regarding any compliance issues or feel free to contact Jonathan Siegel at siegelj@jacksonlewis.com.

 

 

Are My California Pay Stubs Compliant?

Nearly all California employment wage and hour class action lawsuits assert a cause of action under California Labor Code Section 226 as plaintiffs’ attorneys almost always automatically include such cause of action when there are other alleged underlying wage violations, i.e. failure to pay overtime. By asserting this cause of action in their class action complaint, the plaintiffs are provided with the ability to access written itemized wage statements (more commonly known as pay stubs) of (a) a sample of putative class members regardless of whether or not a class action is certified and (b) the entire class if a class action is ultimately certified. At first glance, disclosing pay stubs does not seem problematic except for the time and expense associated with providing the same to the plaintiffs’ attorneys. However, once the plaintiffs’ attorneys are in possession of the pay stubs, they will analyze them to determine if they are non-compliant on their face, which can create large penalties for an employer.

Employers are required to provide employees with pay stubs, which can be a stand-alone document or a detachable part of a pay check. In California, Labor Code Section 226 governs pay stubs. Under Labor Code Section 226, the following items must appear on every pay stub:

Gross wages earned;

  1. Total hours worked by each employee (except for salaried employees who are exempt from the state overtime rules);
  2. The number of piece-rate units earned and any applicable piece rate (if the employee is paid on a piece rate basis);[1]
  3. All deductions;
  4. Net wages earned;
  5. The inclusive dates of the period for which the employee is being paid;
  6. The employee’s name and only the last four digits of the employee’s social security number or an employee identification number other than a social security number;
  7. The name and address of the legal entity that is the employer (and if the employer is a farm labor contractor, the name and address of the legal entity that secured the services of the employer); and
  8. All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

Temporary service employers are also required to provide on pay stubs the rate of pay and the total hours worked by each temporary employee for each temporary services assignment. It should also be noted that in California, the amount of paid sick leave available to an employee is also required to be on the face of the pay stub or provided to the employee in a separate document with the employee’s wages on the designated pay dates.

If any of the items enumerated above are missing, employees may be entitled to penalties. Under Labor Code Section 226, an employee may recover the greater of all actual damages or $50 for each initial violation per employee, and $100 per employee for each subsequent violation, not to exceed an aggregate penalty of $4,000 for a period of one year preceding the filing of a lawsuit. When such penalties are applied to each member of a class, the financial exposure for the employer can be considerable. In addition, employees may recover costs and reasonable attorney’s fees. Moreover, if there is a violation on the face of the pay stub, a plaintiffs’ motion for class certification will more than likely be granted, at least with respect to a Labor Code Section 226 claim.

Although this post relates to California’s itemized wage statement requirement, this issue is not unique to California. In fact, the majority of states have requirements for what must be included on a pay stub as well as applicable penalties for the failure to comply.

[1] Note that pursuant to Labor Code Section 226.2, additional rules apply to employees paid on a piece rate basis.

New PAGA Amendments – What Employers Doing Business in California Need to Know

We previously reported on Governor Brown’s 2016/2017 budget change proposal as something employers should monitor.[1]  The proposal included increased funding for the Labor & Workforce Development Agency (“LWDA”), the agency responsible for overseeing the Private Attorneys General Act of 2004 (“PAGA”).  The budget proposal also contained recommendations for widespread changes to the way PAGA cases are handled.

On June 15, 2016, the California Legislature passed SB 836, which contained numerous amendments to the PAGA. While not all of the original proposals were enacted, there are several significant changes of which employers should be aware.

  • While PAGA notices previously were required to be provided to the employer and the LWDA by certified mail, PAGA notices are now required to be provided to the LWDA online, accompanied by a $75 filing fee, unless the filing party obtains a waiver.
  • Any employer response to the notice must also be accompanied by a $75 filing fee, unless the employer obtains a waiver.
  • The LWDA now has 60 days to review a notice under Labor Code § 2699.3(a), rather than the 30 days it previously had.
  • For cases filed on or after July 1, 2016, the time for the LWDA to investigate the claim has been extended from 120 to 180 days.
  • For cases filed on or after July 1, 2016, the aggrieved employee or representative must provide a file-stamped copy of the complaint, which includes the case number assigned by the court.
  • A civil action cannot be filed until 65 days after the aggrieved employee sends notice to the LWDA. The previous waiting period was 33 days.
  • Any proposed settlement provided to the superior court for review must also be submitted to the LWDA at the same time it is submitted to the court.
  • Any superior court judgment in a civil action that provides for, or denies, an award of civil penalties pursuant to PAGA must be submitted to the LWDA within 10 days after entry of the judgment or order.
  • Any PAGA cure notices submitted by employers to the LWDA must be submitted online.

