On Wednesday, August 5, the California Labor Commissioner filed two complaints against ridesharing giants Uber and Lyft with the Alameda County Superior Court.  The complaints allege various wage and hour causes of actions, including misclassification of employees as independent contractors, failure to pay minimum wage, failure to pay overtime, failure to pay wages for meal and rest periods, failure to indemnify employees for incurring business expenses, among others.  However, the crux of Labor Commissioner’s complaints is simple: Lyft and Uber have made business decisions to unlawfully classify its drivers as independent contractors rather than as employees.

The complaints allege that Uber and Lyft cannot overcome the presumption that all of its drivers are employees, as both companies fail to satisfy the requirements under AB-5, as codified in Labor Code section 2750.3 (see discussion below).  Specifically, the complaints allege that Uber and Lyft exert substantial control and direction over the drivers, including setting restrictions on the types of vehicles drivers may drive, setting the fares customers must pay, setting the compensation of their drivers, tracking the drivers through their respective apps., etc.  Additionally, since Lyft’s and Uber’s drivers transport customer passengers, they are not engaged in an independently established trade or business of the same nature as the work they perform for Lyft or Uber.

Ultimately, the Labor Commissioner’s position is that Uber and Lyft cannot meet the elements of the ABC Test.  Thus, both companies have willfully and unlawfully “misclassified [their] drivers as independent contractors . . . thereby denying [them] the protections available to employees under the Labor Code . . .”

The Labor Commissioner’s complaints seek injunctive relief (a court order prohibiting a party from doing or engaging in a specific action or conduct – in this case misclassifying their drivers as independent contractors), as well as, statutory and civil penalties for wage and hour violations.  For that reason, Uber and Lyft could face substantial liability for the alleged violations.

The ABC Test: The Legal Basics

These lawsuits stem from Uber and Lyft violating AB-5.  AB-5, which went into effect on January 1, 2020, codified the California Supreme Court’s ABC Test for independent contractors as set forth in Dynamex Operations West, Inc. v. Super. Ct. decided in 2018. 

In short, AB-5 presumes that a worker is an employee, unless the hiring entity establishes that the worker:

A.     Is free from the control and direction of the hiring entity in connection with the performance of the work – both under the contract for the performance of the work and in fact;

B.     Performs work that is outside the usual course of the hiring entity’s business; and,

C.     Is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Lab. Code § 2750.3(a)(1)(A)–(C) (emphasis added).

Although it may seem simple on its face, the ABC Test makes classifying a worker as an independent contractor much harder for employers.  Specifically, businesses will face an uphill battle in overcoming prong “B” of the test.

Of course, and as with almost any law, AB-5 carves out certain (and very narrow) exemptions, such as for those engaged in “professional services” and “bona fide business-to-business contracting relationships” (if certain conditions are met).  In these circumstances, the determination of employee or independent contractor status is governed by the Borello test. 

The Independent Contractor/Employee Dichotomy: Corresponding Legal Implications and Requirements

Why is it so important to properly classify a worker as an independent contractor vis-à-vis an employee?

Federal and state laws impose numerous requirements on employers with respect to their employees.  That is not the case when workers are classified as independent contractors.  For that reason, many businesses classify workers as independent contractors because it relieves them from having to comply with such laws or providing certain benefits.  For example, independent contractors need not be covered by workers’ compensation, are not covered by wage and hour laws, and are excluded from coverage under the National Labor Relations Act. 

On the other hand, classifying a worker as an employee may feel as opening Pandora’s box; it triggers numerous requirements under the law.  These include: complying with all wage and hour laws (such as payment for overtime, providing meal and rest breaks, paid sick leave, reimbursement of business expenses), record keeping, deducting employment taxes from their earnings, etc. 

Employers must remember, however, that both independent contractors and employees are protected under state anti-harassment laws.

