Much like the agricultural harvest cycles it may affect, September 12, 2016, marks the planting season for the Phase-In Overtime for Agricultural Workers Act of 2016.

Assembly Bill 1066 (“AB1066”), signed into law by Governor Brown, is an aggressive “phase-in” overtime bill, which will cultivate and change the wage and hour landscape for agricultural workers over the next decade or so.

Current California law exempts agricultural employees from certain typical overtime provisions. In particular, Industrial Welfare Order No. 14-2001 provides that agricultural workers can be paid their regular rate of pay for any hours up to ten (10) in a workday for six (6) days in a week, or sixty (60) hours per week. Overtime rates, paid at one-and-a-half (1.5) times the regular rate of pay in California, only kick in after ten hours in a workday, and for the first eight (8) hours on the seventh day of the workweek. Double-time rates, paid at two times the regular rate of pay, are paid after the eighth hour of work on the seventh day of the workweek.

New AB1066 overtime protections for agricultural workers will sprout up and grow or “phase in” starting next year, providing more and more protections to employees as each year passes.

Below is the schedule that agricultural employers will need to abide by to remain compliant with California law:

  • Beginning January 1, 2017, all other provisions of existing laws regarding compensation for overtime work will apply to agricultural workers.
  • Starting January 1, 2019, any employer with at least 26 employees must pay its agricultural employees overtime rates for any hours worked in excess of 9.5 per day, or any hours worked over 55 in any workweek. (Employers with 25 or fewer employees have until January 1, 2022, to become compliant.)
  • Starting January 1, 2020, any employers with at least 26 employees must pay its an agricultural employees overtime rates for any hours worked in excess of 9 per day, or any hours worked over 50 in any workweek. (Employers with 25 or fewer employees have until January 1, 2023, to become compliant.)
  • Starting January 1, 2021, any employers with at least 26 employees must pay its an agricultural employees overtime rates for any hours worked in excess of 8.5 per day, or any hours over 45 in any workweek. (Employers with 25 or fewer employees have until January 1, 2024, to become compliant.)
  • Starting January 1, 2022, any employers with at least 26 employees must pay its an agricultural employees overtime rates for any hours worked in excess of 8 per day, or any hours over 40 in any workweek. (Employers with 25 or fewer employees have until January 1, 2024, to become compliant.)
  • Starting January 1, 2022, any employer with at least 26 employees must pay double time to any worker in an agricultural occupation who works excess of 12 hours in one day. (Employers with 25 or fewer employees have until January 1, 2025, to become compliant.)

Companies with workers “employed in an agricultural occupation” will need to stay on top of this drastically changing wage and hour landscape. For further information or assistance for developing strategies to remain compliant with California labor laws, please contact the Jackson Lewis attorney with whom you normally work.

On September 7, 2016, the Ninth Circuit Court of Appeals in Mohamed v. Uber Technologies, Inc. largely overturned the District Court’s ruling which had held Uber’s arbitration agreements to be unenforceable.  Last year, the District Court had held that the arbitration agreements were unconscionable due to the inclusion of a waiver of claims brought under California’s Private Attorneys General Act (“PAGA”).  The decision invalidated nearly 250,000 arbitration agreements between Uber and independent drivers, allowing the case against Uber to proceed as a class action in civil court.

Uber appealed the decision, arguing that the District Court should have simply severed the PAGA waiver pursuant to the agreement’s severability provision rather than invalidating the entire agreement. The Court of Appeals agreed, ruling that the PAGA waivers are severed from the arbitration agreements and the agreements are otherwise enforceable.  This decision will allow drivers to pursue their PAGA claims in court, but will allow Uber to compel individual arbitration on all other claims.

Requiring class and collective action waivers as a condition of hire or continued employment violates the National Labor Relations Act (“NLRA”), the Ninth Circuit Court of Appeals ruled on August 22, 2016.

In April 2011, the U.S. Supreme Court ruled that class claims can be waived in a valid arbitration agreement under the Federal Arbitration Act (“FAA”). Many employers have since entered into such agreements with their employees. The National Labor Relations Board, however, takes the position that prohibitions against class or collective proceedings violate an employee’s rights to engage in protected concerted activity for mutual aid and protection under Sections 7 and 8 of the NLRA.

Essentially following the Seventh Circuit’s reasoning in a decision earlier this year, and deferring to the NLRB’s interpretation of the NLRA, the Ninth Circuit has now held that employees have a substantive right to pursue work-related legal claims and to do so together. It also concluded that employers cannot defeat such rights by requiring employees, as a condition of employment, to agree to pursue claims on an individual basis. Other courts, however, including the Second, Fifth and Eighth Circuits, have concluded that class and collective action waivers do not violate the NLRA.

