Several months after Governor Newsom signed into law a statewide right of recall statute affecting the hospitality industry and building services, the Labor Commissioner’s office finally issued a Frequently Asked Questions page.

The FAQs clarify that an acceptance by an employee of an offer must be delivered to the employer within 5 business days, which does not include Saturdays, Sundays, or California state holidays.

Moreover, the obligation to offer positions does not end if an employee declines a position. If an employee turns down a job offer, an employer must offer the employee subsequent jobs that are to be filled assuming the employee worked at the same or similar position. As stated in the statute, an employer does not have to recall a non-qualified employee. A qualified employee is defined as an employee who held the same or similar position with the employer at the time of the employee’s most recent lay-off.

An employer must provide the laid-off employee a written notice within 30 days of the date of filling the position if the position is filled by a less senior employee. The notice must include the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision.

An employer must keep the following records for at least three years from the date of a lay-off notice:

  • the laid-off employee’s full name, job classification, date of hire, last known address of residence, email address, telephone number;
  • a copy of the lay-off notice; and
  • copies of all communication between employer and employee concerning employment offers.

The Labor Commissioner also notes that the statewide right of recall is the minimum bar for employee rights, but cities are permitted to make more stringent requirements. And several California cities continue with their own COVID-19 related right of recall ordinances.

Jackson Lewis will continue to track COVID-19 related statutes and ordinances around the state of California. If you have questions about the right of recall statute or related issues, contact a Jackson Lewis attorney to discuss.

In Ferra v. Loews Hollywood Hotel, LLC, the California Supreme Court has concluded that an employee’s “regular rate of compensation” for meal and rest period premium pay is synonymous with the employee’s “regular rate of pay” for overtime.  Accordingly, employers paying meal and rest period premiums must pay those,  not at an employee’s base hourly rate alone, but at that rate plus all non-discretionary payments, meaning those that are paid “pursuant to [a] prior contract, agreement, or promise . . . .”

Plaintiff Ferra alleged that Loews improperly calculated her meal and rest period premium payments when it excluded her non-discretionary quarterly incentive bonuses from premium pay calculations.  Loews successfully argued before the trial court and court of appeal that Ferra’s “regular rate of compensation” for meal and rest period premium pay is her base hourly rate of pay and is distinguishable from her overtime “regular rate of pay.”

After a lengthy analysis of legislative history, the California Supreme Court disagreed and reversed the court of appeal.  The Court concluded that the “regular rate of compensation” for meal and rest period premium pay under California Labor Code section 226.7(c) is synonymous with the “regular rate of pay” for overtime as defined under California Labor Code section 501(a).  As a result, when employers pay meal and rest period premiums, they must use the employee’s overtime regular rate of pay, which includes all non-discretionary payments for the work performed.

Moreover, the California Supreme Court rejected Loews’ argument that its decision should only apply prospectively. Following its decision in Vazquez v. Jan-Pro Franchising International, the California Supreme Court held that since it was interpreting a statute, not overruling or disapproving previous case law, its holding applies retroactively.

What should employers do now?

  • Review and update payroll policies and procedures pertaining to meal and rest period premiums.
  • Audit prior meal and rest period premium payments to those employees who receive non-discretionary bonuses or other wages that are included in their regular rate of pay calculations, to assess what compliance steps should be taken both prospectively and, potentially, retroactively

If you have questions on how to update your payroll policies or need assistance in correcting prior meal and rest period premium payments, contact a Jackson Lewis attorney to discuss.

A piece-rate plan is a wage payment system where an employee is paid a fixed amount for each unit produced or action completed.  Piece rate is used in many different industries, including automobile repair, trucking, manufacturing, and call centers.  An example of a piece-rate plan is an automobile mechanic who is paid a certain amount per tune-up or a factory worker who is paid a certain amount per number of widgets produced.

Piece rate law under the California Labor Code is not the same as piece-rate law under the Federal Labor Standards Act (FLSA), so it is important for California employers to make sure they comply with California law.

The following four tips can help employers comply with California piece-rate law.

