The beginning of 2019 brought substantial employment case settlements and verdicts.  This Friday’s Five reviews the settlements and verdicts that should catch the attention of all employers, as well as a review of the U.S. Supreme Court’s new ruling on arbitration agreements for transportation workers:

1. Restaurant settles claim with Labor Commissioner for $4 million covering approximately 300 employees.

The restaurant chain in the San Francisco bay area, Rangoon Ruby, settled a Labor Commissioner claim involving more than 300 employees for $4 million.  The damages included payments for unpaid overtime wages, minimum wages, split shift premiums, liquidated damages, waiting time penalties, and failure to provide accurate itemized wage statements.

2. ABM Industries settles class action lawsuit for $5.4 million for required used of cell phones.

In the case, Castro v. ABM Industries, Inc., plaintiffs alleged that the employer required its employees to use their cell phones for business purposes and were not reimbursed for the costs associated with the cell phone use as required under Labor Code section 2802.  Plaintiffs contended they were required to use their cell phones to clock in and out for work and to communicate with their supervisors.

Employers need to be careful regarding requiring employees to use certain apps or their cell phones for work purposes.  As new work-related apps find their way into the workplace, employers need to be careful of claims that the use of their personal cell phone for work purposes was required.  Apps used in the workplace for timekeeping, scheduling, and reporting complaints to employers could be susceptible to these types of allegations.

Indeed, it is a good reminder for employers that employers are still required to reimburse employees for the expense of cell phone use even though the employee did not pay additional cell phone fees for using their cell phone for work purposes.  See prior post on holding in Cochran v. Schwan’s Home Service here.

Plaintiff’s motion for preliminary approval of the class action settlement can be found here.

3. Virgin America flight attendants awarded $77 million in wage and hour class action.

A federal judge awarded a class of flight attendants the money after entering summary judgment against the airline for California flight attendants that were not paid for all hours worked, overtime premiums, missed meal and rest breaks, and inaccurate wage statements.  The court also found the airline liable for waiting time penalties under Labor Code section 203 and awarded derivative penalties under California’s Private Attorney General Act (“PAGA”).  The case is Bernstein v. Virgin America Inc.

4. California Senate settles harassment claim for $350,000.

The Senate settled the lawsuit in November 2018, but was recently reported by the Los Angeles Times.  The lawsuit alleged that a former staffer was terminated in retaliation for reporting being raped by an Assembly legislative aide in December 2016.  On a similar note, the California legislature passed many new #metoo laws in 2018.

5. Supreme Court narrows enforceability of arbitration agreements for transportation workers.

Plaintiff filed a wage and hour class action against New Prime, a trucking company.  New Prime filed a motion to compel arbitration under the Federal Arbitration Act.  Plaintiff countered that the employer could not enforce its arbitration agreement with him because §1 of the FAA exempts from arbitration disputes involving “contracts of employment” of certain transportation workers.  New Prime argued that the question of §1’s applicability in this case is for the arbitrator to decide, and even if the court could decide the issue, plaintiff in this case was an independent contractor.  Therefore, §1’s exclusion from arbitration would not apply in this case.

The Supreme Court framed the two issues as follows:

When a contract delegates questions of arbitrability to an arbitrator, must a court leave disputes over the application of §1’s exception for the arbitrator to resolve? And does the term “contracts of employment” refer only to contracts between employers and employees, or does it also reach contracts with independent contractors?”

The Supreme Court answered the first issue in explaining that “a court should decide for itself whether §1’s ‘contracts of employment’ exclusion applied before ordering arbitration.”  The Supreme Court answered the second issue in explaining that the Federal Arbitration Act’s term “contracts of employment” referred to agreements to perform work, which would also include agreements with independent contractors.  Therefore, the Court held that §1 of the FAA precluded New Prime from compelling arbitration of the plaintiff’s claims in this case.  The case is New Prime Inc. v. Oliveira.

Recently I had the opportunity to interview Nolan Bushnell and Jason Crawford, co-founders of Modal Systems, a LA based virtual reality start-up company.  Nolan is a serial entrepreneur who has founded many companies, but you probably recognize Atari and Chuck E. Cheese as his most notable.  My full interview is available on iTunes here.

