In Grande v. Eisenhower Medical Center, FlexCare, LLC (“FlexCare”), a temporary staffing agency, assigned Plaintiff to work as a nurse at Eisenhower Medical Center (“Eisenhower”). The plaintiff alleged that during her employment at Eisenhower, FlexCare and Eisenhower failed to ensure she received the required meal and rest periods, wages for certain periods she worked, and overtime wages. She then filed a class-action lawsuit on behalf of FlexCare employees assigned to hospitals throughout California. Plaintiff’s claims were based solely on her work on assignment to Eisenhower.

FlexCare settled with the class and the plaintiff executed a release of claims. The trial court entered a judgment incorporating the settlement agreement. Eisenhower was not named as a released party in the settlement.

A year later, Plaintiff brought a second class-action suit against Eisenhower. FlexCare intervened in the action asserting Plaintiff could not bring the separate lawsuit against Eisenhower because she had settled her claims in the prior class action.

The trial court held a limited trial on the issue of the propriety of the lawsuit and ruled that Eisenhower was not a released party under the settlement agreement.

Accordingly, Eisenhower could not avail itself of the doctrine of res judicata or claim preclusion because the hospital was neither a party to the prior litigation nor in privity with FlexCare. The Court of Appeals agreed with the trial court.

The issue before the California Supreme Court limited its review only to the question, “may a class of workers bring a wage and hour class action against a staffing agency, settle that lawsuit with a stipulated judgment that releases all of the staffing agency’s agents, and then bring a second class action premised on the same alleged wage and hour violations against the staffing agency’s client?”

The Court found that the central issue in the dispute was privity, stating that judgments bind not only parties but also those persons in privity with the parties. The Court stated for the affirmative defense of claim preclusion to be successfully asserted an entity must be a party to the prior action or in privity to a party. While Eisenhower argued it was in privity to FlexCare, the Court stated privity “requires the sharing of an identity or community of interest, with adequate representation of that interest in the first suit, and circumstances such that the nonparty should reasonably have expected to be bound by the first suit.” The Court found that there was no such privity between Eisenhower and FlexCare because they had different legal interests.

The California Supreme Court also held that claim preclusion could not be based on a claimed indemnification or agency relationship between litigants.

The decision means that companies will need to take additional care in determining the “released parties” to include in a settlement release of claims.

If you have questions about this decision or related issues, contact a Jackson Lewis attorney to discuss.

On June 29, 2022, the Los Angeles City Council approved a new minimum wage ordinance for certain healthcare workers at privately-owned healthcare facilities within the City of Los Angeles. The mayor is anticipated to sign the ordinance, which will become effective 30 days after his signature.

Minimum Wage

On the effective date of the ordinance, the minimum wage for covered employees will be $25 per hour.

On January 1, 2024, and annually thereafter, the minimum wage shall increase based on the annual cost of living, as measured by the Consumer Price Index for the Urban Wage Earners and Clerical Workers for the Los Angeles metropolitan area.

The ordinance expressly bars employers from funding the wage increase by laying off workers, reducing their hours, reducing their vacation, healthcare, or other non-wage benefits, or increasing charges they incur for parking or work-related materials and equipment.

Covered Facilities

The ordinance includes, but is not limited to, the following privately-owned healthcare facilities located within the City of Los Angeles:

  • General acute care hospitals;
  • Acute psychiatric hospitals;
  • Clinics that are part of general acute care hospitals and acute psychiatric hospitals;
  • Skilled nursing facilities that are part of general acute care hospitals and acute psychiatric hospitals;
  • Residential care facilities for the elderly that are located or licensed at the same address or located on the campus of an acute psychiatric hospital; and
  • Chronic dialysis clinics.

Covered Employers

The new minimum wage applies to employees of “covered facilities” who provide patient care, healthcare services, or services supporting the provision of healthcare, including clinicians, nurses, certified nursing assistants, aides, technicians, maintenance workers, janitorial or housekeeping staff, groundskeepers, guards, food service workers, laundry workers, pharmacists, nonmanagerial administrative workers, and business office clerical workers.

The ordinance does not apply to managers or supervisors, as well as employees whose primary work assignments are principally outside a covered facility, like delivery workers.

