California’s City of Santa Monica’s City Council has adopted an ordinance that enacts minimum wage and paid sick leave requirements for covered employees as well as new regulations pertaining to service charges and surcharges. Ordinance Number 2509 became effective on February 25, 2016, although its provisions will not be implemented until July 1, 2016.

The City Council authorized the City Manager to establish a working group to review and recommend technical adjustments to the adopted Ordinance.

We discuss key provisions below.

Minimum Wage Rates for Non-Hotel Sector Employees

Employers with at least 26 covered employees shall pay no less than the following hourly wages:

  • July 1, 2016 – $10.50
  • July 1, 2017 – $12.00
  • July 1, 2018 – $13.25
  • July 1, 2019 – $14.25
  • July 1, 2020 – $15.00

Employers with up to 25 employees will have an additional year to satisfy each of these pay rates. Therefore, hourly pay increases for smaller employers will start on July 1, 2017, at $10.50 per hour, reaching $15.00 per hour by July 1, 2021. Continue Reading Santa Monica, California, Joins Patchwork of Minimum Wage and Paid Sick Leave Laws

New California regulations declaring that “[e]mployers have an affirmative duty to create a workplace environment that is free from employment practices prohibited by” the California Fair Employment and Housing Act and that “[e]mployers have an affirmative duty to take reasonable steps to prevent and promptly correct discriminatory and harassing conduct” will go into effect on April 1, 2016. Continue Reading New California Regulations on Workplace Anti-Harassment, Anti-Discrimination Policies Effective April 1

The California Department of Fair Employment and Housing (“DFEH”) recently issued guidelines on transgender employee rights, addressing what types of questions employers may ask transgender employees and applicants. The guidelines also address how employers can implement dress code and grooming standards, and make suggestions for maintaining employee restrooms.

An employee need not have undergone sex reassignment surgery for these guidelines to apply, as the Fair Employment and Housing Act recognizes “gender expression” as “a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.” (Govt. Code section 12926(q).) The new guidelines are summarized as follows: Continue Reading DFEH Issues Guidelines for Protecting Transgender Rights in the Workplace

On January 7, 2016, Governor Brown’s office submitted a 22-page Budget Change Proposal for 2016-2017 (http://web1a.esd.dof.ca.gov/Documents/bcp/1617/FY1617_ORG7350_BCP474.pdf) in an effort to “stabilize and improve the handling of Private Attorneys General Act cases.”

Background

Enacted in 2003, the Private Attorneys General Act (PAGA) enables private parties to recover penalties for certain Labor Code violations that could previously only be pursued by the Labor Commissioner or other divisions within California’s Department of Industrial Relations (DIR). Following a 2004 amendment, PAGA requires employees or their representatives to initiate a case by first sending written notice to the employer and the Labor and Workforce Development Agency (LWDA) identifying the alleged violations and setting forth specific supporting facts.  Continue Reading State Budget Proposal Seeks to Reduce PAGA Litigation Through Increased State Oversight

Last week, California Attorney General, Kamala D. Harris – who has been mentioned as a potential nominee to fill Justice Antonin Scalia’s recently vacated seat on the U.S. Supreme Court – issued the California Data Breach Report (Report).  The Report provides an analysis of the data breaches reported to the California AG from 2012-2015. The Report details that nearly 50 million records of Californians have been breached and the majority of these breaches resulted from security failures.

For more details, please see the post from our colleagues in the Privacy, e-Communication and Data Security Group:[http://www.workplaceprivacyreport.com/2016/02/articles/data-security/reasonable-data-security-defined-by-california-ag/].

 

The budget change proposal for the 2016/17 Fiscal Year [document: <http://web1a.esd.dof.ca.gov/Documents/bcp/1617/FY1617_ORG7350_BCP474.pdf>] submitted by Governor Brown last month contains significant proposed changes to the operation of the Labor & Workforce Development Agency (“LWDA”), the agency responsible for overseeing the Private Attorney Generals Act of 2004 (“PAGA”)   including the creation of a “PAGA Unit” with the authority to intervene and object to the adequacy of the settlement funds designated to PAGA claims. The budget requests a $1.6 million increase to the operation budget to cover additional staffing needs for the agency and an additional $1.5 million going forward to “stabilize and improve the handling of PAGA cases.”  The budget proposal justifies the request for additional resources to increase the LWDA’s effectiveness. Continue Reading Governor Brown’s Proposed PAGA Unit May Have Power to Challenge PAGA Settlement in Court

The recent death of conservative Justice Antonin Scalia will give public sector unions a short respite in Friedrichs v. California Teachers Association et al., a case that was likely to limit public sector unions’ ability to require mandatory fees from public workers. Following last month’s oral arguments before the High Court, many legal analysts expected a 5-4 opinion in Friedrichs, striking down mandatory union fees for public workers. Now, it is possible that the lower court ruling upholding the fees will remain in place. Continue Reading Public Sector Union Fees Continue to Hang in the Balance With Scalia’s Passing

Denying an employer’s motion to compel individual arbitration of a wage and hour class action, a California federal court ruled that the employer’s dispute resolution program violated its employees’ right to engage in concerted action under the National Labor Relations Act (“NLRA”). Totten v. Kellogg Brown & Root, LLC. Notably, this ruling departs from the established trend of federal courts declining to follow the precedent set in In re D.R. Horton, Inc. (“Horton I”) and has significant implications for employers contemplating whether to remove a class action involving the enforcement of arbitration agreements to federal court.

Kellogg Brown & Root LLC’s (“KBR”) hired David Totten (“Totten”) in 2012. During his new hire orientation, Totten signed an agreement to participate in KBR’s Dispute Resolution Program (“DRP”) as a condition of his employment. The DRP required employees to arbitrate any claims against KBR that related to, or arose out of, their employment. The DRP also prohibited “KBR, employees and applicants from pursuing claims on a class, collective, or representative basis…” KBR terminated Totten’s employment in June 2014. Approximately one month later, Totten filed a class action against KBR for alleged wage and hour violations and unfair business practices. Continue Reading Arbitration Agreements

Navigating the California laws on discrimination and accommodation of pregnant employees is a significant challenge for retail employers. The Golden State’s protections for pregnant employees are many and they differ from those of federal law and of other states.

Pregnancy Disability Leave Law

Under the Pregnancy Disability Leave Law, which applies to employers with at least five employees in California, an employer must provide up to four months unpaid disability leave to a woman who is disabled due to pregnancy, childbirth, or a related medical condition. Cal. Gov. Code § 12945(a).

However, if an employer provides more than four months of leave for other types of temporary disabilities, the same amount of leave must be made available to women who are disabled due to pregnancy, childbirth, or a related medical condition.

Leave time may be used for prenatal care, severe morning sickness, doctor-ordered bed rest, childbirth, recovery from childbirth, and any related medical condition. (In a normal pregnancy, health care providers typically certify that a woman is disabled beginning four weeks before her due date through six weeks following vaginal delivery, or eight weeks following a C-section.)

A woman can take PDL leave before or after giving birth, any time the woman is physically unable to work because of pregnancy or pregnancy-related condition. PDL does not need to be taken in one continuous period of time, but may be taken intermittently on an as-needed basis or as on a reduced work schedule. Cal. Code Regs., tit. 2, § 7291.7(a).

After PDL, employees are guaranteed a return to the same position, unless the employee would have lost her position because of legitimate business reasons and no comparable position is available (e.g., layoff).

During PDL, the employer does not have to maintain health insurance for the employee, unless it does so for other employees on temporary unpaid disability leaves.

Fair Employment and Housing Law

The California Fair Employment and Housing Act prohibits an employer from discriminating against an employee on the basis of sex, physical disability, or medical conditions, among other things. Cal. Gov. Code § 12940(a). “Sex” is defined to include “[p]regnancy or medical conditions related to pregnancy.” Cal. Gov. Code § 12926(q)(1). This means employers cannot discriminate against pregnant women in terms of hiring, firing, terms and conditions of employment, discipline or employment opportunities.

