Best Practices For California Employers

California employers need to routinely need to review their policies and practices to make sure they are complying with intricacies that may arise in their work place.  In law school, attorneys-to-be are taught to “issue spot,” and the unfortunate litigation landscape that faces California employers, business owners and their supervisors must also “issue spot” and make sure the unique aspects of California employment law are being complied with to avoid liability.  This Friday’s Five covers five issues employers should issue spot on a routine basis to help ensure compliance and reduce liability:

1. Reporting time pay

Reporting time pay is triggered when an employee is required to report for work, but is not put to work or is furnished less than half their usual or scheduled day’s work.  If this occurs, the employee needs to be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which cannot not be less than the minimum wage.

It is important for employers to train managers and supervisors about this requirement, so that they understand the need to pay reporting time pay, or report the instance to HR to ensure the employee receives reporting time pay if they are sent home before one-half of their shift is worked.

2. Split shift pay

A split shift is a work schedule that is interrupted by a non-paid, non-working period established by the employer that is other than a meal or rest break.  So if the employee is required to work a shift, but then asked to report to a second shift over later in the same day, the employer may be obligated to pay a split shift premium.  Again, this issue is one that front-line managers and supervisors need to be trained on to ensure that split shifts are being reported to HR or other appropriate management in the company to ensure any split shift pay obligations are being paid.

3. Expense reimbursement issues

Under Labor Code section 2802, employers need to reimburse employees for any business expenses they incur in the course of completing their work for the employer.  This basic concept sounds easy in principle, but given the technology used in today’s workplaces, there can be many areas that expose employers to liability.  For example, if employees are required to work at home, have access to the internet, print reports, or send and receive faxes, the costs for completing this work should be reimbursed by the employer.  Other areas that are often litigated are cell phone reimbursement, mileage reimbursement, and reimbursement for the costs of uniforms and safety equipment.

4. Off-the-clock claims

Employers can be held liable for unpaid wages if they knew or should have known that employees were working and not being paid for the work.  Employers should establish and regularly communicate a time keeping policy to employees and supervisors.  The policy should set forth that employees always have an open door to complain to their supervisors and other managers or human resources about missed meal and rest breaks, unpaid wages, or unpaid wages.  If employees routinely acknowledge that they understand the time keeping policy and are agreeing to record their time through the employer’s system, this can go a long way in defending any off-the-clock claims.

5. On-Call time

Even though employees are traveling to a work site or even sleeping, if the employee is under the control of the employer, the employer may have to pay them for being on-call.  For example, the California Supreme Court held that security guards who were required to reside in a trailer provided by the employer at construction worksites would still need to be paid for the time they slept while on-call.  In that case, during weekdays the guards were on patrol for eight hours, on call for eight hours, and off duty for eight hours.  On weekends, the guards were on patrol for 16 hours and on call for eight hours.  The Court held that the employer was not permitted to exclude the time guards spent sleeping from the compensable hours worked in 24-hour shifts.  See Mendiola v. CPS Security Solutions, Inc.

Likewise, in Morillion v. Royal Packing Co., the California Supreme Court held that, “we conclude the time agricultural employees are required to spend traveling on their employer’s buses is compensable under Wage Order No. 14-80 because they are ‘subject to the control of an employer’ and do not also have to be ‘suffered or permitted to work’ during this travel period.”  Generally, travel time is considered compensable work hours where the employer requires its employees to meet at a designated place and use the employer’s designated transportation to and from the work site.

This week’s Friday’s Five covers five huge misconceptions about California employment law that can land employers into huge legal trouble:

1. Meal and rest breaks seem so trivial.

The topic may seem trivial for companies that have not faced this litigation before, or for out of state employers who wrongly believe California cannot be much different than federal requirements.  However, with the penalty owed to employees of one hour of pay for each missed meal or rest break (i.e., up to two hours of penalty pay per day) these violations add up to significant amounts of liability very quickly.  A verdict against Wal-Mart for $172 million is a good example of the liability that even small employers face in this regard.

2. My payroll company understands the laws about wages and itemized pay statements.

Payroll companies are not law firms and they will not notify you if you are not paying your employees properly, calculating overtime correctly, tracking and reporting paid sick leave appropriately, or even ensure that the paystubs they generate for your employees comply with the law.  It is the employer’s responsibility to ensure the employment laws are being complied with, and it is wise to have an experienced employment lawyer review these practices and audit the practices of the payroll company.