One-Year Waiver

If an employer can demonstrate by substantial evidence that compliance with the ordinance would raise substantial doubt about the employer’s ability to continue to operate the facility, a court of competent jurisdiction may grant a one-year waiver from the $25 per hour minimum wage requirement. Substantial evidence includes documentation of the employer’s financial condition, as well as the condition of any parent or affiliated entity, and evidence of the actual and potential direct financial impact of compliance with the ordinance. The one-year waiver does not exempt the employer from complying with all other federal, state, or local laws and regulations, including any other applicable minimum wage requirements.

If you have questions about the Los Angeles healthcare minimum wage ordinance or related issues, contact a Jackson Lewis attorney to discuss.

On June 28, 2022, the Los Angeles City Council passed an ordinance designed to increase safety protections for hotel workers in hotels, to limit their daily workload, and to raise their wages. Mayor Eric Garcetti is anticipated to sign the ordinance, which would then take effect 30 days later.

Called the “Hotel Worker Protection Ordinance,” or HWPO, the new law is similar to an ordinance passed last year by the City of West Hollywood.

The following are some of the primary requirements under the HWPO:

Personal Security Devices

Under the HWPO, hotel employers within the City of Los Angeles must provide employees with personal security devices, commonly referred to as “panic buttons,” when assigned to work in a guest room or restroom facility where other workers are not assigned to be present. Hotel employers must provide annual training on using the devices.

Hotel employers shall at all times have a designated and assigned security guard who can receive alerts from the device and can provide on-scene assistance. Hotels with fewer than 60 guest rooms may train a hotel supervisor or manager to fulfill this function in lieu of a security guard.

The HWPO also provides certain rights to hotel employees who report violent or threatening conduct by hotel guests, including reasonable accommodation and paid time off to report such incidents to law enforcement.

Workload and Hours Limitations

HWPO puts limitations on the amount of square footage that hotel employees can be required to clean on a particular workday without triggering wage premiums. The amounts vary based on the size of the hotel and whether any of the space consists of “special-attention” rooms.  Hotel employers also must maintain records, in addition to standardly-required records for all California employers, such as the square footage of all rooms cleaned on a daily basis, for at least three years.

Under HWPO, hotel employers may not require workers to work more than 10 hours in a workday unless the worker consents in writing to do so.

Notice

Hotel employers in the City shall provide written notice of the rights outlined in the ordinance to employees at the time of hire or within 30 days of the effective date.

If you have questions about the Los Angeles Hotel Worker Protection Ordinance or related issues, you may contact the author of this article or the Jackson Lewis attorney with whom you regularly work.

 

On June 17, 2022, Governor Newsom issued an executive order terminating certain provisions of prior executive orders related to Cal/OSHA’s COVID-19 Emergency Temporary Standards (ETS). Some of the terminated orders were no longer necessary due to changes in the ETS. For example, previously the Governor had issued an executive order stating exclusion periods could not be longer than California Department of Public Health (CDPH) guidelines or local ordinances. However, since the ETS now defers to CDPH guidance on isolation and quarantine, the Governor has rescinded his prior executive order on this issue. Moreover, Cal/OSHA has issued guidance for employers on COVID-19 Isolation and Quarantine that aligns with CDPH requirements.

The current version of the ETS remains in effect until the end of 2022. However, Cal/OSHA won’t be done with COVID-19 regulations in 2023. The agency is currently working on a permanent COVID-19 Standard. Recently, the draft of the proposed regulation was released.

The draft regulation carries over many of the employer obligations from the current ETS. The following are some of the proposed requirements:

  • COVID-19 procedures, either included in their Injury and Illness Prevention Program (IIPP) or a separate document.
  • Exclusion and prevention requirements for positive employees and close contacts.
  • Employers would continue to be required to provide testing to employees who have a close contact in the workplace.
  • Employers would continue to have notice requirements for COVID-19 exposure.
  • Employers would continue to have to provide face coverings to employees.
  • Employers would continue to have reporting and recordkeeping requirements for COVID-19 cases and outbreaks in the workplace.

Currently, no public hearing has been set for the proposed permanent COVID-19 Standard, so it is uncertain how soon the regulations may be implemented.

If you have questions about the Cal/OSHA emergency temporary standards or related workplace safety issues, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.

Under California Labor Code 2802, employers are required to reimburse employees for necessary expenses incurred in executing their job duties for their employer. This reimbursement requirement may apply to the use of the employee’s personal vehicle for work purposes, such as driving between work sites. An employee’s regular commute does not typically require reimbursement, just as commute time generally is not deemed hours worked.

