California employers have a lot to keep their eye on over the last few weeks. For this week’s Friday’s Five article, here is a list of five key issues California employers should know about and how these issues will likely impact their workplace:

1. New decision approves striking unmanageable PAGA claims.

In Wesson v. Staples The Office Superstore, LLC, the California Court of Appeals held that trial courts have inherent authority to ensure that Private Attorney General Act (PAGA) claims are manageable at trial, and may strike PAGA classes that are not manageable.  Plaintiff’s lawsuit was on behalf of 346 Staples general managers, arguing that the GM’s were misclassified as exempt employees.  Plaintiff contended that the trial court lacked authority to ensure PAGA claims are manageable arguing that there is no requirement of manageability in the PAGA statute.  Defendant argued that plaintiff’s claims would require individualized assessments for each GM to determine if each individual GM was properly classified, and that this would lead to “an unmanageable mess” that “would waste the time and resources of the Court and the parties.”

The holding in Wesson provides defendants an additional defense against the tide of PAGA claims filed against California employers.

2. California COVID-19 supplemental paid sick leave set to expire September 30, 2021.

California’s supplemental paid sick leave that requires employers with more than 25 employees is set to expire on September 30, 2021.  The law requires employers to provide up to 80 hours of paid leave for certain qualifying reasons.  Absent emergency legislation or an executive order by Governor Newsom, this requirement will end on September 30.

Employers need to be aware of local city or county ordinances that still may be in place requiring paid sick leave for employees.

3. Vaccination mandates on the federal, state, and local levels.

On September 9, 2021, Biden announced a move to mandate private employers with more than 100 workers to require vaccinations or to test for COVID-19 on a weekly basis.  More information about Biden’s vaccine mandate can be read in our prior post here.  As of the date of this writing, OSHA has not published any guidelines or requirements for employers.  This requirement is likely to be announced within the coming weeks.  It has been reported that employers will have 50 to 90 days to comply with the requirements once they are announced.

California does not have a general state-wide mandate (but this could also change in the coming weeks – likely through additional rules made through Cal/OSHA’s ETS).  California does have mandates for teachers and school staff, and for certain health care workers who must be vaccinated by September 30, 2021.

In addition, many local counties and cities have passed or are considering vaccination mandates, such as Los Angeles City and Palm Springs (which only applies to patrons).  Los Angeles County will be issuing a new Health Officer Order requiring patrons and employees of indoor bars, wineries, breweries, nightclubs and lounges.  The order will require customers and employees to have at least one dose by October 7, and the second dose by November 4.

4. New case upholding ban of mandatory arbitration agreements in California.

In U.S. Chamber of Commerce v. Bonta, the Ninth Circuit upheld portions of California’s AB 51 that makes it an unlawful practice for employers to require applicants or employees to enter into arbitration agreements as a condition of employment.  More information about the decision is in our prior post here.  In short, employers with voluntary arbitration programs are unaffected, as AB 51 only regulates mandatory agreements. Also, existing mandatory arbitration agreements are not invalidated, but employers with mandatory arbitration programs should consult legal counsel for guidance on this new decision.

5. California Supreme Court reviewing extend of penalties available in meal and rest break cases.

In Naranjo v. Spectrum Security Services, the California Supreme Court is reviewing the extent of penalties that a plaintiff can recover for meal and rest break violations.  At issue in the case is whether a violation of Labor Code section 226.7, which requires payment of premium wages for meal and rest break violations, also triggers penalties under Labor Code section 203 (waiting time penalties) and section 226 (wage statement violations).  The case is fully briefed by the parties.  The Court’s ruling will greatly impact the value of wage and hour cases being litigated in California.  We will report on the decision once it is issued.

In 2019, California enacted AB 51, making it an unlawful employment practice for employers to require applicants or employees, as a condition of employment, to waive any right, forum, or procedure relating to a Labor Code or FEHA claim. The short version of this word salad is that employers couldn’t mandate arbitration agreements. However, a federal district court preliminarily enjoined enforcement of AB 51 two days before the law was scheduled to go into effect.

Wednesday, a three-judge panel of the Ninth Circuit partially vacated that injunction.

