Federal District Judge Puts On Hold Parts of AB 450 Which Prohibited Employers From Voluntarily Consenting To A Federal Immigration Agent’s Request To Enter Nonpublic Areas or For Voluntarily Providing Records

By Jonathan A. Siegel, Brian E. Schield and Richard B. Azada on July 5, 2018

On July 4, 2018, Federal District Judge John A. Mendez granted a preliminarily injunction enjoining the State of California, Governor Brown, and Attorney General Becerra from enforcing parts of AB 450, the controversial new law that limited employer conduct when dealing with federal immigration enforcement. Specifically, the Judge stopped the enforcement of the California Government Code Sections 7285.1 and 7285.2 and California Labor Code Section 1019.2(a)&(b) as applied to private employers. The Judge upheld two other sanctuary state laws and part of AB 450. The Judge stated in his decision:

AB 103, SB 54, and the employee notice provision of AB 450 are permissible exercises of California’s sovereign power. With respect to the other three challenged provisions of AB 450, the Court finds that California has impermissibly infringed on the sovereignty of the United States.

Effective January 1, 2018, California’s public and private employers have been prohibited from voluntarily consenting to a federal immigration enforcement agent’s request to enter nonpublic areas in the workplace or to voluntarily allowing the agent access to employee records unless the agent provides a judicial warrant under AB 450. Today’s decision directly impacts these two key areas for employers.

The Judge put on hold or enjoined California from enforcing Government Code Sections 7285.1 and 7285.2 against private sector employers. This means private sector employers can not currently be prosecuted for:

(1) allowing or consenting to a federal immigration enforcement agent’s request to enter nonpublic areas in the workplace;

(2) for voluntarily allowing the federal immigration enforcement agent access to employee records.

The Judge also put on hold the new California prohibition against employers from re-verifying the employment eligibility of a current employee outside the time and manner required by federal law, under Section 1324a(b) of Title 8 of the United States Code.

However, the Judge upheld the notice requirements in AB 450 even though they place an administrative burden on California employers. California employers are still required to provide notice to employees as follows:

Pre-Inspection Notice: Within 72 hours of receiving a federal immigration agency’s notice of inspection (“NOI”) of employment records, including I-9 Employment Eligibility Verification forms, an employer must provide notice to each of its current employees. The posted notice must include (1) the name of the immigration agency conducting the inspection; (2) the date the employer received notice of the inspection; (3) the nature of the inspection to the extent known; and (4) a copy of the NOI. California has now released a template Notice of Inspection Form, which meets the requirements under Labor Code 90.2(a)(1).
Post-Inspection Notice: Within 72 hours of receiving written notice of an immigration agency’s inspection results, an employer must provide each affected employee (and his/her collective bargaining representative, if any) with written notice of the results. The notice must include (1) a description of any and all deficiencies or other inspection results related to the affected employee; (2) the time period for correcting any deficiencies identified by the immigration agency; (3) the time and date of any meeting with the employer to correct the deficiencies; and (4) notice that the employee has a right to be represented during any scheduled meeting with the employer. The notice must be tailored to the affected employee and hand-delivered the employee at the workplace. If this is not possible, the employer must endeavor to mail and e-mail the employee and the employee labor union, if applicable.

The federal District Court decision could be appealed by either party so employers should contact Jackson Lewis with any questions regarding the Court’s opinion or the application of AB450. Please feel free to contact Jonathan A. Siegel, Brian E. Schield or Richard B. Azada or the Jackson Lewis attorney you normally work with.

Cal/OSHA Issues Advisory for Employers to Take Precautions to Protect Workers Exposed to Hazards Relating to Wildfires

By Jonathan A. Siegel and Bradford T. Hammock on July 5, 2018

A high heat advisory for employers with outdoor workers in Central and Southern California has been issued by Cal/OSHA. With temperatures rising and more than 10 active wildfire incidents in California, Cal/OSHA is also advising employers that special precautions must be taken to protect workers from hazards from wildfire smoke and other possible concerns.

Cal/OSHA is concerned about workers being exposed to chemicals, gases, and fine particles that can potentially harm lung function, aggravate asthma and other respiratory functions.

Please see the Cal/OSHA Guidance for employers dealing with heavy smoke caused by the wildfires available on Cal/OSHA’s web page.

