Closing the Unequal Pay Gap: California Releases Guidance to Employers on Complying with the California Fair Pay Act

Since passing the California Fair Pay Act (“CFPA”) on October 6, 2015, California has remained a trailblazer in its efforts to address and decrease gender pay inequity. The CFPA requires all employers pay employees performing “substantially similar work” the same wage regardless of gender, ethnicity or race. The CFPA also requires employers to provide the pay scale for a position to an applicant who makes a reasonable request for it, prohibits employers from requesting an applicant’s prior salary history and from relying on an applicant’s salary history alone to justify a disparity in compensation “based on sex, race or ethnicity.”

After enacting the CFPA, the California Commission on the Status of Women and Girls launched the California Pay Equity Task Force (“Task Force”) to monitor the implementation of the CFPA and facilitate dialogue on legislative modifications to California law. On September 10, 2018, the Task Force released written guidance for employees, employers and unions on how they may comply with the CFPA. The guidance includes, amongst other things, a myriad of tips and recommended practices for employers seeking to comply with the CFPA, including:

  • Regularly reviewing and updating job descriptions to ensure they accurately reflect a position’s duties and responsibilities (written job descriptions are pivotal in determining whether two employees are performing substantially similar work and serve as helpful evidence of an employer’s compensation decisions);
  • Educating managers on the factors they may rely upon in making decisions regarding an employee’s compensation;
  • Documenting any and all compensation decisions, the grounds for such decisions and the basis for any differences in compensation between two or more employees (any such documents should be retained by employers for at least four (4) years); and
  • Periodically auditing employee wage practices to identify any substantial differences in wages amongst employees who perform substantially the same work (if any such disparities are found, employers should immediately make the necessary adjustments to remedy them).

Employers should review their hiring and compensation practices to ensure compliance with the CFPA, implement the practices recommended above and consult with counsel regarding any questions or concerns they may have.

The Changing Landscape of Sexual Harassment Claims and Mandatory Arbitration Agreements

The year 2018 has seen significant shifts in the landscape of gender equality and sexual harassment. Complaints of sexual harassment in California nearly doubled in the first three months of 2018. From January through March 2018, the California Department of Fair Employment and Housing received 939 complaints of sexual harassment. This reflects an increase of 86% in comparison to the same period in 2017.

Against this backdrop, some California companies have recently modified their sexual harassment policies such that employees will no longer be required to resolve such claims in private arbitration. These changes come primarily in response to the #MeToo movement.

Historically, companies have preferred to keep workplace disputes out of the court system and in arbitration. This is because the parties have the ability to mutually agree upon an arbitrator (typically someone with subject matter expertise who may also have handled other matters favorably for the company); arbitration proceedings are generally private; the results are kept confidential; the matter proceeds more expeditiously; and there is a limited ability to appeal.

However, in light of mounting pressure to shine a light on the issue, to prevent serial harassers from continuing to engage in inappropriate and possibly unlawful conduct, and to send a strong message to employees that companies take these matters seriously, more and more California companies are carving out sexual harassment claims from mandatory arbitration proceedings.

Whether more corporations will follow and whether other forms of discrimination or harassment will be encompassed by this growing trend is not yet clear, particularly in light of the recent Epic Systems decision by the United States Supreme Court.

New California Law Creates Narrow Rest Break Exemption at Petroleum Facilities

On September 20, 2018, California Governor Jerry Brown signed into law Assembly Bill 2605. This new law provides that unionized employees at petroleum facilities who hold safety-sensitive positions are exempt from the requirement that employees be relieved of all duties during rest periods. The bill went into effect immediately and will remain in effect until January 1, 2021 with the ability to be extended.

Notably, this narrow exemption applies only to employees who meet the following criteria:

  1. Are employed at a petroleum facility in a “safety-sensitive position” (i.e., a job in which the employee’s job duties reasonably include responding to emergencies) and are required to carry and monitor a communication device such as a radio or pager or are required to remain on the premises to monitor and respond to emergencies;
  2. Are subject to Industrial Welfare Commission Wage Order No. 1; and
  3. Are covered by a valid collective bargaining agreement that expressly provides for, among other things, a regular hourly rate of pay of not less than 30% more than the state minimum wage rate, premium wage rates for overtime hours, rest periods, and binding arbitration of disputes concerning rest periods.