When determining how to reimburse an employee for use of their personal vehicle, employers may select between different methods for reimbursement including actual expense, mileage reimbursement, or a stipend method.

The California Labor Commissioner has opined that the use of the Internal Revenue Service (IRS) mileage allowance will satisfy the expenses incurred in the use of an employee’s car for work purposes, in the absence of evidence to the contrary.

Usually, the IRS announces any changes to the mileage allowance rate in the fall in connection with increases to take place at the beginning of the year. However, in response to increases in fuel prices, the IRS recently announced on June 9, 2022, that it would increase the business travel rate to 62.5 cents per mile, effective July 1, 2022. This is a special adjustment for the final six months of 2022.  Employers who reimburse using the mileage reimbursement method should consider increasing their reimbursement rate accordingly.

If you have questions related to mileage reimbursement or related issues, contact a Jackson Lewis attorney to discuss.

The City of Los Angeles, like many other major cities in the state of California, has several local employment law ordinances in effect.  Employers should also be aware that the County of Los Angeles has some separate local ordinances that apply only to unincorporated areas of the county and do not apply to the City of Los Angeles.

Here is an overview of some of the ordinances which apply to employers with employees working within the City of Los Angeles.

Minimum Wage

Los Angeles is one of the many cities in the state with its own citywide minimum wage ordinance. As with many of the local minimum wage ordinances, Los Angeles’s minimum wage is expected to increase on July 1, 2022.

Starting July 1, 2022, the City of Los Angeles’s minimum wage for employers of all sizes will be $16.04.

Hotel Worker Minimum Wage & Leave

The City of Los Angeles also has a separate minimum wage ordinance for hotel employers with 150 or more guest rooms within the city. Starting July 1, 2022, that minimum wage will be $18.17.

The minimum wage ordinance for hotel employers with 150 or more guest rooms also includes requirements for compensated and uncompensated time off. This is similar to the ordinance recently passed in West Hollywood. Under the ordinance, covered full-time employees are entitled to 96, compensated hours, off per year for sick leave, vacation, or personal necessity. Covered full-time employees are entitled to 80 additional, uncompensated hours, off per year to use for sick leave.

Paid Sick Leave

The City of Los Angeles also has its own paid sick leave requirements separate from the statewide paid sick leave statute. Los Angeles’s citywide paid sick leave requirements are as follows:

Front-Loading At least 48 hours provided either at the beginning of each year of employment, calendar year, or 12-month period; OR –
Accrual One (1) hour of paid sick leave for every thirty (30) hours worked.
72-Hour Cap Accrued, unused paid sick leave shall carry over to the following year of employment and may be capped at a minimum of 72 hours; however, an employer may choose no cap or a higher cap.
Separation from Employment An employer is not required to provide compensation to an employee for accrued or unused sick days at separation from employment.
Reinstatement If an employee is re-hired within one (1) year of separation from employment, previously accrued and unused paid sick leave shall be reinstated.
When to Use An employee may use paid sick leave beginning the 90th day of employment.
Reason for Leave Employees may take time off for themselves or to care for a family member.
Cap on Annual Time The use of paid sick leave may be limited to 48 hours of leave, annually.

 

Fair Chance Initiative

The City of Los Angeles has a “ban the box” ordinance similar to the statewide Fair Chance Act.

The ordinance applies to employers with at least 10 employees in the City of Los Angeles, with certain exceptions such as employers who are required by law to obtain information regarding a conviction of an applicant.

Under Los Angeles’s ordinance, covered employers must inform applicants that qualified individuals with criminal histories will be considered. Moreover, employers may not inquire into an applicant’s criminal history after a conditional offer of employment has been made.

Los Angeles has additional information on its “ban the box” ordinance available on its Bureau of Contract Administration website.

If you need assistance with compliance with Los Angeles employment ordinances or related issues, contact a Jackson Lewis attorney to discuss.

In a recent decision by the Ninth Circuit, the Court of Appeals upheld the district court ruling in favor of grocery chain WinCo Holdings, Inc., holding that plaintiffs who were not yet employees when they took drug tests were not entitled to compensation for the time spent being tested.