3. The employee’s title determines if they are owed overtime.

An employee’s title is not determinative of whether they qualify as an exempt employee and do not need to receive overtime pay.  See my previous article on the various exemptions that employees may qualify for, and the requirements necessary for employees to meet those exemptions.

4. Employees can be provided “comp time” instead of paid overtime.

While it is true employers may provide employee’s comp time in lieu of overtime, there are many technical restrictions that must be met in order for comp time plans to be legal under California law.  Labor Code section 204.3 only authorizes employers to provide nonexempt employees with compensated time off instead of paying for overtime if the following requirements are met:

  • Payment for comp time must be at the overtime rate of pay (i.e., not less than one and one-half hours for each hour of employment, or double time if applicable)
  • Must be in writing before work begins
  • Employees cannot accrue more than 240 hours of compensation time off
  • Employee has to make a written request for comp time in lieu of overtime
  • Employee must be scheduled to work at least 40 hours a week
  • Employee must be paid at rate of pay in effect at time of payment
  • Payment at termination must be at high of current or three-year average rate of pay
  • Employee must be permitted to use comp time within reasonable period
  • Employer must keep records of comp time accrued and used

5. My company does not need employment counsel to review our polices on a regular basis, we have it under control.

If you have been a reader of this blog for any time period, you understand that every employer in California needs to understand their legal duties when it comes to employing workers.  And with competent employment law counsel [:)] it is not hard to comply with the law, but it is difficult to keep current with the law and ensure all legal obligations are being met.  California employment law is regularly changing.  In addition, employers need to make sure they are complying with intricacies that may arise in their work place, such as:

 

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Douglas Troester filed suit alleging that Starbucks violated the California Labor Code by failing to pay him for short periods of time he spent closing the store.  He alleged that Starbucks failed to pay him for time spent walking out of the store after activating the security alarm, for the time he spent turning the lock on the store’s front door, and for the time he spent occasionally reopening the door so that a co-worker could retrieve a coat.  Based on these allegations, Troester filed a class action under the California Labor Code for failure to pay minimum and overtime wages, failure to provide accurate written wage statements, and failure to timely pay all final wages.  Over the 17-month period of his employment, Troester’s unpaid time totaled approximately 12 hours and 50 minutes. At the then-applicable minimum wage of $8 per hour, this unpaid time added up to $102.67, not including any penalties or other remedies.

In the lower court, Starbucks filed a motion for summary judgment asking the court to dismiss Plaintiff’s case based upon the de minimis doctrine.  The trial court agreed with Starbucks and dismissed the case, assuming that the additional time would be administratively difficult to capture.  However, this ruling was appealed to the California Supreme Court for review based on Plaintiff’s argument that the de minimis doctrine is not applicable under California law.  The Supreme Court’s decision has major ramifications for California employers.  For this week’s Friday’s Five, here are five issues about the Troester v. Starbucks Corp. holding and the de minimis doctrine employers must understand:

1. The de minimis doctrine: What is it?

The trial court, in granting Starbucks motion for summary judgment, explained the de minimis doctrine as follows:

Under this doctrine, alleged working time need not be paid if it is trivially small: “[A] few seconds or minutes of work beyond the scheduled working hours … may be disregarded.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946), superseded by statute on other grounds as stated in IBP, Inc. v. Alvarez, 546 U.S. 21, 25–26, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005).

The California Supreme Court explained the concept as follows:

The de minimis doctrine is an application of the maxim de minimis non curat lex, which means “[t]he law does not concern itself with trifles.” (Black’s Law Dict. (10th ed. 2014) p. 524.) Federal courts have applied the doctrine in some circumstances to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.

2. What factors do courts look to in determining whether time is de minimis?

The factors some other courts have look to in determining whether time is de minimis include (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.  The trial court in the Starbucks case noted that numerous courts have concluded that daily periods of about 10 minutes are de minimis.