The most notable lessons for entrepreneurs from the interview:

1. Leaders are always learning.

I had an outline of issues to discuss with Nolan and Jason, but the interview quickly moved away from any planned discussion.  Soon we were discussing base reality and philosophy.  The discussion covers philosophy, management issues, and what are common traits of creative people.  As the discussion illustrates, both Nolan and Jason are constantly learning.

2. Entrepreneurs are creatives that have interests in many different areas.

Both Nolan and Jason have interest in many topics.  Jason comes to the VR world from a music background.  Nolan’s an engineer by training, but is responsible for founding the video gaming industry as we understand it today.

3. Chance plays a role in entrepreneurship.

The background of how Jason and Nolan connected an eventually formed Modal is interesting.  It also shows that there is an element of chance that comes into play for entrepreneurs.  Entrepreneurs have to be flexible, and opportunities arise unexpectedly.

However, while chance plays a role, entrepreneurs take advantages of opportunities.  The discussion with Nolan and Jason illustrates that they are always thinking about the opportunities presented to them.  They are always thinking about how to improve the status quo, and when chance opens up an opportunity, they act on it.

4. Being good in school does not equal success as an entrepreneur.

I’m a strong believer in a good education, but simply because an entrepreneur is in the top of his or her class does not predict success in business.  Nolan is a prime example of this, he almost brags about the fact that he was close to the bottom of his engineering class in college.

5. LA’s startup-eco system is strong.

 

Enjoy the interview.  The first part of the full interview is posted on my YouTube channel as well:

Employers should remember to take time to review their employee documentation, retention policies, and how this information is being saved on a periodic basis.  The beginning of 2019 it is a great time to review these items to ensure compliance with the law and to make the best defense against litigation.  The first article in this series of posts covered hiring practices audit for 2019, this post deals with records.  The next post will cover topics for a wage and hour audit.  Five record retention issues employers should audit at the beginning of 2019:

1. Are employee time records maintained for at least four years?

The statute of limitations can reach back four years in wage and hour class actions under California law, and time records will be the primary issues in most cases.  California law requires employers to track start and stop times for hourly, non-exempt employees. The law also requires employers to track the start and stop times for the employee’s thirty-minute meal periods. The time system needs to be accurate.  Employers need to be involved in the installation and setup of the system and not simply use the default settings for the hardware and software. Understand what the system is tracking and how it is recording the data.  Employers should also have a complaint procedure in place and regularly communicate the policy to employees in order to establish an effective way to remedy any issues.

2. Are pay stubs and schedules backed-up and saved by the employer? 

Under Labor Code section 226, employers are required to provide employees with pay stubs “semimonthly or at the time of each payment of wages.”   Section 226 requires that employers keep a copy of the pay stubs for “at least three years.”  Section 226(a).  As mentioned above, because the statute of limitations for labor code violations can extend back four years, many employers retain these records for a four-year period.

In addition, employers should also review where and how the pay stubs are being saved.  Electronic copies of the pay stubs are permitted under section 226 as long as the electronic backup accurately shows all of the information required to be on the pay stubs.

Employers should not rely upon their payroll company to retain copies of these documents.  First, the obligation falls on the employer do retain these, and many payroll companies do not necessarily save this information.  Second, if the company changes payroll companies, it may be difficult to access the payroll information from the former payroll company.

Often overlooked, but critical in defending wage and hour lawsuits are employee schedules.  Given the four-year statute of limitations for wage claims, many employers are also maintaining copies of employee schedules for four years.

3. Are employee files maintained confidentially and for at least four years?

California law does not define the terms “personnel records” or “personnel file,” and this creates considerable ambiguity about what documents should be kept in an employee’s personnel file.
While not legally binding on employers, there is some guidance from the Division of Labor Standards Enforcement(“DLSE”) expressing the following view:

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):
1. Application for employment
2. Payroll authorization form
3. Notices of commendation, warning, discipline, and/or termination
4. Notices of layoff, leave of absence, and vacation
5. Notices of wage attachment or garnishment
6. Education and training notices and records
7. Performance appraisals/reviews
8. Attendance records

Employers should also consider placing the following documents in personnel files:

