Last year the California Department of Industrial Relations (DIR) and the Department of Labor Standards Enforcement (DLSE) initiated a campaign, entitled “Wage Theft is a Crime,” to educate California workers about the complexities of California’s wage laws. DIR Director Christine Baker stated that the “department’s mission is to protect California’s workers with comprehensive labor laws and enforcement focused on businesses that intentionally skirt the law.” The department’s recent effort is the “Wage Theft is a Crime” campaign which encourages workers, especially those in low-wage industries, to report possible labor code violations within the workplace. In support of this program, educational materials have been distributed through local events, mailings, and digital and print media in English, Spanish, Chinese, Vietnamese, Hmong and Tagalog. Continue Reading California Department of Industrial Relations and Labor Commissioner Champion “Wage Theft Is A Crime” Campaign

Two Assembly Bills addressing employee wages in California recently were referred to legislative committees in late January and early February 2015.  Although early in the legislative process, both could have a palpable impact on employers doing business in California.

Senate Bill 3 – Minimum Wages

The first, Senate Bill (SB) 3, proposes to increase minimum wages twice more over the next two years.  Specifically, SB 3 seeks an increase to $11 per hour effective January 1, 2016, and then $13 per hour effective July 1, 2017.  Further, the bill proposes an annual automatic minimum wage adjustment, beginning January 1, 2019, to correspond with the rate of inflation, unless the average percentage of inflation for the previous year was negative.  Thus, should SB 3 pass, employers can expect multiple additional minimum wage increases over the next two years, followed by potential annual increases every year thereafter. Continue Reading More California Wage Changes in the Works

Reversing a trial court’s awarding of a $90 million judgment in a class action case for alleged rest period violations under California law, the California Court of Appeal has ruled that a security company had provided its security guards with proper rest periods, even though they were required to remain “on call” during those breaks. Augustus v. ABM Sec. Services, Inc., Nos. B243788 & B247392 (Cal. Ct. App. Jan. 29, 2015). Significantly, the Court ruled that remaining on call during rest breaks does not “constitute performing work” under Section 226.7 of the Labor Code, which mandates that during rest breaks, an employee not be required “to work,” and the corresponding wage order.

Background

Jennifer Augustus was a security guard for ABM Security Services, Inc. The responsibilities of Augustus and other ABM security guards (collectively, the “guards”) included providing physical security for their assigned premises and responding appropriately to emergency or safety situations. Guards greeted visitors, raised and lowered flags on the premises, monitored traffic, patrolled the buildings, escorted employees and visitors to their cars, and controlled access to the premises. The company provided the guards with rest periods during which the guards must keep their radios and pagers on, remain vigilant, and respond when needs arose. They were otherwise permitted to engage, and did engage, in other activities, including smoking, reading, making personal telephone calls, attending to personal business, and surfing the Internet.

The guards filed a class action suit against the company, alleging that ABM’s failure to completely relieve the guards of all duties during their rest periods violated Section 226.7 of the California Labor Code.

The trial court agreed and granted the guards’ motion for summary judgment. It concluded that an employer must relieve its employees of all duties during rest periods, including while they are on call. The court entered a judgment of approximately $90 million in damages, interest, penalties, and attorney’s fees against the company. The company appealed.

Applicable Law

Under California law, employers must provide employees meal periods and rest periods. Lab. Code, §§ 226.7, 512; Industrial Welfare Commission (“IWC”) Wage Order No. 4-2001, Cal. Code Regs., tit. 8, § 11040. An employee who works more than three-and-one-half hours per day must be permitted to take a paid 10-minute rest period, during which the employee shall not be required “to work,” every four hours of work or major fraction thereof. An employee who works at least five hours also must be given a 30-minute unpaid meal period, during which the employee must be “relieved of all duty,” if the meal period is not to be counted as time worked.

On Call Not the Same as Working

Before the appeals court, the guards argued the company failed to provide lawful rest periods because they must remain on call and respond to calls at all times; thus, their rest periods were indistinguishable from the rest of their workday.

The appellate court acknowledged the guards’ argument had “a certain appeal,” but it rejected the argument because Section 226.7 does not require that a rest period be distinguishable from the remainder of the workday. Section 226.7 mandates only that an employee not be required “to work” during breaks. The Court observed that “even if an employee did nothing but remain on call all day, being equally idle on a rest break does not constitute working.”

Further, the Court pointed out the guards did not perform the same tasks during a rest period that they performed during active duty. For example, they did not patrol the premises, greet visitors, monitor or direct parking, raise or lower the flag, or restrict the movement of persons or property. Rather, unless specifically called to duty, the guards were free to engage in personal activities during their breaks, such as reading, surfing the Internet, and attending to personal business. Thus, the Court determined that “remaining available to work is not the same as performing work.”

The Court also found the language in Wage Order No. 4 did not support the guards’ contention. In Wage Order No. 4, the IWC directed that employees be “relieved of all duty” for meal periods in order for the meal period to be unpaid. However, the IWC did not include a similar requirement in the rest period provision, which the Court found indicated the IWC did not intend to impose such a requirement. Further, all rest periods must be paid, suggesting they normally are taken while on duty and subject to employer control. Accordingly, the Court determined that Wage Order No. 4’s language did not support the guards’ claim.