3. Does the de minimum doctrine apply to California law?

The California Supreme Court held that the de minimis doctrine adopted under the federal Fair Labor Standards Act (FLSA) does not apply to California employers.  However, the Court left open the possibility of some narrower version of the doctrine to apply in wage and hour cases:

In other words, although California has not adopted the federal de minimis doctrine, does some version of the doctrine nonetheless apply to wage and hour claims as a matter of state law? We hold that the relevant wage order and statutes do not permit application of the de minimis rule on the facts given to us by the Ninth Circuit, where the employer required the employee to work “off the clock” several minutes per shift. We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.

We decline to decide whether a de minimis principle may ever apply to wage and hour claims given the wide range of scenarios in which this issue arises.

4. Legal and technical advances have limited the need for a de minimis doctrine in California.

The California Supreme Court refused to adopt the FLSA de minimis doctrine for a number of reasons, but specifically stated that the “modern availability of class action lawsuits undermines to some extent the rational behind a de minimis rule with respect to wage and hour actions.”  The Court explained that individual recoveries which are too small to be worth the individual’s or the court’s time can be aggregated to “vindicate an important public policy.”  “In this age of the consumer class action this maxim [de minimis non curat lex] usually has little value.”

Second, the California Supreme Court relied upon the “technical advances that enable employees to track and register their work time via smartphones, tablets, or other devices” that have made it easier to record employee’s time worked as an additional reason not to adopt the federal de minimis doctrine under California law.

Therefore, the Court held, “[a]n employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine. As the facts here demonstrate, a few extra minutes of work each day can add up.”

5. The Supreme Court recognized some practical steps employers can take to address the “practical administrative difficulty of recording small amounts of time for payroll purposes.”

The Court held that employers are in a better position than employee to “devise alternatives that would permit the tracking of small amount of regularly occurring work time.”  The Court described some alternatives employers could implement include:

  • structuring work so that employees would not have to work before or after clocking out
  • using technology to have time tracking tools to more accurately record employee’s time
  • estimating the time it takes employees to perform work and to compensate employees for that time

The California Supreme Court’s decision, Troester v. Starbucks Corp., No. S234969, 2018 WL 3582702, at *2 (Cal. July 26, 2018) can be read here.  

Employee document storage and retention policies: it is not cutting edge legal theory or management philosophy, but companies that think about and actively develop a plan will save large amounts of money.  The costs savings will come from being able to better defend litigation because the key documents were maintained, and by saving time and effort in searching for and retrieving employment documents when needed.  This Friday’s Five reviews five best practices for document retention for California employers:

1. Define what is kept in a personnel file and communicate this to managers.

Often surprising to many employers, the terms “personnel records” or “personnel file” are not defined under California law and there is considerable ambiguity about what documents should be keep in an employee’s personnel file.

While not legally binding on employers, there is some guidance from the Division of Labor Standards Enforcement (“DLSE”):

Categories of records that are generally considered to be “personnel records” are those that are used or have been used to determine an employee’s qualifications for promotion, additional compensation, or disciplinary action, including termination. The following are some examples of “personnel records” (this list is not all inclusive):

Application for employment

Payroll authorization form

Notices of commendation, warning, discipline, and/or   termination

Notices of layoff, leave of absence, and vacation

Notices of wage attachment or garnishment

Education and training notices and records

Performance appraisals/reviews

Attendance records

Employers need to clearly define what they will keep (or will not keep) in an employee’s personnel file so that all management understands which documents need to be placed in the personnel file of an employee and where to locate documents pertaining to employees.

2. Keep confidential employee medical information separate from personnel file.

State and Federal law requires that employers keep medical information obtained about employees separate from the employee personnel file.  For example, California Regulations require that:

  • Medical information and records obtained as part of the interactive process must be maintained separate from the employee’s personnel file and kept confidential. 2 CCR § 11069(g)
  • Employers must keep information obtained regarding the medical or physical conditions or history of the employee confidential. 2 CCR § 11071(d)(4)

I referenced this issue in a recent video:

3. Time records must be kept long enough and must be in a usable format.

Employers have the burden to record and maintain accurate time records under California law. If the employer knows employees are not properly recording their time, the employer needs to enforce a policy to have employees accurately record their time, even if it requires disciplinary action. Employers need to review their time records to ensure employees are following proper procedures.  Some issues employers need to watch for include:

  • Time records that do not record the employee’s actual time working. For example, the employee records their start and stop time and the same time every day even though the employer knows it changes.
  • Not keeping time records long enough. The statute of limitations can reach back four years in wage and hour class actions, and these records will be the primary issues in most cases. See below for further information.
  • Not recording all required information. For example, employers are required to record employee’s meal periods under the IWC Wage Orders (requirement is found section 7 – Records).
  • Not keeping the time records in a manner that is usable. Maintaining records in a form that makes reviewing the records almost impossible is almost equivalent to not maintaining them in the first place. Some thought should be put into how an employer is keeping old time record information and how that data could efficiently be reviewed in the future if needed.