The future of class, collective, and representative action waivers is uncertain. Within the Ninth Circuit (which has jurisdiction over Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington), it remains to be seen whether the matter will be heard en banc by the full Ninth Circuit Court of Appeals. If the decision stands, the split on this issue is significant, and the matter is ripe for U.S. Supreme Court review. Many of the Supreme Court’s decisions regarding class action waivers have been based on five-to-four rulings, where the late Justice Antonin Scalia represented one of the five votes favoring class waivers. Accordingly, the Supreme Court’s composition likely will affect the fate of class action waivers and the outcome of the dispute among the circuits.

Jared Bryan is a Principal in the Orange County office of Jackson Lewis, an AmLaw 100 firm dedicated to representing management exclusively in workplace law.

On August 29, 2016, the California Court of Appeal for the Second Appellate District reversed summary judgment earlier awarded to the employer in Castro-Ramirez v. Dependable Highway Express, Inc. In its reversal, the court found that an employer’s denial of accommodation to a nondisabled employee may be evidence of associational disability discrimination under the Fair Employment and Housing Act (“FEHA”).

The Facts

Plaintiff Luis Castro-Ramirez (“Plaintiff”) began working for Dependable Highway Express (“DHE”) in 2010. At that time, Plaintiff notified DHE that he had a disabled son who required dialysis on a daily basis.  He requested work schedule accommodations that allowed him to administer dialysis to his son in the evenings and was given such a schedule.  Plaintiff’s typical schedule was from 9:00 or 10:00 a.m. until 7:00 or 8:00 p.m.

In March 2013, Plaintiff’s supervisor was promoted to operations manager, and his new supervisor, Boldomero Munoz-Guillen (“Junior”) changed Plaintiff’s work schedule. That same month, Plaintiff complained to the operations manager that Junior had changed his hours, such that he was unable to attend to his son’s daily dialysis needs.

Plaintiff told Junior, “Please, I need to have my job like always. I’ve always had help from everyone except you.”  The next day, Junior assigned Plaintiff to a shift starting at 12:00 p.m., and due to the route Plaintiff’s supervisor assigned to him, he could not get back in time to administer dialysis by 8:00 p.m.  Plaintiff requested the day off or an alternative shift, and reminded Junior that the operations manager had told Junior about Plaintiff’s needs.  Junior laughed, “[Plaintiff’s former supervisor] doesn’t work here anymore.  Now it’s me.” Junior told Plaintiff that if Plaintiff did not handle the route, he would be terminated.  Plaintiff refused, and DHE terminated Plaintiff’s employment.

The Decision

The Court of Appeal noted that Plaintiff had abandoned his claim for failure to provide reasonable accommodation, and thus, declined to decide whether FEHA provided a duty to accommodate associational disability. However, the Court of Appeal explained that the FEHA creates an associational disability discrimination claim.  The Court of Appeal opined that FEHA makes it unlawful to discharge a person from employment based on physical disabilities or other characteristics, which include “a perception that the person. . .is associated with a person who has, or is perceived to have, any of those characteristics.”  Cal. Gov. Code § 12940(a), § 12940(o).

Based on that framework, the Court of Appeal opined that a jury could reasonably find that Plaintiff’s association with his disabled son was a substantial motivating factor in Junior’s decision both to deny an alternative work schedule and to terminate Plaintiff. “[T]hese facts may give rise to the inference that Junior acted proactively to avoid the nuisance plaintiff’s association with his disabled son would cause Junior in the future.”

The Court of Appeal also held that reasonable juror could find Plaintiff’s repeated complaints about the sudden changes to his schedule represented a protected activity, especially given the proximity of time between Plaintiff’s complaints and the termination. The Court of Appeal found Plaintiff did more than simply request an accommodation; he expressed a degree of opposition to the DHE’s failure to provide the altered schedule and thus there is a triable issue of fact as to retaliation.

The Dissent

The Court of Appeal’s dissenting opinion disagreed with the majority’s statement that it declined to decide whether FEHA establishes a separate duty to reasonably accommodate associational disabilities. Rather, the dissent believes the majority did just that.  Effectively, the employer either must provide accommodations to employees associated with disabled persons, or face liability for associational discrimination for failure to provide such accommodations.

***

The Castro-Ramirez v. Dependable Highway Express ruling finds that an employer could be liable for discrimination and retaliation for adverse employment actions substantially based on associational disabilities.  The decision also asserts that employer denial of accommodation requests by employees associated with disabled persons may be evidence of an associational disability claim.  Accordingly, employers should review their policies and practices regarding responding to disability accommodation requests in light of this decision.  Please contact Jackson Lewis with any legal questions about disability accommodation related issues.

By now, California employers are probably aware of the “Ban the Box” movement sweeping the nation. Lawmakers and government agencies aim to provide applicants with a fair chance at employment by eliminating conviction history inquiries in background checks, interviews, and applications.  Over 100 cities and counties nationwide have adopted similar initiatives to prevent employers from inquiring about and then rejecting applicants from positions based on their criminal history.  President Obama has even endorsed the hiring reform, requiring that federal agencies delay inquiries into criminal records.

