USCIS has published a revised Form I-9 that employers can begin to use immediately.  The old Form I-9 that has the revision date of 03/08/13 can be used until January 22, 2017.

USCIS published two versions of the Form I-9 – one form that can be completed on a computer, and another that is the traditional PDF version that can be printed and completed.

The USCIS hosted a teleconference today that explained some of the updates to the form.  During the teleconference, the following issues were addressed:

  • The USCIS explained that P.O. Boxes are no longer expressly prohibited in section 1 information about the employee.  However, employers cannot use a P.O. Box for their addresses in section 2 of the form.
  • The new form is only required for new hires or for re-verifying employee’s information.  It is not required for current employees who completed the old Form I-9 to complete the revised Form I-9.
  • On the teleconference there were a number of questions about the application of e-signatures when completing the I-9.  During the teleconference, the USCIS deferred answering any specific questions about e-signature options.  However, the Handbook for Employers provides the following:

If you complete Forms I-9 electronically using an electronic signature, your system for capturing electronic signatures must allow signatories to acknowledge that they read the attestation and attach the electronic signature to an electronically completed Form I-9. The system must also:

1.      Affix the electronic signature at the time of the transaction;

2.      Create and preserve a record verifying the identity of the person producing the signature; and

3.      Upon request of the employee, provide a printed confirmation of the transaction to the person providing the signature.

Employers who complete Forms I-9 electronically must attest to the required information in Section 2 of Form I-9.

During the teleconference, it was stressed by USCIS that electronic signatures are acceptable given that the software complies with the USCIS regulations.

  • Do employers have to provide the instructions to the employee when presented the Form I-9?  When on the computer, provide them with internet access so that they can click on the top of the page so that they can review the instructions.  If there is no internet access, you have to provide the instructions to the employee – print or download the instructions for the employee to read the 15 pages of instructions.

Finally, a note of caution for employers who retain copies of Form I-9 documentation.  The Handbook for Employers provides that if an employer chooses to retain copies of an employee’s documents, the employer must do so for all employees, regardless of national origin or citizenship status.  Failure to keep records for all employees could be in violation of anti-discrimination laws.

For more information, employers can visit the USCIS’ website at: https://www.uscis.gov/i-9

What a week – and here we are at Friday already.  This Friday’s Five focuses on how President Trump could change the employment landscape on the federal and California levels.

1.      Department of Labor’s overtime regulations effective December 1, 2016 are still on course to take effect, but could be changed in 2017.

As I’ve written about previously, the DOL has issued changes to the federal rules raising the salary required for employees to qualify as exempt employees.  The DOL raised the salary required to $47,476 annually for a full time worker, and this change is effective December 1, 2016.  Mr. Trump will obviously be unable to roll back this increase until he is inaugurated as president.  However, there have been discussions that congress and some legal actions could prevent this requirement from taking effect, but prudent employers should continue to proceed to comply with the new requirement on December 1, 2016.  It is likely that this regulation will be carefully reviewed by President Trump, but any changes he potentially could make would likely not be effective until mid or late 2017.

2.      Immigration and E-verify issues.

During the campaign, Trump stated that he would mandate employers use the E-verify program to check on applicants’ right to work within the United States.  The system is available for employers to use currently, but Federal law does not require employers to use the system, and some states require its use.  However, employers in California are not currently required to use E-verify.

3.      Minimum wage.

During the campaign, Mr. Trump supported the idea of raising the federal minimum wage from $7.25 per hour to $10 per hour.  In July of 2016, Mr. Trump made statements that he supported this increase, and also supported the idea that states could set a higher minimum wage.  Of course, given California’s current minimum wage is set at $10 per hour, an increase on the federal level will probably not impact California employers, as California’s minimum wage is increasing to $10.50 per hour on January 1, 2017, $11 per hour on January 1, 2018, and then $1 per year thereafter until it reaches $15 per hour in January 2022.  These increased are delayed by one year for employers with 25 or fewer employees.

4.      Paid maternity leave.

Mr. Trump’s website proposes that he would support a law providing 6 weeks of paid leave to new mothers before returning to work.  Currently, under the FMLA, employers with 50 or more employees are required to provide up to 12 workweeks of unpaid, job-protected leave for the birth of a child and care for a newborn.

5.      Implementation of more local laws expected. 

As we have seen here in California, local cities and counties have taken the minimum wage and paid sick leave issues into their own hands and require employers to comply with more restrictive laws than those passed on the state or federal level.  Just in Southern California for example, there are many different minimum wage and paid sick leave laws that employers need to be aware of and comply with.  This local legislation makes it hard for businesses that have more than one location, as the laws require different policies, notices, pay requirements, and tracking obligations for each location.

