Existing law requires an employer to provide an employee with a meal period during a work period of more than five hours per day, except as prescribed. However, on March 23, 2023, Governor Newsom signed Senate Bill (SB) 41, which provides that California’s meal and rest period requirements do not apply to airline cabin crew employees if they are covered by a valid collective bargaining agreement under the Railway Labor Act.

Under the new law, state meal and rest period requirements shall not apply to airline cabin crew employees if the employees meet the following:

  • The employee is covered by a valid collective bargaining agreement under the Railway Labor Act and that agreement contains any provision addressing meal and rest periods for airline cabin crew employees.
  • The employee is part of a craft or class of employees that is represented by a labor organization pursuant to the Railway Labor Act (but is not yet covered by a valid collective bargaining agreement)

The second requirement shall apply for the first 12 months that the craft or class of employees is represented by a labor organization and may apply for longer than the first 12 months only if agreed upon in writing by the employer and the labor organization representing the employee’s craft or class.

The legislation is an urgency statute and states that it is effective immediately.

If you are in the airline industry and covered by a collective bargaining agreement, then it is imperative that you understand the application of SB41 to your business, as it pertains to meal and rest breaks.

Jackson Lewis will continue to track legislation that affects employers doing business in California. If you have questions about SB 41 or related issues, contact a Jackson Lewis attorney to discuss.

The COVID-19 State of Emergency for California ended on February 28, 2023. In its wake, the California Department of Public Health (CDPH) has announced impending updates to its remaining COVID-19 mandates, including those applicable to healthcare workers.

On March 3, 2023, the CDPH announced it would end vaccination requirements for healthcare workers, including those in direct care, adult care, correctional facilities, and detention centers effective April 3, 2023.

In addition to lifting the vaccination mandate, the CDPH will also remove masking requirements for high-risk settings effective April 3, 2023. Masks will no longer be required in health care, long-term care, and correctional facilities as well as homeless, emergency, and warming and cooling centers.

The CDPH indicated that the month between the announcement and the April 3rd effective date is intended to provide health departments and healthcare facilities with time to develop plans customized to their needs and local conditions.

In addition to these healthcare-related orders, the CDPH updated its Isolation and Quarantine Guidance to remove the recommendation that individuals test for COVID-19 in order to leave isolation before Day 10 under certain circumstances. Effective March 13, 2023, a COVID-19-positive person may end isolation after five days if they feel well, have improving symptoms, and are fever-free for 24 hours. The Guidance also amends masking requirements for individuals leaving isolation sooner than Day 10.

If you have questions about the changes in COVID-19 mandates or related issues, contact a Jackson Lewis attorney to discuss.

In November 2022, the City of Los Angeles passed the Retail Fair Workweek Ordinance. The ordinance is set to take effect on April 1, 2023. The ordinance sets forth requirements for retail businesses in handling scheduling and providing work schedules to employees. Covered employees are anyone working in the City of Los Angeles for at least two hours per week for a covered employer and entitled to minimum wage as provided under California labor code and wage orders unless the worker is a bona fide independent contractor.

In advance of the effective date, the City of Los Angeles Office of Wage Standards has published Frequently Asked Questions (FAQs) to assist with compliance with the ordinance.

Here are items to take note of from the FAQs:

Who is a Covered Employer?

Under the ordinance, a covered employer is a business that identifies as a retail business in the North American Industry Classification System (NAICS), has at least 300 employees globally, and exercises control over the wages, hours, or working conditions of any employee. The FAQs clarify that a retail business is any business whose principal NAICS code is within the retail trade categories and subcategories 44 through 45. If a business has more than one unique line of business, the FAQs indicate the Office of Wage Standards will consider the NAICS code that corresponds with the business’s principal business activity e.g., the activity the business derives the largest percentage of its total receipts.

What information is required for a good faith estimate?

Covered employers are required to provide new hires and current employees with good faith estimates of the employee’s work schedule. Pursuant to the FAQs such estimates should include:

  • The estimated number of hours that the employee will be expected to work each week and a notice of rights under the ordinance before hire.
  • The days of the week the employee can expect to work, or the days of the week the employee will not be expected to work.
  • The times or shifts the employee can expect to work, including start and end times, at least 14 days in advance.
  • The locations where the employee is expected to work.
  • Whether the employee can expect to work any on-call shifts.
  • A written good faith estimate of future schedules within 10 days of an employee’s request.

For shifts not separated by 10 hours, does premium pay apply to all hours or only those not separated by at least 10 hours?

Under the ordinance, an employer shall not schedule an employee to work a shift that starts less than 10 hours from the employee’s last shift without written consent. Covered employers shall pay an employee a premium of time and a half for each shift not separated by at least 10 hours.

If an employee agrees in writing to work shifts not separated by at least 10 hours, the employer must compensate the employee with premium pay for all hours in the second shift.

