California Employment Law Report

California Employment Law Report

The latest litigation trends, court decisions, & issues on California Employment Law

Friday’s Five: Five statistics from the EEOC that should get employer’s attention


The EEOC recently disclosed its fiscal year 2015 performance report.  The report is a good reminder to employers of the issues that they may likely face EEOC scrutiny.  Here are five key statistics employers should pay attention to:

1.     EEOC obtained more than $525 million in discrimination suits. 

Of this amount, the parties settled disputes for $356.6 million, and obtained $65.3 million through litigation.

2.     “Systemic” discrimination investigations and litigation.

The EEOC resolved 268 “systemic investigations” of discrimination claims prior to litigation, resulting in more than $33.5 million in settlements.  Systemic discrimination is defined by the EEOC as discrimination that “involves a pattern or practice, policy, or class case where the alleged discrimination has a broad impact on an industry, profession, company or geographic area.”  Some examples of “systemic” discrimination provided by the EEOC are discriminatory barriers in recruitment and hiring, discriminatory restricted access to management trainee programs and to high level jobs, and exclusion of qualified women from traditionally male dominated fields of work.  A list of recent cases provided on the EEOC’s website illustrates some examples: Outback Steakhouse settles $19 million suit for sex bias claims by women in a “glass ceiling” suit; Albertson’s settles $8.9 million suit alleging job bias based on race, color, and national origin.

The agency did not disclose how much it obtained in litigation, but it disclosed that it resolved 26 systemic cases.  Six of those included at least 50 plaintiffs, and 13 that included at least 20 plaintiffs.

3.      EEOC’s training programs. 

The agency claims to have reached 336,855 people through providing 3,700 educational, training and outreach evetns.  The agency’s Training Institute trained over 12,000 people at 140 events that “focused on the agency’s Strategic Enforcement Plan (SEP) priorities, including small businesses, vulnerable workers, underserved geographic areas and communities….”

4.     Number of charges filed with EEOC remained relatively unchanged from 2014. 

The EEOC received 89,385 in FY 2015.  This is slightly up from the 88,778 charges received by the agency in FY 2014.  This is down from the number of charges filed in 2013 (93,727 charges).

In 2015, the agency resolved 44% of its conciliations, which are mediations conducted by the EEOC to resolve employment disputes.

5.     EEOC litigation efforts.

The agency filed 142 lawsuits alleging discrimination for FY 2015.  Of the lawsuits, 100 were individual lawsuits and 42 were cases “involving multiple victims or discriminatory policies (versus discriminatory treatment), of which 16 were systemic suits.”  During 2015, the agency resolved 155 lawsuits alleging discrimination, and has 218 active cases.  Of these active cases, 48 (22%) alleged systemic discrimination and 40 (18%) were “multiple-victim cases.”


California employers must remember that the EEOC is a federal agency responsible for enforcing Federal discrimination laws.  California employers also need to comply with California discrimination laws, which are enforced through California’s Department of Fair Employment and Housing (DFEH).  Wage complaints are handled through the federal Department of Labor or California’s Labor Commissioner.

Friday’s Five: Five Employment Law Considerations For 2016

Today’s Friday’s Five is a short video about five employment law considerations employers should review at the end of 2015.  As mentioned in the video, I will be conducting a webinar on December 2, 2015 for employers to understand and comply with new employment laws taking effect in 2016.  I will also discuss new case law developments from 2015 including paid sick leave and enforceability of arbitration agreements and class action waivers.  There will also be a discussion about businesses’ obligations under Proposition 65 postings at their establishments.

Registration and more information is here (  Hope you can join us for the webinar.

Friday’s Five? The eleven factor test to determine if training time is compensable under California law

Employers that utilize interns, or who provide training to individuals that may lead to employment run the risk of having these individuals qualify as an employee, which would require the employer to comply with Labor Code requirements such as minimum wage, meal and rest breaks, and overtime pay.  The analysis is very difficult, and fact intensive, and employers should approach this issue with caution.  Once again, I cannot keep Friday’s Five to five items, but such is the nature of California.

