The City of Los Angeles recently assessed Carl’s Jr. Restaurants $1.45 million in fines for violation of the City’s minimum wage law ordinance.  The City sought these penalties against Carl’s Jr. for allegedly failing to pay 37 employees the applicable Los Angeles minimum wage rate of $10.50 per hour from July 1, 2016 to December 31, 2016.  The city also claimed that the company failed to post the required notices required by the ordinance and did not allow investigators access to two locations.  This astronomical fine imposed by the city seems out of proportion for the size of the number of employees affected, but it is a stark reminder for employers about how serious any violations of the local ordinances could be.  Here are five lessons for Southern California employers from this incident:

1. Enforcement of local ordinances is taking place.

The cities that have passed local ordinances are enforcing the laws strenuously.  The City of Los Angeles has especially been active in investigating potential violations.  First hand I have had a number of clients who have been contact by the city seeking information about compliance with the ordinance.  The investigators have appeared at workplaces in person and also contacted the employers over the phone. As discussed in item number five below, it is important for employers to train staff about how to appropriately respond to questions with people entering the workplace asking for information about the employer’s employment practices.

2. Review pay rates to ensure compliance with local ordinances.

Employers need to remember that even if their business is not located in a city or county that does not have a minimum wage or paid sick leave requirement, this does not mean your company can ignore the new laws.  Most of the ordinances require compliance with their local laws if any employee works two hours within the city or county even if the employer is not based within that city or county.  For example:

  • Santa Monica:  Law applies to any employee working a minimum of two hours within Santa Monica in a given week (even if employer is located outside of Santa Monica).
  • City of Los Angeles: Ordinance applies to “[a]n employee … who performs at least two hours of work in a particular week within the City of Los Angeles….”
  • County of Los Angeles: Ordinance applies to “[a]nyone who works at least two hours in a one-week period within the unincorporated areas of Los Angeles County is entitled to the County minimum wage for the hours worked in the unincorporated area of the County.”
  • Pasadena: Applies to employees who perform at least two hours of work in Pasadena.
  • Malibu: “This ordinance applies to employees who perform at least two hours of work in a particular week within the Malibu city limits.”

3. Penalties for non-compliance are substantial.

An employer who violates the City of Los Angeles’ minimum wage requirements is liable to the employee for payment of back wages and an additional penalty of $100 for each day that the violation occurred or continued.  Where retaliation has occurred, the employee is entitled to reinstatement and a trebling of all back wages and penalties.

In addition, employers are subject to administrative fines as set forth below:

Failure to post notice of the Los Angeles Minimum Wage rate

$500 per day per employee
Failure to allow access to payroll records $500 per day per employee
Failure to maintain payroll records or to retain payroll records for your years $500 per day per employee
Failure to allow access for inspection of books and records or to interview employees $500 per day per employee
Retaliation for exercising rights under the ordinance $1,000 per day per employee
Failure to provide employer’s name, address, and telephone in writing $500 per day per employee
Failure to cooperate with the Division’s investigation $500 per day per employee
Failure to post Notice of Determination to employee $500 per day per employee

4. Ensure all poster and notice requirements are complied with.

The cities and counties that have local minimum wage and paid sick leave ordinances are making the notices relatively easy to obtain from their websites.  For example, here are a few links published by various cities in the Los Angeles area:

Santa Monica notices:  https://cityofsantamonica.app.box.com/s/nuccal4on935m43p0nhmuzgy65f5mbwl

City of Los Angeles notice: http://wagesla.lacity.org/#information

County of Los Angeles notice: http://file.lacounty.gov/dca/cms1_245570.pdf

Pasadena notice:  http://www.cityofpasadena.net/minimumwage/

Malibu: http://www.malibucity.org/minimumwage

5. Implement policy and train staff and managers about how to respond to investigators.

All staff should receive training about how to respond if contacted by anyone who indicates that they are from a government office and are seeking information about the workplace.  It is important for the employer to be able to identify and confirm that the investigators are who they are reporting to be and that they are actually working for the federal, state or local government.  Once their identify has been confirmed, employers need to designate who from the company will gather and communicate the relevant information to the investigators in a timely manner.  The person designated by the employer should have experience in dealing with investigations, an understanding of the company’s policies and the local legal requirements.  Finally, the employer should address whether they need the assistance of legal counsel to assist in the investigation.