The PAGA amendments set the stage for the LWDA to assert heightened scrutiny of PAGA cases and settlements, as the LWDA will have more time, information, and resources at its disposal. (The Department of Industrial Relations (“DIR”) had estimated “less than 1% of cases have historically been reviewed/investigated.”)  It remains to be seen how the LWDA will utilize its authority, and whether the amendments help curb some of the abuses to PAGA litigation, or instead create uncertainty and increased litigation costs for employers defending PAGA claims.

[1] http://www.californiaworkplacelawblog.com/2016/02/articles/calosha-2/governor-browns-proposed-paga-unit-may-have-power-to-challenge-paga-settlement-in-court/; and http://www.californiaworkplacelawblog.com/2016/02/articles/paga/state-budget-proposal-seeks-to-reduce-paga-litigation-through-increased-state-oversight/

 

Los Angeles Approves Minimum Wage Increases and Mandates Employers to Provide 48 Hours of Paid Sick Leave

Los Angeles Approves Minimum Wage Increases and Mandates Employers to Provide 48 Hours of Paid Sick Leave

Employers in the City of Los Angeles will need to review their current minimum wage and paid sick leave policies to ensure they comply with the new City ordinance increasing the minimum wage and extending paid sick leave benefits to employees working in the City.

On June 1, 2016, the Los Angeles City Council voted in favor of requiring employers in the City to provide their employees with 48 hours of paid sick leave, double the mandatory minimum under California’s statewide paid sick leave law, and approving future increases of the minimum wage. Ordinance No. 184320 goes into effect on July 1, 2016.

Minimum Wage Increases

Beginning on the dates below, employers with at least 26 employees must provide the following minimum wage rates:

  • July 1, 2016: $10.50/hour
  • July 1, 2017: $12.00/hour
  • July 1, 2018: $13.25/hour
  • July 1, 2019: $14.25/hour
  • July 1, 2020: $15.00/hour

On July 1, 2022, and annually thereafter, the minimum wage will increase based on the Consumer Price Index. Employers with 25 or fewer employees will have an extra year to comply with the increases.

Paid Sick Leave Requirements

Who is covered?

Every employee who, on or after July 1, 2016, works in the City for the same employer for at least 30 days within a year from the commencement of employment is entitled to paid sick leave. The Ordinance defines “employee,” in part, as any individual who in a particular week performs at least two hours of work within the geographic boundaries of the City.

Under the Ordinance, an “employer” is “any person, as defined in Section 18 of the California Labor Code, including a corporate officer or executive, who directly or indirectly or through an agent or any other person, including through the services of a temporary service or staffing agency or similar entity, employs or exercises control over the wages, hours or working conditions of the Employee.” This potentially may make corporate officers and executives individually responsible for providing sick leave.

The Ordinance does not provide any exemption for workers subject to a collective bargaining agreement.

How much sick leave is required and can employers limit the amount used?

Employees will be entitled to take up to 48 hours of sick leave in each year of employment, calendar year, or 12-month period. Like the California state law, employers may choose to provide the entire 48 hours of paid sick leave up front (“grant method”) in each year of employment, calendar year, or 12-month period, or employers may use an accrual method such that sick leave accrues at the rate of one hour for every 30 hours worked. Accrued paid sick leave must carry over to the following year of employment, but may be capped at 72 hours.

Employers who provide an amount of paid leave or paid time off, or provide payment for compensated time off, that is equal to or no less than 48 hours are not required to provide additional time.

When do employees begin to accrue paid sick leave?

Employees accrue paid sick leave on the first day of employment or July 1, 2016, whichever is later.

When can employees start using paid sick leave?

Employees may use paid sick leave beginning on the 90th day of employment or July 1, 2016, whichever is later.