The Division Labor Standards Enforcement (DLSE) take that position that in order to determine whether training time is compensable under California law, the following eleven factors would be taken into consideration:

  1. The training, even if it is at the employer’s business and includes operation of the employer’s resources, is similar to that which is given in a vocational school;
  2. The training is for the benefit of the trainees or students, not the employer;
  3. The trainees or students do not displace regular employees, but work under their close observation;
  4. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, the employer’s operations my even be impeded;
  5. The trainees are not necessarily entitled to ta job at the conclusion of the training period;
  6. The employer and trainees or students understand that the trainees or students are not entitled to wages for time spent training;
  7. Any clinical training is part of an educational curriculum;
  8. The trainees or students do not receive employee benefits;
  9. The training is general, so as to qualify the trainees or students for work in any similar business, and not specifically for a job with the employer offering the program;
  10. The screening process for the program is not the same as for employment, and does not appear to be for that purpose, but involves only criteria relevant for being accepted into the program;
  11. Advertisements for the program specify clearly that the program is for training or education, not employment.  However, employers can specify that qualified graduates will be considered for employment.

The DLSE has opined is part of the analysis is that the employee does not have to be paid for voluntary attendance at training programs.  Examples the DLSE cites are English language instruction or literacy training.

Who is responsible for costs of training programs?

The DLSE takes the position that there is generally no requirement that an employer pay for training leading to licensure or the cost of licensure for an employee.  While the license may be a requirement of the employment, it is not the type of cost the employers are required to pay for under Labor Code § 2802.  The DLSE states that the most important consideration of the licensure is that it is required by the state or locality as a result of public policy:  “It is the employee who must be licensed and unless there is a specific statute which requires the employer to assume part of the cost, the cost of licensing must be borne by the employee.”  However, if an employer requires an employees to undergo training that is specific only to that employer, then the employer would usually need to bear the training costs.

Friday’s Five: Five new California employment laws taking effect on January 1, 2016

I can hear the questions already, just five new laws taking effect on January 1, 2016?  No, there are many more, as I have previously written about, but here are five additional new laws employers need to understand going into 2016.

1.     Family members of whistleblower are granted protections and some employers are excluded from the joint employer liability enacted in 2015

AB 1509 – Effective January 1, 2016, this bill prohibits employers from retaliating against an employee who is a family member of an employee who made a protected complaint.  The bill extends the protections to an employee who is a family member of a person who engaged in, or was perceived to engage in, the protected conduct or make a complaint protected the law.  This bill also amends Labor Code section 2810.3 to exclude certain household goods carrier employers from the joint liability imposed between the client employer and a labor contractor.

2.     Labor Commissioner Provided Increased Enforcement Authority Over Local Ordinances and the Ability to Issue Awards For Expense Reimbursement

AB 970 – Effective January 1, 2016, provides the Labor Commissioner with authority to investigate and at the request of the local government, to enforce local laws regarding overtime hours or minimum wage provisions.  The Labor Commissioner has authority to issue citations and penalties for violations, but cannot issue violations if the local entity has already issued a citation for the same violation.  The bill also authorizes the Labor Commissioner to enforce Labor Code section 2802 which requires employers to pay for business related costs that the employee directly incurs in discharging their duties for the employer.

 3.     Labor Commissioner Provided Increased Judgment Collection Authority

SB 588 – Amends the Labor Code to provide the Labor Commissioner many more rights in collecting judgments against employers who are found liable for unpaid wages.  The Labor Commissioner has authority to issue a lien against on an employer’s property for the amount of the judgment.  Also, the law also imposes personal liability for employers in adding Labor Code section 98.8(f):

 Any person who is noticed with a levy pursuant to this section and who fails or refuses to surrender any credits, money, or property or pay any debts owed to the judgment debtor shall be liable in his or her own person or estate to the Labor Commissioner in an amount equal to the value of the credits, money, or other property or in the amount of the levy, up to the amount specified in the levy.