American FlagI published this post the last couple of years just before the Fourth.  Thinking back on it again this year I want to publish the same post, and hopefully I’ll be able to keep publishing it for many years to come.  Hope you have some time this weekend for put aside your work for a bit this weekend and enjoy some time with your family.  Happy Fourth!

Five things I’m thankful for this Fourth of July:

1.     For the great risk and sacrifice our Founding Fathers took to establish the country. 

When learning about the Founding Fathers in high school history class I did not have a perspective about the risks the Founders took in establishing the country.  Only now that I have a business, a family, and am relatively successful, can I realize the huge risks that the Founders took.  By all means, they were the establishment, the elite of the American society, if anyone had an interest in preserving the status quo it was them.  It is great that their sacrifices of life (theirs and their family members) and their fortunes, helped build the foundation we benefit from today.

2.     The ability to speak freely and practice or not practice any religion I want.

It is great being able to say what you want to say freely and believe in whatever you want.  It is also great be free to practice or not practice any religion you want.  We live in a very tolerant society, and it is even better when the government is not telling you how to live your life.  It is important to remember that throughout history, this has been the exception for how a government normally behaves.

3.     Our Country’s ability to attract creative people.

People that like creating things and being productive want to practice their trade where the government will basically leave them alone and provide a good environment to protect their gains derived from their hard effort (see item #5 below).  The U.S. provides this environment, and that is why so many people come to the U.S. to create a business or to practice their trade.  It is also important to recognize how lucky we are to be born in the U.S.

4.     My right to practice any profession and unlimited resources to learn the required skills.

No one is dictating what students need to be after they graduate high school or college.  Everyone is free to pursue their interest, and the market decides the value of the effort.  With basically any information freely available on the Internet, anyone can learn almost any skill, and like no other time in human history individuals have an almost free way to sell their services or products over the Internet.  In your mid-40’s and want to make a career change?  Perfect, and you don’t even need to go back to school as the information is freely available on the Internet.  Didn’t finish college and are 20 years old with an idea?  Perfect.  Venture capitalists don’t care about your pedigree, they basically are only interested if you work hard and don’t give up.

5.     Our legal system.

Yes, it sounds trite.  But while I don’t think our legal system is perfect by any means, it is the best system established in the history of mankind.  Everyone living in the U.S. presently is very lucky to have this benefit.  It is a foundation for many of the items I mentioned above.  Because people have a good basis for predicting the outcomes of their actions, such as being able to retain property legally obtained, and knowing if someone breaches a contract there will be repercussions, it creates an environment that attracts hard effort and the best talent from around the world.  This is why the U.S. has been the leader in ideas and new businesses.  However, just because the system is established it does not mean our work is done.  We have to be vigilant not to lose the fairness, reasonableness, and lack of corruption in legal system.

Happy Fourth of July.  I have to go start the grill.

LA City HallLos Angeles City begins enforcement on July 1, 2017 of its Fair Chance Initiative for Hiring Ordinance that prohibits employers from seeking criminal background information prior to offering a job to applicants.  The ordinance was effective in January 2017, but to give employers time to become compliant with the new hiring prohibitions, the City delayed enforcement until July 1.  This Friday’s Five discusses five issues Los Angeles City employers need to understand prior to the July 1 deadline:

1. Employers are prohibited from inquiring into a job applicant’s criminal history until a conditional offer of employment has been made.

Employers cannot conduct any “direct or indirect” activity to gather criminal history from or about any applicant using any form of communication, including on application forms, interviews or Criminal History Reports.  This includes searching the internet for information pertaining to the applicant’s criminal history.

2. Review the Fair Chance Initiative for Hiring Ordinance Guideline for Employers

The City published a flow-chart setting out a guideline for employers to follow to comply with the Ordinance.

Employers should review this flow-chart, review the Ordinance, and if they will be conducting background checks implementing processes to ensure they are complying with the Ordinance.