At issue is whether AB 51 is preempted by the Federal Arbitration Act, which prohibits states from disfavoring arbitration agreements relative to other contracts. The district court agreed with business groups that AB 51 conflicted with the FAA. AB 51 has several components. One is the prohibition described above. A second component is a ban on discriminating or retaliating against an employee who refuses to sign an arbitration agreement. Additionally, employers who violate these prohibitions are guilty of a misdemeanor and can also be sued by the employee. The district court found that all of the foregoing as preempted by the FAA.

The Ninth Circuit panel split 2-1 in finding that the ban did not conflict with the FAA. The majority reasoned that the ban merely regulates pre-agreement conduct, and that AB 51 does not invalidate any arbitration agreement. Moreover, the FAA’s purpose is not frustrated by AB 51 because the FAA is concerned with enforcing voluntary arbitration agreements, not mandatory ones.  However, the majority found that the criminal penalties and civil liability are preempted (and thus remain enjoined) to the extent they apply to executed arbitration agreements.

This “bifurcated” approach drew sharp criticism from the dissenting justice: “In case the effect of this novel holding is not clear, it means that if the employer offers an arbitration agreement to the prospective employee as a condition of employment, and the prospective employee executes the agreement, the employer may not be held civilly or criminally liable. But if the prospective employee refuses to sign, then the FAA does not preempt civil and criminal liability for the employer under AB 51’s provisions. In other words, the majority holds that if the employer successfully ‘forced’ employees ‘into arbitration against their will,’ … the employer is safe, but if the employer’s efforts fail, the employer is a criminal.”

This decision leaves us with two big questions.

First, what does this mean for the future of AB 51? After all, the district court order was only a preliminary injunction meant to maintain the status quo while the merits of the litigation could be fully resolved. However, the Ninth Circuit’s decision resolved legal questions that will definitely bind the district court and likely bind the Ninth Circuit throughout the rest of the litigation. This means that AB 51 (minus the criminal penalties and civil liability in part) will likely survive unless the entire Ninth Circuit rehears the matter or the Supreme Court agrees to take up the matter. If the Supreme Court does grant certiorari, we will get another chapter in a long-running dispute between the Court and California over arbitration.

Second, what are employers to do now? Those with voluntary arbitration programs are unaffected, as AB 51 only regulates mandatory agreements. Existing mandatory arbitration agreements are not invalidated, either. However, employers with mandatory arbitration programs should consult legal counsel for guidance on this new decision.

Yesterday, September 9, Biden announced a move to mandate private employers with more than 100 workers to require vaccinations or test for COVID-19 on a weekly basis. California legislators have considered a mandatory vaccination law for employers, but did not pass the law prior to the end of the legislative session. Here are five key items California employers need to know about the upcoming federal mandate proposed by Biden:

1. The mandate would be issued through the Department of Labor’s Occupational Safety and Health Administration (OSHA).

OSHA would develop the rules for employers to comply with, and would have the authority to issue fines against employers who are not in compliance.  President Biden said fines could be $14,000 per violation.  OSHA will issue an Emergency Temporary Standard (ETS) soon that will set forth the requirements for employers.  There is no date yet when the ETS are expected.  Biden also signed an executive order requiring all government employees to be vaccinated.

2. What are the requirements for employers under Biden’s vaccine mandate?

Biden announced the mandate on September 9, stating that the mandate will require private employers with 100 or more employees to have their employees vaccinated or require a negative test from unvaccinated employees at least once a week.  The ETS will require employers to pay for the time it takes works to receive the vaccination or to recover post-vaccination.  For now, this is all we know, and employers will have to wait until the ETS is published by OSHA for the details.

The White House said that there will be “limited exceptions” to the vaccine mandate.  According to federal and California state law, employers will need to continue to provide reasonable accommodations for employees with medical issues that prevent them from receiving the vaccination or based upon a sincerely held religious belief.

As employers who have already mandated vaccinations in the workplace are finding, dealing with requests for reasonable accommodations can be tricky, especially for employees who are asking for a reasonable accommodation based upon a sincerely held religious belief.  Hopefully OSHA’s ETS will set forth a clear path for employers on how to document and deal with these type of accommodation requests.  If the ETS does not provide this clarity, it would unfortunately continue to place employers in a difficult position of facing fines for non-compliance with the ETS, or facing civil lawsuits from employees claiming disability or religious discrimination.