The Cal/OSHA guidelines review some of the measures employers can consider:

Engineering controls whenever feasible (for example, using a filtered ventilation system in indoor work areas)
Administrative controls if practicable (for example, limiting the time that employees work outdoors)
Providing workers with respiratory protective equipment, such as disposable filtering facepieces (dust masks)
- To filter out fine particles, respirators must be labeled N-95, N-99, N-100, R-95, P-95, P-99 or P-100, and must be labeled approved by the US National Institute for Occupational Safety and Health (NIOSH).
- Approved respiratory protective equipment is necessary for employees working in outdoor locations designated by local air quality management districts as “Unhealthy”, “Very Unhealthy” or “Hazardous”.
  - It takes more effort to breathe through a respirator and it can increase the risk of heat stress. Frequent breaks are advised. Workers feeling dizzy, faint or nauseated are advised to go to a clean area, remove the respirator and seek medical attention.
  - Respirators should be discarded if they become difficult to breathe through or if the inside becomes dirty. A new respirator should be used each day.

If you have any questions, please feel free to contact Jonathan A. Siegel or Bradford T. Hammock or the Jackson Lewis attorney you normally work with

California’s Hotel Housekeeping Standard: Ready or Not, Here it Comes

By Bradford T. Hammock on June 25, 2018

California’s long-awaited standard on “Hotel Housekeeping Musculoskeletal Injury Prevention” is finally here, coming into effect for California hotels and other lodging establishments on July 1, 2018. The standard is designed to control the risk of musculoskeletal injuries to housekeepers. The standard applies to “lodging establishments,” such as hotels, motels, resorts, and bed and breakfast inns. Please find the rest of this article in our OSHA Law Blog here.

Santa Monica to Implement New Minimum Wage Law

By D’Anne L. Gleicher on June 20, 2018

It’s summertime in the City of Santa Monica and with sunny days and cool ocean breezes also comes an increase in the minimum wage commencing on July 1, 2018. Each year on July 1, Santa Monica employers must comply with the City’s minimum wage law, which was enacted in 2016 and currently runs through 2021. On July 1, 2018, Santa Monica’s new minimum wage will increase to $12 per hour for employers with 25 or fewer employees; to $13.25 per hour for employers with 26 or more employees; and $16.10 per hour for hotel workers. Santa Monica’s minimum wage law for hotels and businesses operating on hotel property was enacted to match City of Los Angeles minimum wage rates. Santa Monica employers must also post in a conspicuous place minimum wage notices in English, Spanish, and any other language spoken by at least 5% of its employees.

For employers not operating in Santa Monica, summertime also serves as a reminder to check your local city government sites to ensure compliance with any mid-year minimum wage increases that might affect your business.

Fair Employment Housing Commissions Publishes New National Origin Discrimination Regulations; Limits “English-Only” Rules and Expands Protections for Immigration Status

By Shannon Bettis Nakabayashi and Brian E. Schield on June 5, 2018

On May 17, 2018, California’s Fair Employment and Housing Commission (“FEHC”) published the final text of its “Regulations Regarding National Origin Discrimination” (to be codified at 2 Cal. Code Regs. §§ 11027 & 11028). The regulations, which become effective July 1, 2018, expand the definition of “national origin” for purposes of the Fair Employment and Housing Act (“FEHA”). Among the more notable changes, the new definition includes all “physical, cultural and linguistic” attributes of a national origin group. The definition also now specifically includes anyone who is a member of or attends an organization, school, or religious institution associated or identified with a national origin group. The new regulations prohibit English only policies except in certain circumstances and prohibit any inquiries into an applicant or employee’s immigration status unless an employer can demonstrate by “clear and convincing evidence” that such inquiry is required by federal law.

The new “national origin” definition incorporates the following six categories: (1) physical, cultural, or linguistic characteristics associated with a national origin group; (2) marriage to or association with persons of a national origin group; (3) tribal affiliation; (4) membership in or association with an organization identified with or seeking to promote the interests of a national origin group; (5) attendance or participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group; and (6) name that is associated with a national origin group. The regulations also clarify that “national origin group” includes any ethnic groups, geographic places of origin, and countries that are not presently in existence. Over the objections of many commentators who felt the Commission had overstepped, the Commission added that height and weight restrictions would be unlawful if they disproportionately affected members of one national origin group and were not justified by business necessity.

The new regulations also expand the list of “Specific Employment Practices” prohibited under the FEHA. In a change from the prior law, all language restrictions are presumed unlawful. Employers must demonstrate that any such restrictions are narrowly-tailored and justified by business necessity. For a policy to be a “business necessity” it must be necessary to the safe and efficient operation of the business and “effectively fulfill[] the business purpose it is supposed to serve.” Employers must also demonstrate there is no effective alternative to the language restriction – for example, posting signage in multiple languages. Employers may not discriminate against employees based on their level of English proficiency unless the employer can demonstrate that English proficiency is necessary for the employee’s particular job duties. Discrimination based on accent is unlawful unless it “interferes materially” with the employee’s ability to do his or her specific job.