3. Post the notice to applicants and employees and ensure documents are retained for three years.

Employers are required to post a notice informing applicants of the law at each workplace, job site or other location in the City of Los Angeles under the employer’s control and visited by the applicants.

In addition, employers are required to retain applications and related information for three years.

4. Develop a process to comply with ordinance if revoking conditional offer based on criminal history report.

The City published a sample notice to rescind employment offer that employers can utilize to comply with the Ordinance after an employee’s criminal history background check reveals information that may allow the employer to revoke the conditional offer of employment.  The sample letter can be downloaded here.

The City also published an individual assessment and reassessment form for employers to use in conducting the required review of whether the employee’s criminal history is job-related and can be used to revoke the offer of employment.  Employers should review this document, understand the required steps to comply with these requirements, and seek help from qualified employment lawyers if/when this assessment must be done in making a determination of whether to revoke a job.

5. Place disclosures in all job-wanted ads to ensure compliance with ordinance.

The Ordinance requires that employers state “in all solicitations or advertisements seeking Applicants for Employment that the Employer will consider for employment qualified Applicants with Criminal Histories in a manner consistent with the requirements of this article.”

The City has proposed the following sample language to comply with this requirement:

We will consider for employment all qualified Applicants, including those with Criminal Histories, in a manner consistent with the requirements of applicable state and local laws , including the City of Los Angeles’ Fair Chance Initiative for Hiring Ordinance.

It is important to remember that this requirement applies to all online advertisements and solicitations.

Employers should review the City’s website for more information as well as the City’s Frequently Asked Questions.

IMG_4751 (1)Mid-way through 2017 and the California legislature is busy and, as expected, there are a number of employment law bills making their way through the legislature.  This Friday’s Five reviews five bills that could have a major impact upon California employers if passed:

1. AB 168 – Prohibition of asking salary history when hiring employees.

This bill prohibits employers from seeking salary history information from applicants and requires employers to set pay scale for positions and to provide this information to applicants.

2. AB 1008 – Statewide “Ban the Box” (limiting any questions by employers about criminal histories on applications).

Los Angeles and San Francisco have already passed regulations prohibiting employers for asking about criminal histories before a job is offered to employee.  This bill would apply similar requirements on employers state-wide.

3. AB 1565 – Increasing the required salary threshold to $47,472 annually ($3,965/month) for white collar exempt employees.

To qualify as an executive, administrative, or professional employee exemption, employers bear the burden of establishing that the employee is paid a salary the equivalent of two times the state minimum wage and that the employee spends more than 50% of their time on exempt duties.  With the state minimum wage at $10.50 per hour for large employers as of January 1, 2017 the currant salary level that must be paid in order to qualify for the white collar exemptions is $43,680/year.  On January 1, 2018, the state minimum wage increases to $11 per hour for large employers, raising the salary required for exempt employees to $45,760/year.  This bill proposes to increase the salary required to be paid to employees to meet the white collar exemptions since the Department of Labor’s attempt to do this on a federal level stalled at the end of last year.

4. AB 1209 – Internet publication of wages based on gender. This bill would require employers to publish information about “pay gender differentials” on a website open to the public. 

The bill would apply to employers who are required to file a statement of information with the Secretary of State and who have 250 or more employees to collect specified information on gender pay differentials. The bill would require an employer to annually update, publish, and submit the information.

5. SB 63 – Require small businesses to provide parental leave.

Currently, employers with 50 or more employees are required to comply with the California Family Rights Act and provide parental leave of up to 12 weeks to bond with a new child within one year of the birth.  This bill would lower the number of employees for covered businesses to 20 employees in a 75-mile radius.  The bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.

 

coffee breakCalifornia Labor Code section 226.7 provides that employees are entitled to receive premium wages in the form of one additional hour of pay at the employee’s regular rate of pay for a missed meal or rest break.

An employee who works more than three and one-half hours per day must be permitted to take a paid 10-minute rest period — during which the employee shall not be required “to work” — per every four hours of work or major fraction thereof.  An employee who works at least five hours must also be given a 30-minute unpaid meal break, during which the employee must be “relieved of all duty” if the meal period is not to be counted as time worked.

