Question: May I require my employees to wear a particular uniform?

California law allows employers to require employees to wear particular types of clothing or uniforms to work. If an employer requires non-exempt employees to wear a uniform, the employer must pay for and maintain it for the employee. What constitutes a "uniform" is not always clear.

According to the California Labor Commissioner, the term "uniform" includes any apparel and/or accessories of distinctive design or color. An employer may prescribe the weight, color, quality, texture, style, form, and make of a "uniform" required to be worn by employees. When an employer simply requires employees to wear "basic wardrobe items which are usual and generally usable in the occupation," the clothing is not a uniform. For example, specifying that employees wear white shirts, dark pants, and black shoes and belts, all of unspecified design, does not constitute a "uniform." The employer is not required to pay for that clothing or its maintenance. If the required clothing can double as street clothes, it is probably not a "uniform."

Some safety equipment or protective apparel must be worn by employees as a matter of law. Proper safety equipment such as goggles, gloves or other accessories or apparel must always be provided by the employer if they are required by a regulation of the Occupational Safety and Health Standards Board.

How is maintenance of a uniform handled?

In addition to the cost of the uniform, the employer must provide non-exempt employees with reasonable maintenance of the uniforms. The employee can either maintain the uniform itself, or pay the employee a weekly maintenance allowance of an hour’s pay at minimum wage, provided that an hour’s pay is a reasonable estimate of the time necessary to maintain uniform properly. It is reasonable to require employees to maintain uniforms requiring minimal care, such as washing and tumble drying, without reimbursement; however, special care, such as ironing, dry cleaning or separate laundering because of heavy soiling or special color, must be reimbursed to non-exempt employees.  Click here to read a Department of Labor opinion letter about when employers should bear the costs to maintain uniforms under the FLSA.  California’s DLSE also has an opinion letter on the topic, which is very similar to the DOL’s opinion. 

Employers need to remember that they can never impose a financial burden on employees, with respect to purchasing or maintaining clothing that reduces the employees’ wage rate below the minimum wage.

Other Concerns:

Employers must also be careful to pay employees for all time worked.  If putting on a uniform (or other equipment) takes a long time, it could be considered time worked, and therefore must be paid.  For more information, a DLSE opinion letters can be read here, here, and here. 

 

Google Latitude, a new Google application allows users to track the physical location of other people through a mobile phone or computer. While the GPS tracking technology is nothing new, the amazing aspect of this is how inexpensive tracking technology has become. Many employers have already implemented GPS tracking, but now with Google’s basically free service many more employers will look to this technology to help manage their workforce. However, there are already concerns about individual privacy rights being voiced about this technology, and employers should be aware of employee’s privacy rights before using this technology.

First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace. Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

In Barbee v. Household Automotive Finance Corp. (2003), a court provided some guidance about the ramifications of section 96(k). Barbee was dating a subordinate at work, which violated the company’s policy and created a conflict of interest. The company gave Barbee and the employee with whom he was involved the option that one of them had to resign or to end the relationship. Barbee refused to resign, and they did not end the relationship, so the company terminated Barbee. Barbee sued, arguing that the company violated Labor Code section 96(k) in that his employer was regulating his lawful conduct during personal time. The court rejected Barbee’s argument in stating:

We conclude that Labor Code section 96, subdivision (k) does not set forth an independent public policy that provides employees with any substantive rights, but, rather, merely establishes a procedure by which the Labor Commissioner may assert, on behalf of employees, recognized constitutional rights. Therefore, in order to prevail on his wrongful termination claim, Barbee must establish that his employment was terminated because he asserted civil rights guaranteed by article I of the California Constitution. We conclude that Barbee cannot make this showing and therefore he cannot establish the first necessary element of his wrongful termination claim.

While the court held that the company’s actions in that case did not violate section 96(k), the facts were very favorable to the employer that are not applicable when dealing with privacy rights and GPS tracking.  Also and there are other arguments available to employees. For example, an employee may also argue violation of Labor Code Section 98.6 which states in part that “no person shall discharge any employee … because the employee … engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 ….”

Therefore, there are a few minimum steps employers should take when using tracking technology in the workplace:

  1. Develop a policy about how the company will use GPS tracking in the workplace.
  2. Disclose the policy in writing to the employees.
  3. Pay for the device or software that is required for the tracking (requiring employees to pay for business expenses violates Labor Code section 2802).
  4. Allow the employee to turn the GPS device off when not working during the day, such as during lunch breaks, on personal time, or after they have left for the day.
     

As difficult as it is to comply with California’s daily overtime rules, it is easy to forget the one form of flexibility provided to employers — makeup time. This provision allows employers to avoid paying overtime when employees want to take off an equivalent amount of time during the same work week. There are, however, a few requirements that must be met to ensure that the employer is not required to pay overtime for the makeup time:

  1. An employee may work no more than 11 hours on another workday, an not more than 40 hours in the workweek to make up for the time off;
  2. The time missed must be made up within the same workweek;
  3. The employee needs to provide a signed written request to the employer for each occasion that they want to makeup time (and if employers permit makeup time, they should have a carefully drafted policy on makeup time and a system to document employee requests); and
  4. Employers cannot solicit or encourage employees to request makeup time, but employers may inform employees of this option.