Interested in learning more about employment law updates facing California employers?  My firm is hosting a webinar on December 13, 2016, discussing the new laws employers must comply with in 2017 and an update on the litigation front.  Click here to register.

With attention on the DOL’s salary increase required to meet the white collar exemptions, it is important for employers to remember that this is only one-half of the test to qualify for as an exempt employee.  The law also requires that the employee perform more than 50% of their time performing exempt duties.  For this week’s Friday’s Five, here are five examples of duties that qualify as exempt duties for the administrative exemption (click here for a description of some of the different exemptions that exist):

1.      Insurance claims adjusters

Insurance claim adjusters whose duties include activities such as interviewing insureds, witnesses and physicians; inspecting property damage; reviewing factual information to prepare damage estimates; evaluating and making recommendations regarding coverage of claims; determining liability and total value of a claim; negotiating settlements; and making recommendations regarding litigation.

2.      Financial services industry employees

Employees in the financial services industry whose duties include work such as collecting and analyzing information regarding the customer’s income, assets, investments or debts; determining which financial products best meet the customer’s needs and financial circumstances; advising the customer regarding the advantages and disadvantages of different financial products; and marketing, servicing or promoting the employer’s financial products.

3.      Executive assistants

An executive assistant or administrative assistant to a business owner or senior executive of a large business generally meets the duties requirements for the administrative exemption if such employee, without specific instructions or prescribed procedures, has been delegated authority regarding matters of significance.

4.      Human resource managers

Human resources managers who formulate, interpret or implement employment policies and management consultants who study the operations of a business and propose changes in organization generally meet the duties requirements for the administrative exemption.

5.      Purchasing agents

Purchasing agents with authority to bind the company on significant purchases generally meet the duties requirements for the administrative exemption even if they must consult with top management officials when making a purchase commitment for raw materials in excess of the contemplated plant needs.

6.      (bonus) Property managers

In McKee v. CBF Corp. C.A. 5 (Tex) the court held that under the Fair Labor Standards Act (FLSA), that a “property manager” was an exempt employee under the administrative exception when her duties including overseeing the employer’s properties, ensuring they were properly maintained.  She also supervised five maintenance employees, approving their schedules and vacation time.  In addition, the property manager had employees reporting to her, as managers would generate a list of issues to be addressed on a daily basis.  She would decide which of these issues would be handled by outside contractors and tasking her employees to individual assignments.

Employers must be careful about this analysis, as California law can differ from federal law.  Therefore, experienced counsel should be consulted when conducting an audit regarding whether an employee is properly classified as an exempt employee.

This Friday’s five summarizes five new laws that were just approved by the Governor last week, and California employers need to heed going into 2017:

1. AB 1843 – Juvenile Criminal History

The new law prohibits employers from asking or taking into consideration juvenile convictions.

The law states, “employers [are prohibited] from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.”  Effective January 1, 2017

2. AB 1676 – Wage Discrimination

Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work for work performance that requires equal skill, effort, and responsibility that are performed under similar working conditions.  This law now establishes that an employee’s prior salary cannot, by itself, justify any disparity in compensation.  It is important to note the bill was modified to take out language that would have prohibited employers from obtaining an applicant’s prior salary.

3. AB 1063 – Wage Differential – Fair Pay Act Expanded to Protect Race and Ethnicity

Current law prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work.  This law expands the prohibition of a wage differential based on an employee’s race or ethnicity for substantially similar work.

4. SB 1001– Immigration Documents

This law prohibits employers from doing any of the following:

  1. Request more or different documents than are required under Federal law.
  2. Refuse to honor documents tendered that on their face reasonably appear to be genuine.
  3. Refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work.
  4. Attempt to reinvestigate or reverify an incumbent employee’s authorization to work using an unfair immigration-related practice.

For any violations, workers may file a complaint with the Department of Labor Standards Enforcement and can recover penalties up to $10,000.  The law is effective January 1, 2017

5.  AB 2337– Notice: Domestic Violence Protection

Employers with 25 or more employees must provide employees written notice about their rights under the domestic violence protections under California law.  The Labor Commissioner must develop a noticed employers can use by July 1, 2017.  Employers do not have to provide the notice until the Labor Commissioner posts the notice.

(Bonus – It is California, and I could not limit the list to only five) SB 1241 – Arbitration Agreements Venue and Choice of Law

This law restricts employers from requiring employees who primarily reside and work in California to adjudicate claims outside of California when the claim arose in California, or deprive employees of California law with respect of claims arising in California.  Employers should carefully review their arbitration agreements with California employees to ensure that the agreement does not have a choice of law provision that applies another state’s law to the agreement or require any claims be adjudicated outside of California.  The effective date for the law is January 1, 2017.