Finally, the new regulations limit practices for verifying work eligibility. Employers may not make any inquiry into an applicant’s immigration status, including requiring documentation, unless the employer can show by clear and convincing evidence that such inquiry is required by federal law. Employers also cannot take adverse action against an employee for updating his or her name, social security number or employment documents. The regulations now specify that threatening to contact immigration or federal law enforcement authorities may be a form of harassment and/or retaliation. Under the federal Immigration Reform Control Act (IRCA), employers cannot knowingly hire, refer, recruit or employ unauthorized immigrants. IRCA mandates procedures for assuring that all employers meet requirements of verifying employment eligibility during the Form I-9 process by checking all employees’ identification documentation that establishes both identity and employment eligibility to ensure they are eligible to work in the U.S. In addition, under IRCA if you employ four or more people, you cannot discriminate against any individual who is employment authorized on the basis of nationality origin and citizenship status, so the federal statute exempts certain small employers. Consequently, there are protections against treating immigrants unfairly that are contained in various overlapping federal and California statutes. Also, bear in mind that California recently enacted a series of laws labeling it a “sanctuary state” that created stringent protections for the work force during worksite immigration enforcement by DHS. For more information, see Surge of ICE Raids Expected in California Following State Adoption of Immigration Laws, discussing The California Values Act, and the Immigrant Worker Protection Act published on 02/15/2018. Despite concerns from commentators that the new regulations were both unnecessary and overbroad, the FEHC opined in its Statement of Reasons that the new regulations were necessary to clarify employer’s obligations.

In light of the new regulations, employers with English-only rules should review their policies to ensure that they are both narrowly tailored and necessary for a particular position. Employers should also review their employment verification practices to ensure that any work authorization inquiries are only for purposes of complying with federal law.

If you have any questions about these regulations, please contact Shannon Bettis Nakabayashi, Brian Schield, or the Jackson Lewis attorney with whom you regularly work.

Court of Appeal Affirms “Waiting Time” Penalties Where Employer Unaware of Wage Law Amendment

By Spencer Davidson on June 1, 2018

In its May 24, 2018 opinion in the matter of Diaz v. Grill Concepts Services, Inc. (Case no. B280846, 2nd Dist.), the California Court of Appeal shed further light on the standard to impose so-called “waiting time penalties” on employers who neglect to pay wages due upon discharge or resignation. Diaz affirmed the maxim that “ignorance of the law is no excuse,” holding that an employer’s failure to investigate a change in the local wage scale constituted a “willful” failure to pay, exposing it to waiting time penalties under the Labor Code. Diaz also held that courts do not have discretion to relieve the employer from such penalties on equitable grounds.

Diaz arose from a class action brought by current and former employees of a Daily Grill restaurant near LAX airport, and located within the City of Los Angeles’ “Airport Hospitality Enhancement Zone.” Restaurants within the Zone were required to pay their employees according to a living wage formula set by the City. In 2010, the City amended this formula to require a higher wage payment. Although the restaurant got wind of the coming amendment and learned during a call with the City Attorney that changes were “in process,” it made no effort to follow-up. As a result, when the increase went into effect in July 2010, the restaurant was ignorant of the adjustment and, accordingly, shortchanged its employees.

The plaintiffs then filed their class action, demanding not only unpaid wages but also waiting time penalties under Labor Code section 203 for employees who had resigned or been discharged since July 2010. Section 203 provides, “[i]f an employer willfully fails to pay…any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.” Although the restaurant then reimbursed all current and former employees for unpaid wages, it disputed that waiting time penalties were appropriate, arguing that its failure to pay was not “willful” under section 203, but was instead a good-faith mistake. It argued further that the court should exercise discretion to waive or reduce these waiting time penalties on an equitable basis.

Diaz rejected both arguments. It first held that a “willful failure to pay wages” under section 203 requires only that the employer have acted voluntarily in a manner which fell short of its legal obligations, and does not require any blameworthy, malicious, or fraudulent conduct. Unless the law was itself uncertain, or there was a good-faith mistaken belief coupled with factual or legal support, the violation will qualify as willful and penalties of up to 30 days continuing wages will issue. Because the City’s wage formula was clear, and the restaurant did not perform a diligent investigation into the July 2010 amendment, its ignorance was no excuse. Finally, Diaz concluded that the language of section 203 (“‘the wages of the employee shall continue as a penalty’ for up to 30 days”) and its intent to protect employees left no discretion for courts to reduce the waiting time penalties properly owed.