Takeaways

The lawsuits against Uber and Lyft serve as an important reminder for all employers to audit and take a closer look at their classification practices, and ensure proper compliance with the law.  Simply deeming and “classifying” a worker as an independent contractor on paper may be insufficient.  Employers must carefully apply the ABC Test to make a proper determinations and classifications.  Moreover, even if a business believes that they may be exempted from the ABC Test, it is recommended that they consult with legal counsel, as the exemptions are rather complex. 

The consequences of misclassification can include liability for unpaid wages and hefty statutory and civil penalties.  More importantly, misclassifying workers may expose companies to lawsuits under the Private Attorneys General Act (PAGA), which allows employees to sue the employer on a representative capacity on behalf of the state and other aggrieved employees.  PAGA claims can lead to substantial civil penalties and can become an employer’s biggest headache rather quickly. 

Employers need to prepare and plan on how to defend claims brought before the California Labor Commissioner.  With some planning, the process is a lot less daunting.  Here are five issues employers must understand in defending Labor Commissioner claims:

1. Understanding the claims made by the employee.

Employers usually become aware of a complaint to the Labor Commissioner when they receive a Notice of Claim and Conference from the Labor Commissioner’s office.  Employers are not required to file any paperwork in response to the notice of conference, but the employer or an employer’s representative, is required to appear at the conference at the date and time indicated on the notice.  The conference is not the actual hearing on the matter.  Rather the conference is structured as a non-binding settlement conference during which the Labor Commissioner discusses the various allegations, the employer’s response, and will attempt to mediate a resolution between the parties.

2. Ensure the claims alleged by the employee can be heard by the Labor Commissioner.

The Labor Commissioner can only hear disputes for “any action to recover wages, penalties, and other demands for compensation.”  Labor Code section 98(a).  Therefore, the Labor Commissioner cannot adjudicate any other types of employment claims, such as harassment or discrimination.  If the employer has a counter claim against the employee, it cannot be heard by the Labor Commissioner, but must be filed in court.  Likewise, if the employee has entered into an arbitration agreement with the employer, the employer can compel arbitration of the claim and remove jurisdiction from the Labor Commissioner.

3. Decide if legal representation is required during the Labor Commissioner complaint process.

Neither the employee or the employer are required to have an attorney during any stage of the Labor Commissioner process.  Whether or not an employer decides to have legal representation during the process depends on how comfortable the employer is with handling these issues and how well they understand the law to assert the various defenses available.  Also, many employers attend the settlement conference without legal representation if they are comfortable with the issues, and if the case does not settle and is set for a hearing, then the employer has an attorney assist with the hearing.

4. Understanding strengths and weaknesses of case going in to settlement hearing.

Although it is not mandatory, most Labor Commissioner offices will often set the matter for a settlement conference.  Employers often misunderstand the purpose of the initial settlement conference.  The settlement conference is not the hearing on the matter in which the Labor Commissioner takes sworn testimony and makes a decision.  While this step is not the actual hearing that will determine who should prevail, employers should prepare evidence that will be persuasive during the settlement conference to establish defenses to the employee’s claims.  It is also good to listen to the employee’s facts and learn what they are claiming, what evidence they may have, and who may be a witness.  It is important to learn this information in the event that the case does not settle and is set for a formal hearing.

It is important for employers to review the paperwork provided from the Labor Commissioner’s office to ensure that they gather and bring the required paperwork to the settlement conference.

Usually the Labor Commissioner requires the following background information from the employer:

  1. Completion of the DLSE’s Report of Workers’ Compensation Insurance
  2. City business license
  3. Articles of information filed with the Secretary of State
  4. Any documentation that may be applicable to the employee’s claims: payroll records, time sheets, handbook and applicable policies, correspondence with the employee, etc.…

The employer should also review the employee’s allegations in the notice of claim and prepare an outline of defenses and facts that support their position.

Employers need to understand the arguments in support of their defenses so that those can be articulated to the employee and Labor Commissioner.  The more persuasive the employer’s case is, the more likely that the case can be resolved for a nominal amount during the settlement conference.

Employers should be prepared to negotiate during the settlement conference and be prepared with a range of how much they would be willing to settle the case. An experienced employment law attorney can help address the strengths and weaknesses of the claims and can help advise on the appropriate settlement offer, if any, that could be made.