  • Signed arbitration agreements
  • Sexual harassment compliance records for supervisors
  • Sign acknowledgements of policy by employee (for example, confidentiality/proprietary information agreements, meal and rest break acknowledgments, handbook acknowledgments)
  • Wage Theft Protection Act notice for non-exempt employees
  • If commissioned employee, written commission agreement signed by both the employer and employee beginning January 1, 2013.
  • Warnings and disciplinary action documents.
  • Performance reviews
  • Documents of any grievance concerning the employee
  • Documents pertaining to when the employee was hired
  • Records pertaining to last day of work and documenting reason for departure from employment

4. Are Forms I-9 being maintained long enough and in a manner easily retrievable?

Employers must keep I-9 forms for three years from the employee’s date of hire, or one year after termination, whichever is longer. Employers have at least three business days to produce Forms I-9 during an inspection.  More information about the Form I-9 can be read here.

5. Are managers and supervisors trained about the company’s forms/documents available to them, what must be documented, and who is responsible for saving the documents?

Even if the employer has valid policies about document retention, it is irrelevant if the managers and supervisors are not also trained about the policies:

    • Do supervisors understand which forms are available to them to document discipline, employee absences, and other routine issues?
    • Who is involved in reviewing disability accommodation requests and how are these documented?
    • Do the managers have standard forms for the following:
      • Employee discipline and write-ups.
      • Documenting employee tardiness.
    • How are employee absences documented?
    • How is the employee documentation provided to Human Resources or the appropriate manager?
    • Who is responsible for saving the document in the paper file or electronically?

Happy New Year!  This Friday’s five video covers five reminders about the minimum wage increase:

1. As of January 1, 2019, the minimum wage in California increased from $11.00 to $12.00 per hour for employers with 26 or more employees (the increase is from $10.50 per hour to $11.00 per hour for employers with 25 or fewer employees on January 1, 2019). 

2. With the increase in the state minimum wage, there is a corresponding raise in the minimum salary required to qualify as exempt under the “white collar” exemptions. 

Therefore, on January 1, 2019, in order to qualify for a white collar exemption, the employee must receive an annual salary of at least $49,920 for large employers and $45,760 for small employers.

3. Salary amount need to be guaranteed, fixed amount.

4. The law also requires that the employee perform more than 50% of their time performing exempt duties. 

More information about the types of duties that qualify for the white collar exemptions can be read at my prior post here.

5. Employers bear the burden of proof to establish the exemptions.

With the start of 2019, it is a great time to audit employment policies and practices.  The next series of posts will be a review of a few practices California employers should review on a periodic basis.  The posts will cover the following topics: the hiring process, employment records (what should be kept and for how long), wage and hour issues, end of employment issues, and will conclude with training requirements for supervisors and employees.  Obviously, it is important to work with a qualified attorney to ensure compliance, but I wanted to highlight a few issues on these topics that employers can use to start a self-audit that then can be used to save time and money when reviewing with an attorney.

Five areas to audit regarding the hiring process in California:

1. Are applications seeking appropriate information?

2. Are new hires provided with required policies and notices?

3.  Are new hires provided and acknowledge recommended policies?

  • For example: meal period waivers for shifts less than six hours

4. Are hiring managers trained about the correct questions to ask during the interview?

5. Does the company provide new hires (and existing employees) with arbitration agreements?

Wishing you and your company the best in 2019!

Merry Christmas and Happy Holidays!  I hope everyone is spending some quality time with family members.  In part to give me a bit of a break from creating entirely new content, this holiday edition of Friday’s Five is five recent videos from my YouTube channel:

1. Holiday leave policies:

2. Understanding the mediation process:

3. Meal and rest break update for 2018:

4. 5 key concepts California managers need to understand:

5. Strategies for defending a labor commissioner claim:

Wishing you and your family the best during the holidays!