Earlier this year, the Department of Fair Employment and Housing proposed regulations, adding section 11017.1 to Title 2 of the California Code of Regulations, which will limit the use of criminal history as a consideration in employment decisions. The California Fair Employment and Housing Act (“FEHA”) currently prohibits harassment and discrimination on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, and military and/or veteran status of any person.  The proposed amendments consider that inquiries into criminal history in employment decisions may constitute a violation of the FEHA if it adversely impacts a person on the protected categories above.

The proposed types of prohibited criminal history inquiries include: (1) An arrest or detention that did not result in conviction (Labor Code section 432.7); (2) Referral to or participation in a pretrial or post-trial diversion program (Id.); (3) A conviction that has been judicially dismissed or ordered sealed pursuant to law (Id.); and (4) A non-felony conviction for possession of marijuana that is two or more years old (Labor Code section 432.8).

Understandably, California employers may have reasons for looking into an applicant’s criminal history. For example, employers may wish to prevent fraud or theft, and they will want to prevent negligent hiring liability.  The proposed text would require employers to establish that consideration of criminal convictions is justifiable because it is job-related and consistent with business necessities.  As with most background searches and hiring practices, employers will be required to provide adequate notice of any background inquiries and a reasonable chance to dispute any factual inaccuracies.

San Francisco employers are already prohibited from asking questions about an applicant’s criminal records, including the following: arrests that did not result in conviction, unless charges remain pending; completion of a diversion program; sealed or juvenile offenses; offense that are more than seven years old from the date of sentencing; and offenses that are not misdemeanors or felonies, such as infractions.

For further information or assistance in developing strategies and policies, please contact the Jackson Lewis attorney with whom you regularly work.

California S.B. 1342 is a new law which allows cities and counties to work with the California Division of Labor Standards enforcement (“DLSE”) to enforce wage payment laws. The new measure was intended to give local enforcement programs the tools required to conduct wage claim investigations in order to recover unpaid wages including the ability to issue subpoenas. The law encourages cities and counties to develop specific measures to target and remedy wage theft. Many cities have already adopted city minimum wage and paid sick leave laws and the list is growing.

 Specifically, the law will add Section 53060.4 to the Government Code. Government Code Section 53060.4 will read:

(a) The legislative body of a city or county may delegate to a county or city official or department head its authority to issue subpoenas and to report noncompliance thereof to the judge of the superior court of the county, in order to enforce any local law or ordinance, including, but not limited to, local wage laws.

(b) The Legislature finds and declares that these provisions do not constitute a change in, but are declaratory of, existing law.

 The California law states the law does not constitute a change in the law but clarifies existing law. It is another reminder for employers to review whether the new local city minimum wage or paid sick leave laws cover any of their facilities. If you have any questions, please feel free to contact the Jackson Lewis attorney you normally work with or Jonathan Siegel at siegelj@jacksonlewis.com.

 

On July 22, 2016, the Governor approved California Assembly Bill 2535 (“AB 2535”), which relates to itemized wage statements (more commonly known as pay stubs). Specifically, AB 2535 revises California Labor Code Section 226. The prior version of Labor Code Section 226 required employers to include on a pay stub total hours worked by the employee unless the employee was paid a salary and exempt from overtime. AB 2535 expands on Labor Code Section 226 and alters reporting requirements by asserting that employers do not need to report total hours worked on a pay stub for employees who are “exempt from the payment of minimum wage and overtime” under specified statutes or any applicable order of the Industrial Welfare Commission.

In sum, AB 2535 adds an additional subsection to Labor Code Section 226, which reads in pertinent part as follows:

“(j) An itemized wage statement furnished by an employer pursuant to subdivision (a) shall not be required to show total hours worked by the employee if any of the following apply:

(1) The employee’s compensation is solely based on salary and the employee is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission.

(2) The employee is exempt from the payment of minimum wage and overtime under any of the following:

(A) The exemption for persons employed in an executive, administrative, or professional capacity provided in any applicable order of the Industrial Welfare Commission.

(B) The exemption for outside salespersons provided in any applicable order of the Industrial Welfare Commission.

(C) The overtime exemption for computer software professionals paid on a salaried basis provided in Section 515.5.

(D) The exemption for individuals who are the parent, spouse, child, or legally adopted child of the employer provided in any applicable order of the Industrial Welfare Commission.

(E) The exemption for participants, director, and staff of a live-in alternative to incarceration rehabilitation program with special focus on substance abusers provided in Section 8002 of the Penal Code.