5. Preparing for hearing.

If the case does not settle at the settlement conference, or if there was never a settlement conference set, the Labor Commissioner will set the matter for a hearing pursuant to Labor Code section 98(a).  The hearings are often referred to as “Berman” hearings after the name of the legislator who sponsored the bill creating this procedure.  The basic idea behind Berman hearings is to provide a relatively fast way to resolve wage disputes.  However, with the state budget constraints, the hearings are usually set for about one year from the date that the settlement conference takes place.

The hearing takes place in the Labor Commissioner’s office, usually in a conference room.  The Labor Commissioner will tape record the hearing, and all witnesses’ testimony is provided under oath, just as if they are testifying in court.  The Labor Commissioner can issue subpoenas compelling the attendance of parties at the hearing, as well as compelling parties to produce documents at the hearing.

Generally, employers need to be prepared but flexible for how the hearing will proceed.  The Labor Commissioner conducting the hearing has a lot of flexibility on how the parties are to present witnesses and conduct cross-examinations.  The rules of evidence are not controlling in the proceeding, but the Labor Commissioner generally has discretion to control the evidence presented during the hearing.  The Labor Commissioner can, and usually will, ask questions of their own to get a better understanding of certain issues.

After the hearing, the Labor Commissioner will issue a written order that must be served on all parties.  Unless this order is appealed, it is a binding judgment against the parties, and a certified copy of the order is filed with the superior court and judgment is entered.

Arbitration agreements are an increasingly popular way for employers to manage employment disputes effectively and efficiently. A common provision in arbitration agreements is a class action waiver, wherein the parties agree to resolve any dispute on an individual basis. Any employer who has faced a wage and hour class action understands how complex and expensive such cases can be to defend, regardless of merit.

A recent published decision from the California Court of Appeal reminds us that arbitration agreements are subject to many of the pitfalls of contract. Specifically, regardless of what you want it to accomplish, a contract is only as good as what it actually says.

In Garner v. Inter-State Oil Company, an employee filed a class action alleging Inter-State Oil “engaged in various illegal employment practices related to wages, breaks, and reimbursement of business expenses.”  The employer sought to compel arbitration of the employee’s claims on an individual basis–i.e., that the class claims would be dismissed and the individual employee’s claims would proceed in arbitration.

The Court of Appeal read the arbitration agreement slightly differently: it ruled that everything, both the individual claims and the class claims, would be going to arbitration.

Yes, there is such a thing as class arbitration. To be clear, this is not what Inter-State Oil wanted. It wanted a ruling that the employee could not maintain a class action and had to proceed in arbitration on an individual basis.

So how did the appellate court decide class arbitration was required? It did so by interpreting two relevant sentences from the arbitration agreement:

"To resolve employment disputes in an efficient and cost-effective manner, you and Inter-State Oil Co. agree that any and all claims arising out of or related to your employment that could be filed in a court of law, including but not limited to, claims of unlawful harassment or discrimination, wrongful demotion, defamation, wrongful discharge, breach of contract, invasion of privacy, or class action shall be submitted to final and binding arbitration, and not to any other forum.”
...

"This Arbitration Agreement Is A Waiver Of All Rights To A Civil Jury Trial Or Participation In A Civil Class Action Lawsuit For Claims Arising Out Of Your Employment."

Inter-State Oil focused on the second sentence, arguing that the employee waived the right to “participate in a civil class action lawsuit.”  But the court found this reading incomplete, noting that “lawsuit” generally refers to a court action.  Thus, just because the employee waived the right to bring a class action lawsuit in court didn’t mean the employee waived the right to participate in any class action.

The Court of Appeal also noted a curious (for Inter-State Oil’s position) inclusion in the first sentence.  The first sentence lists a series of claims that the parties agreed to arbitrate.  The last entry in that series was “class action.” Read in isolation, this meant the parties “agree that any and all claims arising out of or related to your employment that could be filed in a  court of law, including but not limited to . . . class action shall be submitted to final and binding arbitration, and not to any other forum.”