3. California’s vaccine mandates.

California lawmakers considered a potential bill requiring COVID-19 vaccinations on a state level for anyone to enter an indoor business establishment and to have workers vaccinated, but ultimately did not pass any mandate before the end of the legislative session.

California does have mandates for teachers and school staff, and for certain health care workers who must be vaccinated by September 30, 2021.

California requires all workers who provide services or work in heath care facilities set forth below to have their first dose of a one-dose regimen or their second dose of a two-dose regimen by September 30, 2021:

  • General Acute Care Hospitals
  • Skilled Nursing Facilities (including Subacute Facilities)
  • Intermediate Care Facilities
  • Acute Psychiatric Hospitals
  • Adult Day Health Care Centers
  • Program of All-Inclusive Care for the Elderly (PACE) and PACE Centers
  • Ambulatory Surgery Centers
  • Chemical Dependency Recovery Hospitals
  • Clinics & Doctor Offices (including behavioral health, surgical)
  • Congregate Living Health Facilities
  • Dialysis Centers
  • Hospice Facilities
  • Pediatric Day Health and Respite Care Facilities
  • Residential Substance Use Treatment and Mental Health Treatment Facilities

In addition, many local counties and cities have passed or are considering vaccination mandates, such as Los Angeles City and Palm Springs (which only applies to patrons).

Additionally, Cal/OSHA’s own ETS requires weekly testing of unvaccinated employees whenever a workplace experiences a COVID-19 outbreak, defined as three or more cases within a 14-day period.

4. Employers must start considering how to implement mandatory vaccines.

California employers will need to continue to navigate the patchwork of federal, state, and local laws regarding vaccinations.  Now with this impending federal requirement from the Biden administration, employers with 100 or more employees need to start preparing on how to comply with the new requirement.  We have developed a checklist of seven items that California employers can use to start the process of requiring mandatory vaccinations, which is available here.

5. Legal challenges to Biden’s mandatory vaccination requirement.

Republican governors have already stated that they will be mounting a legal challenge to Biden’s vaccine mandate.  There are likely other groups that will challenge the mandate also.  However, the legal challenges will likely take some time to be resolved.  Until the OSHA ETS are ruled by a court to be invalid in some manner, employers will need to ensure compliance with the new regulations.

Hope you have been able to enjoy the summer.  As many employees take (or consider taking) vacation during these last remaining days of the summer, employers in California must be aware of unique rules that apply to vacation time. This Friday’s Five is a reminder of five issues on vacation policies that can create traps for California employers:

1. No use-it-or-lose-it policies permitted.
Under California law, vacation is treated the same as earned wages and vest as the employee performs work. Because vacation is earned proportionally as the employee works, policies requiring employees to lose vacation already earned is illegal under California law.

2. Reasonable caps are allowed.
While employers cannot implement “use-it-or-lose-it” policies, they can place a reasonable cap, or ceiling, on vacation accrual. The DLSE explains:

Unlike “use it or lose it” policies, a vacation policy that places a “cap” or “ceiling” on vacation pay accruals is permissible. Whereas a “use it or lose it” policy results in a forfeiture of accrued vacation pay, a “cap” simply places a limit on the amount of vacation that can accrue; that is, once a certain level or amount of accrued vacation is earned but not taken, no further vacation or vacation pay accrues until the balance falls below the cap. The time periods involved for taking vacation must, of course, be reasonable. If implementation of a “cap” is a subterfuge to deny employees vacation or vacation benefits, the policy will not be recognized by the Labor Commissioner.

3. Vacation is a form of earn wages that must be paid out on the employee’s last day of work.
An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination. See Labor Code Sections 201 and 227.3.  More information about the timing and payment of final wages can be read here.

4. Deductions are not permitted from employee’s final wages for use of vacation that was not accrued.
Vacation is treated as a form of wages under California law, and by permitting an employee to take vacation time before it is earned is similar to providing a loan to the employee.  Employers may not utilize self-help remedies to recover debts from the employee’s final pay check, including deducting wages owed to an employee to cover vacation that time was used but had not yet been accrued by the employee.