(F) The exemption for any crew member employed on a commercial passenger fishing boat licensed pursuant to Article 5 (commencing with Section 7920) of Chapter 1 of Part 3 of Division 6 of the Fish and Game Code provided in any applicable order of the Industrial Welfare Commission.

(G) The exemption for any individual participating in a national service program provided in any applicable order of the Industrial Welfare Commission.”

On July 7, 2016, Assembly Bill No. 1684 (“AB1684”)[1], introduced in support California’s anti- human trafficking laws, passed both the Senate and the House of Representatives and was ordered enrolled.

Originally introduced earlier this year by Assembly Member Mark Stone, AB1684 amends the current law to expressly allow the Department of Fair Employment and Housing (“DFEH”) to receive, investigate, conciliate, mediate, prosecute and bring civil actions for and on behalf of victims of human trafficking against the perpetrator.

AB1684 allows any damages in a civil action brought by the DFEH to be awarded directly to the victim.   Specifically, in a civil suit brought by the DFEH, a successful plaintiff may be awarded the following:

  • Exemplary damages (punitive damages) to be awarded by the jury or court;
  • A civil penalty of $25,000 to be awarded to the individual human trafficking victim; and
  • Attorney’s fees and costs as may be determined by the court, which will be awarded to the DFEH for bringing the claim.

The bill will now be delivered to the Governor to sign into law.

[1] http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160AB1684

 

On July 20, 2016, California Department of Industrial Relations (“DIR”) issued a press release stating DIR enforcement of a contractor and subcontractor’s requirement to submit certified payroll records(“CPRs”) using DIR’s online system will resume on August 1. DIR clarified that the requirement to keep CPRs has not changed. Previously, DIR suspended enforcement of filing CPRs electronically because of problems with the system and improvements. However, employers should have continued to maintain CPRs and the ability to file them electronically was operational. The key difference is now DIR will enforce the filing requirement effective August 1st. See press release

California prevailing wage requirements are complicated and we recommend you consult with the Jackson Lewis attorney you normally work with regarding any compliance issues or feel free to contact Jonathan Siegel at siegelj@jacksonlewis.com.

 

 

Nearly all California employment wage and hour class action lawsuits assert a cause of action under California Labor Code Section 226 as plaintiffs’ attorneys almost always automatically include such cause of action when there are other alleged underlying wage violations, i.e. failure to pay overtime. By asserting this cause of action in their class action complaint, the plaintiffs are provided with the ability to access written itemized wage statements (more commonly known as pay stubs) of (a) a sample of putative class members regardless of whether or not a class action is certified and (b) the entire class if a class action is ultimately certified. At first glance, disclosing pay stubs does not seem problematic except for the time and expense associated with providing the same to the plaintiffs’ attorneys. However, once the plaintiffs’ attorneys are in possession of the pay stubs, they will analyze them to determine if they are non-compliant on their face, which can create large penalties for an employer.

Employers are required to provide employees with pay stubs, which can be a stand-alone document or a detachable part of a pay check. In California, Labor Code Section 226 governs pay stubs. Under Labor Code Section 226, the following items must appear on every pay stub:

Gross wages earned;

  1. Total hours worked by each employee (except for salaried employees who are exempt from the state overtime rules);
  2. The number of piece-rate units earned and any applicable piece rate (if the employee is paid on a piece rate basis);[1]
  3. All deductions;
  4. Net wages earned;
  5. The inclusive dates of the period for which the employee is being paid;
  6. The employee’s name and only the last four digits of the employee’s social security number or an employee identification number other than a social security number;
  7. The name and address of the legal entity that is the employer (and if the employer is a farm labor contractor, the name and address of the legal entity that secured the services of the employer); and
  8. All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

Temporary service employers are also required to provide on pay stubs the rate of pay and the total hours worked by each temporary employee for each temporary services assignment. It should also be noted that in California, the amount of paid sick leave available to an employee is also required to be on the face of the pay stub or provided to the employee in a separate document with the employee’s wages on the designated pay dates.

If any of the items enumerated above are missing, employees may be entitled to penalties. Under Labor Code Section 226, an employee may recover the greater of all actual damages or $50 for each initial violation per employee, and $100 per employee for each subsequent violation, not to exceed an aggregate penalty of $4,000 for a period of one year preceding the filing of a lawsuit. When such penalties are applied to each member of a class, the financial exposure for the employer can be considerable. In addition, employees may recover costs and reasonable attorney’s fees. Moreover, if there is a violation on the face of the pay stub, a plaintiffs’ motion for class certification will more than likely be granted, at least with respect to a Labor Code Section 226 claim.

Although this post relates to California’s itemized wage statement requirement, this issue is not unique to California. In fact, the majority of states have requirements for what must be included on a pay stub as well as applicable penalties for the failure to comply.

[1] Note that pursuant to Labor Code Section 226.2, additional rules apply to employees paid on a piece rate basis.