California 2020: New Decade, New Employment Laws!

Each new year brings about new changes in employment law. Governor Gavin Newsom signed into legislation a number of new laws that impact California employers. Here’s what to look for in 2020:

AB 5 - New Employee Classification Test: The law codifies and modifies the California Supreme Court’s “ABC test” from its decision in the Dynamex case last year. The law severely limits the ability of California companies to classify workers as independent contractors rather than employees. Stated in an abbreviated manner, to satisfy the ABC test and classify a worker as an independent contractor, the company must prove that the worker is (A) free from the company’s control, and (B) performs work outside the company's primary business, and (C) is regularly engaged in the trade the worker is hired for, independent of work for the company. There are specific exemptions for certain industries.

AB 9 - Statute of Limitations for FEHA Claims Expanded: The period of filing a complaint for workplace harassment, discrimination or retaliation has been extended from one to three years.

AB 25 - Employee Data Exempt from CCPA: The current California Consumer Privacy Act (CCPA) allows consumers various rights with regards to their personal information held by businesses, including to have their personal information deleted. The bill broadly included employees and job applicants, who could potentially ask to have information deleted from their personnel files. Under the new law, employee data is exempt from the CCPA; however, the exemption is only good for one year.

AB 51 – Banning Mandatory Employment Arbitration Agreements: Beginning January 1, 2020, employers are prohibited from requiring any applicant for employment or employee to sign an arbitration agreement as a condition of employment or continued employment. Employers cannot retaliate against or terminate any employee or applicant who refuses to sign an arbitration agreement.

SB 83 – Expansion of Paid Family Leave: Beginning July 1, 2020, Paid Family Leave (PFL) benefits from California’s State Disability Insurance program will be increased from six to eight weeks.

SB 142 - Expanded Lactation Accommodation Requirements: Employer requirements to provide appropriate workplace lactation accommodations have been expanded. The added requirements require employers to provide a lactation room close to the employee’s work area, shielded from view, and free from intrusion. In addition, employers must provide access to a sink with running water and a refrigerator. Employers must implement a lactation accommodation policy.

SB 188 - Protected Hairstyles: Under FEHA, the law prohibits discrimination and harassment based upon a person’s natural hairstyle. Natural hairstyles such as “braids, locks, and twists” are now protected.

SB 778 – Extending Deadline to Complete Sexual Harassment Prevention Training: Sexual harassment prevention training deadline has been extended from January 1, 2020 to January 1, 2021.

Join us in late January for our Annual Employment Law Update! Our attorneys will discuss these new employment laws in detail and provide you with the tools and information your California business needs to ensure you are in compliance for 2020.

Eight Common Mistakes Employers Make

California employers are subject to countless federal, state and local laws, imposing various requirements, including wage and hour and anti-discrimination laws. Unfortunately, many employers – particularly small businesses – are unaware of their obligations and violate various worker protection laws, often resulting in expensive lawsuits, civil settlements and penalties. Here are some common, costly mistakes employers make:

Misclassifying Non-Exempt Workers as Exempt
Generally, all workers are entitled to overtime pay. However, some employees – typically executive, managerial or professional employees – are “exempt” from overtime and receive a flat salary, regardless of the number of hours the employee works. However, the exemption only applies in certain narrow situations defined by law, and many employers improperly classify workers as “exempt” when they are legally entitled to overtime wages and meal and rest break requirements.

Misclassifying Employees as Independent Contractors
Determining whether a worker is an employee or independent contractor depends on a number of factors, and the law in this area is still evolving with the recent California Supreme Court decision in Dynamex v. Superior Court, and California’s new AB5 legislation. All workers in California are presumed to be employees, and there are only limited circumstances under which a worker (particularly if the worker will be doing the type of work that is part of the employer’s normal business) can be treated as an independent contractor. Because of the complexity surrounding the classification of independent contractors, and the enormous potential liability for employers for misclassifying workers, it is imperative to speak with legal counsel before treating a worker as an independent contractor.