5. “Cliff vesting” policies are problematic.
Employers may set probationary periods or waiting periods during which times employees do not accrue vacation time. However, the DLSE maintains that employers may not maintain a policy that grants employees a lump sum of vacation upon reaching certain dates (for example, such a policy would grant the employee five days of vacation at the employee’s one year anniversary of work, but not permit the employee to take any vacation prior to the anniversary date).

The DLSE’s view on this type of “cliff vesting” is that the employer is attempting to provide for accrued vacation, but at the same time is attempting to limit its liability of having to pay out a pro rata share of the accrued vacation if the employee does not work until the date the vacation is granted to the employee.  Many employers avoid these potentially problematic lump sum grants of vacation, and simply set a time period (i.e., the employee’s first six months of employment) that the employee does not accrue vacation.

California law is vastly different than Federal law and other states. It can be a trap for employers, but with some understanding of the obligations created under the law it can easily be managed.

Hope you are enjoying the final weeks of the summer.

California passed a wave of new laws in 2018 relating to the #metoo movement, many of which prohibit confidential settlement agreements or disclosure of allegations related to sexual harassment in the workplace.  This Friday’s Five post is a review of five areas impacted by these prohibitions of certain terms in settlement agreements, which illustrate the need for employers to stay informed about the new requirements that apply to their company and industry:

1. Civil Procedure Code section 1001 – Limits on confidentially clauses

California’s Stand Together Against Nondisclosure (STAND) Act prohibits certain terms in agreements with employees.  The law voids any confidentiality provisions in agreements settling claims for sexual harassment under Civil Code section 51.9, workplace sexual harassment or discrimination, failure to prevent harassment, and retaliation for reporting sexual harassment or discrimination.

This law applies to agreements entered into on or after January 1, 2019 involving claims filed in court or filed in an administrative action.  The law permits the claimant to request a term in the settlement that his or her identify remain confidential, including all facts that could lead to the discovery of his or her identity, including pleadings filed in court.

The law does not apply to pre-litigation settlements.  The law also permits parties to keep the amount of the settlement confidential (unless a government agency or public official is a party to the settlement agreement).

2. Civil Code section 1670.11 – Right to testify about sexual harassment

Civil Code section 1670.11 makes any provision in a contract or settlement agreement entered on or after January 1, 2019 void and unenforceable if it waives a party’s right to testify in an administrative, legislative, or judicial proceeding about alleged criminal conduct or alleged sexual harassment.

3.  Government Code section 12964.5 – Employer may not release FEHA claims unless it involves a “negotiated settlement agreement”

Section 12964.5 of the Government Code makes it an unlawful employment practice for an employer to require and employee to sign a release of a claim or right under the Fair Employment and Housing Act (“FEHA”).  In addition, the law prohibits an employer from requiring an employee to sign a nondisparagement agreement or other document that denies the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to sexual harassment.  The law took effect on January 1, 2019.

The law makes any document violating its terms unenforceable.

The law does not apply to “a negotiated settlement agreement” to resolve an underlying claim filed by an employee in court, before an administrative agency, alternative dispute resolution forum, or through an employer’s internal complaint process.  “Negotiated” is defined as an agreement that “is voluntary, deliberate, and informed, provides consideration of value to the employee, and that the employee is given notice and an opportunity to retain an attorney or is represented by an attorney.”

4. The Tax Cuts and Jobs Act – Limit on tax deductions for payments and attorney’s fees related to confidential settlements or payments

Enacted on December 22, 2017, the Tax Cuts and Jobs Act changed the Internal Revenue Code to prohibit tax deductions as an ordinary and necessary business expense for any settlements or payments “related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement.”  The law also disallows any deductions for attorney’s fees related to the confidential settlement or payment.  See 26 U.S.C. § 162(q).