As the California Supreme Court recognized in Augustus v. ABM Security Services (2016), employers how cannot provide the required meal or rest breaks to employees have various options to comply with the law.  The Court stated:

Several options nonetheless remain available to employers who find it especially burdensome to relieve their employees of all duties during rest periods — including the duty to remain on call. Employers may (a) provide employees with another rest period to replace one that was interrupted, or (b) pay the premium pay set forth in Wage Order 4, subdivision 12(B) and section 226.7. (See Brinker, supra, 53 Cal.4th at p. 1039.)

As recognized by the Supreme Court, employers may consider voluntarily paying premium wages when it is questionable if an employee did not receive a compliant break or if they in fact missed the break.  Here are five issues employers should understand about the option of paying premium pay voluntarily1.

1. Employers potentially only owe two premium pay hours for each day worked.

The court in United Parcel Service, Inc. v. Superior Court (2011) concluded that the employer is liable up to two hours of premium wages – one hour for a missed meal break and one hour for a missed rest break – per day.  Even if the employee missed two rest breaks and one meal break in one day of work, the employee would only be entitled to one hour of premium pay for the missed rest breaks, and one hour of pay for the missed meal break, for a total of two hours of premium pay for that day.

2. Voluntarily making premium payments establishes that employer has effective open door policy.

By paying premium pay to employees who are not able to take breaks or complain that they have not been able to take breaks establishes that the company has an effective complaint procedure employees should utilize when any problems arise.  This presents an effective argument against any claims by employees after-the-fact that they were unable to take their breaks, and assert claims against the employer well after their employment ended.

3. Voluntary payment reduces potential liability.

The premium pay mentioned above is the penalty that is provided to the employee if they miss any of their required breaks.  Therefore, if the employer voluntarily pays the premium when the employee did not receive proper breaks, this will reduce the total potential liability owed to employees if sued.

4. Establishes that employer understands its legal obligations.

In making premium payments to employees who are arguably not able to take meal and or a rest break, establishes to any governmental agency or a plaintiff’s counsel that the company understands it obligations under the law and treats the obligations seriously.

5. If paid, it should be listed separately on employees’ paystubs to record payments.

It goes without saying that if the employer is taking this affirmative step, it needs to record the payments in a manner that makes it clear to the employee that the premium pay is being paid when breaks are missed.  In addition, the employer needs to have a record to establish all premium paid that could possibly be asserted by an employee has been paid out.

I’m tired of HR getting push to the corner of the executive suite meetings.  I get to see firsthand on a daily basis about how effective HR departments (or even CEOs, CFOs, or other company leaders) who recognize the importance of personally connecting with employees and helping employees develop, are more profitable organizations with reduced litigation costs.  Full disclosure, I developed (i.e., stole) many of these ideas after hearing Gary Vaynerchuk talk about how he values HR so much that he is not just the CEO of VaynerMedia, but he is the head of HR as well.  This Friday’s Five focuses on five reasons why HR needs to be a more critical role in your company:

1. It does not matter what your title or job is – CEO, CFO, HR, or even pilot – you still must have a personal touch.

A few years ago, I took my son to the Red Bull Air Races.  We had a great day watching the pilots racing over the shores of Mission Bay in San Diego.  My son was young, and I debated attending a meet-and-greet with the pilots put on by Red Bull.  The fact that Red Bull put this event on shows that they understand personal relationships in the business context.  So I drove my four year old son to Fox Field east of San Diego to see what it was all about.  Upon arriving, many of the pilots were standing next to their airplanes and had taken down the rope they could have used to protect their planes (and themselves) from the public.  We were able to actually meet most of the pilots, talk to them, and even take pictures with them.  Here were pilots that are some of the best in the world – Kirby Chambliss, Nigel Lamb, and Paul Bonhomme – and they were connecting with fans.  The pilots we met, took pictures with, and spoke to became my son’s (and my) most favorite competitors in the air races.  Still to this day, we still talk about this event, and when we see the air races on TV we are supporting the pilots we met and spoke with.  Gary Vaynerchuk calls it the Ricky Henderson effect, I refer to it as the Nigel Lamb effect (picture of my son and Nigel to the right).

