In early 2021, the 9th Circuit upheld federal preemption of California’s meal and rest break laws for interstate motor carrier drivers, in the consolidated case of International Brotherhood of Teamsters v. Federal Motor Carrier Safety Administration. In that matter, the 9th circuit held the Federal Motor Carrier Safety Administration (FMCSA)’s determination that federal law preempts California’s meal and rest break rules for interstate motor carriers subject to the FMCSA’s rest break regulations was a permissible interpretation.

The 9th Circuit panel revisited the issue in Valiente v. Swift Transportation.  The issue presented was whether the decision in International Brotherhood of Teamsters barred plaintiffs from proceeding with lawsuits that commenced before the decision was issued.

The plaintiffs argued against the retroactive application. The 9th Circuit applied a two-step test for retroactivity, holding under the first step that because Congress clearly intended for the FMSCA to have the power to halt enforcement of state laws, and because the FMSCA intended for this particular preemption determination to apply to pending lawsuits, the FMSCA’s decision prohibits present enforcement of California’s meal and rest break rules regardless of when the underlying conduct occurred.

The 9th Circuit did not reach the second step of the test for retroactivity of a decision.

This ruling means that any case filed after the FMCSA’s determination in 2018, and continuing through the present, would be barred by the 9th Circuit’s prior decision in International Brotherhood of Teamsters.

Jackson Lewis continues to track case law applicable to California employers. If you have questions about the application of this case or related issues, contact a Jackson Lewis attorney to discuss.

2023 was supposed to be the year that all California employers would be subject to the same minimum wage of $15.00 per hour.  However, inflation has triggered a further increase. Effective January 1, 2023, the state minimum wage for all California employers will be $15.50.

Some cities and counties raised the minimum wage rate that may be paid in their jurisdictions on July 1, 2022.  In addition, several local municipalities will also increase their minimum wage rates at the start of the new year.  Those localities include the following:

LocaleRate
Belmont$16.75
Burlingame$16.47
Cupertino$17.20
Daly City$16.07
East Palo Alto$16.50
El Cerrito$17.35
Foster City$16.50
Half Moon Bay$16.45
Hayward$15.50 (1-25 employees)
$16.34 (26 or more employees)
Los Altos$17.20
Menlo Park$16.20
Mountain View$18.15
Novato$16.32 (100+ employees
$16.07 (26-99 employees)
$15.52 (1-25 employees)
Oakland$15.97
Palo Alto$17.30
Petaluma$17.06
Redwood City$17.00
Richmond$16.17
San Carlos$16.32
San Diego$16.25
San Jose$17.00
San Mateo$16.75
Santa Clara$17.20
Santa Rosa$17.06
Sonoma$16.00 (1-25 employees)
$17.00 (26 or more employees)
South San Francisco$16.70
Sunnyvale$17.95
West Hollywood$17.00 (1-49 employees)
$17.50 (50 or more employees)

Employers should ensure that their minimum wage postings are updated appropriately to reflect the upcoming state and local increases.

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.

Today, November 29, 2022, the Los Angeles City Council passed the Fair Work Week Ordinance on the second reading. The ordinance now goes to the mayor for final approval. If approved by the mayor, it will take effect on April 1, 2023.

Covered Employers

Under the ordinance, covered employers are defined as those businesses identified as a retail business under the North American Industry Classification System (NAICS) and employ 300 employees globally. Individuals employed through staffing agencies, and employees of certain subsidiaries and franchises count towards the 300-person total.

Covered Employees

Anyone working in the City of Los Angeles two hours or more per week for a covered employer and who is entitled to minimum wage under the state Labor Code and Wage Orders is covered by the new ordinance.

Obligations of Covered Employers

The ordinance sets forth specific requirements for covered employers in the handling of scheduling practices and procedures. The following is an overview of some of the requirements:

  • Covered employers shall provide each new employee before hiring a written good faith estimate of the employee’s work schedule.
  • Covered employers shall provide a written good faith estimate of the employee’s schedule within 10 days of an employee’s request.
  • Employees have a right to request a preference for certain hours, times, or locations of work. Covered employers may accept or decline requests, provided the employer notifies the employee in writing of the reason for any denial.
  • Covered employers shall provide an employee with written notice of the employee’s schedule at least 14 calendar days before the start of the work period.
  • Before hiring a new employee, covered employers shall first offer the work to current employees.
  • 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.
  • Covered employers shall post notice informing employees of their rights under the ordinance.

Predictability Pay

Under the new 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.

Penalties and Right to Cure

Employees will be required to give employers written notice of any alleged violations and an opportunity to cure them before filing a claim with the City of Los Angeles. Employers will have 15 calendar days to cure alleged violations after notice.

The City of Los Angeles can recover up to $500 per violation per employee.

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

In order for an employee to be deemed exempt from overtime regulations under California law, the employee must fit into a category of work that is deemed exempt. The most common exemption is the executive, administrative, and professional exemption, which includes workers who are employed in administrative, managerial, executive, or professional capacities. There are also detailed requirements as to the amount of work performed in certain areas and most employees must also meet a minimum salary threshold, which for most of the exempt categories, is no less than two times the state minimum wage for full-time employment (40 hours).