Most likely, whoever drafted this arbitration agreement intended it to mean that the employee waived the right to bring a class action, and that any dispute had to be resolved on an individual basis in arbitration. But this is not the first time a contract was meant to accomplish one thing but written another way. As the Court of Appeal noted, this agreement “is not a model of clarity.”

Take this opportunity to review your arbitration agreement to make sure it says what you mean it to say. Just in case, have legal counsel give it a second look. And if your arbitration agreement is old enough to wear a mask, check to see if it needs updating to meet your needs and the ever-changing legal landscape.

This week’s Friday’s Five is reexamining the Families First Coronavirus Response Act (FFCRA) and four new issues addressed by the DOL on July 20, 2020.  Plus, (because I needed an additional point to make this five points), I reexamine the DOL’s definition of “individual” as used in qualifying reason number three for EPSLA.  Many employers are dealing with these questions as they are fighting to reopen their businesses across the country, and it is a good time to re-familiarize oneself with the guidance issued by the DOL.

Questions 94 to 97 are summaries of the DOL’s questions and answers issued on July 20, 2020, and the final question is the reexamination of the prior guidance, but is a question we have been dealing a lot with recently.

Question #94: Issue regarding employer’s concerns of employee who has taken paid sick leave under the FFCRA and is returning to work.  The employee has been taking care of a sick family member.  Can the employer require the employee to telework or take leave until they test negative for COVID-19?

DOL states that it depends.  The DOL sets forth the following guidance:

  • The employer may reinstate employee to an equivalent position that requires less interaction with co-workers or require him to telework.
  • May require the employee to telework or take leave until he has tested negative for COVID-19, regardless of whether the employee has taken any time of leave. The DOL cautions employer that they cannot require employees to take be tested for COVID-19 simply because the employee took FFCRA leave.

Question #95: Issue of where an employee has used all 80 hours of paid sick leave under the FFCRA before being furloughed, and now the employer is recalling the employee.  Does the employee have additional paid sick leave to use once they return to work?

No.  The DOL explains that employees are limited to a total of 80 hours of paid sick leave under the FFCRA.

Question #96: Issue of an employee who has taken four weeks of expanded family and medical leave before being furloughed, and is now being recalled by her employer.  If the employee still needs to care for her child because the child care provider is unavailable for COVID-related reasons, how much expanded family and medical leave does the employee have to use?

The DOL explains that employees are entitled to 12 weeks of expanded family and medical leave.  If the employee has used four weeks before being furloughed, when she returns to work she will have eight additional weeks available.

The DOL also notes the following regarding re-certification by the employee for the reason of the leave:

Because the reason your employee needs leave may have changed during the furlough, you should treat a post-furlough request for expanded family and medical leave as a new leave request and have her give you the appropriate documentation related to the reason she currently needs leave. For example, before the furlough, she may have needed leave because her child’s school was closed, but she might need it now because her child’s summer camp is closed due to COVID-19-related reasons.

Question #97: Issue of an employer who furloughed all employees, and now the quarantine order has been lifted and employees are returning to work.  Can the employer extend one employee’s furlough because he would need to take additional FFCRA leave to care for his child?

No.  The DOL explains that employers cannot discriminate or retaliate against employees (or prospective employee) for “exercising or attempting to exercise their right to take leave under the FFCRA.”  The employer cannot assume the employee will make a request, and use this as a factor in deciding whether to recall the employee from furlough.

Question #63: What type of relationship does an employee must have with an “individual” to qualify for paid leave under reason #4 of the Emergency Paid Sick Leave Act?

This guidance has been issued well before the July 20 guidance set forth above, but there have been a few issues arising with this and wanted to address.  The DOL explains that employees can qualify for EPSLA if they care for an individual who, as a result of being subject to a quarantine or isolation order, is unable to care for themselves and depends on the employee for care.  By providing the care, the employee is then prevented from working or teleworking.  The DOL sets forth that an “individual” “includes an immediate family member or someone who regularly resides in your home. You may also take paid sick leave to care for someone if your relationship creates an expectation that you would care for the person in a quarantine or self-quarantine situation, and that individual depends on you for care during the quarantine or self-quarantine.”  Paid sick leave would not apply for caring for someone where there is no relationship, or if the person does not expect or depend on the employee’s care.