These pilots probably never expected that to be a great pilot that they needed to know how to talk to kids and the public.  But it is this skill that differentiates these pilots from those flying cargo planes.  Plus, they were investing time into making the air races more popular, which equals more profit in the long run.

2. Personal understanding and connections cannot be faked.

It is also important to note that we could easily see which pilots actually liked the meet-and-greet, and the pilots who were only doing it because they had to.  This is a skill that cannot be faked.  If an organization tries to fake the personal aspect of HR, every employee will easily see through this hypocrisy.  It is better to simply not spend the time and money to pretend caring about employees, skip this step, and at least not be viewed as a hypocritical company.

3. Treating employees fairly and on a personal level will reduce litigation.

I’ve written about this before and even though I don’t have any empirical data to prove it, I’m sure Steve Jobs created litigation costs for Apple in the way he treated employees.  To be clear, there is nothing illegal about being a jerk to employees, but most employees don’t understand this.  If an employee feels disrespected they will want to get even, and to get even with the company they will file a lawsuit – meritorious or not.  Plus, with increased turnover, employers are likely to have increased employment litigation.

4. Hard skills are only part of the equation.

It is important for an organization to recognize the A-players who create discontent and chaos in the company are not worth the cost.  These type of employees will eventually bring the entire organization down.  Employees don’t want to deal with assholes, no matter how great the assholes are at their job.  Eventually (this might not be immediate, but will definitely occur over time) the other A-level employees who like being on a team and being treated with respect will leave.

5. HR should be more than filling out paperwork and providing parking cards.

I would argue that a good HR department should delegate task such as providing new hire paperwork or tracking employee’s down if they have not signed the employee handbook.  While the policies and documentation are critical, HR must be viewed as more than the department or person that is responsible for enforcing the policies, making sure paperwork is completed, and throwing a holiday party once a year.  If the paperwork aspect of the job takes away from creating relationships with employees, companies should consider having some other department handle obtaining information for the new hire packets, getting handbooks signed, and following up to ensure that supervisors have satisfied their sexual harassment training every two years.  Having HR focus on the employee development and satisfaction, not the paperwork, could also send a message to employees that the company understands and cares about HR.

In speaking to a few groups of California employers this week, a common question kept coming up about what are the essential Booksemployment policies California employers must have?  While there are more than five, this week’s Friday’s Five starts with what I consider to be critical policies that every California must have in place.

1. At-will policy

Under California law, it is presumed that all employment is terminable at-will. California Labor Code section 2922 provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” The at-will doctrine means that the employment relationship can be terminated by either party at any time, with or without cause, and with or without advanced notice. There are some major exceptions to this rule, but generally California law recognizes that employers and employees may, at any time, and for any legal reason, terminate the employment relationship.

2. Anti-harassment, discrimination and retaliation policy

California’s Fair Employment and Housing Council published new regulations pertaining to anti-discrimination and anti-harassment requirements effective April 1, 2016.  Employers need to review and potentially update their policies in order to meet the new requirements.  The full text of the regulations can be obtained here.

3. Timekeeping policy

California law requires employers to track start and stop times for hourly, non-exempt employees. The law also requires employer to track the start and stop times for the employee’s thirty minute meal periods. The time system needs to be accurate, and the employer needs to be involved in the installation and setup of the system. Do not simply use the default settings for the hardware and software. Understand what the system is tracking and how it is recording the data. Since the statute of limitations for California wage and hour violations can extent back four years, it is recommended that employers take steps to keep these records at least four years.  Employers should also have a complaint procedure in place and regularly communicate the policy to employees in order to establish an effective way to remedy any issues.

4. Meal and rest break policy

As I’ve written about many times previously, employers must have a compliant meal and rest break policy.  Indeed, given the California Supreme Court’s ruling in Augustus v. ABM Security Services in December 2016, employers should review their rest beak policy to ensure it complies with this ruling.