However, for certain exempt categories, the Department of Industrial Relations (DIR) sets the minimum monthly salary based on increases to the California Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI). Under Labor Code section 515.5, certain computer software employees are one of the professions that must be paid a statutorily specified rate in order to be deemed exempt from overtime regulations.

Effective January 1, 2023, the minimum hourly rate for computer software employees to meet the exemption will be $53.80, with a minimum monthly salary of $9,338.78 (annually $112,065.20). The current rates are $50.00 per hour, $8,679.16 minimum monthly salary, and $104,149.81 annually.

Similarly, under Labor Code section 515.6, certain licensed physicians and surgeons must be paid a statutorily specified rate to be deemed exempt from overtime regulations.  Effective January 1, 2023, the minimum hourly rate for licensed physicians and surgeons to meet the exemption will be $97.99. The current hourly rate is $91.07

If you have questions about overtime exemption requirements or related issues, contact a Jackson Lewis attorney to discuss.

As the dust settles after another active California legislative session, employers still have more legislation to be on the lookout for by way of ballot measures. In the midterm elections this year, several cities in California will be voting on regulations that will impact employers.

Over the summer, several California cities considered, and some passed ordinances increasing the minimum wage for healthcare workers in those cities to $25.00. Since the summer, many of the ordinances are stayed pending referendums in the future, but two cities, Duarte and Inglewood, will vote on whether to implement a $25.00 minimum wage for healthcare workers effective 2024. The City of Los Angeles will ask voters whether to proceed with its healthcare minimum wage, but it won’t be on the ballot until March 2024.

Laguna Beach voters will consider whether to establish a Hotel Worker Protection Ordinance similar to one recently passed by the City of Los Angeles. Under the proposed ordinance, 60 days following the effective date of the ordinance, the minimum wage for hotel employees would increase to $18.00, and on January 1, 2023, it would increase to $19.00, with further increases annually. The proposed ordinance would also put in place protections for hotel workers from violent and threatening conduct, including providing personal security devices and paid time off to report violent and threatening conduct to law enforcement. The ordinance, if passed, would also establish certain limitations on workload, both time and amount of work, for hotel workers.

The success of these local ballot measures may be a precursor for similar industry-specific measures in other cities. Jackson Lewis will continue to track legislation that affects employers. If you have questions about these local ballot measures, contact a Jackson Lewis attorney to discuss.   

We are excited to welcome you back to our annual in-person presentation of updates in the areas of wage and hour, leave and accommodation and workplace safety in The Golden State.

Join Jackson Lewis P.C. attorneys across California, network with your peers and end the year with new connections.

REGISTER NOW (Registration Fee: $50.00 per session, per attendee.)

Program Details:

Orange County – Tuesday, December 6

Sacramento – Wednesday, December 7

San Diego – Thursday, December 8

San Francisco – Wednesday, December 14

Los Angeles – Thursday, December 15

Registration and Breakfast for all locations: 8:00–9:00 a.m.

Program for all locations: 9:00 a.m.–12:00 p.m.

In recent years several cities, including Los Angeles and West Hollywood have passed hotel worker protection ordinances, which put both safety and workload protections in place.

The city of Irvine may be joining this trend. On October 25th, the Irvine City Council voted by a close margin to pass a hotel worker protection ordinance. The ordinance still must pass a second reading vote, in order to become effective. To date, the second reading has not been scheduled.

The following are the basics of the proposed ordinance which mirror other California cities:

Personal Security Devices

Under the ordinance, hotel employers would be required to provide workers with a panic button device, which can be activated in the event of a situation where personal safety issues exist.

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

Workload and Hours Limitations

The ordinance also establishes certain workload and hours limitations for hotel workers. Based on the size of the hotel, the ordinance would establish a maximum room cleaning quota for hotel staff. Further, hotel employers could not require or permit a hotel worker to work more than 10 hours in a workday, unless the hotel worker consents in writing to additional hours of work.

Hotel employers will be required to provide written notice of the hotel worker’s rights regarding the workload requirements at the time of hire or within 30 days of the effective date of the ordinance.

Moreover, the workload and hours limitations may be superseded by a collective bargaining agreement (CBA), but only if the waiver is expressly set forth in the CBA.

If passed on second reading, the ordinance would become effective 30 days from the vote, except for the measures to provide fair compensation for workload which would become effective in 180 days.

If you have questions about the Irvine 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.

Over the past several years, there has been a significant increase in the use of dashcam technology. The technology available in the market is quite advanced. As we observed here, these devices can be equipped with geolocation, AI, facial recognition, and other technologies.  Designed primarily to enhance driver safety and fleet management, privacy concerns are tapping the brakes on implementation in California.

On September 29, 2022, Governor Gavin Newsom signed into law AB-984, and becoming effective January 1, 2023. The law builds on other privacy protections in California, such as the California Consumer Privacy Act and Penal Code Sec. 637.7. Section 637.7 prohibits using an electronic tracking device to determine the location or movement of a person, however, it does not apply when the vehicle owner (e.g., the employer) has consented to the use of the device.