Also, if an employer has a judgment entered against it, and it is not paid within 30 days after the time to appeal the judgment, the employer is required to obtain a bond in order to continue to do business in California. Effective January 1, 2016

 4.     Employee’s Permitted Time Off From Work Expanded

SB 579 – Existing law prohibits an employer who employs 25 or more employees working at the same location from discharging or discriminating against an employee who is a parent, guardian, or grandparent having custody of a child in a licensed child day care facility or in kindergarten or grades 1 to 12, inclusive, for taking off up to 40 hours each year for the purpose of participating in school activities, subject to specified conditions.  The law is amended to provide these protections for employees under a broader “child care provider”, and applies these protections to employees who are a stepparent, foster parent, or who stands in loco parentis to a child.

The bill also amends California’s Kin Care law set forth in Labor Code section 233 to require employers to allow employees to use “an amount not less than the sick leave that would be accrued during six months” for family members as defined in the Healthy Workplaces, Heathy Family Act of 2014, otherwise known as California’s paid sick leave law.  The Kin Care law is amended under this bill to provide that employers must allow employees to use up to one-half of their sick leave to attend to victims of domestic violence or the diagnosis, care, or treatment of an existing health condition of, or preventive care for, the employee or the employee’s family member.  Family member definition is broadened from the existing definition under the law (a child, parent, spouse, or domestic partner) to also include grandparents, grandchildren, and siblings.  Effective January 1, 2016.

  5.     Limits Placed on Employer’s Use of E-Verify

AB 622 – Effective January 1, 2016, this bill adds Labor Code section 2814 which expands the definition of an unlawful employment practice to include an employer or any other person or entity using the E-Verify system when not required by federal law to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, as required by federal law, or as a condition of receiving federal funds. The bill also requires an employer that uses the E-Verify system to provide to the affected employee any notification issued by the Social Security Administration or the United States Department of Homeland Security containing information specific to the employee’s E-Verify case or any tentative nonconfirmation notice “as soon as practicable.”  The bill provides for a civil penalty of $10,000 for an employer for each violation of its provisions.

It is a good time to review employee policies and handbooks to ensure they are compliant with the new requirements.

Friday’s Five: Considerations for issuing electronic wage statements in California

Employee Wage Statement-1

More and more employers are moving to electronic on-boarding to minimize the expenses and reliability issues in relying on paper.  Employers are also moving toward issuing wage statements electronically to employees.  Unfortunately, there is very little regulatory guidance as to the requirements that employers must meet when issuing electronic wage statements.  Indeed, the Labor Code section that pertains to the information required to be placed on wage statements, Labor Code section 226, is completely silent in regards to whether employer can issue the statements electronically and only sets out that employers must provide employees a wage statement as “a detachable part of the check, draft, or voucher paying the employee’s wages.” I’ve written previously about what information is required to be listed on the pay stub.  This Friday’s Five includes five requirements, plus a “bonus” sixth requirement (I knew keeping these articles limited to five items in California would be a continual battle).

California’s Division of Labor Standards Enforcement (DLSE) has issued an opinion letter on the issue to provide some guidance (but employer must understand that the DLSE’s opinion is not binding legal authority, so caution must be used when relying on the DLSE’s opinion letters).

In the opinion letter authorizing electronic distribution of wage statements, the DLSE provides:

The Division in recent years has sought to harmonize the “detachable part of the check” provision and the “accurate itemized statement in writing” provision of Labor Code section 226(a) by allowing for electronic wage statements so long as each employee retains the right to elect to receive a written paper stub or record and that those who are provided with electronic wage statements retain the ability to easily access the information and convert the electronic statements into hard copies at no expense to the employee.

The DLSE approved electronic wage statements as long as the employer incorporated the following features:

  1. An employee may elect to receive paper wage statements at any time;
  2. The wage statements will contain all information required under Labor Code section 226(a) and will be available on a secure website no later than pay day;
  3. Access to the website will be controlled by unique employee identification numbers and confidential personal identification numbers (PINs). The website will be protected by a firewall and is expected to be  available at all times with the exception of downtime caused by system errors or maintenance requirements;
  4. Employees will be able to access their records through their own personal computers or by company provided computers. Computer terminals will be available to all employees for accessing these records at work.
  5. Employees will be able to print copies of their electronic wage statements at work on printers that are in close proximity to the computer or computer terminal. There will be no charge to the employee for accessing their records or printing them out. Employees may also access their records over the internet and save it electronically and/or print it on their own printer.
  6. Wage statements will be maintained electronically for at least three years and will continue to be available to active employees for that entire time. Former employees will be provided paper copies at no charge upon request.

As for the sixth point above, employers need to understand that the statute of limitations for many wage and hour class actions in California can extend back to four years under Business and Professions Code section 17200, and therefore should consider keeping wage statements and other documentation required to defend against claims going back the previous four years.

Also, employers should note that California passed a law in October 2015 providing employers to cure certain wage statement violations and minimize penalties if they take certain steps to fix the problem and inform the impacted employees within a very short period of time.

Friday’s Five: Facebook “likes” and employee’s calling employer “asshole” can be protected activities

FB meh

Jillian Sanzone worked for Three D, LLD, d/b/a Triple Play Sports Bar and Grille, as a waitress and bartender and Vincent Spinella worked as a cook.  The employees realized that they owed more money in State income taxes than expected and complained to the employer.  Sanzone, Spinella, and another former employee, Jamie LaFrance, began posting about the situation on Facebook.  LaFrance’s initial status update stated, “Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money…Wtf!!!!”  Sanzone added to the comment in stating “I owe too. Such an asshole.”  Spinella then “liked” LaFrances initial status update.  The employer terminated Sanzone and Spinella based on the posts, and that Spinella “liked” the post.  The NLRB held that the employee’s engaged in protected concerted activity and the employer violated their rights under the Act in terminating them.  On October 21, 2015, the United States Court of Appeals for the Second Circuit upheld the NLRB’s ruling in Three D, LLC v. National Labor Relations Board.  Here are five lessons employers should learn from this case:

1.     The NLRB can enforce compliance issues even for non-union employers

Section 7 of the 1935 National Labor Relations Act (the “Act”) guarantees that “[e]mployees shall have the right to self‐organization, to form, join, or assist labor organizations . . . and to engage in other concerted activities for the purpose of . . . mutual aid or protection . . . .” 29 U.S.C. § 157. Section 8(a)(1) of the Act protects employees’ Section 7 rights by prohibiting an employer from “interfer[ing] with, restrain[ing], or coerc[ing] employees in the exercise of the rights guaranteed in [Section 7] . . . .” 29 U.S.C. § 158(a)(1).  This applies to unionized and non-unionized employers alike.  For example, the employer in the instant case was not unionized.

2.     Employees may engage in “protected concerted activity”

The NLRB defines “protected concerted activity” as follows:

The law we enforce gives employees the right to act together to try to improve their pay and working conditions, with or without a union. If employees are fired, suspended, or otherwise penalized for taking part in protected group activity, the National Labor Relations Board will fight to restore what was unlawfully taken away.

Because the Facebook comments were found to be protected concerted activity, the employer’s decision to terminate the employees based on these comments and Facebook “like” of the comments was held to be in violation of the Act.

3.     Employee’s Facebook like of the comments can be a protected activity

Neither party in this case contended that the act of “Liking” a Facebook post could not be a protected activity.  Indeed, the NLRB, and the Second Circuit Court hearing the appeal recognized that in today’s workplace, social media comments and discussions are typically where protected concerted activity occurs.  The NLRB held that the comments in this case posted on Facebook were protected comments because it involved current employees and was “part of an ongoing sequence of discussions that began in the workplace about [the employer’s] calculation of employees’ tax withholding.”

4.     Not all activity is protected

While employees have the right to comment and discuss work related complaints on social media, this right is not unlimited.  An employee’s communications with the public may lose the protection of the act if they are sufficiently disloyal or defamatory.

The NLRB held that the posts in this case did not lose this protection because the comments “did not even mention [the employer’s] products or services, much less disparage them” and that the employee’s claims of insufficient tax withholdings were “maliciously untrue.”  And Sanzone’s characterization of her employer as an “asshole” in connection with the asserted tax-withholding errors “cannot reasonably be read as a statement of fact; rather, Sanzone was merely (profanely) voicing a negative personal opinion of [her employer].”

5.     Employers need to take care in drafting their internet/blogging policies to ensure it does not run afoul of the NLRB or state law. 

The NLRB also found that the company’s social media policy violated the law.  The company’s policy stated the following:

The Company supports the free exchange of information and supports camaraderie among its employees. However, when internet blogging, chat room discussions, e-mail, text messages, or other forms of communication extend to employees revealing confidential and proprietary information about the Company, or engaging in inappropriate discussions about the company, management, and/or co-workers, the employee may be violating the law and is subject to disciplinary action, up to and including termination of employment. Please keep in mind that if you communicate regarding any aspect of the Company, you must include a disclaimer that the views you share are yours, and not necessarily the views of the Company. In the event state or federal law precludes this policy, then it is of no force or effect.

The NLRB found that this policy violated employee’s rights under Section 7 of the Act because, “…we believe that employees would reasonably interpret the Respondent’s rule as proscribing any discussions about their terms and conditions of employment deemed ‘inappropriate’….”  This finding was despite the policy’s savings clause.  The ruling leaves many questions of what type of policy would be upheld by the NLRB, and is a point of caution for employers.

Photo: Sam Michel

FedEx $228 million class action settlement preliminarily approved on third try

fedex ground

The recent settlement creating a $228 million fund by Federal Express in a multistate class action brought in 2005 alleging that drivers were misclassified as independent contractors.  However, the parties are encountering some reluctance from the court in obtaining court approval of the settled.  This case is a good example that entering into a settlement with the opposing party does not necessarily end the case.  Parties in a class action must still obtain court approval of the settlement.  This Friday’s Five provides a list of five items to understand about the settlement process of class actions.

1.      The judge must approve the settlement to protect the interests of absent class members

The judge is tasked with the roll of protecting the absent class members who will be impacted by the settlement.  The judge will review the claims asserted by the plaintiffs, how strong the claims are, and the likelihood of success on the claims in reviewing the terms of the settlement.  Therefore, it is usually contingent upon plaintiffs’ counsel to set out a detailed evaluation of the claims and potential risks in continued litigation when seeking the court’s approval.  Judicial approval requires the judge to review the judgment of experienced counsel and make a determination that the agreement is “fair, adequate and reasonable” in context with the risks and delay of continued litigation.

2.      Notice to the absence class members must be given

The California Rules of Court provide that, in the event the court grants preliminary approval and certifies a settlement class, “notice of the final approval hearing must be given to the class members,” which shall “contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.”  The court will likely require notice to be provided to as many of the class members as possible, and that the notice is sent to each individual class member if practicable.

3.      Court will review plaintiff’s attorneys fees and the incentive awards provided to the named plaintiffs

It is likely that the named plaintiffs will seek an incentive award, which is a payment beyond the payment they will receive with the other class members.  Courts approve these payments for the named plaintiffs’ work in bringing the case and participating in the litigation.  As for the plaintiffs’ attorney’s fees, the court will look to the monetary and nonmonetary results achieved for the class members.  Plaintiffs’ fees are usually based upon a percentage of the total recovery for the class members, with “lodestar” cross-check.  The lodestar method cross-check examines the plaintiffs’ attorneys’ reasonable hours spend on the case multiplied by a reasonable rate per hour.

4.      The court ensures the settlement was not collusive

In determining whether a class action settlement is fair, the court will look to whether the settlement was reached through “arm’s-length” negotiations.  Therefore, if an independent mediator was involved in helping the parties reach the settlement, the parties will explain the mediation process to the court.  The court will also look to whether plaintiffs’ counsel conducted sufficient investigation and discovery into the claims in order to make a reasonable determination of the strengths and weaknesses of the case.  The experience of the class counsel is also taken into account by the court.  Finally, the judge will review the number of objectors to the settlement in addition to how many of the class members opted out of the settlement in evaluating the fairness of the settlement.

5.      After preliminary approval, the court holds a final fairness hearing

Once the court has preliminarily approved the class action settlement, notice has been provided to all of the class members, the class members have the opportunity to file an opt-out or objection to the settlement, the court will hold one last fairness hearing.  At this point in time, the parties can submit to the court all of the information pertaining to how many class members participated in the settlement, how many opted out of the settlement, and if there were any objectors.  Objectors also have the ability to appear at the fairness hearing.  Managing Class Action Litigation: A Pocket Guide for Judges, explains:

If objectors and unrepresented class members appear at the fairness hearing, it is important to permit them to fully voice their concerns. For class members who feel strongly enough about their injuries to appear, the fairness hearing is their “day in court.” Judges in settlements involving tort claims such as the Agent Orange and silicone gel breast implant litigation held multiple days of hearings to accommodate the interests of class members.

The Federal Express case illustrates that the process of obtaining court approval may take multiple attempts to cure issues the court has with any number of the items set forth above.  Indeed, the FedEx settlement is only at the initial preliminary approval stage, and the court has set the final fairness hearing to take place on March 24, 2016.  What is the lesson to learn from this case?  The work is not done once a settlement is reached, the parties still have to obtain the court’s approval.

Photo: Rob Young

Friday’s Five: California employers get some PAGA relief

California passed a new law in October 2015 that provides employers some potential protection against penalties imposed by the Private Attorney General Act of 2004 (PAGA). Employers need to understand the intricacies of PAGA, and the importance of seeking legal counsel immediately upon receiving a copy of the letter a plaintiff must send to the Labor and Workforce Development Agency (LWDA). Today’s Friday’s Five provides five highlights to assist in this understanding, and what potential relief employers are provided under the amendment of the law:

1. PAGA authorizes individuals to collect penalties only previously obtainable by the state’s LWDA.

PAGA (sometimes referred to as the bounty hunter law) was designed by the California Legislature offer financial incentives to private individuals to enforce state labor laws. As the Court noted in its opinion, at the time the legislation passed, the state’s labor law enforcement agencies did not have enough resources or staffing necessary to keep up with the rapid growth of California’s workforce. Therefore, PAGA allows aggrieved employees to act like a private attorney general in collecting civil penalties for Labor Code violations. The employee must give 75% of the collected penalties to the Labor and Workforce Development Agency, and the remaining 25% is to be distributed among the employees affected by the violations.

2. PAGA claims are representative suits, which are very different than class actions.

First, because the plaintiff under PAGA is seeking penalties set out in the statute, a one year statute of limitations applies. This varies drastically from the four year statute of limitations that apply to most wage and hour class actions when a Business and Professions Code section 17200 cause of action is alleged.

Second, the California Supreme Court in Arias v. Superior Court held that a plaintiff does not have to have the class certified as a class action in order to recover damages on behalf of all of the other employees plaintiff seeks to represent.

3. PAGA claims cannot be waived by employees.

The California Supreme Court also clarified that employees may not waive their right to bring a representative action under PAGA (even though the Court held that class action waivers in arbitration agreements are enforceable). The Court held in Iskanian v. CLS Transportation that, “we conclude that an arbitration agreement requiring an employee as a condition of employment to give up the right to bring representative PAGA actions in any forum is contrary to public policy.”

4. Before bringing suit, a plaintiff must notify the state of their intention to file suit to recover PAGA penalties.

Employees seeking recovery under PAGA must comply with requirements that place the Labor and Workforce Development Agency and the employer on notice that the employee will be seeking remedies under the Act and give the Agency a chance to investigate itself. If the Agency does not investigate, then the plaintiff can proceed with the claim. As discussed below, this is important because in October 2015, employers now have the ability to cure problems set forth in the plaintiff’s letter to the LWDA, which could bar the plaintiff from obtaining any penalties.

5. In October 2015, legislation was passed to provide employers an additional right to cure defects in pay stubs, and potentially bar plaintiffs from recovering any penalties.

AB 1506 amended PAGA to allow employers the ability to cure certain violations in order to avoid penalties. The law went into effect as of October 2, 2015. The amendments provide that employers can fix paystubs that do not list the inclusive dates of the period for which the employee is paid (required under Labor Code section 226(a)(6)) and the name and address of the legal entity that is the employer (required under Labor Code section 226(a)(8)). In order to cure the defects, within 33 calendar days of the postmark of the notice to the LWDA by the plaintiff, the employer must give written notice by certified mail to the aggrieved employee or their representative, and the LWDA that the violation has been cured, describe the actions taken, and set out that no civil action pursuant to Section 2699 may commence. The employer must also provide a fully compliant itemized wage statement to each aggrieved employee for each pay period for the three-year period prior to the date of the written notice by the plaintiff. It is vital that employers who receive a PAGA notice seek counsel immediately to potentially cure any defects pursuant to this new legislation, and potentially avoid large PAGA penalties.

California enacts new equal pay protections for 2016

Equal pay act

Today, October 6, 2015, Governor Brown signed into the law Senate Bill 358, directed at ensuring equal pay across genders.  While it was illegal to pay employees different wages based upon their gender or race already under California law, the new law expands the protection to workers who do “substantially similar” work.  The bill amends Labor Code section 1197.5.  If challenged, employers can justify different pay if the employer can show it is based on one or more of the following factors:

  1. A seniority system
  2. A merit system
  3. A system that measures earning by quantity or quality of production
  4. A bona fide factor other than sex, such as education, training, or experience.

The law also requires that employers maintain records of the wages and wage rates, job classifications, and “other terms and conditions of employment of the person employed by the employer” for three years.

The statute of limitations requires that a plaintiff bring a case no later than two years after the cause of action accrues, exempt that if the violation is “willful” a three years statute of limitations applies.

Employees who bring a lawsuit under the law can recover the balance of the wages, including interest thereon, and an equal amount as liquidated damages, costs of the suit and reasonable attorney’s fees, notwithstanding any agreement to work for a lesser wage.

The law also prohibits employers from restricting employees from disclosing their wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging others to exercise their rights under the new law.  Current law already regulated employer’s ability to limit employee’s discussion of their wages and workplace environment.  For example, employers cannot prohibit employees from discussing or disclosing their wages, or for refusing to agree not to disclose their wages under Labor Code Sections 232(a) and (b). In addition, employers cannot require that an employee refrain from disclosing information about the employer’s working conditions, or require an employee to sign an agreement that restricts the employee from discussing their working conditions under Labor Code Section 232.5.

The new law becomes effective January 1, 2016.  Employers should consider the implications of this new law and how best to preserve evidence that documents and justifies the different rates of pay for employees.

This law, among other laws that California employers must comply with at the beginning of 2016 will be discussed during a webinar I’m conducting next month.  For more information about the webinar and to register, please email me.

Five ways companies can best utilize employment attorneys

It may not be a topic on the minds of many business owners, human resource managers, or in-house counsel, but developing an effective relationship and engaging employment law counsel is essential in saving the company money and avoiding litigation. This Friday’s Five is a video in which I discuss five ways companies should be engaging their employment law attorney help minimize risk and avoid litigation.

Please drop me an email if you have any questions or topics you would like me to address in the Friday’s Five.