Failing to Train Supervisors Regarding Employment and Labor Laws
Employment laws prohibit employers from taking action against an employee for certain reasons, including discrimination on the basis of a protected characteristic such as race, religion, gender, sexual orientation, national origin, pregnancy, etc. Employees are also protected from retaliation for complaints of discrimination or illegal activity. It is vital to train supervisors to manage their employees in accordance with all applicable laws.

Failing to Use an Employee Handbook
An employee handbook informs employees about the employer’s values and policies and facilitates compliance with employment and labor laws. A proper employee handbook can be an essential shield for an employer to raise when defending wage and hour claims or discrimination claims.

Failing to Properly Document Employee Job Performance
Proper documentation clearly establishes the employer’s expectations and where the employee failed to reach them. Written job descriptions and employee evaluations serve as training tools, performance measures and critical evidence in the event you have to terminate an employee.

Failing to Accommodate Disabled Workers
The law not only prohibits employers from discriminating against those with disabilities, it also imposes a duty on employers to engage in an “interactive process” with employees who may have a disability and to “reasonably accommodate” disabled employees so they can perform the essential functions of their job. Accommodations may include assistive devices, a modified work schedule or a restructuring of job duties.

Failing to Comply with Wage Payment and Notification Requirements
California requires employers to pay their employees in a certain manner and provide written notice of pay periods and amounts. There are no less than ten itemized requirements that must appear on all employee pay stubs. Failure to comply can subject the employer to penalties and a civil lawsuit, and every pay period in which a violation of these requirements exists can trigger a separate penalty. 

If you have questions about your compliance in regards to any of the foregoing employment laws, please do not hesitate to contact an employment attorney at Schneiders & Associates, L.L.P. for advice and legal guidance.

Mandatory CalSavers Retirement Program – What Does it Mean for Employers?

Beginning July 1, 2019, CalSavers Retirement Program became a new employment law in California.  CalSavers is a state-run retirement savings program for private-sector workers whose employers do not offer a retirement program (such as a 401k plan). Employers with five or more employees are required to either provide a retirement plan for their workers or register for CalSavers and facilitate employees’ contributions to Individual Retirement Accounts. An employer that offers a tax-qualified retirement plan is not eligible and its employees cannot participate in the CalSavers program.

Deadlines

CalSavers is scheduled to open for employers to register on July 1, 2019 — but employers need not register until June 30, 2020. Deadlines for compliance vary according to the size of the business, as follows:

Employers with more than 100 employees must register by June 30, 2020;

Employers with more than 50 employees must register by June 30, 2021; and

Employers with five or more employees must register by June 30, 2022.

Employer’s Responsibility

Within 30 days of registering, employers need to provide the CalSavers program administrator with a collection of personal information about each employee. This information includes: the name, Social Security number, date of birth and contact information for each eligible employee.

Employers must ensure that each employee receives a packet of information from the program administrator. Employers will need to calculate the appropriate rate of deduction from each employee’s wages, based on a schedule promulgated by the state.

Employers will deduct each employee’s contributions to the CalSavers program from their salary and remit the contributions to the program administrator within seven days of deduction.

In addition, if a new employee is hired after registration, that individual’s information must be submitted to the program administrator within 30 days of the date of hire.

Registering your business is easy. Visit the CalSavers website to register. Employers do not pay any fees for their employees’ participation in the CalSavers program and are not required to contribute to the CalSavers program, aside from facilitating the program and submitting participating employees’ contributions via payroll deduction.

The CalSavers program will ensure nearly all Californians have access to a workplace retirement savings program. Employers are prohibited from encouraging or discouraging employees from participating in the CalSavers program, or from providing any advice about any decisions related to investment and contribution relating to the program.

If you have questions about the CalSavers program or how it affects your business, please contact an employment law attorney at Schneiders & Associates today.

By: Ted Schneider, Esq.

New Twist on Employer Liability for Commuting Employees’ Vehicular Accidents

In general, employers are liable for any wrongful actions committed by their employees while the employees are carrying out their job duties — including vehicular accidents while on the job. Accident victims can sue not only the individuals at fault, but often their employers as well.

