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California Workplace Law Blog

San Francisco Bay Area Employers Must Provide Commuter Benefits by September 30th

Employers with at least 50 full-time employees in the San Francisco Bay Area must offer commuter benefits, such as payments for commuter transit passes made with employees’ pre-tax earnings, to any employee who works at least 20 hours per week no later than September 30, 2014.

Covered employers also must communicate commuter benefits information to employees, designate a commuter benefits coordinator, and register with the Bay Area Commuter Benefits Program (“CBP”). The CBP is a pilot program that will be effective until December 2016. The Bay Area Air Quality Management District (“Air District”) and the Metropolitan Transportation Commission (“MTC”) are authorized to adopt and implement the CBP.

Covered Employers

The CBP applies to all public, private, or nonprofit entities that employ at least 50 full-time employees per week in the San Francisco Bay Area Continue Reading

Sacramento Managing Shareholder Listed in Daily Journal’s ‘Top 75 Labor & Employment Lawyers’ in California

David Bradshaw, Office Managing Shareholder of Jackson Lewis’ Sacramento office, has been listed in Daily Journal‘s ‘Top 75 Labor & Employment Lawyers’ in California. Mr. Bradshaw, who specializes in class actions and complex litigation, is profiled in the July 16, 2014 publication, highlighting his work on Silva v. See’s Candy Shops Inc. along with an ongoing case involving the National Labor Relations Board and a major retailer.

Congratulations, David!

California Supreme Court Limits Application of Commission Overtime Exemption for Employer Subject to Wage Order 4 and 7

The California Supreme Court has narrowed application of the “commission exemption” from overtime, dealing employers a setback in Peabody v. Time Warner Cable, Inc., No. S204804 (Cal. Jul. 14, 2014). Under Wage Orders 4 and 7, sales employees who earn more than 50 percent of their wages in commission and earn at least 1.5 times the state minimum wage may be exempt from California overtime requirements. The California Supreme Court ruled that an employer may not attribute commission wages paid in one pay period to other pay periods to satisfy California’s compensation requirements of earning at least 1.5 times the state minimum each pay period. The Court stated:

In conclusion, we hold that an employer satisfies the minimum earnings prong of the commissioned employee exemption only in those pay periods in which it actually pays the required minimum earnings. An employer may not satisfy the prong by reassigning wages from a different pay period.

Employers are reminded that this decision affects only employers under Wage Orders 4 and 7 since the commission exemption is stated only in these two Wage Orders. Employers still need to verify that the sales employees meet an overtime exemption under federal law. Employers relying on the “commission” exemption should consult with their legal counsel and conduct a review of their payroll procedures.

CA Division of Workers’ Compensation Posts Updated Time of Hire Pamphlet in Spanish

The California Division of Workers’ Compensation posted a corrected Spanish language time of hire pamphlet on its website. The previously posted Spanish language version contained some outdated information. We recommend employers download the new pamphlet for their new hire packets.

Employers should ensure they provide all the upon hire pamphlets required by California. If you have any questions, please contact Jonathan Siegel.

CA Truck Drivers Entitled to Meal Periods and Rest Breaks

On July 9, 2014, a Ninth U.S. Circuit Court of Appeals ruled that California truck drivers are entitled to meal breaks and rest periods under California state law despite federal deregulation of the trucking industry. Prior to the Court of Appeals ruling in Dilts v. Penske Logistics, Inc. (July 9, 2014), several federal judges in California ruled that trucking companies were exempted from the requirement to provide mandatory breaks by the Federal Aviation Administration Authorization Act of 1994 which prohibits states from enforcing any statutes “related to a price, route or service of any motor carrier” that is transporting property.  The Dilts decision now sets those rulings aside by holding truck drivers are protected by state law.  The Court reasoned in its decision that “while motor carriers may have to take into account the [California] meal and rest break requirements when allocating resources and scheduling routes – just as they must take into account state wage laws, or speed limits and weight restrictions – the laws do not ‘bind’ motor carriers to specific prices, routes, or services.” Employers should monitor whether the case will be appealed.

Undocumented Worker Not Barred from Asserting Discrimination Claims

In Salas v. Sierra Chemical Co., No. S196568 (Cal. June 26, 2014), the California Supreme Court has ruled that federal immigration law did not preempt California law extending employee protections and remedies “regardless of immigration status,” except to the extent it authorized damages for any period after the employer’s discovery of an employee’s ineligibility to work in the United States.  An employee who repeatedly falsified his employment status to obtain employment, as his employer learned only after he was laid off a second time and filed suit, was not barred by the doctrines of “after-acquired evidence” or “unclean hands” from asserting claims for alleged disability discrimination against his employer under California law. However, the Court held the employee’s right to lost compensation was limited to the period preceding the employer’s discovery of the misconduct. As this case raises policy concerns regarding preemption under federal immigration law, it is possible U.S. Supreme Court review may be sought.

To read the full article on the Jackson Lewis website, please click here.

Arbitrator, Not Court, Decides Arbitration Agreement’s Enforceability, California Court Holds

A clause delegating to an arbitrator the authority to decide questions of an arbitration agreement’s enforceability was not unconscionable under California law, the California Court of Appeal has ruled. Malone v. Superior Court, No. B253891 (Cal. Ct. App. June 17, 2014). The Court affirmed an order enforcing the delegation clause and compelling arbitration. Significantly, the Court rejected, as preempted by the Federal Arbitration Act (“FAA”), California case law reasoning that such delegation clauses are unconscionable because arbitrators have a financial self-interest in finding an agreement arbitrable — so that they can be compensated for arbitrating the dispute on the merits and be considered for further arbitration assignments.

To read the full article on the Jackson Lewis website, please click here.

Recovery Periods, Like Rest Periods, are Compensable Time

New law SB 1360 has clarified that recovery periods, like rest periods, are paid time. This is a significant clarification of the law since there was an ambiguity in the past whether recovery periods were to be treated as paid time or unpaid time. Until now, the situation was unclear as recovery periods were mandated by California Occupational Safety and Health (Cal-OSHA) regulations, not the California Labor Code. Continue Reading

California Tide is Turning in Favor of Arbitration

In a decision that should not go unnoticed in the wake of the California Supreme Court’s ruling in Iskanian v. CLS Transp. Los Angeles, LLC which rejected prior limitations on class action waivers but held representative actions under California’s Private Attorneys General Act cannot be waived, the California Court of Appeal in Malone v. Superior Court (California Bank & Trust), Case No. B253891 (June 17, 2014) upheld an employer’s delegation clause requiring issues relating to the enforceability of an employer’s arbitration agreement to be sent to the arbitrator for resolution. While the U.S. Supreme Court continues to uphold arbitration provisions pursuant to the Federal Arbitration Act (FAA), California courts have been reluctant to follow the Supreme Court’s clear guidance. Malone suggests the California tide is beginning to turn in favor of arbitration. Continue Reading

California Supreme Court Okays Class Action Waivers and Overrules Gentry v. Superior Court, but Bans Waivers of Representative Actions Under the PAGA

Overruling Gentry v. Superior Court, 42 Cal. 4th 443 (2007) as preempted by the Federal Arbitration Act (“FAA”), the California Supreme Court upheld the validity of class action waivers in employment arbitration agreements. Iskanian v. CLS Transportation Los Angeles, LLC, No. S204032  (Cal. Jun. 23, 2014).  Declining to follow D.R. Horton, 357 NLRB No. 184 (Jan. 3, 2012), the Court also rejected that class action waivers are unlawful under the National Labor Relations Act (“NLRA”).  However, the Court further ruled that employers could not require waivers of representative actions under the California Private Attorney General Act (“PAGA”) as contrary to public policy and unwaivable as a matter of state law and were not preempted by the FAA.  Accordingly, the Court reversed the judgment of the Court of Appeal and remanded the case for further proceedings. Continue Reading