5. Paid sick leave policy

Many local governments in Southern California have passed laws increasing the minimum wage and amount of paid sick leave that must be provided to employees.  Employers must ensure they are complying with the law that provides the most benefits to employees.  Here is a brief summary of some of the local laws in Southern California:

State/City Minimum Wage Paid Sick Leave
1) California $10/hr January 1, 2016; $10.50 January 1, 2017; $11/hr January 1, 2018; $12/hr January 1, 2019; $13/hr January 1, 2020; $14/hr January 1, 2021; $15/hr January 2022* Current: 3 days or 24 hours
2) Los Angeles – City (click here for more information about Los Angeles City’s minimum wage and paid sick leave laws) July 1, 2016: $10.50/hr; July 1, 2017 $12; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00 * (click here for more information about Los Angeles’s minimum wage ordinance) July 1, 2016: 48 hours*
3) Los Angeles – County (applies to unincorporated cities in LA County) Same as LA City (see above) No specific requirement – state law applies
4) San Diego City July 2016: $10.50 (date not set yet – likely effective in first half of July 2016); January 1, 2017 $11.50; January 1, 2019 $11.82; January 1, 2020 $12.15; January 1, 2021 $12.49; January 1, 2022 $12.84 5 paid sick days
5) Santa Monica (click here for Santa Monica’s website for details of the law) $10.50 July 1, 2016; July 1, 2017 $12.00; July 1, 2018 $13.25; July 1, 2019 $14.25; July 1, 2020 $15.00* January 1, 2017: 32 hours for small businesses, 40 hours for large businesses; January 1, 2018: 40 hours for small business, 72 hours for large businesses*
*Employers with 25 or fewer employees the implementation is delayed one year.

Happy Memorial day weekend!

Expense reimbursement may seem like a small issue in comparison with the other areas of liability facing California employers, but the Old Carexposure for not appropriately reimbursing employees can be substantial. In Gattuso v. Harte-Hanks Shoppers, Inc., the California Supreme Court clarified the parameters of mileage reimbursement under California law, as well as the three different methods available for employers to reimburse employees for their mileage reimbursement.  This Friday’s Five post discusses five issues employers need to know about automobile and mileage reimbursement under California law.

1. Mileage reimbursement based on IRS mileage rate is presumed to reimburse employee for all actual expenses

The IRS publishes standard mileage rates each year (and sometimes adjusts these rates during the year). The 2017 IRS mileage rate is as follows:

  • 53.5 cents per mile for business miles driven, down from 54 cents for 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

If the employee challenges the amount reimbursed, the employee bears the burden to show how the “amount that the employer has paid is less than the actual expenses that the employee has necessarily incurred for work-required automobile use (as calculated using the actual expense method), the employer must make up the difference.” Gattuso, at 479.

The California Supreme Court also held that the reimbursement rate can be negotiated by parties as long as it fully reimburses the employee, and the amount does not have to be set at the IRS mileage rate. The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses:

We agree that, as with other terms and conditions of employment, a mileage rate for automobile expense reimbursement may be a subject of negotiation and agreement between employer and employee. Under section 2804, however, any agreement made by the employee is null and void insofar as it waives the employee’s rights to full expense reimbursement under [Labor Code] section 2802.

Gattuso, at 479.

2. Actual expense method of reimbursement

In examining the different methods of reimbursement, the Supreme Court held that the actual expense method is the most accurate, but it is also the most burdensome for both the employer and the employee. Gattuso, at 478. Under the actual expense method, the parties calculate the automobile expenses that the employee actually and necessarily incurred and then the employer separately pays the employee that amount. The actual expenses of using an employee’s personal automobile for business purposes include: fuel, maintenance, repairs, insurance, registration, and depreciation.

3. Mileage reimbursement method

The Court recognized that employers may simplify calculating the amount owed to an employee by paying an amount based on a “total mileage driven.” Gattuso, at 479.

Under the mileage reimbursement method, the employee only needs to keep a record of the number of miles driven for job duties. The employer then multiplies the miles driven by a predetermined amount that approximates the per-mile cost of owning and operating an automobile. The Court recognized that the mileage rate agreed to between the employer and employee is “merely an approximation of actual expenses” and is less accurate than the actual expense method. It is important to note that while this amount can be negotiated, the employee still is unable to waive their right to reimbursement of their actual costs as mentioned above.

4. Lump sum payment method

Under the lump sum method, the employee need not submit any information to the employer about work-required miles driven or automobile expenses incurred. The employer merely pays an agreed fixed amount for automobile expense reimbursement. Gattuso, at 480. This type of lump sum payment is often labeled as a per diem, car allowance, or gas stipend.