An exception to this rule exists for accidents that occur during an employee’s normal commute. Because employees are not engaged in work duties while traveling to and from work, employers are generally not liable for employees’ misdeeds during those travels.  This exception has been weakened over the years by certain Appellate Court Decisions.  The Courts have taken the position that if the employee’s use of his or her personal vehicle is required for the work, such use benefits the employer and the employer will be liable for vehicular accidents occurring during normal commute times.

A recent California Court of Appeal decision (Newland v. County of Los Angeles, 24 Cal.App.5th 676 (2018) has actually created an exception to the exception to the law imposing liability upon the employer for an accident during a commute. The Court held that if the accident occurs on a day in which the employer didn’t require the employee to use a personal vehicle, such as driving to visit clients, make deliveries, do errands, and thus didn’t obtain a benefit from having the car available that day, the employer wouldn’t be vicariously liable for a commute accident on such a day. (Newland v. County of Los Angeles, 24 Cal.App.5th 676 (2018)).

Contact our office today if you have questions about employer liability or if you need your employee manual updated.

By: Roy Schneider, Esq.

Working Off the Clock – Do Employers Have to Pay for Small Amounts of Time Worked?

On July 26th, 2018 the California Supreme Court ruled that employers must pay employees for routine and small amounts of time they spend working off-the-clock. The court found that the federal de minimis rule that allows employers not to pay for short amounts of time that are difficult to keep track of did not apply to Californian labor law.

This ruling arose from Starbucks employee, Douglas Troester, suing Starbucks for not paying him for time he spent after work locking up and doing other minimal tasks. Troester argued that Starbucks owed him pay for time he spent locking up the store, setting alarms, and walking employees to their cars; which took him between four to ten minutes each day. The federal District Court ruled in favor of Starbucks.  Troester appealed his case to the Ninth Circuit, which was then advanced the case to the California Supreme Court which accepted Troester’s position that the federal standard did not apply in California. This case affirms that, unlike federal labor laws, California employees must pay employees for all time spent off the clock, even if considered de minimis.  It is still an open question, however, as to what kind of work is too brief, fleeting or trivial to track. In a concurring opinion a Justice declared that employers may not have to consider every “fraction of a second.”  Despite uncertainty in some aspects of how this ruling could be enforced, California employers should ensure that employees are compensated for all time spent before or after clocking in – no matter how small the amount may seem.

If you have questions or need guidance as to how best to protect yourself, as an employer, from claims for unpaid wages, please contact the attorneys at Schneiders & Associates, LLP for a consultation.

California Court Upholds Rounding Employee Time Records by 15 Minutes

In June, the California Court of Appeals in AHMC Healthcare, Inc. v. Superior Court of Los Angeles County found that the employer’s policy of rounding employee time records by 15 minutes is lawful.

The suit was brought by two employees who argued that the company’s policy of rounding to the nearest quarter-hour unfairly reduced wages and was a violation of California law that requires accurate time keeping. The employer, AHMC, argued that the policy was neutral in effect (AHMC rounded both up and down), and therefore not illegal.

A statistics and economics expert was called to analyze the data regarding time keeping at the company and found that the policy resulted in adding hours for 48% of employees at the location where the two plaintiffs worked, and deducted hours for 51% of the workers. The expert also found that one of the plaintiff’s lost 3.7 hours while the other lost 1.6 hours. However, across all of the employer’s locations, employees as a whole were significantly overcompensated due to the rounding practice. The employer’s rounding practice did not systematically undercompensate employees.

Despite the expert’s finding that the plaintiff employees lost hours due to the rounding, the court sided with the employer and found that the policy was valid. The court found that the plaintiffs failed to establish any bias in the rounding practice. The fact that a bare majority of employees at one location lost a minimal amount of time, on its own, was not enough for the court to find a triable issue of fact. In addition to upholding the policy, the court underlined the crucial aspect of neutrality required in all rounding policies. Rounding practices that unfairly target a particular class of employees could be illegal.

Despite this pro-employer ruling, we still recommend that you accurately track hours worked down to the minute. If you do decide to use a rounding policy to calculate hours, ensure that it is applied neutrally to all employees and that you carefully monitor hours and pay to ensure that you are not underpaying any classes of employees.