3. Ensure there is that the institutional knowledge of a company’s document storage and retention policies is maintained.

Is there one person with full knowledge of the employment policies implemented by the company? Institutional knowledge about the various policies put into place by the company, when they were implemented and why they were implemented is critical knowledge. Also, this information should not reside with just one person, but instead there are a few key people who know where this information is retained and how to retrieve it during times of litigation.

5. Develop a checklist for managers to follow regarding records policies.

Employers need to develop of checklist and review the checklist with managers to ensure the requirements are being met.  Some items employers should consider placing on the checklist include:

  • Are employee personnel files maintained confidentially and for at least four years?
  • Is medical information kept separately from the employee’s personnel file?
  • 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?
  • Are personnel files maintained in a secure location or backup on line?

 

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The experience of litigation is foreign to a lot of people, and the different stages of litigation can require different strategies and points of reference from the parties.  Mediation is one of the aspects of litigation that can be confusing for parties in a lawsuit, but there are few ground rules to understand about the process that can make it a lot less daunting.  Mediation is a non-binding meeting where the parties in a lawsuit hire an independent third party (a retired judge or lawyer) to try to reach a settlement.  Here are five concepts all parties should understand about the mediation process:

1. The mediator’s role is to make you uncomfortable (but in a good way).

As I wrote in a prior post, a mediator’s only role is to get the case settled.  He or she is not there to be your friend, not to tell you what they feel the case is worth, or to protect your opponent’s position.  Their role is to get a settlement.  Put yourself in the mediator’s shoes, and you have two adversarial parties who hate each other and believe they will win if their case goes to trial.  How, as a mediator, do you get the parties to move off their respective beliefs?  You must attack both sides’ theory of the case by pointing out the weaknesses of each position.

So don’t take the attacks personally, or think that the mediator is only attacking your position.  If the mediator is persuasive about how weak your case is, she is equally persuasive to other side.  Understand also, that the attacks are not personal, it is not about you as a person, but instead about the facts of the case and weaknesses of the case.

2. Understand when being cooperative will help you get a better deal.

A party involved in a mediation must understand that there are two parts to a mediation: (1) the process and (2) the content.  The process is how you interact with the other party being negotiating against.  Are you cordial?  Do you make small talk?  The content is the subject being negotiated, such as the dollar amounts.  A party that is cooperative about the process and competitive about the content will do better overall in a mediation than compared to a party that is competitive on both the process and content.

Think about how you interact with someone that is simply being a jerk to you on ever little issue, even issues that do not impact the subject being negotiated.  When dealing with the hyper-competitive negotiator, your guard goes up and the negotiation turns more personal.  This is a bad combination for attempting to reach a reasonable settlement.

3. If you make a last, best and final offer, make it your last best and final offer.

Parties’ statements made during a mediation must have credibility.  If you make a “last, best and final offer” during a mediation, and the other side rejects the offer, but you continue to negotiate, you have lost credibility with the other party and the mediator.  As a result, even if you continue to negotiate and truly reach your last, best and final offer, the other side (and the mediator) will not believe that is your final number and will continue to push you beyond this number.  There are occasions to make a last, best and final offer, but if you qualify your offer as such, be ready to walk out of the mediation if the offer is rejected.

4. Bracketing.

Ralph Williams, a mediator with ADR Services, explains bracketing as follows:

Negotiation “bracketing” is the process of making a conditional offer linked to an expected response from the other side.  For example, plaintiff states, “I will demand $500,000 if the defendant offers $200,000.”  Defendant responds by accepting the bracket or proposing a different bracket (Defendant will offer $100,000 if plaintiff demands $400,000) or offering an absolute number.  Plaintiff then replies with one of the same three options.  Using negotiation “bracketing,” the parties send clear signals about their expectations, save time and avoid the stress of the negotiating dance that starts with a $1 million demand and a $10,000 offer.