5. Review standard forms to ensure compliance

Employers should review their documents and forms to ensure compliance with these requirements.  For example, employers should review and potentially update employment documents, which may include the following:

  • severance agreements
  • standard release of claims, and settlement agreements
  • non-solicitation agreement
  • confidentiality agreements
  • nondisclosure agreements
  • employee handbook procedures and policies

Employers often ask me the question of what steps can they take to stop employment litigation. My response usually begins with a warning that there is nothing an employer can do that will prevent a frivolous lawsuit. However, employers can control their actions and decisions, and by reviewing a few items on a regular basis, it can greatly reduce a company’s liability. Here are five steps employers can start with:

1. Implement an accurate and easy to use timekeeping system.

California law requires employers to track start and stop times for hourly, non-exempt employees. The law also requires employer to record an employee’s thirty-minute meal period. 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.

2. Keep employee handbook and other policies up to date.
Employers should periodically have their handbooks, operating policies and new hire packets reviewed to ensure they are current. Employers need to remember that a review of policies should extend beyond the handbook and should also incorporate a review of all other policies, pay practices, and documents that are given to employees when they are hired and at termination.

3. Document everything.
I cannot overemphasis the need to document what occurs in the workplace. Most importantly, employers need to document employee performance. It is all too often that a problem employee’s personnel file does not contain any type of documentation about his poor performance. Lack of documenting makes it much harder to prove the business reason behind a termination for poor performance.

4. Consider hiring a knowledgeable HR professional.
An experienced HR professional will allow the president or other executives in the company to focus their time and energy in their core roles. In addition, it is helpful from a structural and managerial perspective for the employees in an organization to know exactly who to go to for HR information or complaints. A human resources professional with experience in handling workplace investigations and dealing with employee complaints is very valuable to a company. Let’s face it, no matter how well you run your company, there will be complaints. Having a proactive, knowledgeable professional assisting in the process of investigating and resolving the issues is instrumental to a successful company.

5. Get to know an employment attorney you can run issues by on a day-to-day basis.
You knew this was coming, but regardless of the unashamed self-promotion, employers should have counsel that is well versed in California employment law. California’s employment laws are very nuanced, and an attorney that has experience in this area will save the company not only in legal fees, but also in potential exposure. I have a client that says that when you have a problem with your eyes, you don’t go to your general practitioner. The same applies for advice on California employment issues – California employment law is unique. In addition, working with an employment lawyer on a routine basis is also a great way to see how he or she works and if the lawyer is compatible with your operations. It is better to find counsel you trust early on, instead of discovering that you don’t get along with your counsel in the middle of defending a lawsuit.

The City of Los Angeles will likely implement a vaccine mandate next week for anyone wishing to visit certain public venues.  This is on the heals of California’s mandate that teachers and school staff must be vaccinated or be tested at least once per week, and certain health care workers to be vaccinated by September 30, 2021.  The City of Los Angeles’ mandate raises many issues and questions for employers, should it pass as expected.  Here are five key issues facing businesses under an ordinance that requires customers to be vaccinated:

1. What is required by the City of Los Angeles’ vaccine mandate?

The Los Angeles City Council voted 13-0 on Wednesday, August 11, to instruct the City Attorney “to prepare an present an ordinance that would require eligible individuals to have received at least one dose of vaccination to enter indoor spaces, including but not limited to, restaurants, bars, retail establishments, fitness centers, spas, and entertainment centers such as stadiums, concert venues, and movie theaters.”  While the motion sets forth some establishments that will be covered, the key issue is what are the other establishments covered by the “but not limited to” clause in the motion?

Also, the ordinance does not require the public to be vaccinated but prevents them from being able to visit or shop at these public facilities.  However, it would likely require the employees at these facilities to be vaccinated, as discussed below.

2. Who will enforce the ordinance?

It is one thing for employers to ask employees about vaccination status and document their status, but quite another issue to place this burden on businesses to check the vaccination status of the public who wish to enter their facility.

3. How will companies verify if an individual has a medical condition or a sincerely held religious belief that prevents them from getting the vaccine?

Again, in the employment context, it is easy to work with employees to see who needs a reasonable accommodation due to medical issues or based on sincerely held religious beliefs as required under the law.  However, it is likely that companies will have to offer similar accommodations to the public based on their medical condition and sincerely held religious beliefs in order to enter their facility.  How are businesses to verify that the customer is entitled to a reasonable accommodation?  Is the customer’s verbal statement that they need a reasonable accommodation sufficient?  There are many privacy issues at play here as well.