If you are an employer with questions about your policies and practices, please contact an employment law attorney at Schneiders & Associates, L.L.P.

By: Ted Schneider, Esq.

New FEHA National Origin Discrimination Protections Employers Must Know

On July 1, 2018, new regulations will go into effect under California’s Fair Employment and Housing Act (FEHA) that are designed to prevent discrimination based on an employee’s national origin. National origin discrimination is already illegal in California, but these new regulations expand on those existing prohibitions, and protect both employees and applicants, including undocumented employees and applicants.

The new regulations define “national origin” broadly to include an individual’s actual or perceived

  • Physical, cultural or linguistic characteristics associated with a national origin group;
  • Marriage to or association with persons of a national origin group;
  • Tribal affiliation;
  • Membership in or association with an organization identified with or seeking to promote the interests of a national origin group;
  • Attendance or participation in schools, churches, temples, mosques or other religious institutions generally used by persons of a national origin group; and
  • Name that is associated with a national origin group.

Under the new regulations, language restriction policies (e.g., English-only policies) are illegal unless the employer can show that the language restriction is (1) based on a business necessity, (2) the language restriction is narrowly tailored, and (3) the employer has notified its employees of the circumstances and time when the language restriction is required to be observed. Language restrictions that are merely convenient or due to customer or co-worker preference are not considered to be based on a “business necessity.” Keep in mind that English-only policies are always prohibited during non-working times, such as when employees are on meal or rest breaks.

Similarly, an employer cannot require that an employee or applicant have a certain level of English proficiency unless the employer’s English proficiency requirement is justified by business necessity (i.e., the level of proficiency required by the employer is necessary to effectively fulfill the job duties of the position). The regulations clarify that it is not unlawful for an employer to ask an applicant or employee about his or her ability to speak, read, write or understand any language, including languages other than English, if doing so is justified by business necessity.

The new regulations provide that discrimination based on an applicant’s or employee’s accent is unlawful national origin discrimination.

The new regulations apply to undocumented applicants and employees to the same extent as any other applicant or employee. Immigration status is irrelevant when determining liability in any proceeding brought to enforce FEHA. Questions about an applicant’s or employee’s immigration status is prohibited unless there is clear and convincing evidence that the inquiry was necessary to comply with federal immigration law. It is also unlawful for an employer to discriminate against an applicant or employee because of his or her immigration status, unless there is clear and convincing evidence that the conduct was required to comply with federal immigration law.

If you have any questions about compliance with the new national origin discrimination prevention regulations, please do not hesitate to contact a labor and employment law attorney at Schneiders & Associates for assistance.

By: Ted Schneider, Esq.

 

 

How to Hire an Unpaid Intern Without Breaking the Law

With very few exceptions, all workers at your place of business must be paid at least minimum wage for all hours worked. But what about interns, who work at companies without pay as part of a training or educational program?

On January 5, 2018, the United States Department of Labor (DOL) issued a new standard for determining whether an individual could be classified as an unpaid intern. Prior to January, the DOL used a 6-part test for analyzing whether individuals could be treated as interns and denied compensation for their work. That 6-part test has given way to the “primary beneficiary” test, which is designed to examine whether the intern or the employer is the primary beneficiary of the relationship.

The DOL, and courts in several recent cases, now look at seven factors to scrutinize the “economic reality” of the intern-employer relationship.

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Courts describe the “primary beneficiary test” as a flexible test. No single factor is determinative, and whether an intern is an employee necessarily depends on the unique circumstances of each case. If analysis of these circumstances reveals that an intern is actually an employee, then he or she is entitled to minimum wage and overtime pay.

Employers considering the use of unpaid interns must carefully evaluate the relationship, taking into account the new 7-factor test outlined above to determine who will be the “primary beneficiary” of the intern-employer relationship. If the conclusion is that the employer benefits most from the arrangement – because, for example, the intern is doing routine work that the employer ordinarily would have had to pay an employee to do – then the individual should be treated as an employee and paid minimum wage and overtime.