In the case that a nonexempt employee meeting the above criteria is required to interrupt his or her rest period to address an emergency, the law provides that another rest period shall be authorized and permitted in a reasonably prompt manner after the emergency has passed. If circumstances do not allow the employee to take a rest period, the employer must pay the employee one hour of pay at the employee’s regular rate of pay for the missed rest period.

Assembly Bill 2605 addresses concerns that requiring employees in safety-sensitive positions at petroleum facilities to take rest breaks in order to comply with state law could create a potential public safety or security hazard by preventing the facilities from being able to effectively respond to or prevent emergencies such as leaks, fires or explosions. Although the law is limited to a narrow category of employees, it is an example of the legislature’s willingness to balance the needs of both employers and employees to protect the public health and welfare.

California Expands Upon Lactation Accommodation Requirements

California Governor Jerry Brown signed into law Assembly Bill 1976, expanding California employer obligations respective to employee lactation accommodation. Under preexisting California Labor Code section 1031, an employer was required to make available a private location, other than a toilet stall, for an employee to express milk for an infant child, and provide employees with a reasonable amount of break time to do so. Recently signed Assembly Bill 1976 amends Labor Code section 1031 providing that the private location be a place other than a bathroom, when reasonable. Please find the rest of this post in our Disability, Leave and Health Management blog here.

Expanded Paid Family Leave Benefits Coming to California Employees

Under the Family Medical Leave Act, eligible employees are entitled to take time off for due to a “qualifying exigency” arising from the deployment of the employee’s spouse, parent, or child for active military duty to a foreign country. Examples of “qualifying exigencies” include attendance at military events, making childcare arrangements arising from a military member’s covered active duty, making or updated financial and legal arrangements to attend a military member’s absence on covered active duty, and accompanying the military member during a rest and recuperation leave during deployment.

Currently California employees who wish to receive pay during leave for a qualifying exigency would need to use their own accrued vacation or paid time off hours. However, beginning January 1, 2021, an employee can apply for wage replacement benefits from the State of California Paid Family Leave insurance program during such a leave. Employees applying for benefits may be required to provide a copy of any active duty orders or other documentation issued by the military to support a request for benefits.

California Issues Emergency Regulation for Electronic Submission of 300A Forms by December 31, 2018

On October 10, 2018, California’s Department of Industrial Relations, Division of Occupational Safety and Health (“DOSH”) issued a notice of proposed emergency regulation requiring California employers to begin submitting their 300A Form to the Federal OSHA portal, Injury Tracking Application (“ITA“).  Specifically the regulation, if approved, will require the electronic submission of the 300A Form for each establishment with 250 or more employees at any time during the previous calendar year and for establishments with 20 or more employees but fewer than 250 employees in designated industries. Please find the rest of this article on our OSHA Law Blog here.

To Successfully Oppose Class Certification, You Have To Do The CSI

Six years after the California Supreme Court’s landmark decision in Brinker v. Superior Court (2012) 53 Cal. 4th 1004, virtually every California employer understands the rules concerning an employer’s obligations regarding meal periods.  The court gave California employers a “Big Win,” ruling that employers need only provide and not ensure meal periods.  Less publicized was that portion of the Brinker opinion that ostensibly allows for class certification where the employer’s “uniform policies” are facially non-compliant, regardless of whether under the governing legal standard the material issues to be tried are, in fact, subject to individualized differences, making class treatment inappropriate.

Lost in Brinker’s “uniform policies” analysis is a key question of whether the employer’s supposedly uniform policies were in fact implemented consistently across the class, such that the plaintiff’s theory of liability can be established through common proof.  After all, the existence of any common policy is not sufficient to show that common issues predominate.  The policy in question must be a means to establish liability on a class wide basis.

The recent decision in Payton v. CSI Electrical Contractors, Inc., 2018 Cal. App. LEXIS 879 (Cal. Ct. App., Sept. 28, 2018) is illustrative.   California law requires that employers authorize and permit rest breaks of at least 10 minutes for every four hours worked or substantial fraction thereof.  Rest breaks should be scheduled in the middle of the work period to the extent practicable, and they may not be combined or added to meal periods to create one longer break time. In CSI Electrical, the employer’s corporate representative testified at a deposition in response to questions about the company’s rest break policies at the job site   The representative testified that class members received one 10-minute rest break per eight-hour day, “tacked on” at the end of their 30-minute meal period.  He testified that there would be no separate rest breaks in the afternoon.

Based on this testimony, the plaintiff moved for certification of a rest break class and argued that the evidence showed a “common policy” that violated the law.  The employer opposed the motion and submitted declarations from numerous employees testifying that they always received afternoon breaks separate from the lunch break. The declarations included testimony by a union business manager that part of his job was to ensure that employees took their afternoon breaks. The employer also presented a declaration from the corporate representative, who stated that he had only been speaking at his deposition about scheduled site-wide break policies, not whether individuals or individual work crews took additional rest breaks that were not scheduled.  The court credited these declarations and denied class certification, concluding that, based on the evidence, the question of whether employees were permitted rest breaks was “highly individualized” and “trial would turn into an individual-by-individual exercise.”

The decision in CSI Electrical underscores the need for employers to conduct a thorough investigation to develop facts in opposing class certification.  Even where the plaintiff’s theory of liability purports to rest on a “uniform policy,” the employer should be sure to gather and present direct evidence showing individualized differences among putative class members; e.g., that its policies vary by location, or vary over time, or between departments, or by jobs, or by shifts, or by days worked during the week, etc.   In such a case, the plaintiff likely cannot submit a workable trial plan to show that the class is manageable simply on the basis of the “uniform policies.”

The Jackson Lewis Class Actions and Complex Litigation Practice Group combines substantial class action experience and significant subject matter knowledge with thoughtful, strategic and creative approaches in providing clients with sensible strategies to defend difficult lawsuits.  For further information, please contact a Jackson Lewis attorney.

California Enacts New Laws to Combat Human Trafficking

On September 27, 2018, California enacted Senate Bill 970 establishing a minimum threshold for human trafficking awareness training and education in the hospitality industry. Under the law, hotels and motels are required to provide 20 minutes of classroom or other interactive training regarding human trafficking awareness to each employee likely to interact or come into contact with victims of human trafficking.  Employees required to receive training are those who have recurring interactions with the public, including those working in the reception area, performing housekeeping duties, helping customers move their belongings, and driving customers.

The human trafficking and awareness training must be completed by January 1, 2020, for all employees hired before July 1, 2019, and within six months of hire for those employed after July 1, 2019. After January 1, 2020, employers must provide training to existing employees every two years and within six months of hire for new employees.  The training must include the following information:

  • The definition of human trafficking and commercial exploitation of children.
  • Guidance on how to identify individuals who are most at risk for human trafficking.
  • The difference between labor and sex trafficking specific to the hotel sector.
  • Guidance on the role of hospitality employees in reporting and responding to this issue.
  • The contact information of appropriate agencies, such as the National Human Trafficking Hotline toll-free telephone number and text line, and the telephone numbers of the appropriate local law enforcement agencies.

If an employer fails to comply, California’s Department of Fair Employment and Housing may seek an order requiring compliance.

California also enacted Assembly Bill 2034, which requires hotels, motels, bed and breakfast inns, and several other types of business establishments, to post a compliant notice about slavery and human trafficking. The notice, which must be at least 8 ½ inches by 11 inches, written in 16-point font, posted in English, Spanish, and one other language that is the most widely spoken language in the county where the establishment is located, must state the following:

If you or someone you know is being forced to engage in any activity and cannot leave—whether it is commercial sex, housework, farm work, construction, factory, retail, or restaurant work, or any other activity—text 233-733 (Be Free) or call the National Human Trafficking Hotline at 1-888-373-7888 or the California Coalition to Abolish Slavery and Trafficking (CAST) at 1-888-KEY-2-FRE(EDOM) or 1-888-539-2373 to access help and services.

Victims of slavery and human trafficking are protected under United States and California law

The notice must also indicate that the hotlines are available 24 hours a day, 7 days a week, toll-free, operated by nonprofit, nongovernmental organization, anonymous and confidential, accessible in more than 160 languages, and able to provide help, referral to services, training, and general information.

Assembly Bill 2034 also mandates that employers provide a minimum of 20 minutes of training in recognizing the signs of human trafficking and how to report those signs to the appropriate law enforcement agency. The training must be provided to new and existing employees who may interact or come into contact with a victim of human trafficking, or who are likely to receive a report from another employee about suspected human trafficking, no later than January 1, 2021.

If an employer fails to comply, civil penalties of $500 for the first offense and $1,000 for each subsequent violation may be imposed.

If you have any questions about these new laws, please contact Cary Palmer or Kaitlyn Lavaroni in the Sacramento office of Jackson Lewis, or the Jackson Lewis attorney with whom you regularly work.

New CA Case Confirms: No Absolute Rule to Permit Leave to Amend to Substitute Class Representative If Named Plaintiff Is Found Inadequate

In Jones v. Farmers Ins. Exchange (2013) 221 Cal.App.4th 986 (“Jones”), the California Court of Appeal held that “[t]he lack of an adequate class representative … does not justify the denial of the certification motion.  Instead, the trial court must allow Plaintiff[[] an opportunity to amend [his] complaint to name a suitable class representative.  [Citation & fn. omitted.]  The court should then grant the certification motion if it approves a class representative.”  Id. at 999.

The Jones rule seemed to imply, and Plaintiffs’ counsel often argued, that even if a class representative is found to be inadequate, the remedy is simply to permit Plaintiffs’ counsel to find a new class representative as a substitute. To continue to read this blog please visit our post on the Employment Class  and Collective Action Update here.

California Construction Industry Could Avoid Big Civil Penalties Claims: Union Employers Should Review the New Collective Bargaining Exemption to Potential PAGA Claims

Unionized employers in the construction industry can potentially receive some well-needed relief from California’s Labor Code Private Attorneys General Act of 2004 (Labor Code Section 2698 et seq.), known as “PAGA,” in light of the Governor signing AB 1654. Unionized employers in California must review their collective bargaining agreements and evaluate whether they can take advantage of AB 1654.

In light of recent decisions which have made it more difficult to bring class action lawsuits against employers for wage and hour issues, especially if the employer utilizes arbitration agreements, and the procedural hurdles in bringing and certifying a class action, plaintiff’s lawyers are turning to non-class representative PAGA claims at an increased rate. In California, small compliance issues can grow into significant liabilities for civil penalties under PAGA.

Why? PAGA provides for the imposition of potentially harsh civil penalties in the event of a statutory violation. If no civil penalty for a particular Labor Code violation is specifically provided, the statute establishes the following civil penalty:

“If, at the time of the alleged violation, the person employs one or more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation.”

A PAGA claim is commonly referred to as a “representative” action and, unfortunately, case law provides a plaintiff need not meet the class action certification requirements before proceeding with a representative PAGA claim. Significantly, 75% of the civil penalties recovered is distributed to the State of California, while the remaining 25% goes to the “aggrieved” employees.  An employee who prevails in a PAGA action is also entitled to an award of reasonable attorney’s fees and costs.

AB 1654 provides an exception to PAGA regarding employees in the construction industry. “Employee in the construction industry” is defined as “an employee performing work associated with construction, including work involving alteration, demolition, building, excavation, renovation, remodeling, maintenance, improvement, repair work, and any other work as described by Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, and other similar or related occupations or trades.”

In order to qualify for the construction industry exception to PAGA, employees must be subject to a valid collective bargaining agreement that expressly provides:  (1) for the wages, hours of work, and working conditions of employees; (2) for premium wage rates for all overtime hours worked; and (3) for the employee to receive a regular hourly rate of not less than 30 percent more than the state minimum wage.

In addition, the collective bargaining agreement must do all of the following: (1) prohibits all of the violations of the Labor Code that would be redressable by PAGA, and provides for a grievance and binding arbitration procedure to redress those violations; (2) expressly waives the requirements of PAGA in clear and unambiguous terms; and (3) authorizes the arbitrator to award any and all remedies otherwise available under the Labor Code, provided that nothing in the new law authorizes the award of penalties under PAGA that would be payable to the Labor and Workforce Development Agency.

It is important unionized employers in California take advantage of this new law to see if it is appropriate or possible to negotiate language into their union contracts which could meet the new law’s exception requirements. Employers should reach out to the Jackson Lewis attorney they normally work with to evaluate the new possibilities of AB 1654.