In addition, brackets are conditional offers.  Therefore, unless the other side accepts the proposed bracket, the party making the offer is not committed to those numbers.  This allows parties to potentially make larger moves without the fear of having those moves held against them later in the mediation or in the case.

The use of bracketing during negotiations can add another layer of complexity to the settlement negotiations.  However, with advice from counsel about how to negotiate using brackets, they are an effective tool in resolving cases.  Understanding the concept of bracketing before a mediation – even at a very basic level – will help save time during a mediation and allow you keep your focus on the negotiation.

5. Enter the mediation prepared with a bottom walk-away number, but also a number that represents a goal.

It is important to know what your last best and final number is prior to going into the mediation.  Steve Pearl, a mediator with ADR Services, explains:

Experienced negotiators will set not only the walkaway numbers beyond which they will not move, but also goals that are better than those walkaway numbers. Parties who set “shoot for” numbers as their reference points typically do better than those who only formulate walkaway numbers.

However, just like almost every negotiation “rule” there are drawbacks in setting a walk-away numbers.  Pearl explains that sometimes parties may have to shift their reference points to resolve the case.  So, parties should have clear numbers set going into the mediation, but must also have a mechanism to reevaluate these goals if the case will not settle within these predetermined numbers.

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New California regulations impact employment practices such as English-only policies, height and weight requirements, and documents applicants or employees may be required to provide for employment.  California’s Fair Employment and Housing Council’s new regulations focused on preventing national origin discrimination go into effect July 1, 2018.  Employers should carefully review the new regulations to ensure policies are compliant and managers are following the new requirements.  It is also a good reminder for employers to review handbooks and policies at this mid-year point.  This Friday’s Five focuses on obligations created under the new FEHC regulations:

1. Regulations clarify definition of “national origin” and other terms.

The regulations set forth that “national origin” includes, but is not limited to, the individual’s or ancestors’ actual or perceived:

  • physical, cultural, or linguistic characteristics associated with a national origin group;
  • marriage to or association with persons of a national origin group;
  • tribal affiliation;
  • membership in or association with an organization identified with or seeking to promote the interests of a national origin group;
  • attendance or participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group; and
  • name that is associated with a national origin group.

The regulations also define “national origin groups” to include, but are not limited to, ethnic groups, geographic places of origin, and countries that are not presently in existence.

“Undocumented applicant or employee” means an applicant or employee who lacks legal authorization under federal law to be present and/or to work in the United States.

2. New regulations on English-only policies.

The FEHC regulations make it an unlawful employment practice for an employer to adopt or enforce a policy that prohibits the use of any language in the workplace, such as an English-only rule, unless:

(A) The language restriction is justified by business necessity;

(B) The language restriction is narrowly tailored; and

(C) The employer has effectively notified its employees of the circumstances and time when the language restriction is required to be observed and of the consequence for violating the language restriction.

A “business necessity” means an overriding legitimate business purpose, such that:

(A) The language restriction is necessary to the safe and efficient operation of the business;

(B) The language restriction effectively fulfills the business purpose it is supposed to serve; and

(C) There is no alternative practice to the language restriction that would accomplish the business purpose equally well with a lesser discriminatory impact.

It is not sufficient that the employer’s language restriction merely promotes business

convenience or is due to customer or co-worker preference.  In addition, English-only rules violate these rules unless the employer can prove the elements listed above.

Finally, the regulation makes it clear that English-only rules are never lawful during an employee’s non-work time, such as during breaks, lunch, unpaid employer-sponsored events.

3. Height and weight requirements may be discriminatory.

The FEHC believes that an employer’s requirement that certain positions in a company must meet certain height and weight requirements may have the effect of creating a disparate impact on members of certain national origins. The regulations explain that if an adverse impact is established, such requirements are unlawful, unless the employer can demonstrate that they are job related and justified by business necessity. Where such a requirement is job related and justified by business necessity, it is still unlawful if the applicant or employee can prove that the purpose of the requirement can be achieved as effectively through less discriminatory means.  As a side note, earlier in 2018 a California court held that obesity can qualify as a disability under California law as set forth in my prior article here.