The analysis discussed above is very fact-specific and can be tricky to implement. If you use interns, or are considering hiring interns, please contact an attorney at Schneiders & Associates for assistance in evaluating whether that individual is truly an intern, or rather should be classified as an employee.

Are Your Walls Compliant with CA Labor Laws?

There are 19 different notices that the law requires employers to post in the workplace advising employees of their rights with respect to myriad employment, wage and hour laws, leaves of absence and discrimination protection. In some jurisdictions, local ordinances require additional postings addressing minimum wage, paid sick leave and other requirements. There are unique situations that may require additional posters such as heavy equipment or forklifts, chemical use and government contracts. You should review whether any unique poster requirements apply to your business. In addition, you must post one of the IWC Wage Orders based upon the “main purpose” of your business.

Often, employers will post these notices in the lunchroom or other communal gathering space for employees. The law requires that employers place most of these advisements “conspicuously” where all employees and applicants can see them. If you have multiple facilities, you need to display these posters at your remote facilities if those employees do not frequent the main facility.

Keep in mind that, in addition to posting in English, some posters must be posted in other languages. The minimum wage and workers’ compensation notices must be posted in Spanish if any of your employees speak only Spanish. The Department of Fair Employment and Housing disclosure, California Family Rights Act and Pregnancy Disability Leave notices must be posted in the language of 10 percent or more of your workers at any facility. For example, if 10 percent of your workforce speaks only Spanish, you must display Spanish language versions of those posters alongside the English versions. If your workforce includes a significant portion of workers not literate in English, you must provide the Family and Medical Leave Act notice in a language in which the employees are literate.

If you are unsure of which posters are required for your business, or would like a review of your employee posters, disclosures and notices, please contact an employment law attorney at Schneiders & Associates, LLP for assistance.

By: Ted Schneider, Esq. 

Major New Employment Laws that You Need to Know About

Governor Brown signed 859 bills at the California Legislature’s 2017 session. California employers should be aware of several new laws that will materially affect their businesses. Here is a summary of some of the most significant new employment laws coming in 2018:

The New Parent Leave Act (SB 63)

Employers will be required to provide up to 12 workweeks of unpaid parental leave for an employee to bond with a child, and to continue the employee’s group health insurance coverage during this period. Businesses with 50 or more employees have already had this requirement under the California Family Rights Act. This new law will apply to businesses with as few as 20 employees.

The Immigrant Worker Protection Act (AB 450)

Employers will be required to verify that federal immigration enforcement agents have a judicial warrant prior to entering the workplace. Employers are prohibited from allowing federal immigration enforcement agents to enter their business without a warrant. Employers must also provide notice to employees if there has been a request to review the employer’s Form I-9s.

Ban-the Box for Criminal History (AB 1008)

Employers with five or more employees will be prohibited from asking about criminal history information on job applications and from inquiring about, or considering, criminal history at any time before a conditional offer of employment has been made to the applicant. Further, the bill requires an employer who makes a preliminary decision to deny employment based on criminal history to provide the applicant written notification of the decision, and grant the applicant 5 business days to respond to that notification before the employer makes a final decision. Employers will need to carefully review and update their employment applications and hiring processes.

Prior Salary History Prohibition (AB 168)

Employers cannot ask about the salary history of an applicant or use an applicant’s prior salary history as a factor in determining whether to offer employment to an applicant, or in determining what salary to offer an applicant. In addition, employers are required to provide the pay scale for a position upon demand to any applicant applying.

Mandatory Sexual Harassment Training and Posting Requirement (SB 396)

Employers with 50 or more employees must expand the mandatory supervisor sexual harassment prevention training to also include training and education on harassment based on gender identity, gender expression and sexual orientation. Employers will be required to post a poster developed by the Department of Fair Employment and Housing regarding transgender rights in a prominent and accessible location in the workplace.

If you would like more information on new employment laws that will affect your business in 2018, contact Schneiders & Associates, L.L.P. and enroll in the 2018 Employment Law Update to be held in Ventura, California.  This important seminar will cover all the new employment laws that will take effect in 2018.

By: Ted Schneider, Esq.