4. Will employees who work in the facilities covered by the ordinance be required to be vaccinated?

It seems that employees working in facilities that are covered by the ordinance will need to be vaccinated and that excluding the employees from this requirement would defeat the intent.  However, except for teachers, school staff, and certain health care workers, there has not been a state or local mandate in California requiring employees to receive the vaccine.  This ordinance, to the extent it applies to employees, would be the first-time employees are required to be vaccinated outside of the school, government, or healthcare setting.  See our prior post Checklist for Developing a Mandatory Vaccination Policy in California for more information about employers’ obligations when developing a mandatory vaccination policy.

5. By requiring mandatory vaccines, does this guarantee that the facilities covered by the ordinance will remain open, even if there is a surge in Delta-variant cases?

The statements made by the Councilmembers in support of the ordinance do support the idea that if the mandate is in place it will avoid another shutdown.  For example, Variety reported that Councilmember Kevin de Leon stated, “This is a no-brainer.  My constitutes can’t accept another shutdown.”  Also, politically, it would be difficult for Councilmembers to support the mandatory vaccination, require their constitutes to be vaccinated, and then support another economic shutdown in the future.  It would be an incentive for businesses to support such measures if they knew with reasonable certainty that it would prevent the City from imposing further shutdowns.  Likewise, it would be an incentive for individuals to receive the vaccine if they knew the public establishments which they are receiving the vaccine in order to enter will in fact remain open, even if the Delta-variant becomes more widespread.

On June 24, 2021, Mayor Eric Garcetti issued an Order mandating COVID-19 Vaccine Leave (“Vaccine Leave”) for employees who work in the City of Los Angeles. The requirements of the Order apply retroactively to January 1, 2021. The Order is currently set to terminate on its own on September 30, 2021, with minor exceptions for employees who take leave on or around the time of expiration. 

Compliance:

Employers must provide Vaccine Leave upon oral or written request of an employee who have been employed with the employer for at least 60 days for the time spent by the employee: (1) traveling to and from an appointment for vaccine, (2) receiving the injection, and (3) recovering from vaccination-related side effects that prevents the employee from being able to work or telework.  

Vaccine Leave Entitlement:  

Employers with 25 or fewer employees must provide leave as follows: 

  • Full-Time employees are entitled to up to four hours of leave to obtain each vaccine injection, and up to eight hours to recover from any vaccination-related side effects.  
  • Part-Time employees are entitled to the prorated amount of four hours per injection based on the average number of hours worked the 60 days preceding the injection, and up to the prorated amount of the right hours to recover from any vaccination-related side effects.  

Employers with more than 25 employees must provide the same leave described above, provided however, that the employee has already exhausted all available leave under other sick leave allotments such as city or state mandated COVID-19 supplemental paid sick leave.  

Rate of Pay:

Nonexempt employees entitled to the leave are to be compensated at the highest of the following rates: 

  • The normal rate of pay for the workweek in which the leave is taken; 
  • The city’s minimum wage; or 
  • The average hourly pay for the preceding 60 days, not including overtime. 

Exempt employees are to be compensated for the leave in the same manner as the employer calculates other forms of paid leave. Leave required by the Order is not to exceed $511 per day (or $255.50 per each 4 hours) or $1,022 in aggregate. 

Although the Order applies specifically to City of Los Angeles, employers everywhere should be aware of similar directives from their local city or county governments providing employees with vaccine-related leave rights.   

This week many employers made the decision to mandate vaccination policies for their employees.  Disney, Uber, Microsoft, and Walmart are some of the larger employers in the news this week that are requiring all or some of their employees to be vaccinated in order to return to the workplace.

Federal and California law make it clear that employers can mandate employees to be vaccinated.  California’s DFEH issued guidance that permits California employers to require employees to be vaccinated:

Under the FEHA, an employer may require employees to receive an FDA-approved vaccination against COVID-19 infection so long as the employer does not discriminate against or harass employees or job applicants on the basis of a protected characteristic, provides reasonable accommodations related to disability or sincerely-held religious beliefs or practices, and does not retaliate against anyone for engaging in protected activity (such as requesting a reasonable accommodation).