4. Employers cannot require applicants or employees to present driver’s license unless certain exceptions apply.

Under the regulations, employers may only require an applicant or employee to “hold or present” a license issued under the Vehicle Code only if (1) the possession of a driver’s license is required by state or federal law, or (2) if the possession of a driver’s license is “otherwise permitted by law.”  The regulations set forth that an employer’s policy requiring applicants or employees to present driver’s license that is not applied uniformly to all employees or is inconsistent with a legitimate business reason would violate the law.  For example, if the possession of a driver’s license is not needed to perform an essential function of the position.

5. Anti-retaliation provisions.

The regulations explain that it is an unlawful employment practice to retaliate against any individual because the individual has opposed discrimination or harassment on the basis of national origin, has participated in the filing of a complaint, or has testified, assisted, or participated in any other manner in a proceeding in which national origin discrimination or harassment has been alleged.

Cheesecake Factory restaurants in Southern California were cited for $4.57 million for wage and hour violations and penalties by the Labor Commissioner earlier this week.  What may come as a surprise to many is that 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.  This Friday’s Five focuses on key takeaways for California employers from the Labor Commissioner investigation and citation:

1. Cheesecake Factory is being held jointly liable for the subcontractor’s wage violations under Labor Code section 2810.3.

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

2. 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, and negotiating a contract with the company providing that the contractor indemnifies the hiring company for any wage and hour violations.  The hiring company should also ensure that there are some assets or potential insurance that would be available should indemnity be required.

3. Review split shift policies to ensure compliance.

The Labor Commissioner found that the janitorial employees worked split shifts without being paid the split shift pay.  A split shift is defined in the California IWC Wage Orders as:

…a work schedule, which is interrupted by non-paid non-working periods established by the employer, other than bona fide rest or meal periods.

See Cal. Code Regs., tit. 8, § 11040, subd. 2(Q). If the employee works two shifts separated by more than a rest or meal period, they are entitled to receive one hour’s of pay at the minimum wage rate in addition to the minimum wage for that work day. See Cal. Code Regs., tit. 8, §11040, subd. 4(C). Any additional amounts over minimum wage paid to the employee can be used to offset the split shift pay due to an employee.  Additional information about split shifts can be read here.

4. Review meal break policies to ensure compliance.

The California Supreme Court made clear in Brinker Restaurant Group v. Superior Court that employers need to provide an employee their first meal break “no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10th hour of work.”  The following chart illustrates the timing requirements for meal breaks:

Meal breaks must be recorded.  Generally, meal breaks can only be waived if the employee works less than six hours in a shift. However, as long as employers effectively allow an employee to take a full 30-minute meal break, the employee can voluntarily choose not to take the break and this would not result in a violation. In Brinker, the Supreme Court explained that:

The employer that refuses to relinquish control over employees during an owed meal period violates the duty to provide the meal period and owes compensation [and premium pay] for hours worked. The employer that relinquishes control but nonetheless knows or has reason to know that the employee is performing work during the meal period, has not violated its meal period obligations [and owes no premium pay], but nonetheless owes regular compensation to its employees for time worked.

Employers should also establish a complaint procedure and provide that the company has a system in place to correct any violations. If during an investigation, the employer confirms that the employee in fact missed the break because of the rush of business or some other factor, the company should pay the employee the one hour “premium pay” penalty at the employee’s regular rate of pay. Also, the company should record these payments made to employees to be able to establish it has a complaint procedure in place to address missed breaks.  The employee is entitled to receive up to two hours of premium pay per day – one hour for missed meal breaks and one hour for missed rest breaks.  If the employee missed two meal breaks in one day, they would only be entitled to one hour of premium pay.  The same applies to rest breaks.  See UPS v. Superior Court.

5. Review rest break policies to ensure compliance.

In terms of rest breaks, the California Supreme Court held in Brinker that, “[e]mployees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on.”  The following chart sets forth the number of rest breaks employees are entitled to based on the number of hours worked:

The Wage Orders generally require that employers must provide a 10-minute rest period per every four hours worked and the break should, whenever practicable, fall in the middle of the work period. (See Wage Order 4, subd. 12(A).  The rest period must also be paid, and the law does not require that employers record when the employee takes the rest period (unlike an employer’s obligation to record when 30-minute meal breaks are taken).  The California Supreme Court made it clear in Augustus v. ABM Security Services, Inc. that employers must relieve employees of all work-related duties and they must be free from control of the employer during the rest breaks.  For more information about rest breaks, see my prior post here.