If an overtime premium is paid for a shift, then is Predictability Pay due?

Under the ordinance, employers shall provide predictability pay when a covered employee has agreed to a change in their work schedule after the advance notice requirements under the ordinance.

The employee is entitled to one additional hour of pay at their regular rate for each change to a scheduled date, time, or location that does not result in a loss of time to the employee or does not result in additional work time that exceeds 15 minutes. An employee is entitled to one-half of the employee’s regular rate of pay for the time the employee does not work if the employer reduced the employee’s work time listed by at least 15 minutes.

However, for any hours that the employer pays an overtime premium under California Labor Code section 510, the employer does not need to provide predictability pay.

The Office of Wage Standards will also publish rules and regulations and a required posting for the ordinance.

If you have questions about the Los Angeles Retail Fair Workweek Ordinance or related issues, contact a Jackson Lewis attorney to discuss.

Three years ago, California voters approved Proposition 22, the “Protect App-Based Drivers and Services Act,” which allowed app-based rideshare and delivery companies to hire drivers as independent contractors if certain conditions were met. This week the California Court of Appeal mostly upheld the Proposition as constitutional.

Proposition 22 went into effect in 2021 and was quickly challenged in California state court by various groups seeking a declaration that it violated California’s Constitution. The trial court ruled that Proposition 22 was invalid in its entirety for several reasons including that the legislation intruded on the legislature’s authority to create worker’s compensation laws, limited the Legislature’s authority to amend the legislation, and because it violated the single subject rule for initiative statutes. The single-subject rule requires voter initiatives such as Proposition 22 to only cover one subject.

Proponents of Proposition 22 and the State of California appealed.

The Court of Appeal held that the Proposition did not intrude on the legislature’s authority pertaining to workers’ compensation or violate the single-subject rule. The Court did hold that the Proposition’s definition of an amendment violated the separation of powers principle in the State Constitution. However, the Court found that the unconstitutional provision could be severed from the rest of the Proposition such that Proposition 22 would still apply to covered entities. Based on the majority’s decision Proposition 22 remains in effect for those who qualify under the law, with the exception of the amendment provision deemed invalid. The law has been in effect pending appeal. The case may be appealed to the California Supreme Court.

If you have questions about Proposition 22, or related issues contact a Jackson Lewis attorney to discuss.

On February 19, 2023, San Francisco’s Private Sector Military Leave Pay Protection Act took effect.  The ordinance requires covered employers to provide supplemental pay to an employee while on leave for military duty for up to 30 days in a calendar year.

San Francisco’s Office of Labor Standards Enforcement has issued Implementation Guidance to assist employers with compliance. The guidance provides answers to frequently asked questions (FAQ) regarding the ordinances, such as which employers are covered by the ordinance, which employees are covered, and how to calculate supplemental pay. The FAQ notes the following important points:

Covered Employers

The ordinance covers employers with 100 or more employees worldwide.  The ordinance is not limited to employers that have 100 or more employees who live or work in San Francisco.  Where the employee count fluctuates above or below 100 over the course of the year, the employer should use the average number of employees per pay period during the preceding calendar year.  Moreover, owners who perform work for compensation for the business are also counted for purposes of determining the employee threshold.

Notably, the City and County of San Francisco and all other governmental entities are not covered employers.

Covered Employees

Only employees who work within the geographic boundaries of San Francisco and who are members of the reserve corps of the United States Armed Forces, National Guard, or other United States uniformed service organizations are covered by the ordinance.  The ordinance does not cover employees who work at San Francisco International Airport or who work within federal enclaves such as the Presidio, Fort Mason, and Golden Gate National Recreation Area.

Calculating Supplemental Compensation

Under the ordinance, for up to 30 calendar days in a calendar year, a covered employer must pay a covered employee supplemental compensation, which is the difference between the employee’s gross military pay and the amount of gross pay the employee would have received from the employer had the employee worked their regular work schedule. The employee should not receive more compensation than they would have received had they worked their regular work schedule.

“Gross military pay” includes the basic pay rate which can be assessed for the federal Armed Forces at www.dfas.mil. That website lists the current basic pay rates according to the employee’s rank. Gross military pay does not include any military pay allowances, such as combat, clothing, housing, or aviation.

The employee’s gross pay includes their wages for hours they would have worked and includes overtime if the employee was regularly scheduled for overtime hours. In addition, the employer is required to continue paying all benefits, including health care, retirement, and profit-sharing as if the employee had worked their regular schedule.

If an employee does not have a regular or predetermined work schedule at the time they are required to take military leave, the employer should determine the employee’s regular work schedule based upon the employee’s monthly, bi-weekly, semi-monthly or weekly pay periods immediately preceding the employee’s military leave as follows:

  • Three monthly pay periods;
  • Six bi-weekly or semi-monthly pay periods; or
  • Twelve weekly pay periods.