For the full list of the DOL’s questions and answers (and the full text of the Q&A), visit the DOL’s website here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

On July 3, 2020, the CDC issued revised guidance regarding the testing of employees for non-healthcare related workplaces – SARS-CoV-2 Testing Strategy: Considerations for Non-Healthcare Workplaces.  The CDC cautioned employers that the guidelines “are meant to supplement, not replace, any federal, state, local, territorial, or tribal health and safety laws, rules, and regulations with which workplaces must comply.”  Moreover, the CDC reminds employers that employers must use the guidelines in a “manner consistent with law and regulation, including laws protecting employee privacy and confidentiality. They should also be carried out consistent with Equal Employment Opportunity Commission guidance regarding permissible testing policies and procedures.”

Employers should review the California Department of Public Health’s memo to employers, Responding to COVID-19 in the Workplace, and ensure they are complying with all local requirements as well.

The CDC guidance discussing the following five testing strategies for non-healthcare workplaces:

1. Testing individuals with signs or symptoms consistent with COVID-19

Employees with COVID-19 symptoms should be separated from other people.  CDC recommends making the screening as private as possible to protect employee’s privacy.  Workers with COVID-19 symptoms should be referred to a healthcare provided for potential screening, and should remain home while waiting for test results.

2. Testing asymptomatic individuals with recent known or suspected exposure to SARS-CoV-2 to control transmission

The CDC recommends viral testing for all close contacts of person with COVID-19.  These individuals also need to be isolated.  The CDC notes that if an individual is tested early after contact with the virus, the test may not detect the virus.  Serial testing, tests done at different points in time, are more likely to detect the virus among close contacts of a COVID-19 case.

However, as the CDC notes, employers must be careful to follow additional regulations from state or local authorities regarding whether a negative test permits an employee to return to work.

The CDC also notes that a broad-based testing strategy may be appropriate for high-risk settings:

High-risk settings that have demonstrated potential for rapid and widespread dissemination of SARS-CoV-2 include:

  • High-density critical infrastructure workplaces
  • Workplaces where employees live in congregate settings (e.g., fishing vessels, offshore oil platforms, farmworker housing or wildland firefighter camps)
  • Workplaces with populations at risk for severe illness if they are infected, such as nursing homes

Employers are encouraged to consult with state, local, territorial, and tribal health departments to help inform decision-making about broad-based testing.

3. Testing asymptomatic individuals without known or suspected exposure to SARS-CoV-2 for early identification in special settings

The CDC sets forth when testing employees without symptoms may be appropriate “[w]hen communities experience moderate to substantial transmission…”  The CDC explains that workplace settings that may be appropriate for this type of testing include:

  • Workplaces where physical distancing is difficult and workers are in close contact (within 6 feet for 15 minutes or more) with co-workers or the public
  • Workplaces in remote settings where medical evaluation or treatment may be delayed
  • Workplaces where continuity of operations is a high priority (e.g., critical infrastructure sectors)
  • Workplaces providing congregate housing for employees (e.g. fishing vessels, offshore oil platforms, farmworker housing or wildland firefighter camps)

4. Testing to determine resolution of infection

The CDC sets forth different strategies for determining when an employee may return to work:  a symptom-based (i.e., time-since-illness-onset and time-since-recovery strategy), time based, or a test-based strategy. The CDC notes that “which strategy to use should be made in consultation with healthcare providers and public health professionals.”

Los Angeles County takes the position that “asymptomatic persons with laboratory confirmed COVID-19 are considered infectious 48 hours before the date of their first positive molecular test (sometimes called a PCR test) until 10 days after that initial positive test.”