This Friday’s Five provides a few reminders about documenting employee performance. While good documentation is hard to gather at the time, it is critical in communicating clear objections to employees for better performance. Also, should a dispute arise that results in litigation, how well the employee’s performance was documented can be the different in winning or losing the litigation. You’ve probably heard these before, but these five reminders are a must for documenting employee performance:

1. Get employee feedback during counseling.

Employees are more likely to ultimately accept critical performance reviews if their feedback is heard. This does not mean that the employer must agree with the employee’s feedback, but just that the employer is considering their feedback in the decision-making process and the employee is not being pre-judged. A good example on how obtaining the employee’s feedback avoided a potentially embarrassing situation and harming a relationship with the employee was noted in an article by SHRM (“How to Create Bulletproof Documentation”). The article recalled a situation when a manager wanted to discipline an employee for being late to her new position in the company. But prior to issuing the discipline, the HR manager asked the manager to seek clarification from the employee about why she was late. The manager followed the advice, and it turned out that the employee’s tardiness was a result of employee providing training to the replacement at her prior position in the company.

2. Set clear consequences.

Employers need to be clear in their documentation of performance with employees. Set out clear benefits and consequences for the employee’s success or failure going forward. The documentation should not forget to document the positives if the employee improves. Likewise, while sometimes difficult to confront employees with the consequences for their failure to improve, it is critical to be clear. The documentation should be clear, such as: “Failure to improve performance as set forth in this review may result in further disciplinary actions, up to and including termination.”

3. Avoid vague language like “bad attitude” or “failure to get along with other employees.”

One of the hardest issues as a litigator is defending a wrongful termination claim when the documentation provided to the employee contains vague criticisms of the employee’s performance. Managers should avoid at all costs performance reviews that the employee has a “bad attitude.” If litigation ensues, and the company is forced to defend its decision to terminate the employee, and vague statements like this do not clearly establish the reasons for the termination. Instead a creative plaintiff’s lawyer can spin this language as evidence to support their allegation that the reason was based on the employee’s complaint, race, gender or age. A good practice is to use concrete examples in the performance review, such as:

  • You were 25 minutes late today.
  • Your conduct towards your coworker was unacceptable today when you informed Mr. Jones that “it was not your job to help him and he should know how to do these tasks by now.” You are expected to assist others in all aspects of their job, and to the extent they need additional help, you need to provide assistance to ensure that the customer’s needs are met.
  • You did not provide adequate customer service last Tuesday when you ignored the customer’s request for help in retrieving a different size three times.

4. Employees do not need to sign written performance warnings.

While it is a good practice to have employees sign performance reviews to avoid any disputes that they were never shown the performance review, it is no legal requirement to have the employee sign the document. Employees often object to signing documents criticizing their performance. There are two potential responses to this objection: 1) have the employee’s acknowledgment clearly state that the employee’s signature is only acknowledging receipt of the document, not agreeing with the content, or 2) if the employee simply refuses to sign, have the manager or a witness sign and date the document with a notation that the document was provided to the employee and he or she refused to sign.

Also, another misconception: there is no legal requirement that employees must be given three warnings prior to being terminated (as long as the company has maintained the employee’s at-will status).

5. Remember that write-ups and documentation do not have to be on any “official” forms.

Managers sometimes feel that they must wait until they can officially document an employee’s performance on the company’s official form. However, managers need to be trained on how to document performance and it must be made clear to them that while the company’s forms are preferred, documentation can be done on many formats, such as: e-mail to oneself or to HR, the manager’s log, any paper available, or even electronically on any other company device. I personally like when managers send emails to themselves documenting conversations with employees. Given the data associated with e-mails, such as time and date created, e-mails are excellent documentation of a manager’s conversation with an employee about performance issues. Managers should also be reminded that they need to document verbal warnings in some manner – if the verbals are not documented, it is as if they never occurred.