  1. Ensure Employees Are Paid Minimum Wage for All Hours Worked, Including Nonproductive Time.

All employers are obligated to ensure that employees receive at least minimum wage for all hours worked. California requires minimum wage compensation for each hour worked. While piece-rate workers typically earn more than minimum wage, employers need to make sure employees are paid separately for non-productive time, which includes time spent performing tasks other than those that earn piece-rate pay, such as traveling to and from job sites, loading or maintaining vehicles, attending meetings, time spent training, etc.   If the employer directs a piece-rate worker to do something such as attend a meeting in which they would not be able to earn piece-rate, the employer must pay the employee at least minimum wage for that period.

Here is an example:

An employee is an automobile mechanic.  On Monday, Employee spends 6 hours repairing 3 automobiles (i.e., each automobile takes 2 hours to repair). The employee earns a piece rate of $100 per automobile repair or $300 for the 3 repairs done on Monday ($100 x 3).

Also, on Monday, Employee spent 1 hour in a meeting and another hour waiting for customers to drop off their automobiles, or 2 hours of nonproductive time (i.e., time not compensated by the piece-rate system of $100 per repair).  In that case, the employee worked a total of 8 hours, 6 hours of productive time (i.e., automobile repairs earning a piece-rate payment), and 2 hours of nonproductive time (i.e., meeting and waiting time not earning a piece-rate payment).

The employee is paid $300 gross wages for his work on Monday.  Under the FLSA, the employer could average Employee’s pay to ensure Employee was paid the applicable minimum wage.   For example, Employee was paid $300 for 8 hours of work, or an average of $37.50/hour.  If $37.50 is greater than the applicable minimum wage, the employer did not violate the minimum wage law under the FLSA.

However, in this case, the employer did violate the California Labor Code.  Even though the Employee earned an average of $37.50 per hour worked, which is higher than any current minimum wage rate in California, Employee did not earn at least minimum wage for each hour worked because Employee was not paid separately for the 2 hours of non-productive time.

Instead, under the California Labor Code, the employee earned $50/hour for the productive time (i.e., time spent repairing automobiles), and $0/hour for the nonproductive time (i.e., time spent in meetings and waiting for vehicles to repair).  The $0/hour payment violates California minimum wage law.

Assuming the applicable minimum wage rate was $15/hour, the employer should have paid Employee at least $330 for Monday (i.e., $300 for the productive time and $30 [or $15/hour] for the nonproductive time).

Employers must make sure they make a separate payment equal to at least minimum wage for all nonproductive time.

  1. Ensure Employees Are Properly Compensated For Rest And Recovery Periods.

Under California law, non-exempt employees must be provided paid rest periods equal to at least 10 minutes for every 4 hours worked, or major fraction thereof.

Pursuant to the California Labor Code, piece-rate workers must be compensated separately for rest and recovery periods at a regular rate that is no less than the higher of:

  • “An average rate determined by dividing the total compensation for the workweek, exclusive of compensation for rest and recovery periods, and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of rest and recovery periods” or
  • The applicable minimum wage rate (defined as “the highest of the federal, state, or local minimum wage that is applicable to the employment”).

 The California Department of Industrial Relations provides more detailed information on the calculation on their FAQ Page for Piece Rate Compensation.

  1. Ensure Employees Are Paid Overtime At The Proper Rate.

The California Labor Code provides overtime wages at a rate of 1.5x, or 2x, an employee’s “regular rate” of pay, depending on the number of consecutive days and hours worked.  For piece-rate workers, the California Labor Commissioner has approved the following two methods to determine an employee’s regular rate of pay:

  • Commonly Used Method: Compute the regular rate by dividing the total earnings for the week, including earnings during overtime hours, by the total hours worked during the week, including the overtime hours. For each overtime hour worked, the employee is entitled to an additional one-half the regular rate for hours requiring time and one-half and an additional full rate for hours requiring double time.
  • Less Common Method: Using the piece rate as the regular rate and paying one and one-half times this rate for production during overtime hours.