In Gattuso, the Court made it clear that employers paying a lump sum amount have the extra burden of separately identifying and documenting the amounts that represent payment for labor performed and the amounts that represent reimbursement for business expenses.

5. Don’t forget about other expenses incurred in the “course and scope” of working

In addition to mileage, employers may also have to reimburse employees for other costs they incurred in driving their personal cars for business. In making the determination about whether an employee’s actions are in the “course and scope” of their job, courts examine whether the expense being sought by the employee is “not so unusual or startling that it would seem unfair to include loss or expense among other costs of the employer’s business.” Employers need to be mindful about reimbursing employees for cell phone use, printing and office supplies (if employee is required to maintain a home office or use personal printer for work), and other work related expenses.

Happy Friday!  This Friday’s Five covers five areas that employers can start with in conducting an employment practices Checklistsaudit.  Coming up on the mid-point of the year, it is a good time to conduct an employment law practices audit to ensure that policies are compliant, managers are properly trained, and the company is maintaining the required records for the necessary length of time.  Here are five areas to start with in conducting an audit and a few recommended questions for each topic:

1. Hiring Practices

  • Are applications seeking appropriate information?
    • For example: Be careful about local ban the box regulations.
  • Are new hires provided with required policies and notices?
  • Are new hires provided and acknowledge recommended policies?
    • For example: meal period waivers for shifts less than six hours
  • Are hiring managers trained about the correct questions to ask during the interview?
  • Does the company provide new hires (and existing employees) with arbitration agreements with class action waivers?

 2. Records

  • Are employee files maintained confidentially and for at least four years?
  • Are employee time records maintained for at least four years?
  • Are employee schedules maintained for at least four years?
  • Do the managers have set forms for the following:
    • Employee discipline and write-ups
    • Documenting employee tardiness
  • How is the employee documentation provided to Human Resources or the appropriate manager?
  • Who is involved in reviewing disability accommodation requests?
  • How are employee absences documented?

3. Wage and Hour Issues

  • Does the company have its workweeks and paydays established?
  • Are paydays within the applicable time limits after the pay period as required under the law?
  • Are employees provided with compliant itemized wage statements?
  • Are employees provided a writing setting out their accrued paid sick leave each pay period?
  • Are employees properly classified as exempt or nonexempt?
    • For exempt employees, review their duties and salary to ensure they meet the legal requirements to be an exempt employee.
  • Any workers classified as independent contractors, and if so, could they be considered employees?
  • Are nonexempt employees properly compensated for all overtime worked?
  • Is off-the-clock work prohibited?
    • Policy in place?
    • Are managers trained about how to recognize it and what disciplinary actions to take if find employees working off-the-clock?
  • Does the company’s time keeping system round employee’s time?
    • If so, is the rounding policy compliant with the law?
  • Are meal and rest period polices set out in handbook and employees routinely reminded of policies?
    • Does the company pay “premium pay” for missed meal and rest breaks? If so, how is this documented on the employee pay stub?
    • Do employees record meal breaks?
    • Are managers trained on how to administer breaks and what actions to take if employees miss meal or rest breaks?
  • Is vacation properly documented and tracked?
  • Are all deductions from the employee’s pay check legally permitted? (use caution, very few deductions are permitted under CA law)
  • Are employees reimbursed for all business expenses, such as uniforms, work equipment and miles driven for work?

 4.End of Employment Issues

  • Are employees leaving the company provided their final wages, including payment for all accrued and unused vacation time?
  • Does the employer deduct any items from an employee’s final paycheck?
    • If so, are the deductions legally permitted?

5. Anti-harassment, discrimination and retaliation

  • Are supervisors provided with sexual harassment training every two years? (If employer has 50 or more employees, supervisors are legally required to have a two-hour harassment prevention training that complies with AB 1825 and amendments to this law).
  • Are supervisors and managers mentioning the open-door policy of the company to employees at routine meetings with employees? Is this being documented?

Please let me know if you have any other items your company considers during review of employment policies – it would be great to update this list to share with readers.  Have a great weekend.