To qualify as an exempt employee, California requires that an employee must be “primarily engaged in the duties that meet the test of the exemption” and “earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” Labor Code section 515. This forms the two-part test the employees must meet to be exempt: (1) the salary basis test and (2) the duties test. Here are five general issues employers should know about the salary basis test going into 2019:

1. Salary required to meet “white collar” exemption increases on January 1, 2019.

To be exempt from the requirement of having to pay overtime to the employee, the employee must perform specified duties in a particular manner and be paid “a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” (Lab. Code, § 515, subd. (a).)  As of January 1, 2019, the minimum wage in California increased from $11.00 to $12.00 per hour for employers with 26 or more employees (the increase is from $10.50 per hour to $11.00 per hour for employers with 25 or fewer employees on January 1, 2019).  With the increase in the state minimum wage, there is a corresponding raise in the minimum salary required to qualify as exempt under the “white collar” exemptions.  Therefore, on January 1, 2019, in order to qualify for a white collar exemption, the employee must receive an annual salary of at least $49,920 for large employers and $45,760 for small employers.

2. Salary must be predetermined and guaranteed.

The court in Negri v. Koning & Associates set forth that in order to qualify as a “salary” the pay “must still be a predetermined amount that is not subject to reduction based upon the quantity or quality of work.”  Therefore, bonuses, commissions, and other payments made to the employee during the course of the year are usually not considered part of the employee’s salary to qualify as exempt.  Employers need to be careful about the salary calculation to ensure the employee is paid a sufficient salary that qualifies the employee as exempt.

3. The employee’s salary cannot be reduced for quality or quantity of work.

In Negri v. Koning & Associates (2013), an insurance claims adjuster challenged his employer’s exempt classification of his job.  The plaintiff was paid $29 per hour with no minimum guarantee, and when he worked more than 40 hours in a week, he still only received $29 per hour.  The employer attempted to argue that the plaintiff was an exempt employee under the administrative exemption.  The court rejected the employer’s position in holding that because the employee did not receive a guaranteed amount in “salary”, the employee did not meet the salary basis test to qualify as exempt.  In determining what constitutes a salary, the court looked to federal law:

An employee is paid on a “salary basis” if the employee “regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. Subject to the exceptions provided in paragraph (b) of this section [(relating to absences from work)], an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for any workweek in which they perform no work. An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.” (29 C.F.R. § 541.602(a) (2012)

Therefore, because the plaintiff’s pay varied according to the amount of time he worked, and was not guaranteed a base amount, he did not meet the salary basis test and was found to be non-exempt.

4. If misclassified, the employee is entitled to unpaid overtime.

For all non-exempt employees, overtime is owed at a rate of one and one-half times the employee’s regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek.  Double the employee’s regular rate of pay is owed for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.  California’s Department of Industrial Relations FAQ on California overtime provides a good overview of the overtime requirements under California law.  In addition to the unpaid overtime that is owed to misclassified employees, employers also fact substantial penalties that accrue as a result of the employee not being paid all wages when earned.

5. Employers bear the burden of proof in establishing the exemption.

California courts have made clear that the employer bears the burden of proof when asserting that an employee is an exempt employee.  “[T]he assertion of an exemption from the overtime laws is considered to be an affirmative defense, and therefore the employer bears the burden of proving the employee’s exemption.”  Ramirez v. Yosemite Water Co. (1999).

As we are in the midst of the holiday season, employers need to be mindful about the parameters that may apply when granting employees time off to volunteer, paying employees to volunteer to support a cause, and other potential issues involving volunteer time.  This topic was raised as a suggestion from a regular reader of the blog, and if you have any topics you would like to see covered, please let me know.  This Friday’s Five covers five issues employers need to be aware of regarding time off and pay issues for volunteer time:

1. When does an employer need to pay for employee’s volunteer time?

The California Division of Labor Standards Enforcement (DLSE) issued some guidance for California employers in an opinion letter addressing whether workers for religious organizations are employees or volunteers.  The DLSE took the position that “the intent of the parties is the controlling factor.  If the person intends to volunteer his or her services for public service, religious, or humanitarian objectives, not and an employee and without contemplation of pay, the individual is not an employee….”  The DLSE continued explaining that employees of the religious, charitable, or non-profit organization can donate services as a volunteer, but these services cannot be of the “usual services of that employees’ job.”

The United States Department of Labor issued an opinion letter on the issue under federal law similar to California’s DLSE.  The DOL maintained that “time spent in work for public or charitable purposes at the employer’s request, or under his direction or control, or while the employee is required to be on the premises, is working time. However, time spent voluntarily in such activities outside of the employee’s normal working hours is not hours worked.”