In Johnson v. WinCo Foods Holdings, Inc, et al. (WinCo), a class of applicants who successfully received job offers and subsequently were hired as employees of WinCo brought claims alleging, they should have received compensation as an employee for the time and expense of taking a pre-employment drug test. Under WinCo’s procedures at the time, a hiring manager would call successful applicants to extend a job offer contingent on the completion of a background check and drug test. WinCo paid for the testing fee but did not compensate for travel expenses or the time required to undergo the testing.

The district court ruled that class members were not employees of WinCo when they underwent drug testing and therefore were not entitled to compensation. The Ninth Circuit upheld the lower court decision, noting the absence of any California state court case on this issue. The Ninth Circuit considered the “control test” standard under California law for the determination of whether an individual is an employee. While WinCo prescribed the time and date of the tests and where the test was performed, the drug test was part of the application process, and the test result did not control any aspect of job performance.

The Ninth Circuit also determined that the job offer was contingent on the drug test being completed (and a background check) and therefore there was no contract of employment to support the plaintiffs’ claim they were contracted to be employees at the time they were drug tested. The Ninth Circuit highlighted that WinCo went to great lengths when the verbal offer was made to expressly communicate that its job offer was conditional on passing the drug test.

Although the Ninth Circuit commonly asks the California Supreme Court to decide on new issues of California law, the Ninth Circuit stated that, in this case, “[t]he law is clear. There is no need to delay resolution of this case and others that may be pending in the federal district courts by certifying any questions to the California Supreme Court.”

As a note of caution, this case only addresses pre-employment drug testing and does not discuss drug testing for current employees.

If you have questions about pre-employment drug testing for employees or related issues, contact a Jackson Lewis attorney to discuss.

It may come as a surprise to some, but Cal/OSHA’s workplace violence regulations currently apply only to the Health Care Industry. Cal/OSHA plans to change that.

Right now, for non-healthcare industries, Cal/OSHA regulates workplace violence using the employer’s obligation to regularly identify and evaluate workplace hazards under Section 3203, California’s version of the general duty clause.

Cal/OSHA recently released a revised draft regulation for workplace violence prevention to apply to general industry, not just health care,  proposing a broad application of the standards with limited exceptions.

Under the draft regulations, employers would need to establish, implement, and maintain an effective Workplace Violence Prevention Program (WVPP), similar to the requirements for an Injury Illness Prevention Program (IIPP) or COVID-19 Prevention Program. Among other requirements, a WVPP would need to include procedures for responding to a workplace violence emergency. For the WVPP to be effective, the employer would need to provide training to employees on handling workplace violence.

Employers would also be required to record incidents of violence in a Violent Incident Log. Under the current draft regulations, employers who have not had an incident in the past five years would be exempt from keeping a log.

Cal/OSHA invited interested parties to submit written comments on the draft regulations by July 18, 2022. It is uncertain how quickly this rule-making process will proceed. A previous effort to adopt these regulations in 2018 seemingly stalled out.

In the meantime, according to Cal/OSHA, workplaces that identify factors for potential workplace violence should include the following in their IIPP:

  • A system for ensuring that employees comply with safe and healthy work practices, including ensuring that all employees, including supervisors and managers, comply with work practices designed to make the workplace more secure and do not engage in threats or physical actions which create a security hazard to other employees, supervisors or managers in the workplace.
  • A system for communicating with employees about workplace security hazards, including a means that employees can use to inform the employer of security hazards at the worksite without fear of reprisal.
  • Procedures for identifying workplace security hazards including scheduled periodic inspections to identify unsafe conditions and work practices whenever the employer is made aware of a new or a previously unrecognized hazard.
  • Procedures for investigating occupational injury or illness arising from a workplace assault or threat of assault.
  • Procedures for correcting unsafe conditions, work practices, and work procedures, including workplace security hazards, and with attention to procedures for protecting employees from physical retaliation for reporting threats.
  • Training and instruction about how to recognize workplace security hazards, measures to prevent workplace assaults, and what to do when an assault occurs, including emergency action and post-emergency procedures.

These policies and procedures should also be mirrored in employee policies to the extent necessary to ensure they are communicated to employees.

If you have questions about including workplace violence prevention information in your IIPP or employee handbook, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.

On January 1, 2022, California’s statewide minimum wage increased to $15.00 ($14.00 for employers with 25 employees or less).  A statewide minimum of $15.00 for all businesses was scheduled to go into effect on January 1, 2023.  However, as a result of rates of inflation of over 7%, a further statutory increase has been triggered and the statewide minimum wage will now increase to $15.50 on January 1, 2023.