The California Department of Industrial Relations provides more detailed information on the calculation on their FAQ Page for Piece Rate Compensation.

  1. Ensure Employees Are Provided Accurate Wage Statements.

There are specific requirements under the California Labor Code for what must be included on a wage statement. However, for piece-rate workers, employers must include the following additional items on every wage statement:

  • The total hours of compensable rest and recover periods;
  • The employee’s rate of compensation for rest and recovery periods;
  • The employee’s gross wages paid for rest and recovery periods;
  • The total hours of nonproductive time worked;
  • The employee’s rate of compensation for nonproductive time; and
  • The employee’s gross wages for the nonproductive time.

If you have questions about piece-rate or related issues, contact a Jackson Lewis attorney to discuss.

The state and some local COVID-19 supplemental paid sick leave requirements continue through the summer. And the City of Los Angeles’ mayor issued a public order mandating additional paid leave.

Under the order, employees who work within the City of Los Angeles and have been employed by their employer for 60 days are entitled to paid time off to get vaccinated for COVID-19, including traveling to and from the appointment, as well as recovering from the side effects of vaccination, if it prevents the employee from being able to work or telework.

Effective Period

The leave mandate went into effect immediately on June 24th and expires on September 30, 2021. However, certain payment requirements are retroactive to January 1, 2021.

Amount of Leave

The amount of time an employee is entitled to take is dependent on the size of the employer and whether the employee is full-time or part-time.

Size of Employer Full-Time Employee  Part-Time Employee
25 or fewer employees
  •        4 hours of COVID-19 Vaccine Leave to obtain each COVID-19 vaccine injection.
  • Up to 8 hours of COVID-19 Vaccine Leave to recover from any vaccination-related side effects.
  • The prorated amount of 4 hours of COVID-19 Vaccine Leave per injection based on the average number of hours worked in the 60 days preceding the injection.
  • Up to the prorated amount of 8 hours of COVID-19 Vaccine Leave to recover from any vaccination-related side effects.
More than 25 employees
  • If the employee has exhausted leave under other sick leave allotments such as the city mandated supplemental paid sick leave

o   4 hours of additional paid leave per injection

o   Up to 8 hours of additional paid leave for recovery from vaccination-related side effects.
  • If the employee has exhausted leave under other sick leave allotments such as the city mandated supplemental paid sick leave

o   Up to the prorated amount of 4 hours per injection based on the average number of hours worked in the 60 days preceding the injection.

o   Up to the prorated amount of 8 hours for recovery from vaccination-related side effects.

Rate of Pay

Non-exempt employees entitled to the leave are to be compensated at the highest of the following rates:

  • The normal rate of pay for the workweek in which the leave is taken;
  • The City’s minimum wage;
  • The average hourly pay for the preceding 60 days, not including overtime.

Exempt employees are to be compensated for the leave in the same manner as the employer calculates other forms of paid leave. However, leave required by the order is not to exceed $511 per day (or $255.50 per each 4 hours), or $1,022 in aggregate.

Retroactive Provisions

If an employee took leave to receive a COVID-19 vaccine or to recover from vaccination on or after January 1, 2021, and was not compensated at an amount equal or greater to the rate required by the order, then upon oral or written request of an employee, the employer must provide a retroactive payment.

Retroactive payment will also be due to an employee if the employee had to use leave other than the city-mandated sick leave or city-mandated supplemental paid sick leave, such as vacation time and such leave must be restored to the employee.

If you have questions about compliance with the City of Los Angeles order or related issues with COVID-19 leave, contact a Jackson Lewis attorney to discuss.

On May 18, 2021, Santa Clara County ordered businesses to track employee’s COVID-19 vaccination status. This Order departed largely from the prior County Orders as well as the California Blueprint for a Safer Economy.  However, in conjunction with the California Department of Industrial Relations, Division of Occupational Safety and Health (commonly known as Cal/OSHA), the County has now issued a new Order limiting the requirement.