The DOL explained:

Therefore, the employer need not compensate an employee for time spent volunteering for charitable purposes if the work is performed outside of normal working hours and the employee is truly volunteering, not performing the volunteer work as a result of coercion or pressure by the employer.

The DOL’s opinion letter sets forth that under federal law, an employer who encourage employees to volunteer for “public or charitable purposes” outside of normal working hours is not obligated to pay wages to the employee as long as participation is optional.  If the employee does not participate in the volunteer activity, this “will not adversely affect working conditions or employment prospects.”

2. Volunteer firefighters, reserve peace officers or emergency rescue personnel are provided with protected time off under California law. 

California’s Labor Code, Sections 230.3 and 230.4 provide leave protections to employees who volunteer as a firefighter, reserve peace officer, and emergency rescue personnel.  An employer cannot not discharge or discriminate against an employee for taking time off to perform emergency duty as a volunteer firefighter, a reserve peace officer, or emergency rescue personnel.  In addition, employers with 50 or more employees must allow employees to take temporary leaves of absence, not to exceed an aggregate of 14 days per calendar year, for the purpose of engaging in fire, law enforcement, or emergency rescue training.

3. Civil Air Patrol members are provided protected time off under California law. 

Labor Code sections 1501 and 1503 provide that employers are required to allow employees no less than 10 days per calendar year of unpaid Civil Air Patrol leave to an employee who responds to an emergency operational mission of the California Wing of the Civil Air Patrol.

4. Employers need to be careful in permitting volunteer time for certain limited causes. 

If employers do allow employees unpaid time off to volunteer for certain causes, the employer should be careful that the causes supported by the company are not viewed as supporting one political view or cause.  For example, Labor Code section 1101 prohibits employers from forbidding or preventing employees from engaging or participating in politics or from becoming candidates for public office.  The law also prohibits employers from “controlling or directing, or tending to control or direct the political activities or affiliations of employees.”  Section 1102 prohibits employers from coercing or influencing employees through the threat of discharge or loss of employee to “adopt or follow or refrain from adopting or following any particular course or line of political action or political activity.”  Employers developing a volunteer time off policy must keep these requirements in mind in order to avoid any potential claims that the policy violates this labor code section.

5. Approach unpaid internships with caution. 

Sometimes workers that are young or are looking to break into a new industry will volunteer as an intern without pay for a company or individual to learn the industry and develop contacts.  In April 2010, the DLSE issued an opinion letter setting for the analysis it would conduct in making a determination regarding whether an intern is properly classified.  In its opinion letter, the DLSE set forth that it would examine the following factors:

  1. The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;
  2. The training is for the benefit of the trainees or students;
  3. The trainees or students do not displace regular employees, but work under their close observations;
  4. The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may actually be impeded;
  5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

While these factors are a fairly loose test, an intern attempting to challenge the classification as an intern would probably have at least a few good facts to support their position. This is why California employers need to approach the intern classification with caution.

Here are five considerations that should be on the top of every employer’s mind in California when interviewing applicants for an open position.

1. Does the applicant’s actions back-up their interview?

Don’t come to an interview saying that you have a passion for business development and marketing, but when I review your LinkedIn page you have five connections and have never written any articles on your subject matter.  You don’t have to have 1,000 connections either, but employees saying they are interested in marketing need to back this up with some actions.  And no, your 1,000 followers on your Instagram account that only has pictures of where you eat and vacation does not count either.

2. Will the applicant commit the “unforgivable sin”?

Gary Vaynerchuk explains that being able to put in long hours is not a skill that he looks for in every employee.  The “unforgivable sin” for Vaynerchuk is if employees cannot get along with co-workers, are disrespectful, selfish, or create conflict.  How can an employer find out if an applicant is not a team player?  Seeing how the applicant treats the receptionist upon arriving for the interview and how they treat the waiter at the lunch meeting can be key indicators.  Calling references provided by the applicant can lead to good information.  Also, asking around with colleagues and your network about people can surprisingly lead to great information about applicants.  For example, it amazes me how many attorneys know of other attorneys in Los Angeles and how important one’s reputation is even in a large legal community like Los Angeles.