This Friday’s Five is a bit of everything: news, new California employment laws, and reminders about October 1 deadlines for the City of San Diego:

 1. House moves to delay DOL overtime rule implementation.

There is a great article by Lisa Jennings from Nation’s Restaurant News summarizing the House’s move to delay the overtime rule implementation, which is set to go into place on December 1, 2016.  The White House has already threatened to veto the bill if it makes it to the President’s desk.  For more information about the DOL overtime rules, visit my posts here.

2.  San Diego employers need to ensure they are in compliance with the October 1, 2016 deadline.

The City of San Diego’s new paid sick leave law (and its “implementing ordinance”) requires employers to provide written notice to employees about the paid sick leave law by October 1, 2016 (yes – that is tomorrow).  The Implementing Ordinance requires that every employer must also provide each employee at the time of hire, or by October 1, 2016, whichever is later, written notice of the employer’s legal name and any fictitious business names, address, and telephone number and the employer’s requirements under the law.  The notice must also include information on how the employer satisfies the requirements of the law, including the employer’s method of earned sick leave accrual.  The notice must be provided to employees in English and in each employee’s primary language, if it is a language if it is spoken by at least five percent of the employees at the employer’s workplace.  Employers may provide this notice through an accessible electronic communication in lieu of a paper notice.  The City published a form notice to comply with these requirements, which can be downloaded here.

3.  Governor signs law making it illegal for out-of-state employers to have their disputes heard outside of California.

Governor Brown signed S.B 1241 into law that restricts employers from requiring employees who primarily reside and work in California to adjudicate claims outside of California when the claim arose in California, or deprive employees of California law with respect of claims arising in California.

Employers should carefully review their arbitration agreements with California employees to ensure that the agreement does not have a choice of law provision that applies another state’s law to the agreement or require any claims be adjudicated outside of California.  The effective date for the law is January 1, 2017.

4.  New CA law prohibits employers from asking about juvenile convictions.

A.B. 1843, signed into the law by Governor Brown on September 27, 2016 prohibits employers from asking or taking into consideration juvenile convictions.  The law states, “employers [are prohibited] from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.”

5. NCAA and Pac-12 sued by former USC football player for unpaid wages.

An interesting class action lawsuit was filed by a former USC football player claiming that the NCAA and Pac-12 violated the Fair Labor Standards Act and California law by not paying football players minimum wage or overtime.  This is a different twist to the often debated issue of whether college athletes should be allowed to accept endorsement money.  It will be interesting to see how the lawsuit develops: on one side there is an argument that as the college sports programs have turned into huge profit generating centers sports, not academics could be seen as the primary focus for these athletes, but on the other hand the players are still students and many school programs do not generate huge revenues for the schools.

Welcome to Friday’s Five!  Here are five video excepts from a presentation I conducted in September 2016 to a group of restaurateurs:

  • exempt employee overview
  • the DOL’s increase in the salary basis test and what it means for employers
  • California’s minimum wage – state and local considerations

 

Please let me know if you have any questions or suggestions for topics you would like to see discussed.  Have a great weekend.

Recently, the NStanley Moskinth Circuit Court of Appeals issued an opinion in Morris v. Ernst & Young holding that class action waiver in an arbitration agreement were unenforceable because the class action waiver was contrary to the rights provided to employees under the National Labor Relations Act.  The ruling is contrary to the holdings in the Second, Fifth, and Eight Circuits that concluded that the NLRA does not invalidate collective action waivers in arbitration agreements, creating a split in the circuits.  Given this split in the circuits, the case may potentially be reviewed by the United States Supreme Court.  For now, however, what should California employers take away from the case?  This Friday’s Five answers five issues California employers should understand about this changing area of the law:

1. What is an arbitration agreement?

Employers can agree that they and any employees who enter into an arbitration agreement will resolve their differences before a private arbitrator instead of civil court. There are many different arbitration companies to choose from, but the American Arbitration Association and JAMS are two of the larger ones that are routinely appointed in arbitration agreements.

2.  Why would an employer want to implement an arbitration agreement?

There are a number of reasons. The arbitration process can proceed more quickly than civil litigation, saving a lot of time and attorney’s fees in the process.  For example, often times the discovery process moves more quickly, and if there are any disputes, the parties can raise them with the arbitrator telephonically, instead of the lengthy motion process required to resolve disputes in civil court. The arbitration process is also confidential, so if there are private issues that must be litigated, these issues are not filed in the public records of the courts. The parties also have a say in deciding which arbitrator to use in deciding the case, whereas in civil court the parties are simply assigned a judge without any input into the decision. This is very helpful in employment cases, which often times involve more complex issues, and it is beneficial to the parties to select an arbitrator that has experience in resolving employment cases.