California employers are also subject to several local minimum wage ordinances that are higher than the state minimum wage.  Many of these will increase this summer.

The following localities will raise their minimum wage on July 1, 2022:

Locality Current Minimum Wage New
Minimum Wage
Alameda $15.00 $15.75
Berkeley $16.32 $16.99
Emeryville $17.13 $17.68
Fremont $15.00 $16.00
Foster City State Requirement $15.75
Long Beach (hotels) $15.69 $16.73
Los Angeles (City) $15.00 $16.04
Los Angeles (County – unincorporated areas) $15.00 $15.96
Los Angeles (large hotels with ≥150 rooms) $17.64 $18.17
Malibu $14.25 $15.96
Milpitas $15.65 $16.40
Pasadena $15.00 $16.11
San Francisco $16.32 $16.99
Santa Monica $15.00 $15.96
West Hollywood (≥50 employees) $15.50 $16.50
West Hollywood (<50 employees) $15.50 $16.00
West Hollywood (hotels) $17.64 $18.35

 

Employers must also ensure their minimum wage postings are updated appropriately to reflect state and local increases.  The minimum salary basis for exempt employees is based on the state minimum wage and will not increase based on changes in local law.

To ensure your company has up-to-date minimum wage information, subscribe to Jackson Lewis’ Minimum Wage Watch, which provides alerts on changes in the minimum wage in California and around the country.

If you have questions about minimum wage compliance, contact a Jackson Lewis attorney to discuss.

The California Industrial Welfare Commission has 17 wage orders that apply to different employers based on their industry or occupation.  Although other than minimum wage, these wage orders have not been updated since 2001, they provide specific rules regarding a wide variety of employment compliance issues, such as overtime, expense reimbursements, uniforms, and suitable seating requirements.

The following provides a non-exhaustive list of key parts of the wage orders.

Minimum Wage

The minimum wage order applies to all employers.  As of January 1, 2022, employers with 25 or fewer employees must pay employees a minimum wage of $14.00 per hour and employers with 26 or more employees must pay employees a minimum wage of $15.00 per hour.

Classifications

All orders set forth which industry/occupation they apply. For example, Wage Order No. 1 applies to the manufacturing industry while Wage Order No. 6 applies to the laundry, linen supply, dry cleaning, and dyeing industry.  The Department of Industrial Relations has issued guidance to inform employers of which Wage Order applies to them.  Employers should also consult with their employment counsel regarding proper wage order classification.

Overtime and Exemptions

The wage orders generally set forth that eight hours constitutes a day’s worth of work.  Each wage order includes daily and weekly overtime provisions that lay out the rate of overtime pay for employees who work more than eight hours in a day or forty hours in a week. In some orders, this section also sets forth requirements for an employer to implement an alternative workweek schedule.

The wage orders also lay out those categories of employees “exempted” from overtime pay.  These categories are called exemptions and most wage orders contain at least three: the professional exemption, the executive exemption, and the administrative exemption.  Each exemption contains distinct factors a position must pass to be considered exempt, such as minimum salary requirements and whether the employee is able to regularly exercise their discretion and independent judgment as part of their job. Employees who fall into these exemptions are not subject to certain parts of the wage orders, including the minimum wage, overtime pay, and meal period and rest break requirements. It is important when reviewing an exemption to verify what parts of the order the exemption apply.

Meal and Rest Periods

The wage orders restate the requirements for meal periods set forth in Labor Code 512. The wage orders are the basis for rest period requirements for employees. Under several of the wage orders, employers are required to provide 10-minute paid rest periods per 4 hours or a major fraction thereof.

Miscellaneous Requirements

The wage orders also include other regulations with which employers are required to comply, including providing uniforms and tools in certain circumstances, providing suitable seating when the work “reasonably permits the use of seats,” and keeping the temperature of the workplace at a level that provides “reasonable comfort consistent with industry-wide standards.”

Posting Requirement

Under the wage orders, employers are required to keep a copy of applicable orders posted in an area frequented by employees where it may be easily read during the workday. Where the location of work makes posting impractical, every employer shall keep a copy of the order and make it available upon request. As such, employers who are not familiar with the wage orders may want to review applicable industry orders and ensure they are either posted or available as soon as possible.

If you have questions about California wage order compliance or related issues, contact the Jackson Lewis attorney with whom you regularly work.