Read the full article on Jackson Lewis’ Workplace Privacy, Data Management & Security Report.

Like its neighbor City of Los Angeles, Santa Monica has local employment ordinances. However, as a popular tourist destination, Santa Monica has several ordinances pertaining to the hospitality industry that employers should take note of.  

Minimum Wage and Hotel Worker Living Wage

On July 1, 2022, Santa Monica raised the minimum wage for most businesses to $15.96.

The city has a separate ordinance, the Hotel Worker Living Wage, which applies to hotel workers. Under this ordinance, hotel workers are defined as individuals whose primary place of employment is at one or more hotels and is employed directly by the hotel employer, or by a person who has contracted with the hotel employer to provide services at the hotel. The ordinance does not apply to employees in managerial and supervisory roles. Effective July 1, 2022, the hotel worker minimum wage is $18.17.

The Hotel Worker Living Wage applies to all hotels, not including Santa Monica’s youth hostels.

Paid Sick Leave

Santa Monica also has its own paid sick leave ordinance. Under the ordinance, small businesses (employ 25 or fewer employees in Santa Monica) must provide 40 hours of paid sick leave, and large businesses (employ 26 or more employees in Santa Monica) must provide 72 hours of paid sick leave.

Under the city’s ordinance, an employer may provide sick leave using an accrual method or front loading. If an employer uses the accrual method, the employer must allow accrued, unused sick leave to carry over annually up to the accrual cap. However, if the employer uses a frontloading method, no carryover is required.

Right of Recall

In the wake of COVID-19, several cities and the state passed right-of-recall statutes requiring covered employers to offer qualified employees, who were laid off due to the pandemic, available positions based on seniority and related factors.

Santa Monica has had such an ordinance in place since 2001. Under the city’s ordinance, employees who were laid off and are qualified must be offered open positions as they become available. This ordinance does not apply to employees in managerial and supervisory roles. An employee is deemed qualified if: (1) the employee held the “same or similar position” at the same site of employment at the time of the employee’s most recent separation; or (2) is or can be qualified for the position with the same training that would be provided to a new employee hired into that position.  

Hotel Worker Protection

Similar to an ordinance recently passed by the City of Los Angeles, Santa Monica passed a Hotel Worker Protection ordinance on January 1, 2020.

Under Santa Monica’s ordinance:

  • Hotel employers must provide personal security devices to hotel workers assigned to work in a guest room or restroom facility;
  • Hotel workers must be provided training on using personal security devices, how to respond to activation, and hotel workers’ rights;
  • Certain protections must be afforded to hotel workers who report violent or threatening conduct by hotel guests, including providing sufficient paid time to report violent conduct to law enforcement and to consult with a counselor or advisor.

Like the Los Angeles ordinance, Santa Monica’s ordinance puts certain requirements in place regarding hotel workers’ workload, including prohibiting hotel workers to work more than 10 hours in a workday without the worker’s written consent.

There are also certain Public Housekeeper Training Organization requirements under the ordinance.

If you need assistance with compliance with Santa Monica’s local ordinances or related issues, contact a Jackson Lewis attorney to discuss.

The U.S. Court of Appeals for the Ninth Circuit reviewed a challenge to California’s “ABC Test,” also referred to as Assembly Bill (AB) 5, which is California’s test for whether a worker can be classified as an independent contractor.  In Mobilize the Message, LLC v. Bonta, the plaintiffs appealed the district court’s denial of a preliminary injunction seeking to restrain the California Attorney General from applying the ABC Test to classify doorknockers and signature gatherers as either employees or independent contractors.

In the case, Mobilize the Message, LLC argued that the California law violated the First Amendment of the U.S. Constitution because it discriminates against speech based on its content. Specifically, plaintiffs argued that it was discriminatory to require doorknockers and signature gatherers to be classified as employees or independent contractors under the ABC Test while occupations such as direct salespersons, newspaper distributors, and newspaper carriers are exempt from the test’s application.

In the Ninth Circuit’s review of the district court’s denial, it accepted the plaintiffs’ assertion that their doorknockers and signature gatherers would likely be classified as employees under the ABC Test, and that such classification would impose greater costs which may limit clients from retaining their services. The Ninth Circuit panel stated, however, that such an indirect impact on speech did not violate the First Amendment. The panel further noted that the codification of the ABC Test into California law does not target certain types of speech and applies across California’s economy aside from certain exemptions. As such, “plaintiffs were not unfairly burdened by the application of the ABC test to their doorknockers and signature gatherers.”

Moreover, the panel rejected the plaintiffs’ argument that exemptions for direct sales salespersons, newspaper distributors, and newspaper carriers were content-based discrimination, as the exemptions did not depend on the content of communications conveyed but rather the worker’s occupations.

Based on the panel’s findings, the district court’s ruling in denying a preliminary injunction was upheld.

Mobilize the Message, LLC v. Bonta is the latest in failed industry challenges to the application of the ABC Test. In July 2022, the U.S. Supreme Court denied the trucking industry’s petition for review of its challenge to the ABC Test.   

If you have questions about the application of the ABC Test or independent contractor classification, contact a Jackson Lewis attorney to discuss.