While there are many benefits of arbitration agreements, they do not come without a few drawbacks. The primary drawback is that in California, the employer must pay all of the arbitrator’s fees in employment cases. Arbitration fees can easily be tens of thousands of dollars – a cost that employers do not need to pay in civil cases. However, if the company values the confidentiality and speed of process provided in arbitration, this extra cost may well be worth it.

3.  Are class action waivers enforceable in arbitration agreements?

That is the key issue raised in the Morris v. Ernst & Young case.  Many courts have been upholding arbitration agreements that contain class action waivers, including the California Supreme Court in Iskanian v. CLS Transportation Los Angeles, LLC.  That case held that class action waivers are enforceable, following the standards set forth by the U.S. Supreme Court in AT&T Mobility v. Concepcion.

However, the Ninth Circuit’s ruling in the Morris case creates some uncertainty about whether arbitration agreements that contain class action waivers can be enforced.  The arbitration agreements in the Morris case were mandatory, and they contained a “concerted action waiver” clause preventing employees from bringing a class action.  Plaintiffs claimed that the “separate proceedings” clause contravenes the National Labor Relations Act (“NLRA”), 29 U.S.C. §§ 151 et. seq.  The Ninth Circuit held:

This case turns on a well-established principle: employees have the right to pursue work-related legal claims together. 29 U.S.C. § 157; Eastex, Inc. v. NLRB, 437 U.S. 556, 566 (1978). Concerted activity—the right of employees to act together—is the essential, substantive right established by the NLRA. 29 U.S.C. § 157. Ernst & Young interfered with that right by requiring its employees to resolve all of their legal claims in “separate proceedings.” Accordingly, the concerted action waiver violates the NLRA and cannot be enforced.

As mentioned above, this holding is contrary to the holdings in the Second, Fifth, and Eight Circuits that have concluded that the NLRA does not invalidate collective action waivers in arbitration agreements.  For California employers, the Morris holding creates a strange current state of the law where arbitration agreements with class action waivers may be enforceable in state courts under the Iskanian ruling, but may not enforceable in federal court under the Morris v. Ernst & Young ruling.

4.  Should every employer implement arbitration agreements with its employees?

No. The decision to implement an arbitration agreement should be reviewed with an employment lawyer to discuss the positives as well as the negatives of arbitration agreements.

5.  Are arbitration agreements enforceable in California?

Generally speaking, if the agreement is drafted and implemented properly, it is enforceable.  The holding in Morris v. Ernst & Young does not change the enforceability of arbitration agreements, but rather focuses on the issue of whether a class action waiver contained in an arbitration agreement is enforceable.  In addition, arbitration agreements are routinely struck down by courts if they are not properly drafted. For example, a California court held in Ajamian v. CantorCO2e, that an arbitration agreement was not enforceable because it required the employee to waive statutory damages and remedies.  In addition, the agreement in that case only allowed the employer to recover its attorney’s fees if successful, not the employee.  This flaws in the arbitration agreement were fatal to the enforceability of the agreement.  Therefore, as a good lawyer always says, it is critical that employers considering implementing arbitration agreements review the pros and cons of the decision, and receive assistance in drafting the arbitration agreement.

I bet your lawyer has never uttered those words to you (unless, of course, I am your lawyer).  For today’s Friday’s Five, I wanted to remind readers about five free resources I offer.  That’s right – they are absolutely free.  Happy Friday.Employers Survival Guide

1.  Download the termination checklist

I’m a big proponent of checklists.  Even if you have performed hundreds of employee terminations, there are so many issues that employers must get right every time, I recommend that each employer develop their own termination checklist.  Download my draft checklist as a start to drafting your own checklist for your company here.

2. Subscribe to my webinar and seminar newsletter

I’m routinely conducting webinars and seminars to California employers regarding best practices and employment law updates.  I often times waive the costs or reduce the costs for clients, friends of the firm, and readers of my blog.  You can subscribe here.

3. Subscribe to my Youtube channel – The Employment Law Report

Rather learn by watching videos?  Subscribe to my Youtube channel, The Employment Law Report.  Some popular videos are my overview of California’s paid sick leave law.  More videos to come soon.  View and subscribe to the channel here.

4. Subscribe to my blog

Receive at least weekly updates about California employment law and best practices for employers.  Reading this, right?  Might as well receive an email by subscribing here when I post a new article so you don’t miss any posts.  That is right, as always, this is absolutely free, so why not?  Subscribe to the blog by entering your email address above the big yellow button to the right.

5. Download my e-book on the top ten best HR practices

The Top Ten Best Human Resources Practices for California Employers e-book – need I say more?  Download it here.

Now you do not have any reason to not to utilize these free resources.  And don’t forget, you can find me on Facebook too.  Have a great Labor Day weekend.