Diaz serves as another reminder of the care employers must exercise to ensure they pay all earned wages to employees who are discharged or resign. If any wages remain unpaid, the employer will have a high bar to satisfy to demonstrate that its failure to pay was not “willful” within the meaning of Labor Code section 203, and courts do not have discretion to reduce these penalties even where it might seem fair to do so. Please contact your local Jackson Lewis office if you wish to receive more detailed guidance on this, or any other employment issue.

Class Action Waivers Remain Inapplicable to PAGA Claims

By Zoe Yuzna and Hazel U. Poei on May 29, 2018

The U.S. Supreme Court’s recent ruling that class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA) does not extend to claims under the California Private Attorneys General Act (PAGA). Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP et al. v. Morris et al., No. 16-300; National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307 (May 21, 2018); Iskanian v. CLS Transportation Los Angeles (2014) 59 Cal.4^th 348.

Last week’s much anticipated U.S. Supreme Court ruling that class action waivers in employment arbitration agreements are enforceable sent waves across both sides of the employment bar. The decision favors the implementation of arbitration agreements for employers that do not yet have them and updating arbitration agreements for employers that do. But the Supreme Court’s decision does not extend to claims under the PAGA. Under the PAGA, employees can recover civil penalties for violations of the California Labor Code. Seventy-five percent of the civil penalties are recoverable by the State, with the remaining amount recoverable by employees. The rationale underlying the carve-out for PAGA claims from class action waivers is that PAGA claims are brought on behalf of the State, and the State is not a party to the arbitration agreement. Therefore, PAGA claims remain exempted from class action waiver provisions in arbitration agreements. Whether or not PAGA claims may be brought on a class-wide basis in arbitration or whether they must be decided by a court remains an open question in California.

Does The De Minimis Defense Apply To California Labor Code Claims?

By Danny Yadidsion and Hazel U. Poei on May 16, 2018

The California Supreme Court recently heard the case of Troester v. Starbucks Corporation which could significantly increase employers’ exposure to claims by hourly paid employees for small pre-shift and post-shift tasks that are currently treated as insignificant and not compensable.

The de minimis doctrine, an established defense under the Fair Labor Standards Act (“FLSA”), permits employers to disregard time spent by employees on minor pre-shift and post-shift tasks (generally, to the extent less than 10 minutes). The applicability of the de minimis defense is dependent upon factors such as: (a) the practical difficulty the employer would encounter in recording the additional time; (b) the total amount of compensable time; and (c) the regularity of the additional work. This defense usually applies to the minimal amount of time spent by employees, for example, in logging onto a computer or donning and doffing safety equipment.

Specifically, in this case, Douglas Troester was a non-exempt supervisor at a Starbucks store. He filed a lawsuit against Starbucks alleging that it failed to pay him wages for time spent performing certain tasks at closing, such as activating the store alarm, locking the front door and walking co-workers to their cars. The federal district court granted summary judgment in favor of Starbucks and found that, while Troester’s closing activities occurred regularly, they only took 4 to 10 minutes per day and were administratively difficult to track and compensate. Troester appealed this decision to the Ninth Circuit Court of Appeals which certified for decision by the California Supreme Court the question of whether the de minimis defense is available to wage claims under the California Labor Code.

During oral argument before the California Supreme Court, the justices noted that, while the defense is recognized in FLSA regulations, no corresponding reference to it exists under the California Labor Code or in the Wage Orders. On the other hand, the justices also seemed concerned that striking down the defense would cause an increase in the filing of costly lawsuits over very small amounts on unpaid time worked.

Pending a decision from the California Supreme Court, employers should consult with counsel regarding the review and implementation of their timekeeping policies and procedures for de minimis off-the-clock work.

A decision is expected from the California Supreme Court within the next 90 days.

California Supreme Court Applies “ABC” Test When Assessing Independent Contractor Status

By Hazel U. Poei on May 7, 2018

The California Supreme Court, in Dynamex Operations v. Superior Court, held that for purposes of claims under the California Wage Orders “engage, suffer or permit to work” determines employee status, thus requiring a defendant who disputes that a worker is an employee (rather than an independent contractor) to prove (A) the worker is free from control and direction of the hirer in connection with performing the work, both under contract and in fact; (B) the worker performs work outside the usual course of the hiring entity’s business; and (C) the worker customarily engages in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.

With its decision, the High Court provides further clarification to employers in determining whether a worker may be classified as an independent contractor rather than an employee, which has substantial economic and legal implications for employers across California.

A more detailed analysis can be found on our publications page.