3. Does the employer follow-up with references provided by applicant?

It is a good practice to follow-up with the applicant’s references provided.  I’m also a big proponent of conducting a search of the applicant’s background on the Internet.  For some issues that may arise when an employer uses the Internet to do a search on an applicant, my previous article on the topic can be read here.

4. Does the employer understand obligations when conducting non-criminal background checks?

When conducting background checks on applicants and employees, employers need to take time to review the applicable state and federal laws that apply to background checks.  LinkedIn was sued previously for violation of the federal Fair Credit Reporting Act (FCRA) for certain background reports it generated for users of the site.  In addition, under California law, the Investigative Consumer Reporting Agencies Act and the Consumer Credit Reporting Agencies Act could apply to background checks in the employment context.  These laws are very complex, and employers should enter this area with the knowledge of their obligations before conducting background checks.  For more information about background checks, please see my previous article here.

5. Does the employer understand state and local criminal history background check prohibitions?

Effective January 1, 2018 California employers cannot ask an applicant for employment to disclose information about criminal convictions.  The new law (added as Section 12952 to the Government Code) applies to employers with 5 or more employees.  Once an offer of employment has been made, employers can conduct criminal history background checks, but only when the conviction history has a “direct and adverse relationship with the specific duties of the job,” and requires certain disclosures to the applicant if employment is denied based on the background check.  In addition, local governments, such as Los Angeles and San Francisco have implemented their own prohibitions on criminal history checks, and employers must also comply with these local requirements.  Don’t forget about California’s prohibition on inquiring about applicant’s prior salary history as well.

Happy Thanksgiving!  I hope everyone is getting some time to relax and enjoy some time with their families.  Entering the holiday season, it is a good time to review employer’s obligations to accommodate requests for time off for holidays and best pay practices during holiday leaves.  This Friday’s Five covers five reminders for employers about holiday leaves and pay:

1. California employers are not required to provide employees time off for holidays.

There is no requirement that California employers provide time off (except for religious accommodations – see below) for holidays. California’s DLSE’s website states the following:

Hours worked on holidays, Saturdays, and Sundays are treated like hours worked on any other day of the week. California law does not require that an employer provide its employees with paid holidays, that it close its business on any holiday, or that employees be given the day off for any particular holiday.

2. California employers are not required to pay for time off for holidays, nor are they required to pay additional wages if employees work on holidays.

Likewise, there is no requirement that employers pay employees extra pay or “holiday pay” for work performed on holidays. Employers can voluntarily agree to pay employees extra pay for work that is required during holidays, but these terms would be governed by policy set forth by the employer. Therefore, employers are urged to make sure their holiday pay policies are clearly set forth.

California’s legislature has proposed bills that would require certain employers to pay employees double time for work done on Thanksgiving, but none of these bills have become law.  For example, the “Double Pay on the Holiday Act of 2016” proposed to require an employer to pay at least 2 times the regular rate of pay to employees at retail and grocery store establishments on Thanksgiving. None of these attempts by the legislature have been successful yet in requiring California employers to pay any extra “holiday pay.”

3. Employers must provide reasonable accommodations for employees who cannot work on certain holidays due to religious observances.

Employers need to be aware of any religious observances of their employees since employers need to provide reasonable accommodations for employees due to religious reasons. The analysis of reasonable accommodation is required is a case by case analysis based on the company’s type of business and the accommodation requested by the employee. If the employer’s operations require employees to work during normally recognized holidays, such as a restaurant, then this should be communicated to employees in the handbook or other policies and set the expectation that an essential function of the job requires work during normal holidays.

4. If an employer does pay for time off during holidays, the employer does not have to allow employees to accrue holiday paid time off.

If an employee leaves employment before the holiday arrives, the employer is not required to pay the employee for the day off.  But the employer’s policy regarding holiday pay must clearly set out that this benefit does not accrue to employees and that they must be employed during the specific holidays to receive the holiday pay.  Often the employer will also require that the employee works the days leading up to and following the holiday in order be eligible for the holiday pay.

5. If a pay day falls on certain holidays, and the employer is closed, the employer may process payroll on the next business day.

If an employer is closed on holidays listed in the California Government Code, then the employer may pay wages on the next business day.