Los Angeles County also requires a 14-day quarantine for employees who have had close contact with a confirmed case, and testing does not permit the employee to return to work sooner:

As a result, testing does not expedite return to work for close contacts. As mentioned above, a negative test in a close contact does not mean they are not infected. Close contacts may not leave quarantine until they have remained symptom free for 14 days.  Asymptomatic employees with a positive COVID-19 test may be released from isolation and return to work 10 days after the initial positive test, barring the development of symptoms.

Requiring A Doctor’s Note – CDC Changes Position

In prior guidance, the CDC set forth that employers should not require a doctor’s note for an employee to be able to return to work.  In this July 3 guidance, the CDC has changed this position, and sets forth the following:

Under the Americans with Disabilities Act, employers are permitted to require a healthcare provider’s note to verify that employees are healthy and able to return to work. However, as a practical matter, employers should be aware that healthcare provider offices and medical facilities may be extremely busy during periods of community transmission of SARS-CoV-2 and may not be able to provide such documentation in a timely manner. In such cases, employers should consider not requiring a healthcare provider’s note for employees who are sick to validate their illness, qualify for sick leave, or to return to work.

Los Angeles County recommends that employers do not require a doctor’s note to permit an employee to return to work.  Los Angeles County has stated that in order “[t]o help us avoid overburdening the health system, you should not require a healthcare provider’s note either to justify the absence of an employee who is sick with respiratory disease or to permit the employee to return to work.”

5. Public health surveillance for SARS-CoV-2

Surveillance testing can be conducted to detect transmission hot spots or to understand disease trends in the workplace.  The CDC notes that surveillance testing should only be done if the “results have a reasonable likelihood of benefiting workers.”  Surveillance testing raises many privacy and confidentiality issues in the workplace, and employers should approach such testing very carefully and with guidance for health authorities and advice from counsel.

Effective January 1, 2015, Labor Code section 2810.3 expanded California employer’s liability beyond its own employees, and made certain employers jointly liable for wage and hour violations committed by “labor contractors,” such as staffing agencies.  Here are five items California employers must understand about this joint employer liability:

1. 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.

2. Labor Code section 2810.3 excludes employers based on size.

Labor Code section 2810.3 states that “client employer” does not include any of the following companies based on size:

(i) A business entity with a workforce of fewer than 25 workers, including those hired directly by the client employer and those obtained from, or provided by, any labor contractor.

(ii) A business entity with five or fewer workers supplied by a labor contractor or labor contractors to the client employer at any given time.

3. Companies contracting for services need to ensure the subcontractors follow all applicable wage and hour laws and pay the employees properly.

With the joint liability created by Labor Code section 2810.3, companies contracting for labor at their establishments need to take steps to ensure that the contractors are following wage and hour laws.  This may entail reviewing the contractor’s pay practices.  The hiring company should also ensure that there are some assets or potential insurance that would be available should indemnity be required.

4. California Labor Commissioner held Cheesecake Factory liable for $4.57 million for wage and hour violations under Labor Code section 2810.3.

Cheesecake Factory restaurants in Southern California were cited for $4.57 million for wage and hour violations and penalties by the Labor Commissioner in June, 2018.  The citation was based on alleged wage violations for employees of contractors hired by Cheesecake Factory, not its own employees.  The investigation focused on the janitorial subcontractors who performed work at the restaurants.  The Labor Commissioner found that the janitorial employees were not paid for all minimum wage, overtime, not provided meal and rest breaks, and not paid for split shifts.

The subcontractor janitorial company was Americlean Janitorial Services Corp., a Minneapolis company doing business as Allied National Services, Inc. The workers were managed by a San Diego-based company, Magic Touch Commercial Cleaning.  The Labor Commissioner alleged that the workers had to work additional hours when asked to complete tasks or wait for approval of their work by the Cheesecake Factory managers.

5. Consider indemnity agreements with staffing agencies and labor contractors.

Labor Code section 2810.3 provides that the client employer can seek indemnity from the labor contractor for violations.  The hiring company should consider negotiating an indemnity provision in the contact with the labor contractor to protect itself should any wage and hour liability that arises.