In calculating supplemental pay, employers should not include periods in which an employee was on unpaid or partially paid leave prior to taking military leave.

The Implementation Guidance covers many other important topics.  If you have questions regarding the guidance or the San Francisco Military Leave Pay Protection Act, contact a Jackson Lewis attorney to discuss.

On March 3, 2023, the Cal/OSHA Standards Board published notice of proposed revised regulations pertaining to workplace exposure to lead for the general industry and construction safety orders.

In its Initial Statement of Reasons for the revisions, the Board indicates that the existing requirements are based on lead toxicity information and medical and epidemiological data that is now more than 40 years old and that more recent evidence demonstrates that low levels of lead exposure may have harmful health effects.

The proposed amendments to the regulations are designed to mitigate these harmful health issues from lower levels of exposure by maintaining employees’ blood lead levels below 10 µg/dl (micrograms per deciliter), whereas existing regulations were designed to maintain employees’ blood lead levels below 40 µg/dl, a level four times higher.

To achieve this reduction in exposure the revisions would:

  • Reduce exposure to airborne lead
  • Reduce exposure to lead through the oral route of exposures, and
  • Expand requirements of blood lead testing of employees who work with lead, independent of measure levels of airborne lead.

The revisions lower the action levels under a time-weighted average for when protective measures are triggered. It also lowered the blood lead level requirement for when employees must be offered medical examinations and consultations at least annually. The revisions also lower the criteria for the temporary removal of an employee from work with lead due to elevated blood lead levels.

The Standards Board anticipates the revisions will reduce the number of employees exposed to harmful amounts of lead.

The 45-day public comment period will remain open until April 20, 2023. On April 20, Cal/OSHA will hold a public hearing on the revisions.

Interested stakeholders, such as employers in the construction industry, may submit written comments.

If you have questions about the proposed changes to Cal/OSHA lead exposure regulations 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.

In May 2022, the California Supreme Court issued its decision in Naranjo v. Spectrum Security Systems, which considered the issue of whether failing to pay premium wages for meal and rest period violations gave rise to claims for waiting time penalties or violations of wage statement requirements.

The underlying action was a class action brought by former and current employees of Spectrum Security for meal period violations. The class sought waiting time penalties and penalties for failure to provide accurate wage statements.

The California Supreme Court remanded the matter to the California Court of Appeals to consider two issues:

  1. Whether the trial court erred in finding Spectrum Security had not acted “willfully” in failing to timely pay employees premium pay, which barred recovery of waiting time penalties.
  2. Whether Spectrum Security’s failure to report missed-break premium pay on wage statements was “knowing and intentional” to allow recovery of penalties for failure to provide accurate wage statements.

The Court of Appeal concluded as to the first question that the substantial evidence supported the trial court’s finding that Spectrum Security presented defenses at trial in good faith for its failure to pay meal premium to departing employees and therefore its failure was not “willful” to entitle employees to waiting time penalties.

As to the second question the Court of Appeal held that because Spectrum Security had a good faith belief that it was in compliance with wage statement requirements, the trial court was precluded from finding the violation was “knowing and intentional” and awarding penalties.

While the outcome was good for Spectrum Security, the path to the decision was extremely fact specific based on the defenses presented by Spectrum Security at separate phases of trial, including that the class members were not covered by California labor law because they worked on federal enclaves and/or performed federal functions.

Helpfully in the decision, the Court of Appeal reiterated that the regulations interpreting the California statute for waiting time penalties do not conflict with the statute but act to define terms not defined in the statute. The regulations specifically state that a “good faith dispute” that any wages are due occurs when an employer presents a defense, based on law or fact which if successful, would preclude any recovery on the part of the employee.

Moreover, the Court of Appeal interpreted the knowing and intentional language when it comes to penalties as being willful based on similar language in other statutes that willful is intentional and rejected some federal district court interpretations to the contrary.

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

This year, employers in California have updated pay data reports to submit to the state’s Civil Rights Department (CRD).  Senate Bill (SB) 1162, passed in 2022, updated previous employee pay data reporting obligations and created an entirely new obligation to pay data reporting related to “employees hired through labor contractors.”  This year, these pay data reports are due by May 10th.

In January, the state issued Frequently Asked Questions to assist employers to navigate these new requirements—in particular regarding the requirement to submit pay data reports on “labor contractor employees.”

California’s initial guidance was that “labor contractor employees” included only workers

  1. “on a labor contractor’s payroll,”
  2. “for whom labor contractor is required to withhold federal social security taxes from that individual’s wages,” and
  3. “who performs labor for a client employer within the client employer’s usual course of business.” 