There are many considerations California employers need to make before implementing a mandatory vaccination policy, including the following:

1. Determine if the mandatory vaccination policy applies to all employees.

Employers must decide if all employees will be required to obtain the vaccination, or if it will apply to only certain employees.  For example, Microsoft announced this week that employees who wish to return to the office must have the vaccination.  Walmart is requiring its corporate staff members and regional managers to be fully vaccinated by October 4, and is offering all other employees a $150 incentive to obtain the vaccine according to The Washington Post.  Employers must be careful in designating who and who will not be required to be vaccinated to avoid any potential discrimination or disparate treatment claims.

2. Determine when employees are entitled to be paid for time taken to receive the vaccine or to recover from side effects from receiving the vaccine and expenses.

Employers must review federal, state, and local laws regarding any requirements to pay employees for the time (and expenses, such as mileage) involved to get vaccinated.  There is a patchwork of laws that employers must navigate in California that apply to employee compensation in this regard:

California employers must also review local requirements to pay for employees’ time to receive the vaccine and to recovery from any side effects.  For example, Los Angeles area employers must comply with:

3. Review and set up process to provide reasonable accommodations to employees.

California’s Fair Employment and Housing Act (FEHA) applies to employers with 5 or more employees.  It requires employers to reasonably accommodate employees with a disability unless the accommodation presents an undue hardship after engaging in the interactive process with the employee.  While the interactive process does not have to be recorded in a writing, it is a best practice for employers to develop a set of forms that ask the employee about the accommodation that is being sought, the employer’s response to the accommodation request, and the process that the company will take to evaluate all accommodation requests.

4. Determine what type of proof of vaccination the company will require.

According to the EEOC, employers may ask for proof of vaccination because such proof is not considered a disability-related inquiry.  According to the DFEH, employers may ask the employee for “proof” of the vaccination:

Because the reasons that any given employee or applicant is not vaccinated may or may not be related to disability or religious creed, simply asking employees or applicants for proof of vaccination is not a disability-related inquiry, religious creed-related inquiry, or a medical examination. However, because such documentation could potentially include disability-related medical information, employers may wish to instruct their employees or applicants to omit any medical information from such documentation. Any record of employee or applicant vaccination must be maintained as a confidential medical record.

Cal/OSHA’s revised ETS permits employers to document employee’s vaccination status, but does not set forth how employers are supposed to document vaccination status and what steps must be taken to document status.  Cal/OSHA’s FAQs provide the following are acceptable options to document employees’ vaccination status:

  • Employees provide proof of vaccination (vaccine card, image of vaccine card or health care document showing vaccination status) and employer maintains a copy.
  • Employees provide proof of vaccination. The employer maintains a record of the employees who presented proof, but not the vaccine record itself.
  • Employees self-attest to vaccination status and employer maintains a record of who self-attests.

5.  Develop protocols on how proof of vaccination will be kept and who within the company will have access to the confidential information.

Since people who have received the vaccine are given a card, it would be reasonable to ask for proof via this card. However, employers should not ask intrusive follow-up questions such as the reasons why the employee is not getting vaccinated since these questions may be considered disability-related and accordingly trigger ADA protections. Employers should also request that employees provide them no more information than necessary as proof of vaccination in order to avoid violations of other disability laws.

6.  Set forth policies and training for employees explaining that vaccinated employees need to still abide by social distancing protocols.

Employers must still abide by federal, state and local guidelines for the workplace.  Employers need to maintain compliance with these regulations, and can impose additional requirements on its workforce to prevent the spread of COVID-19 in the workplace.  Employees who have been vaccinated are not exempt from these requirements.

Also, the CDC has also cautioned against individuals who have received the vaccine from attending social gatherings if they have symptoms.

7.  Set forth COVID-19 testing requirements and explain that vaccinated employees may be subject to testing requirements in the future.

Nothing prevents employers from requiring COVID-19 tests for its employees, even if they have been vaccinated.  Employers should develop a plan under which circumstances they would require employees to be tested.  Employers should also review their testing requirements during outbreaks under Cal/OSHA’s revised ETS.