I have published this post since 2015 recognizing the Fourth of July (one of my favorite holidays).  Hopefully I’ll be able to keep publishing it for many years to come.  Wishing you a great Fourth, and hope you have some time to put aside your work for a bit 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 the Founders took.  By all means, they were the establishment, the elite of the American society, and if anyone had an interest in preserving the status quo, it was them.  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 freely speak your mind and believe in whatever you want.  It is also great be free to practice (or not) 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 have been born in the U.S.

4.     My right to practice any profession and access to 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 method 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 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 the legal system.

Happy Fourth of July. No parade, beach festivities, or restaurants to go to this year, but I’m still looking forward to grilling some steaks and going for a run.

Governor Newsom announced today that all dine-in at California restaurants must stop immediately for certain counties for the next 3 weeks, due to a recent spike in COVID-19 cases. Restaurants can continue outdoor dining and pick-up and delivery services.  Bars must close all operations even if they are operating outdoors.

As of July 1, 2020, the impacted counties include: Contra Costa, Fresno, Glenn, Imperial, Kern, Kings, Los Angeles, Merced,  Orange, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Barbara, Santa Clara, Solano, Stanislaus, Tulare, and Ventura.

Here is a short video from our recent webinar describing the Governor’s actions today:

This Friday’s Five highlights five recent recordings of common questions we are hearing from California businesses during the last few weeks of June 2020.

1. Coronavirus Reasonable Accommodation Requests

ZLG partner, Anne McWilliams, gives an overview of employees who may qualify for certain accommodation requests during the coronavirus pandemic. Anthony Zaller follows with a discussion on a recent case (EEOC v. Baystate Medical Center), regarding an employee who believed they were unlawfully terminated.

 

2. US Supreme Court Ruling on Sex Discrimination and Title VII

ZLG partner, Anthony Zaller, discusses the new ruling by SCOTUS on Sex Discrimination in the workplace, as the Supreme Court holds that “An employer who fires an individual for merely being gay or transgender violates Title VII of the Civil Rights Act of 1964. Date of Recording: June 19, 2020.

 

3. LA County Health Department Inspections

ZLG partner, Anne McWilliams, discusses how the LA County Health Department is inspecting an increasing number of restaurants to make sure that they are compliant with California COVID-19 health guidelines. Date of Recording: June 19, 2020.

 

4. CDC’s “Return to Work Timeline” for Essential Workers Who Test Positive for COVID-19

Description: ZLG partner, Anthony Zaller, goes into detail about what an employer’s timeline should look like for bringing back essential workers that have tested positive for COVID-19.

 

5. New Face Cloth Covering Mandate in California

ZLG attorney, Rick Reyes, discusses the new mandate by the state of California, requiring all people in California-subject to certain restrictions-to wear face coverings when going out in public. Date of Recording: June 19, 2020.

 

Here is a short summary of five best practices for hotels reopening in Los Angeles (this is just a summary adopted from a presentation I provided to a group of hotel owners, and not a substitute for reviewing the applicable federal, state and local regulations):

1. Highlights from Los Angeles County’s protocol applicable to hotels.

  • Los Angeles County’s reopening protocol requires hotels to provide accommodations for vulnerable staff. It sets forth that vulnerable staff (those above age 65, those who are pregnant, and those with chronic health conditions) should be assigned work that can be done from home whenever possible, and should discuss any concerns with their healthcare provider or occupational health services to make appropriate decisions on returning to the workplace.
  • Hotels need to develop and have a plan in place for positive cases:
    • Isolate themselves; self-quarantine of all employees who had exposure; should consider plan to have quarantined employees tested.
    • If there are 3 or more known cases within 14 days the hotel must report to Dept. of Public Health.
  • Cleaning & Sanitizing: Consider reducing business hours for extra deep cleaning.
  • Written, worksite-specific COVID-19 plan
  • Copies of protocol distributed to all employees
  • Physical distancing:
    • Housekeeping is only performed when guests are not present
    • Elevators limited to 4 individuals or a family at a time and all riders must wear face covering
  • Facility Safety: To the extent possible, log guests: name, phone number and email address
  • Cleaning & Sanitizing: Housekeepers are provided PPE for cleaning.
    • Housekeeping employees are provided gloves when removing dirty linens. Dirty linen is placed in a single-use, sealed bag.
  • Copy of the protocol posted at all public entrances to facility
  • Guests are notified of policies and procedures prior to arrival
  • Signage is posed at the hotel (see examples in protocol)
    • Employee Health & Hygiene: Reinforce employee training on health and safety guidelines with periodic refresher trainings
    • Facility Safety: Log all employees that come on-premise for purposes of supporting public health contact tracing