The June 21, 2021 health order includes recommendations to continue to keep the community safe from COVID-19, which the County suggests include: (1) getting vaccinated; (2) continuing to emphasize outdoor activities; (3) avoid travel if not fully vaccinated; and (4) continue regular testing for COVID-19 if not fully vaccinated and, regardless of vaccination status, get immediately tested if you have COVID-19 symptoms.  The County cited declining cases, widespread community vaccination, and the newly amended Cal/OSHA regulations as the reasons it was phasing out its May 18th Order.

Under the revised order, businesses in Santa Clara county must have completed two rounds of ascertainment of the vaccination status of their personnel. Prior to the June order, ascertainment of vaccination status was an ongoing obligation for employers in the county.

As clarified by the County, the first round of ascertainment was to be for all personnel and the second round for those who did not indicate they were fully vaccinated. Once two rounds of ascertainment are completed, the May 18th order will no longer apply.

The first round should have been completed by June 1, 2021, per the original order. The FAQs Santa Clara issued regarding the revised order state that if employers have not completed ascertainment to date, the first round should be completed immediately, and the second round 14 days thereafter.

The County states all entities must maintain their records of compliance for the period Cal/OSHA COVID-19 Emergency Temporary Standards (ETS) remain in effect. Currently, the ETS are set to expire on January 14, 2022.

Under the May and June orders, a business can ascertain an employee’s vaccination status by reviewing the documentation establishing the employee’s vaccination status e.g. the employee’s vaccine card, or the employee may complete a certification of vaccination status. The County developed a template for self-attestation to assist with compliance with the order.

Employers are directed to document if an employee declines to disclose their vaccination and like the ETS treat the employee as if they are not fully vaccinated.

Jackson Lewis continues to track local and state regulations pertaining to COVID-19 in the workplace. If you have questions about complying with the Santa Clara order or related issues contact a Jackson Lewis attorney to discuss.

It’s summer and California has eased COVID-19 restrictions, which makes it the perfect time for employers to refresh themselves on the rules and regulations governing vacation time for employees in California.

Vacation Not Required

While California is known for its complex web of leave requirements, there is no requirement for California employers to provide vacation time to employees. Moreover, employers are permitted to exclude certain classes of employees, such as part-time, temporary, or probationary employees from vacation plans or policies. To avoid misunderstandings, a clear and specific policy that states the classifications that are entitled to vacation time is recommended. When vacation is provided, the rules and regulations can be complicated.

Vacation Time is Considered Wages

Under California law, earned vacation time is considered wages, and vacation time is considered earned as an employee performs work for the employer. In practice, this means that vacation pay is accrued as it is earned and cannot be forfeited unless otherwise allowed by applicable law. Upon the termination of employment, an employee generally must be paid all earned and unused vacation time at the employee’s final rate of pay. Although sick leave is not paid out at separation, these payout rules apply to Paid Time Off (PTO) policies that combine vacation and sick leave.

Reasonable Cap

While an employee cannot usually forfeit vacation time once earned, an employer is permitted to place a reasonable cap on vacation benefits. Employers should note that the California Labor Commissioner has held that policies that require an employee to take all vacation in the same year it is earned are unfair.

A cap on vacation time may set a maximum amount of vacation time an employee may accrue. Once an employee reaches the maximum or cap, they will not accrue additional vacation time until they use some of their accrued time.

Controlling Vacation Time

Employers have the right to manage vacation pursuant to the terms of their policy. This right includes being able to direct how an employee requests vacation, when an employee can take vacation time, and how much an employee can take at a given time upon proper notice.

Some employers with seasonal upticks in work may elect to have vacation “blackout periods” in their policies or related rules pertaining to vacation time. Vacation policies should be carefully drafted to address the needs of the business but also ensure compliance with the law.

“Unlimited” Time Off

Some employers have adopted “discretionary” or “flexible” time off policies.  Under these policies, employees are given flexibility in the amount of time off that can be taken for a vacation purpose.  Under such policies employees do not accrue vacation hours, so they do not present the same forfeiture and payout obligations discussed above.  Instead, employees are allowed to take time off as workloads permit.