For what reasons can an employee use paid sick leave?

Employees may use paid sick leave for their own medical care and for the medical care of certain covered family members for the same reasons paid sick leave must be provided under state law, i.e., for preventive care or diagnosis, care, or treatment of an existing health condition, or for certain purposes as a victim of domestic violence, sexual assault, or stalking.

In addition to allowing paid sick leave to be used for the care of family members defined under state law, the Ordinance also allows for use of paid sick leave for “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”

Can employers set restrictions on the use of paid sick leave?

Employers must provide paid sick leave upon the oral or written request of an employee. Employers may require an employee to provide reasonable documentation of an absence from work for which paid sick leave is or will be used. The state paid sick leave law is silent regarding whether an employer can require documentation regarding absences.

Do employers have to pay out unused, accrued paid leave upon termination?

Employers are not required to pay out earned sick leave upon termination of employment if the earned sick leave is separate and distinct from a paid time off or vacation plan. However, if an employee is rehired within a year from the date of separation, previously used and unused paid sick time must be reinstated.

What are the posting and notice requirements?

Every employer shall post at the workplace or job site the notice published each year by the City informing employees of the current City minimum wage rates, sick time benefits and of their rights under the Ordinance. The notice must be posted in any language which is spoken by at least 5% of the employees at the workplace or job site.

Every employer also must provide at the time this Ordinance becomes effective or at the time of hire, whichever is later, the Employer’s name, address, and telephone number in writing.

Implementation and Enforcement

The Office of Wage Standards of the Bureau of Contract Administration (designated the “DAA”) may issue guidelines and rules to implement the law. If the DAA determines that the employer’s established policy is more generous overall, the DAA may allow an employer’s established paid leave or paid time off policy or one which provides payment for compensated time off to remain in place and deemed in compliance with the Ordinance even though it does not meet all of the requirements of the Ordinance.

The Office of Wage Standards of the Bureau of Contract Administration within the Department of Public Works shall be responsible for enforcement of the Ordinance.

Employees may not waive their rights under the Ordinance.

Retaliation

Employers are prohibited from retaliating against employees for requesting or using paid sick leave. Retaliation may include discharge, reduction in compensation, or other forms of discrimination.

***

Employers with operations in the City of Los Angeles should carefully review the Ordinance, their minimum wage rates, as well as policies and practices related to paid sick leave.

Employers should regularly review their policies and practices with employment counsel to ensure they effectively address specific organizational needs and comply with all applicable laws. Please contact Jackson Lewis with any legal questions about the Ordinance.

Employee Who Failed to Provide Additional Doctor Notes to Support New Restrictions May Still Survive Summary Judgment

Last week, in Thomsen v. Georgia-Pacific Corrugated, LLC, a federal district court in California held that an employer might have violated its obligations under California’s Fair Employment and Housing Act (“FEHA”) when it simply told an employee to return to his doctor to obtain a note outlining additional work restrictions.   The Court held that a reasonable jury could find that the employer was obligated to do more than tell the Plaintiff to go back to his physician and get a new doctor’s note, especially because evidence suggested it would have been possible to respond to some of Plaintiff’s concerns without a new doctor’s note.

The Facts

Plaintiff worked as a cut-and-die operator at a corrugated container plant. In May 2012, Plaintiff injured his shoulder at work, went on workers’ compensation leave, and returned to work eight months later after undergoing surgery on his left shoulder. Read More

High Heat Alert in California

On June 1, 2016, The California Occupational Safety and Health Division issued a “High Heat Advisory,” warning employers to protect their outdoor workers from heat illness as temperatures hit extreme highs this week — well over 100 degrees in many locations. This Advisory provides a timely reminder of California’s Heat Illness Prevention (“HIP”) regulation, adopted last year, which set specific requirements for potable water, shade, cool-down periods, high-heat procedures, emergency preparedness, and acclimatization, training, and heat illness prevention plans. Here’s a summary of the HIP regulation’s key requirements:

Potable Water Requirements

Employers must provide employees with access to potable drinking water that is fresh, pure, suitably cool, and provided free of charge to employees and should be located as close as practicable to the areas where employees are working, unless the employer can demonstrate infeasibility.  The employer must provide each employee with a minimum of one quart of water per hour for the entire shift. Read More

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