2. Los Angeles County’s requirements for face coverings in hotels.

Employees

All employees who have contact with the public or other employees during their shift(s) are offered, at no cost, a cloth face covering. The covering is to be worn by the employee at all times during the workday when in contact or likely to come into contact with others. Employees need not wear a cloth face covering when the employee is alone.

Employees are instructed on the proper use of face covering, including the need to wash their face coverings daily.

Housekeepers and others who must enter guest rooms are directed to wear a cloth face covering.

Bellman/Porters are to wear face coverings and utilize gloves when handling guest baggage. Where possible, baggage deliveries are to be placed in the room by the guest.

Guests

Guests must wear face covering in elevators.

Guests are instructed that they must wear cloth face coverings whenever they are not eating and/or drinking; this includes upon entry to the facility, when walking anywhere in the facility, and when using the restrooms. This applies to all adults and to children over the age of 2. Only individuals with chronic respiratory conditions or other medical conditions that make the use of a face covering hazardous are exempted from this requirement.

Customers who refuse to wear a cloth face covering may be refused service and asked to leave.

Guests will be provided face coverings upon entry to the hotel if they do not have one.

3. Los Angeles City Guidelines.

  • Process to log all employees on site
  • If there is a positive case at the hotel:
    • Inform guests (not clear on this requirement)
    • Ensure all those who have come in contact are tested before returning to work
    • If testing is not possible, inform coworkers that had close contact to self-quarantine and self-monitor for symptoms per public health guidance
    • Consider written plan on how to inform coworkers and how they can get tested/self-quarantine
  • Refresher training courses on social distancing, cleaning, and PPE
  • Provide copy of COVID-19 related safety and health plan to employees and document receipt
  • Presumptive case in affected guest room: shall not be returned to service until undergoing an enhanced cleaning and disinfecting utilizing EPA approved products within CDC guidelines, ideally by a licensed 3rd party
  • Examples of signs located at end of guidance: https://corona-virus.la/sites/default/files/inline-files/20200612%20LA%20Resuming%20Operations%20Playbook%20-%20Hotels.pdf

4. Compliance with City of Los Angeles 5-day notice and priority of recall ordinance.

Under City of Los Angeles Ordinance 186602, the City requires covered employers to offer laid off workers their positions or similar positions based on the workers seniority with the employer.  The Ordinance defines “Hotel Employer” as “owner, operator or manager of a residential building in the City designated or used for public lodging or other related service for the public and either contains 50 or more guestrooms or has earned gross receipts in 2019 exceeding $5 million.  A Hotel Employer includes the owner, operator, manager or lessee of any restaurant physically located on hotel premises.”

Workers have no less than 5 business days to accept or decline the offer for the position.

5. To the extent a hotel operates another facility, such as a restaurant or golf course, the applicable protocol for those industries must also be followed.

County of Los Angeles protocol for in-person dining: http://www.publichealth.lacounty.gov/media/Coronavirus/docs/protocols/Reopening_Restaurants.pdf

County of Los Angeles protocol for golf courses: http://www.publichealth.lacounty.gov/media/Coronavirus/docs/protocols/Reopening-GolfCourses.pdf

The City of Los Angeles website:  https://corona-virus.la/Business

City of Los Angeles Protocol for restaurants: http://publichealth.lacounty.gov/media/coronavirus/docs/protocols/Reopening_Restaurants.pdf