The FEHA also requires an employer to provide reasonable accommodation for an employee’s known disability, unless the employer demonstrates that the accommodation would produce “undue hardship…to its operation.” Cal. Gov. Code § 12940(m). This means employers must accommodate pregnancy and related medical conditions to the same extent they would accommodate other disabilities. As with any other reasonable accommodation request, the employer must explore all possible means of reasonably accommodating the employee.

Reasonable accommodations for pregnancy and related conditions can include:

  • changing job duties or work hours,
  • providing leave,
  • relocating the work area, and
  • providing mechanical or electrical aids.

On her physician recommendation, an employee may request as an accommodation a transfer to a less strenuous or hazardous position for the duration of her pregnancy. Cal. Gov. Code § 12945(b)(3); Cal. Code Regs., tit. 2, §7291.6(a). The employer may require the employee to obtain certification from a health care provider of the medical advisability of any reasonable accommodation.

California Family Rights Law

The California Family Rights Act covers employers with at least 50 full-time employees within 75 miles of the employee’s worksite, and protects their employees with more than 12 months of service (working at least 1,250 hours in a 12-month period), requiring such employers to provide a 12-week unpaid leave to an eligible employee for the birth of a child for “baby bonding.” Cal. Gov. Code § 12945.2(a). While CFRA baby-bonding leave may be taken intermittently, it generally must be taken for a minimum of two weeks and must be concluded within one year of the child’s birth.

If an employee is eligible for CFRA leave, she may take both PDL and CFRA leave consecutively for the birth of her child. For example, an employee may take four months of PDL for her disability during pregnancy, and then take 12 weeks of CFRA leave to bond with her baby following birth.

The employer must maintain health insurance benefits for the employee during CFRA baby-bonding leave.

The employee must be reinstated to the same or a comparable position upon returning from CFRA leave, unless the employer can demonstrate the employee would not have been employed at the end of the leave period.

What This Means for Retail Employers

Retail employers must remain vigilant against potential pregnancy discrimination in their operations (particularly since more than 65 percent of women work while pregnant and women make up 49 percent of the retail workforce). This includes ensuring required leaves of absence and other accommodations are provided to pregnant employees. Local managers must be trained on how to recognize their employees’ accommodation requests for pregnancy and related conditions, and how to respond appropriately to such requests.

Employers also must assess possible accommodations for pregnant employees on a case-by-case basis, apart from leave. For retail employers, accommodations may include:

  • providing stools or other seating;
  • additional food, water, and restroom breaks;
  • relief from heavy lifting; and
  • flexible scheduling to accommodate morning sickness or prenatal appointments.

Employers should consider a variety of factors to determine the most practical way to make these accommodations, including the number of sales associates on duty, the types of positions and duties involved, and the size and shape of the store.

Retail employers also must keep in mind that they cannot force a pregnant employee to go on leave if she does not request one — provided that the employee can perform the essential functions of her position with a reasonable accommodation, she cannot be made to go on a leave on account of her pregnancy.

Further, they should bear in mind that accommodation for childbirth and related conditions includes lactation accommodations for nursing mothers. California requires that nursing women be provided a private space, such as a private office, lounge, or private break room, to express breast milk.

Moreover, even upon expiration of the employee’s PDL and CFRA baby-bonding leave, an employee may be entitled to additional leave under the FEHA for a disability.

Employers should regularly review their policies and practices with employment counsel to ensure they address specific organizational needs effectively and comply with applicable law.

Despite recent U.S. Supreme Court decisions strongly upholding the enforceability of class action waivers in arbitration agreements, opposition to class action waivers on both the political and legal fronts persists, especially in California. As interpreted by California courts, the state’s law traditionally has looked with disfavor on the enforcement of class action waivers, and that attitude continues despite repeated rebukes from the federal courts and the U.S. Supreme Court. Now, the Supreme Court, in a 6-3 decision, has held that the California Court of Appeal’s restrictive interpretation of an arbitration agreement is inconsistent with the Federal Arbitration Act (FAA), and that the FAA requires that the arbitration agreement, including the class action waiver, be enforced. DirecTV, Inc. v. Imburgia, et al., No. 14-462 (Dec. 14, 2015).

The Facts

Continue Reading U.S. Supreme Court Rejects California Limitation on Arbitration Agreements with Class Action Waivers