Last, examining the meaning of “work” as used in the Labor Code and Wage Order No. 4, the Court concluded the prohibition against requiring an employee to “work” during a rest period means an employer cannot require an employee to engage in some action for its benefit. However, as on call status is “a state of being, not an action,” the Court found the prohibition does not extend to “the status of remaining available to work.” Accordingly, the Court reversed the judgment in favor of the guards and returned the case to the trial court.

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It remains to be seen whether the California Supreme Court will review this case to further address on call status. Jackson Lewis will continue to monitor and report on developments in this challenging area of the law.

Jackson Lewis attorneys are available to answer inquiries about this and other workplace issues.

The California Division of Labor Standards & Enforcement (“DLSE”) has published additional FAQs regarding California’s new Paid Sick Leave law.  These FAQs, dated January 2015, can be found here.  Below is a summary of the DLSE’s FAQs:

  • The Wage Theft Prevention Act Notice (“Notice”):  The new Paid Sick Leave law is clear that employees hired after January 1, 2015 are to be provided the State’s new Notice pursuant to Cal. Labor Code section 2810.5 at the time of hire.  Linked here is the State’s template Notice.  However, the law is unclear as to whether employers must issue the new notice to employees hired pre-January 1, 2015.  The supplemental FAQs address this issue as follows:
    • If the employer changes or institutes a new Paid Sick Leave policy, then employers must provide to employees hired prior to January 1, 2015 a new Notice within seven days of the change, or alternatively, provide individual notice to such employees using an alternative authorized method.   The FAQs do not specifically address what an authorized alternative method is. Continue Reading New California Paid Sick Leave FAQs From the DLSE

AB 2053 went into effect on January 1, 2015, thereby requiring that California employers with 50 or more employees provide training on the “prevention of abusive conduct” along with the sexual harassment training already required by law.

“Abusive conduct” is defined under California Government Code section 12950.1(g)(2) as the “conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.”  For example, abusive conduct “may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.” Notably, there is no requirement that the abusive conduct be tied to a protected characteristic. Continue Reading AB 2053: Sexual Harassment Training Must Now Include the “Prevention of Abusive Conduct”

In December 2014, the California Court of Appeal (“Court”) found that Morongo Unified School District’s (“School District”) failure to reassign a disabled teacher to her preferred position raised a triable issue of fact.  Swanson v. Morongo Unified School Dist. (Cal. App. Ct. 12/23/14), Case No G050290.  In doing so, the Court reversed the School District’s summary judgment as to the teacher’s disability claims, thereby permitted the claims to proceed to trial.  This ruling addressed employers’ unique and ongoing responsibilities when handling accommodations of disabled employees. Continue Reading Court Rules School District Should Have Done More to Accommodate Teacher Battling Cancer

Employers received a welcome development late last week when the California Supreme Court decided to review the controversial Dynamex Operations West, Inc. v. Superior Court (SC S222732/B249546 rev. granted 1/28/15) regarding misclassification of independent contractors. This case is important since it arguably created a different definition of “employee” for determining if an individual is misclassified as an independent contractor with respect to violations of the California Industrial Welfare Commission (“IWC”) Wage Orders.  The Court will consider the following issue: Continue Reading Controversial Dynamex Case Regarding Misclassification of Independent Contractors to be Reviewed by California Supreme Court

A new case from the California Court of Appeal, Fourth Appellate District, Division Two, Ruiz v. Moss Bros. Auto Group, Inc., was certified for publication on December 23, 2014, and addresses an area of interest for many employers – electronic signatures on arbitration agreements. Employers must build safeguards into such systems  to be able to prove the employee electronically signed the document. To view the Court’s opinion, click here.

In the Ruiz case, an employer filed a petition to compel arbitration of the employment-related claims.  The trial court denied the petition on the ground that the employer failed to meet its burden of proving the parties had an agreement to arbitrate the controversy. The employer could not establish to the court’s satisfaction that the employee signed the agreement.  (Code Civ. Proc., § 1281.2.)   Continue Reading Employer Could Not Establish Sufficient Evidence to Prove Employee Signed an Arbitration Agreement through an Electronic Signature

The U.S. Supreme Court has declined to review the California Supreme Court’s decision that representative claims under the California Labor Code Private Attorneys General Act (“PAGA”) cannot be waived in employment arbitration agreements. Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (Cal. 2014), cert. denied, No. 14-341 (U.S. Jan. 20, 2015).

In Iskanian, the California Supreme Court ruled the Federal Arbitration Act (“FAA”) preempted California law disfavoring enforcement of a class action waiver in employment arbitration agreements. However, it also ruled the FAA did not preempt representative actions under PAGA. For additional information on Iskanian, please see our article, California High Court: Class Action Waivers in Arbitration Valid, But Waivers of Representative Actions under State Law Are Not. Continue Reading California Supreme Court Decision Barring Waiver of Representative Claims is Left Intact by U.S. Supreme Court

This article is originally published on Inside Counsel. View the original here.

California has joined a growing number of jurisdictions mandating employers to provide paid sick leave to their employees, including part-time and temporary workers. Below is a summary of the California law’s key points:

Effective dates

There are two dates to keep in mind: January 1 and July 1.

The employer’s obligation to provide paid sick leave under the law does not take effect until July 1, 2015.

However, on Jan. 1, 2015, covered employers are required to: