California Employment Law Report

California Employment Law Report

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

Five point checklist: sexual harassment and reducing liability in the workplace

Employers need to review their compliance with California’s sexual harassment training requirements on a periodic basis.  When doing so, it is a good time to update policies and remind employees about the company’s policies on a routine basis – not just when a complaint is made.  This Friday’s Five provides reminders about sexual harassment training and dealing with complaints in the workplace:

1.      Employers with 50 or more employees must provide sexual harassment training to all supervisors every two years.

Employers with 50 or more employees must provide at least two hours of classroom or other effective interactive training and education regarding sexual harassment to all supervisory employees who are employed as of July 1, 2005, and to all new supervisory employees within six months of assuming a supervisory position.  From, all covered employers must provide sexual harassment training and education to each supervisory employee once every two years.  In 2015, California requires that a portion of the training also address “abusive conduct.”

2.      It is recommended that employers provide training to all employees.

All employees should be training about the company’s anti-harassment policy and seriousness of violations of the sexual harassment policy.  Rank and file employees should be encouraged to report any harassment or inappropriate conduct that they see occur in the workplace even though it may not be directed at them.  Encourage employees to help other employees to speak up and make the company aware of inappropriate conduct so that the company can take effective measures to stop the conduct.

3.      Employers should have a compliant policy and complaint procedure.

All employers should have an anti-harassment policy of their own developed and distributed to all employees.  In addition, employers are required to distribute the pamphlet, Sexual Harassment Is Forbidden by Law (DFEH-185), to all employees.  Employers should also routinely discuss the sexual harassment policy with employees at meetings and remind them of the complaint procedures and document these additional steps.  This additional training will show that the company is serious about preventing harassment and took affirmative steps to protect its employees.

4.      Investigate all complaints.

Employers are liable for harassment when it knows or should have known that harassment has occurred.  Therefore, employers should take immediate and appropriate action when they become aware of any potential harassment taking place in their workplace.  An employer must take effective action to stop any further harassment and to minimize any effects of the harassment. The investigation should fully inform complainant of his/her rights.  In addition, the investigation must be immediate, thorough, objective and complete.  All witnesses and anyone with information on the matter should be interviewed.  A final determination must be made and the results communicated to the complainant, to the alleged harasser, and, as appropriate, to all others who have a need to know.

If the investigation determines that harassment occurred, the company must take prompt and effective remedial action.  These steps would include taking appropriate action against the harasser, and keep the complainant informed of these steps.  In addition, the employer must take steps to prevent further harassment.

5.      Protect employees who complain against retaliation.

Employers must take steps to prevent retaliation against any employee who complains about harassment.  This even applies if the employer determines that the complaint was unfounded, the fact that a complaint was made is a protected activity.  Employers should remind the complainant of the anti-retaliation policy and have the employee report any perceived retaliation to the appropriate person in the company.  In addition, the employer should remind the person against who the complaint was made that there cannot be any retaliation against the complainant.  The employer may consider separating the two people involved in the situation to avoid any retaliation claims.

 

Termination checklists: five considerations to start with

Happy Friday!  This Friday’s Five focuses on the termination process.  Employers should develop a termination checklist to ensure all documents and contingencies are consistently covered during the process.  Here are five pointers employers can use to start in developing their own checklist:

1.      Final wages must be timely paid.

The employee’s wages must be paid at the time of termination.  In addition, employers are required to pay the employee all accrued but unused vacation in this final paycheck.  In addition, other items employers should review to ensure they are timely paid:

  • Expense reimbursement for business expenses
  • Commissions
  • Non-discretionary bonuses or profit sharing agreements

2.      Provide all required forms to employee at separation.

To the surprise of many employers, there are many forms that employers are required to provide to employees at the time of termination.  Here is a non-exclusive list of some of the routine forms required:

Employers should take time to review their obligations and forms that are required for their particular industry or situation.

3.      Communications about the terminated employee with others in the company and outside of the company. 

In order to prove a libel or slander claim, the employee must prove: (1) false communication; (2) unprivileged statement of fact (not opinion); (3) it was made about the plaintiff; (4) published to a third party; and (5) caused damage to the plaintiff.  More information about liable for slander claims can be read here.

Employers should take appropriate measures not to discuss the circumstances surrounding why an employee left the company with people within the company that do not have a need to know.  In addition, employers need to be very careful in how they communicate with anyone outside of the company about the employee’s work at the company.  To avoid any potential claims, many employers restrict what information they will provide for reference checks (even for employees who were good and left on good terms) to the employee’s dates of employment, and if authorized by the employee, the employee’s last rate of pay.

4.      Consider if a severance agreement would be appropriate.

Offering an employee some severance pay may cost the company money in the short-term, but could save a lot of time and money in the long run. If the employer believes that there is a potential dispute with the employee, the employer may choose to pay some severance in exchange of a release of claims by the employee in order to avoid any potential litigation.  If done properly, an employee’s acceptance of a severance agreement would effectively waive any and all claims against the company.  If there is any potential for a dispute about any issues that arose during employment, entering into a severance agreement could be an effective way to avoid costly and time consuming litigation.  I’ve previously written about five common questions about severance agreements here.

5.      Have an attorney review the process.

If the termination has any type of complicated issue, of if the company is going to over a severance agreement, an employment lawyer familiar with the law should be consulted.  It is also helpful to discuss a termination with an employment lawyer to see if there are any other potential issues that the employer may not have considered, and develop a strategy to deal with the issues at the time of termination, and not during litigation.

Don’t forget to update wage information on notices required by Wage Theft Protection Act in 2016

California employers are required to provide non-exempt employees with certain information upon hire as required by the Wage Theft Protection Act.  The law became effective in 2012 and is codified at Labor Code section 2810.5.  Many employers use the Labor Commissioner’s template (embedded below) to meet their legal requirement, and will pre-populate the items in the form that do not change from employee to employee, lessening the information required to be completed on the form for each employee.

Many employers that have employees working at the minimum wage will pre-populate the wage information section of the form with the minimum wage rates and the applicable overtime rates based on that minimum wage rate.  However, with the increase in California’s minimum wage in 2016 state wide and also in many local areas (such as Los Angeles and Santa Monica), employers should review and update the wage information section on the Notice to Employee.

Do employers need to re-issue the Notice To Employee for all employees given the higher minimum wage?

No.  Employers are not required to re-issue the Notice to Employee to existing employees with updated wage information as long as new increased rate is show on the employee’s pay stub with the next payment of wages.  The DIR publishes a great FAQ on the law here that employers should review.

Friday’s Five: 2016 will be the year of joint employer liability – is your company ready?

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2016 will be a year in which joint employer liability will be a major issue for employers.  Why am I making this prediction?  First, the NLRB has refocused attention to this issue in hopes of expanding the number of employers that can be found jointly liable.  Second, the Department of Labor issued an Administrative Interpretation this week and set up a new website setting out how the DOL views the joint employer analysis.  Today’s Friday’s Five focuses on five issues employers should review regarding the joint employer analysis.

1.      Employers should review the DOL’s Administrative Interpretation on the joint employer relationship

On January 20, 2016, the Department of Labor issued an Administrative Interpretation regarding how it views and would analyze whether there is joint employer liability between two or more different entities that share workers.  The Administrative Interpretation can be read here.

The DOL sets out the difference between horizontal joint-employers and vertical-joint employers:

 Horizontal joint employment exists where the employee has employment relationships with two or more employers and the employers are sufficiently associated or related with respect to the employee such that they jointly employ the employee. The analysis focuses on the relationship of the employers to each other.

Vertical joint employment exists where the employee has an employment relationship with one employer (typically a staffing agency, subcontractor, labor provider, or other intermediary employer) and the economic realities show that he or she is economically dependent on, and thus employed by, another entity involved in the work. This other employer, who typically contracts with the intermediary employer to receive the benefit of the employee’s labor, would be the potential joint employer. Where there is potential vertical joint employment, the analysis focuses on the economic realities of the working relationship between the employee and the potential joint employer.

The DOL’s opinion letter sets out the factors it would review in making a determination under the horizontal or vertical joint employment scenarios, and employers should review these factors.  The DOL also created a website setting out additional information about joint employment under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.

2.      California’s joint employer test

“[T]he basis of liability is the defendant’s knowledge of an failure to prevent the work form occurring.”  Martinez v. Combs, 49 Cal.App.4th 35, 70.  Therefore, to be an employer, the entity must have power to prevent the worker from performing work.  If there is no control to prevent the work, the entity cannot be held liable as a joint employer.

California’s Industrial Welfare Commission (IWC) also sets forth law regarding California’s wage and hour requirements.  The IWC definition also includes “any person … who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.”  The court in Martinez held that a joint employer relationship exists when one entity, which hires and pays workers, places the worker with another entity that supervises the work.  There are many factors that a court can look to in making this determination, and employers should approach

3.      Additional responsibilities for California employers under Labor Code section 2810.3

Effective January 1, 2015, Labor Code section 2810.3 expanded the liability of “client employers” that obtain workers through temporary agencies or other labor contractors.  The law requires that the client employer who obtains the workers through the agency must share in the liability for any wage and workers compensation issues.  The law also provides that a client employer cannot shift all of the liability for wage and workers compensation violations.  However, the law does provide that the client employer can seek indemnity from the labor contractor for violations.  Therefore, it is important for employers who are covered by Labor Code section 2810.3 and who are obtaining workers through a labor contractor to ensure the labor contractor is meeting all wage and workers compensation requirements, and negotiate an indemnity provision in the contact with the labor contractor should any liability arise.

4.      Even if there is found to be a joint employer relationship, there is no personal liability for unpaid wages under CA law (but see item #5 below)

California law does not hold corporate officers or directors personally liable for unpaid wages by the corporate employer.  See Reynolds v. Bement, 36 Cal.4th 1075, 1085 (2005).  This is different than the FLSA, which does impose liability on “any person” acting on behalf of the employer  for unpaid wages.  It is important to note that under California law personal liability could still be imposed on a company’s officers or owners under the alter ego theory.

5.      However, there may be personal liability for civil penalties imposed under CA law

In addition, the California Labor Code’s civil penalties could be imposed on individuals.  For example, Labor Code section 558(a) provides that “any employer or other person acting on behalf of an employer” who violates or causes a violation could be held personally liable for applicable civil penalties.  Labor Code section 1197.1 that applies to minimum wage likewise holds individuals potentially liable for civil penalties for failure to pay minimum wages.  See Labor Code section 1197.1.  Therefore, employers need to review and set up policies and practices to ensure that they do not find their companies, and potentially themselves personally liable for liability created by an outside agency that supplies workers for to them.

Can/should companies follow employee’s on social media? Gary Vaynerchuk weighs in

Gary Vaynerchuk discusses how he uses social media to engage with his 500 or so employees and addresses the risks on The Ask Gary Vee Show, episode 176 (video below).   Gary made his career using social media, and continues to do so in running his digital media company, Vayner Media.  So it does not come as much of a surprise that he embraces using social media to engage with employees.  He is correct in his position that “intent trumps everything.”  He means that if employers have a good intent in engaging employees via social media, there will be less risk of litigation from its use.  Gary is also correct in his position that employees can make up anything or sue on anything, and if being afraid of litigation is the standard about whether to engage in certain conduct, employers would have a very difficult time running a business.  Gary notes also that employees are happy when he engages with them on social media, but he notes he does engage with respect, and does not want to make anyone uncomfortable.

I generally agree with Gary’s position, and employers should feel free to engage employees on social mediation as long as they understand the general rules of employee privacy issues that arise (and as noted below, this is nothing new with the development of social media).

California’s right to privacy

First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace, but is even more protected when the employee is conducting personal activities during non-working hours. A person’s privacy expectation in their social media posts is very low since it is posted for the general public. But one could argue that off-work conduct (which includes social media activity) is part of the employee’s privacy right recognized in the California Constitution.

Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

Indeed, employees have successfully alleged claims that an employer’s use of off-work conduct was used in making an employment decision that violated the employee’s privacy.  For example, in Rulon-Miller v. IBM Corp. (1984) an IBM employee was terminated for an alleged conflict of interest due to her dating a manager of an IBM competitor.  IBM warned the employee to stop dating the manager of the competition, and when she protested IBM terminated her employment.  The court found that IBM violated the employee’s right to privacy in terminating her employment due to off-work conduct, and the jury awarded her $300,000.

Unreasonable intrusion into an individual’s private affairs

There is also a potential for employees to argue that it is intrusion into their private affairs.  To be unlawful conduct in California, an intrusion into someone’s privacy must be an unreasonable intrusion into one’s seclusion or private affairs that is highly offensive to a reasonable person.  A plaintiff can state a cause of action when their privacy is invaded in an offensive manner without consent, and it does not matter if the information was disclosed after the invasion.  See Shulman v. Group W Prods. Inc. (1998).  However, because an employer is following an employee’s posts on social media, it would be very difficult for an employee to establish that such an invasion occurred because the employee is posting the information publically.

So can employers use social media to follow and communicate with employees?

There is nothing illegal about employers or supervisors from following employees on social media.  The information posted by the employees is publically shared, so it would be very difficult for employees to state that the employer somehow intruded upon their privacy by following or commenting about the information posted by the employee.  However, employees do have a privacy interest in their off-work conduct and as established by the IBM case above, and employers must be careful in making employment decisions based on this information.  So is social media off limits to supervisors or companies?  No necessarily so as Gary states.  Indeed, the IBM case above was decided in 1984, well before social media existed.  Employers, managers, and supervisors always had to manage this risk – even before social media.  Therefore, it is not per se illegal that companies follow and engage their employees on social media, as many companies are probably feeling to pressure to do so as this is becoming the standard way many people communicate.  As Gary discusses, the fact that a company is engaging its employees on social media can be a huge employee morale boost, and a way to establish that the company cares about employees and is communicating with them on a less formal basis.  Companies should approach the sensitivity of the information and privacy of employees just as they would have prior to the invention of social media.

Five reminders for paid sick leave at the start of 2016 for California employers

I’ve been fielding a lot of questions from clients about California’s paid sick leave at the beginning of 2016.  There has been a lot of confusion about accrual rates and tracking paid sick leave for employees, and if the employee’s paid sick leave accrual re-sets at the beginning of the calendar year.  This week’s Friday’s Five is five reminders about California’s paid sick leave for 2016:

1.     Employers must remember to keep the two different methods of providing paid sick leave (up-front grant vs. accrual) separate when analyzing their obligations under the law. 

Many employers get confused because they examine the requirements of the law without understanding which requirements apply to the the up-front grant method or the accrual method.  Employers must keep these two different methods distinct when analyzing their obligations under the law.  For example, if employers provide the three days or 24 hours up-front to employees (i.e., the employees do not have to accrue the sick leave), then there is no need to set a cap on accrual.  This is because the law states that employers using the up-front grant do not have to carry over any unused paid sick leave to the next year.

2.     Employee’s accrual and usage is usually tracked based on the employee’s anniversary date.

Generally, the law requires that the employer must provide the employee with three days or 24 hours (whichever is greater) of paid sick leave from the employee’s hire date.  Therefore, the calendar year usually does not apply when tracking and resetting the amount of paid sick leave employees are eligible to use.

3.     Under the accrual method, employers have different options of how to set the accrual rate of paid sick leave.

The law originally required that employers provide employees with an accrual of one hour for every 30 hours worked and allow use of at least 24 hours or 3 days (whichever is greater) each year.  The law was amended in October 2015 to allow employers to use an alternative accrual method as long as it is (1) on a regular basis, and (2) the employee has no less than 24 hours or three days paid sick leave or paid time off by the 120th calendar day of employment, or each calendar year, or in each 12-month period.

I’ve written about the other amendments made to the law in this previous article and discussed the amendments in this video.

4.     At the time of hire, employers must provide notice to most employees about paid sick leave.

The DIR has generated a Notice to Employees that most California employers should be providing to their non-exempt employees.  Among other things, the notice sets forth information about the employer’s paid sick leave policy.

5.     Employers must review their record keeping and pay stub requirements.

The law requires that employers keep records about how much paid sick leave employees earned and used for three years.  Employers are also required to provide employees with information about how much paid sick leave the employee has available to use on their pay stub or on another writing provided to the employee at the same time the employee is paid.

Click here for a video discussing some of the other general requirements of the paid sick leave law.

Five action items to start 2016 off right

I cannot believe it is already Friday, and one week done in 2016.  This Friday’s Five focuses on a few action items for employers can use to start a review of their employment policies for 2016.Happy New Year 2016

 1.      Ensure the new hire packets contain all required information for employees. 

If employers do not have a standard new hire packet, the first step in 2016 should be implementing this packet.  There are many disclosures and documents that need to be provided to employees when they are hired.  This packet should be reviewed by legal counsel as well to ensure that all required forms are included for each employee.  For example, employees earning commissions must be provided the commission agreement in a writing signed by both the employee and the employer.  See Labor Code Section 2751.

 2.      Review pay stubs to ensure they are compliant. 

The DLSE provides an example of a pay stub and the required information for an hourly employee:

Also, do not forget that with California’s paid sick leave law that took effect on July 1, 2015, employers will have additional reporting information regarding employees’ accrued paid sick leave and usage. Employers must show how many days of sick leave an employee has available on the employee’s pay stub or a document issued the same day as a paycheck.

3.      Analyze if arbitration agreements are appropriate.

Employers should understand the potential benefits and costs associated with arbitration agreements, and should review with counsel whether they might be appropriate for their workforce.

4.      Review payroll practices and ensure overtime is being paid correctly.

If non-exempt, review to ensure the appropriate overtime is being paid at the proper rate, and that all overtime is being paid for work done over eight hours in a day and 40 hours in a week.

Generally, any work performed over eight hours in any workday or more than six days in any workweek requires that the employee is compensated for the overtime at not less than:

  •  One and one-half times the employee’s regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; and
  • Double the employee’s regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.

Employers should review that the employee’s “regular rate of pay” used for calculating overtime includes all required payments to the employee such as non-discretionary bonuses, piecework earnings, or commissions.  The Department of Industrial Relations provides some good examples on what must be included when calculating the regular rate of pay and how to calculate the applicable overtime.

5.      Understand new laws taking effect in 2016.

Employers should learn about the new laws passed that are effective in 2016.  I’ve posted some excerpts from a webinar I recently conducted last week on a few new laws facing California employers in 2016.  I’ll be posting additional excerpts soon as well.  If you would like to be notified about future webinars or seminars I conduct, you can sign up here.

Five videos all California employers should watch for 2016

Happy New Year!  This Friday’s Five consists of five new video’s taken from a recent presentation I conducted on new employment laws facing California employers in 2016.  Wishing everyone the best in 2016.

2016 Update: California’s new equal pay protections:

2016 Update: Meal and rest break considerations:

2016 Update: Minimum wage increases state and locally:

2016 Update: Employers may cure some PAGA violations on pay stubs

2016 Update: California’s new requirements for piece rate pay employees:

If you find these updates useful, please email me (anthony [dot] zaller [at] yahoo.com) if you are interested in attending any of my future presentations or webinars on California employment law.

Five holiday considerations for California employers

Merry Christmas and Happy Holidays!  I have been enjoying the excellent skiing in the Eastern Sierras (California’s snow pack is looking great this year).  So this Mammoth Skiingweek’s Friday’s Five article is a bit shorter, but I wanted to address five issues that the holidays create in regards to wage and hour issues in California:

1.     Five things to understand about holiday pay under CA law.

2.     Five rules for drafting vacation policies the right way under California law.

3.     Spending a lot of time with family during the holidays is a given, but is there room for workplace relationships

4.     Holiday implications for wage and hour issues.

  The Department of Industrial Relations provides a FAQ on issues surrounding holidays.

5.     Yearly items employers should audit.

Merry Christmas!  Hope you are enjoying some time off and time with your family.

Friday’s Five: Five employment law areas to review for 2016

As we approach the close of 2015, employers should take the time to review their employment law policies and practices.  I’m often asked where should the process start?  Here are five areas employers can focus on to start the audit process:

1.      Employee handbooks

Employers need to ensure their policies are up to date, and a few areas that saw updates that may need attention in regards to employee handbooks are the revisions to California’s paid sick leave, the enforceability of arbitration agreements that contain class action waivers, and equal pay protections.

Employers should review new laws taking effect in 2016 to ensure compliance.

2.      Ensure compliance with minimum wage increases

California minimum wage increases to $10 per hour effective January 1, 2016.

Employers need to remember that the state minimum wage also sets the salary basis for exempt employees, and therefore the minimum salary that must be paid to exempt employees will also be increasing.

3.      Wage and hour issues

There are so many wage and hour areas that employers need to ensure compliance with, but here are few to help start the audit process:

4.      Meal and rest breaks

Even though it is widely known by employers of their obligations to provide meal and rest breaks, there is still substantial litigation over this issue.  Therefore, employers should continually review their meal and rest break policies and practices to ensure compliance with the law.  To start, here is a link to a previous article about five things California employers should not forget about meal and rest breaks.

5.      Correct information is listed on employee pay stubs and new requirements for piece-rate employees

Employers should ensure their pay stubs provided to employees comply with the requirements of Labor Code section 226.  The DLSE provides a sample of what information a compliant pay stub should list for an hourly employee, but don’t forget about the requirement to report an employee’s accrued paid sick leave.

Employers should especially conduct this review if they paid employees on a piece-rate basis.  A new law, AB 1513, adds various Labor Code sections and places new requirements on employers who pay on piece-rate basis.  The law now mandates that employers pay piece-rate employees separately for the following activities:

  • Rest breaks
  • Recovery periods (for employees who work outside)
  • Non-productive time (defined by the law)

The law requires employers to calculate the regular rate of pay for each workweek, and then pay the piece-rate employees the higher of this regular rate of pay or the applicable minimum wage for rest break time.  The law also requires employers to pay piece-rate employees for “nonproductive time” which is defined as “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.”  The nonproductive time is required to be paid at a rate no less than the applicable minimum wage rate.  Employers paying employees on a piece rate basis should review the new obligations with an employment law attorney to ensure compliance.

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