Remember, time and a half overtime is due for (1) time over eight hours in one day or (2) over 40 hours in one week or (3) the first eight hours worked on the seventh consecutive day worked in a single workweek; and double time is due for (1) time over 12 hours in one day and (2) hours worked beyond eight on the seventh consecutive day in a single workweek. For more information regarding overtime and related issues, the DLSE provides a good summary here.
 

California law treats “tips” (defined as any discretionary gratuity left by a customer for a server) as a strange kind of compensation — which may belong to the employee who initially received the tip, other employees involved or, for certain purposes, even the employer itself. Given the confused property rights involved, businesses are often unsure how tips should be handled.

The Legal Status of Tips.
The Labor Code states unequivocally that “Every gratuity is hereby declared to be the sole property of the employee or employees for whom it was paid, given or left for.” (Lab. Code § 350). Yet, California courts have also reached the seemingly contradictory conclusion that employers may lawfully require that this “sole property” of the employee must be shared with other employees. Moreover, the federal Fair Labor Standards Act (“FLSA”) and state and federal tax withholding rules treat tips not as direct payments from customers to servers, but rather as a form of “wages” paid by the employer.

California restaurateurs are currently experiencing a wave of class action lawsuits seeking damages for illegal “tip pooling.” These lawsuits usually allege that the employer has violated the law by permitting ineligible employees to participate in the tip pool. According to these lawsuits, employees are ineligible for tip pooling where they were either not directly involved in providing any service to the customer who left the tip or they are “agents” of the employer.

Labor Commissioner’s Position On Tip Pooling.
According to the most recent non-binding opinion letter issued by the California Labor Commissioner on the subject, a tip pooling arrangement is permissible so long as it is a “fair and equitable” system that has “a correlation with prevailing industry practice.” (September 8, 2005 Op. Letter of Donna M. Dell). But the Labor Commissioner further opines that any tip-pooling policy must also comply with the following requirements:

  1. The tip pool should include only “those employees who contribute in the chain of the service bargained by the patron;” and
  2. The tip pool should exclude any supervisory employee “with the authority to hire or discharge any employee or supervise, direct, or control the acts of employees.”

Although not legally controlling authority, the Labor Commissioner opinion constitutes good advice for any employer seeking to avoid lawsuits. For the California’s Division of Labor Standards Enforcement position on tip pooling, visit their website here.

Avoiding Liability From Tip Pooling Lawsuits.
Employers can take steps to prevent and/or minimize liability for tip pooling claims. Here are a few items that employers can consider in order to minimize the liability regarding tip pooling.

  • Employers should consider implementing a policy stating that all tips are the sole property of the waiters, and employees are free to enter into any voluntary tip pooling arrangements with co-workers on their own.
  • Employers should consider notifying patrons on the menu or on the receipt that any tip left may be distributed according to a tip pooling arrangement, unless the patron affirmatively indicates that his or her tip should only go to one person.
  • Regardless of the employer’s policy on tip pooling, the employer should implement and enforce a policy that the employer’s supervisory employees are always prohibited from sharing in tip pools. For purposes of this policy the operative definition of a supervisor is any “person other than the employer having the authority to hire or discharge any employee or supervise, direct, or control the acts of the employee.”

As a general caveat, however, each case has unique facts and may present issues not addressed in this article. As a result, employers should seek competent legal advice before implementing a new policy regarding tip pooling policies.

 

 

Many California companies have recently been sued and had an assessment issued against them by the California Employment Development Department (“EDD”) for unpaid payroll taxes because the company allegedly misclassified its California workers as independent contractors rather than employees.

If a company improperly classifies a worker as an independent contractor, it may face liability from an assessment from the EDD for unpaid unemployment insurance, disability insurance, and employment taxes. In addition to the EDD assessment, the misclassified workers could also allege that they are owed unpaid overtime going back four years in addition to seeking reimbursement and for businesses expenses and penalties in violation of Labor Code section 2802.

For guidance on whether employers have properly classified its workers as independent contractors, the California Division of Labor Standards Enforcement (“DLSE”) provides an explanation of the “economic realities” test. The DLSE maintains that the most indicative fact determinative of whether a worker is an employee or an independent contractor depends on whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. The DLSE also sets forth the other factors that are considered when determining an employee’s status:

  1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
  2. Whether or not the work is a part of the regular business of the principal or alleged employer;
  3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
  4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
  5. Whether the service rendered requires a special skill;
  6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
  7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
  8. The length of time for which the services are to be performed;
  9. The degree of permanence of the working relationship;
  10. The method of payment, whether by time or by the job; and
  11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

The DLSE’s full explanation of this topic can be found here. The DLSE’s information provides a great starting point for employers to audit their classifications of employees, but each case may present different facts, and the economic realities test may change depending on the jurisdiction and whether state or federal law is at issue.
 