In drafting such flexible time-off policies where vacation does not accrue like a traditional vacation policy, employers should consider the following:

  1. Is the policy in writing?
  2. Does the policy clearly provide that an employee’s ability to take paid time off is not a form of additional wages for services performed but part of the employer’s promise to provide a flexible work schedule?
  3. Does the policy spell out the rights and obligations of both the employee and employer and the consequences of failing to schedule time off?
  4. In practice, does the policy allow sufficient opportunity for employees to take time off, or work fewer hours in lieu of taking time off?
  5. Is the policy fairly administered so that it neither becomes a de facto ‘use it or lose it policy’ nor results in inequities, such as where one employee works many hours, taking minimal time off, and another works fewer hours and takes more time off?

If you have questions about vacation time in California or need assistance with related issues, contact a Jackson Lewis attorney to discuss.

Under Cal/OSHA’s COVID-19 Emergency Temporary Standards (ETS), employers are mandated to have a written COVID-19 Prevention Program. In light of the recent revisions to the ETS, Cal/OSHA has released an updated model prevention program. The updated program includes directives for vaccinated and unvaccinated individuals such as face-covering requirements. The new model program also includes an appendix for documentation of employee’s COVID-19 vaccination status.

While the model prevention program is very detailed, employers will still need to conduct a workplace-specific evaluation to ensure they are appropriately addressing the hazards facing their workforce. Employers can find fact sheets and links to Cal/OSHA’s FAQs about the ETS on the COVID-19 Prevention Emergency Temporary Standards page.

If you have need assistance in updating your COVID-19 Prevention Program 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.

The simple answer is Cal/OSHA has not clarified if the 30-year retention rule is triggered by requirements of the COVID-19 Emergency Temporary Standards (ETS).

Pursuant to Cal/OSHA’s amended ETS employers are required to document the vaccination status of their employees if the employer intends to allow vaccinated employees to work without a face covering or to determine whether an employee needs to be excluded from the workplace due to a close contact with a COVID-19 case.

Under Cal/OSHA’s Frequently Asked Questions for the revisions to the ETS  three acceptable options are outlined for obtaining this vaccination information:

  • Employees provide proof of vaccination (vaccine card, image of vaccine card, or health care document showing vaccination status), and the employer maintains a copy.
  • Employees provide proof of vaccination. The employer maintains a record of the employees who presented proof, but not the vaccine record itself.
  • Employees self-attest to vaccination status and the employer maintains a record of who self-attests.

Under a separate Frequently Asked Questions page for the ETS generally, Cal/OSHA includes the following:

Q: How long are employers required to maintain documentation of employee vaccination status?

A: Vaccination records created by the employer under the ETS need to be maintained for the length of time necessary to establish compliance with the regulation, including during any Cal/OSHA investigation or appeal of a citation.

In order to encourage documentation using vaccination records, Cal/OSHA has determined that it would not effectuate the purposes of the Labor Code to subject such records to the thirty (30) year record retention requirements that apply to some medical records.

It is unclear if this response is intended to absolve employers from the typical 30-year medical record retention for all methods of vaccination status confirmation or only “employer created” documents such as when an employee’s self-attests to vaccination status.

Under 8 CCR 3204, subdivision (d), employers are mandated to maintain for at least the duration of an employee’s employment plus 30 years, medical records of employees, except for minor exceptions. Under the regulation, a medical record is defined as a “record concerning the health status of an employee which is made or maintained by a physician, nurse, or other health care personnel, or technician.”

Based on the general Cal/OSHA regulation, it would appear if an employer collects a copy of the vaccine card or other proof that was made or maintained by a physician, nurse, or other health care personnel, or technician, the employer would need to maintain those records for the duration of employment plus thirty years.

Hopefully, Cal/OSHA will further clarify their FAQs regarding the maintenance of vaccination records shortly. In the meantime, employers should be sure that if they are requesting documentation of vaccination status from employees it is being maintained in a confidential file.

If you have questions about compliance with the Cal/OSHA ETS or related workplace safety issues contact a Jackson Lewis attorney to discuss.