Even though severance pay is not required under California law, employers facing disputes with exiting employees should consider offering severance pay in exchange for a release of claims in order to preempt potential litigation.  If an employee is at-will and either the employer or the employee decides to end the employment relationship, unless there is a contractual agreement, the employer is not required to provide severance to the employee.  However, severance agreements should be utilized by employers in certain circumstances to avoid potential costly litigation.  While there are many aspects to consider about severance agreements (which cannot be covered in one article), here are five issues employers need to understand about severance agreement terms:

1. Release of claims

The idea of the severance agreement is to have some certainty that there will not be litigation following the employee’s separation from the company.  Employers may seek a general release of known and unknown claims if it is specific and easy to understand.  Courts have held that “a written release extinguishes any obligation covered by the release’s terms, provided it has not been obtained by fraud, deception, misrepresentation, duress, or undue influence.”  Skrbina v. Fleming Cos. (1996).

Release of Unknown Claims

The employee (and employer for that matter) can waive all known claims. However, in California, for any party to release unknown claims, the agreement needs to be clear and advise the party that they are releasing unknown claims. Ideally, the agreement should set forth that the employee is waiving all rights under California Civil Code section 1542, and to specifically quote section 1542 in the agreement, which provides:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

2.  Choice of law and venue

California Labor Code section 925 prohibits employers from requiring an employee who primarily resides and works in California, as a condition of employment, to adjudicate claims outside of California that arose in California and deprive the employee of “substantive protection of California law.”  Section 925 does not apply to any contracts negotiated when the employee is represented by legal counsel.  Section 925 only applies to contracts entered into, modified, or extended on or after January 1, 2017.  However, since a severance agreement is being entered at the end of the employment relationship, employers may have the argument that section 925 does not apply to severance agreements because it is not being entered into “as a condition of employment.”  Employers should approach this issue carefully, and to the extent there is a need to provide for a state other than California’s law to apply to the severance agreement, or for the venue to be set outside of California, employment counsel needs to be consulted.

3. No re-hire

Beginning January 1, 2020, an employer may not include a no re-hire provision in the severance agreement under certain circumstances.  Code of Civil Procedure section 1002.5 prohibits and invalidates any provisions in settlement agreements entered into on or after January 1, 2020 that prevent workers from obtaining future employment with the settling employer or its affiliated companies.

The law applies to any employees who have filed a claim: (1) against the employer in court, (2) before an administrative agency, (3) in an alternative dispute resolution forum, or (4) through the employer’s internal complaint process.  Therefore, if the employee has complained internally, and a severance agreement is reached with the employee without any litigation being filed, the employer would still be restricted from placing a no-rehire provision in the severance agreement.

The law does not prohibit or otherwise restrict an employer from preventing an employee from obtaining future employment if the employer has made a good faith determination that the person engaged in sexual harassment or sexual assault.

4. Confidentiality

Severance agreements may a contain limited confidentiality provision where the employee agrees not to disclose the amount paid or the terms of the agreement.  The confidentially provision can set forth the limited number of people the employee may make disclosures to, such as legal or tax advisors, family members, or as required under the law.  However, California employers need to be careful about confidentiality provisions,  as California law prohibits confidential settlement agreements or disclosure of allegations related to sexual harassment in the workplace.

5. Special provisions for a release of age claims

The Older Workers Benefit Protection Act (OWBPA) protects individuals 40 years old or older. The OWBPA provides that to release a claim for age discrimination, a severance agreement must meet certain requirements. Some of these requirements include that the employee is advised to consult with an attorney, the waiver is easily understood, the individual is given at least 21 days to consider the agreement, and the individual is given at least 7 days following the execution of the agreement to revoke the agreement. The 21-day consideration period can be waived by the employee, but the seven-day revocation period after the agreement is signed cannot be waived by the employee. Therefore, it is important to consider potentially not paying any money until after the seven-day revocation period expires. If the employer is offering the release to a group or class of employees a longer consideration period and other requirements apply. It is recommended that employers receive the assistance of counsel to ensure that employees 40 years old or older effectively waive any rights under the OWBPA. For more information, the EEOCs’ website provides a good explanation and some examples.