Because the phrase “who performs labor of a client employer within the client employer’s usual course of business” was not defined, many employers and commentators reasonably interpreted the reporting to be limited to workers who are involved with the actual functioning or immediate support of the employer’s business. 

This interpretation includes, for example, administrative augmentation, information technology support, call center workers, and contract labor performing the same work as the company’s employees.  But it would exclude ancillary workers, such as overnight custodial staff, parking attendants, and groundskeepers from “labor contractor employee” pay data reporting.

However, the California Civil Rights Department (CRD) updated its Frequently Asked Questions Page on February 22, 2023.  One of CRD’s new FAQs clarifies that the CRD believes “the client employer’s usual course of business” is far broader than most understood. 

What is “labor . . . within the client employer’s usual course of business,” such that workers performing that labor are “labor contractor employees” who must be reported on?

A “labor contractor” is an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business. Gov. Code. § 12999(k)(2).

A client employer’s “usual course of business” means the regular and customary work of the client employer. “Regular and customary work” means work that is performed on a regular or routine basis that is either part of the client employer’s customary business or necessary for its preservation or maintenance. “Regular and customary work” does not include isolated or one-time tasks.

Example: Farmworkers contracted seasonally to pick fruit for a client employer’s farm would be performing work within the client employer’s usual course of business because the work is performed on a routine basis and is part of the client employer’s customary business.

Example: Janitorial staff performing nightly cleaning and general maintenance of a client employer’s premises would be performing work within the employer’s usual course of business because the work is performed on a regular basis and is necessary for the maintenance of the client employer’s customary business.

Example: Catering staff contracted to serve food at a trucking company’s tenth anniversary party would not be performing work within the client employer’s usual course of business, assuming catering a party is an isolated occurrence for the company.

Example: Accountants hired to perform an external audit of a fitness company’s financial statements would not be performing work within the client employer’s usual course of business, assuming financial auditing is an isolated occurrence for the company.

An individual performing work within the client employer’s usual course of business is a labor contractor employee if that individual is on a labor contractor’s payroll and the labor contractor is required to withhold federal social security taxes from that individual’s wages. For more information, see the FAQs “Which employers are required to submit Labor Contractor Employee Reports to CRD?” and “For Labor Contractor Employee Reports, what is the ‘Snapshot Period?’”

This new guidance shifts the focus away from the substance of the worker’s contribution to the client employer’s business.  Instead, the critical question becomes whether the function is (a) “performed on a regular or routine basis” and (b) “either part of the client employer’s customary business or necessary for its preservation or maintenance.”  Moreover, the examples make clear that CRD intends workers like custodial staff should be included in the annual labor contractor pay data report. 

This new FAQ will require employers to revisit their pay data reporting plans.  Under this new guidance, far more “workers” may be “labor contractors” who must be included in the reporting.

Jackson Lewis attorneys will continue to monitor California’s pay data reporting and other pay equity issues. If you have questions about compliance with California’s pay data reporting contact a Jackson Lewis attorney to discuss.

It is well-known that California law is often more strict than federal law. Just as California handles overtime differently than the federal Fair Labor Standards Act (FLSA), California law also treats aspects of overtime exemptions differently than the FLSA. One such difference is the Outside Salesperson exemption.

Under the FLSA, an outside sales employee is exempt if they meet the following test:

  • The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
  • The employee must be customarily and regularly engaged away from the employer’s place or places of business.

California’s requirements for outside salespersons are different. Under the California Labor Code and  California Wage Orders, an outside salesperson is defined as follows:

  • Any person, 18 years of age or over;
  • Who customarily and regularly works more than half (more than 50 percent) the working time away from the employer’s place of business
  • Selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities.

Essentially, unlike the FLSA’s qualitative standard, California law sets a quantitative standard. Stated differently, under California law, the amount of time a salesperson spends doing various tasks, and where the activity takes place, must be considered when assessing the employee’s exemption status.

If you have questions about the outside salesperson exemption or related issues, contact a Jackson Lewis attorney to discuss.

While the State of California and several cities across the state increased their minimum wages on January 1, 2023, some cities—including the City of Los Angeles—will increase their minimum wage in July 2023.

On February 1, 2023, the City of Los Angeles Office of Wage Standards announced the coming increase for July 1, 2023. Based upon the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPA-W) for the Los Angeles metropolitan area, the minimum wage for the City of Los Angeles will increase by $0.74 for a new minimum wage rate of $16.78 per hour.

The City of Los Angeles’ minimum wage ordinance applies to employees who in any particular week perform at least two hours of work within the geographic boundaries of Los Angeles for their employer and are entitled to payment of minimum wage under California law.

The Office of Wage Standards has also published the required posting on their website: https://wagesla.lacity.org/

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 complying with state or local minimum wage laws, contact a Jackson Lewis attorney to discuss.