All the way back in 2018, California passed Senate Bill 826 requiring publicly-held corporations with principal executive offices in California to have a certain number of females on their board of directors. Similarly, in 2020, Assembly Bill 979 was passed which required publicly held corporations headquartered in California to diversify their board of directors with “underrepresented communities.”

Both laws have faced legal challenges including taxpayer organizations arguing that the State of California should not be permitted to use tax dollars to enforce the law and from shareholders of covered corporations.

Recently, the 9th Circuit revived a shareholder suit pertaining to Senate Bill 826. The suit was brought by a shareholder of a company covered by the statute. The shareholders of the company are responsible for selecting the corporation’s directors at their annual meeting. The shareholder alleged that the statute discriminates on the basis of sex in violation of the Equal Protection Clause of the 14th Amendment and “seeks to force shareholders to perpetuate sex-based discrimination.”

In December 2019, the company elected a female to fill a vacant board-member seat which meant the company was in compliance with the requirements of the statute. On that basis, the State moved to dismiss the shareholder’s complaint for lack of Article III standing. The district court granted the motion to dismiss reasoning that the shareholder had not suffered any injury in fact, because the penalties imposed under the statute were against non-compliant corporations, not shareholders.

The 9th Circuit reversed finding the shareholder had alleged injury in fact and thus had standing to challenge the statute.  Moreover, the appellate court opined in a footnote that the panel is leaving it to the district court on remand to determine whether SB 826 is constitutional.

The ruling does not change the current status of either Senate Bill 826 or Assembly Bill 979, as currently no preliminary injunction to bar enforcement is in place but the ruling could affect the future of both statutes as challenges against the lawfulness continues.

Jackson Lewis continues to track litigation and statutes that affect employers. If you have questions about compliance with diversity requirements or related issues contact a Jackson Lewis attorney to discuss.

While the past week brought many changes around California for COVID-19 requirements, both the state statute and several local supplemental paid sick leave ordinances persist.

The statewide COVID-19 Supplemental Paid Sick Leave (“SPSL”) law remains in effect until September 30, 2021.

As a reminder, under the state SPSL, employees are entitled to leave for the following reasons:

  • The employee is subject to a quarantine or isolation period related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The employee is attending an appointment to receive a vaccine for protection against COVID-19;
  • The employee is experiencing symptoms related to a COVID-19 vaccine that prevents the employee from being able to work or telework;
  • The employee is experiencing symptoms related to COVID-19 and seeking medical diagnosis;
  • The employee is caring for a family member who is subject to a quarantine or isolation order or has been advised to self-quarantine;
  • The employee is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

Similarly, many local ordinances also remain in effect, and so employers should be aware of the local ordinances applicable to their business. There may be overlap under the local ordinances with the statewide obligations.

Locality Expires
Long Beach (City) Based upon City Council determination.
Los Angeles (City) Until 2 calendar weeks after the expiration of the COVID-19 local emergency period.

Los Angeles

(County – unincorporated areas only)

 Shall be in effect until two calendar weeks after the expiration of the COVID-19 local emergency, as ratified and declared by the Board of Supervisors.

Marin

(County – unincorporated areas only)

 September 30, 2021
Oakland (City) Shall expire after the expiration of Oakland’s Declaration of COVID-19 Emergency.
Sacramento (City) June 30, 2021
San Jose (City) June 30, 2021
Sacramento (City) September 30, 2021
Santa Rosa (City) September 30, 2021
Sonoma (County -unincorporated areas only) September 30, 2021

Marin and Sonoma County are the most recent localities to issue or expand their supplemental paid sick leave ordinances. Marin applies to employers with 25 or fewer employees. However, the reasons for which paid leave may be taken, and the amount of supplemental paid sick leave provided, mirror the statewide law. Sonoma County similarly extended the expiration date of its supplemental paid sick leave ordinance, but also provided a new bank of time retroactive to January 1, 2021.

If you have questions about COVID-19 sick leave requirements or related issues, contact a Jackson Lewis attorney to discuss.