Today, February 2, 2009, employers were supposed to transition to start using a new I-9 Form.  However, Friday, U.S. Citizenship and Immigration Services department made the following announcement:

USCIS Delays Rule Changing List of Documents Acceptable to Verify Employment Eligibility Reopens Public Comment Period for 30 days

WASHINGTON—U.S. Citizenship and Immigration Services (USCIS) announced today it has delayed by 60 days, until April 3, 2009, the implementation of an interim final rule entitled “Documents Acceptable for Employment Eligibility Verification” published in the Federal Register on Dec. 17, 2008. The rule streamlines the Employment Eligibility Verification (Form I-9) process.

The delay will provide DHS with an opportunity for further consideration of the rule and also allows the public additional time to submit comments. A notice announcing the delay was transmitted today to the Federal Register. In addition, USCIS has reopened the public comment period for 30 days, until March 4, 2009.

Employers were originally required to use the new form beginning today, on February 2, 2009.  However, employers must now wait until April 3, 2009 to begin using the new form.  Click here for the USCIS’s website for download the Form I-9. 

Title VII prohibits employers from retaliating against employees who report workplace race or gender discrimination. The issue examined by the US Supreme Court in Crawford v. Metro Government of Nashville, was whether this protection extends to an employee who speaks out about discrimination not on her own initiative, but in answering questions during an employer’s internal investigation. The basic holding by the Supreme Court on the issue can be summed up the Court’s statement:

Nothing in the statute requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when asked a question.

The Court explained Title VII’s two anti-retaliation provisions:

The Title VII antiretaliation provision has two clauses, making it “an unlawful employment practice for an employer to discriminate against any of his employees . . . [1] because he has opposed any practice made an unlawful employment practice by this subchapter, or [2] because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” 42 U. S. C. §2000e–3(a). The one is known as the “opposition clause,” the other as the “participation clause,” and Crawford accused Metro of violating both.

The lower court in the Sixth Circuit in this case held that the plaintiff could not satisfy the opposition clause because she had not “instigated or initiated any complaint,” but had “merely answered questions by investigators in an already-pending internal investigation, initiated by someone else.”

The Supreme Court rejected the lower court’s rational. The Court reiterated that under the Farragher/Ellerth defense, when no tangible employment action is taken against an employee, the employer may invoke a defense to the employee’s claim if it took reasonable care to prevent/correct and discrimination, and the employee failed to take advantage of the opportunities offered by the employer to prevent or to correct the discrimination. The Court explained that the lower court’s rational, if applied here would create a catch-22 for the employee:

The appeals court’s rule would thus create a real dilemma for any knowledgeable employee in a hostile work environment if the boss took steps to assure a defense under our cases. If the employee reported discrimination in response to the inquiries, the employer might well be free to penalize her for speaking up. But if she kept quiet about the discrimination and later filed a Title VII claim, the employer might well escape liability, arguing that it “exercised reasonable care to prevent and correct [any discrimination] promptly” but “the plaintiff employee unreasonably failed to take advantage of . . .preventive or corrective opportunities provided by the employer.”

The Take-Away for Employers:

  1. Investigate all employee workplace complaints;
  2. Document the investigation well (such as who was spoken to, who conducted the investigation, and what was said);
  3. Take all reasonable steps to stop improper workplace conduct discovered during the investigation; and
  4. Ensure that no one who participates in the investigation is retaliated against for providing information during the investigation.

The Ohio Employment Law Blog and the Connecticut Employment Law Blog have also posted their great analysis on this case. 

Yes, the Government Code specifically addresses employees’ right to wear pants to work in California.

Section 12947.5 states:

(a) It shall be an unlawful employment practice for an employer to refuse to permit an employee to wear pants on account of the sex of the employee.
(b) Nothing in this section shall prohibit an employer from requiring employees in a particular occupation to wear a uniform.

Also, employers should note, dress standards or requirements for personal appearance need to be flexible enough to take into account religious practices. While it is lawful for an employer to implement rules about employee physical appearance, grooming, or dress standards, the standards cannot discriminate based on a protected category, such as race or sex.

This graph is courtesy of Seth Godin.  Generous and calm are good business practices to abide by everyday, but I think employers need to especially remind themselves of this practice during these times. 

I would also like add another quality in the upper right hand corner – less litigation.  Angry and selfish employers leave employees no choice but to seek out a lawyer because they think they’ve been wronged (mistakenly or not). 

UPDATE: I revised the original image to include my comments:

The question whether an employer is obligated to pay an employee for time on-call depends on interpretation of the term “hours worked.”

In a recent opinion regarding class action issues (Ghazaryan v. Diva Limousine, LTD), an appellate court offered an analysis of what would be considered “hours worked” and, therefore, entitling the employee to pay. The court examined this definition by turning to the IWC’s Wage Order No. 9. This provision defines “hours worked” as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”

The court also looked to California’s Division of Labor Standards Enforcement (DLSE). The DLSE offers opinions on California employment issues, and while the DLSE’s opinions are not binding on the courts, they are given some weight by the courts. The court in Diva explained the DLSE opinion letter on the issue of what constitutes hours worked by an employee:

One such advisory letter, issued on March 31, 1993,  acknowledges the inquiry is “highly fact-driven,” but “[t]he bottom line consideration is the amount of ‘control’ exercised by the employer over the activities of the worker. . . . [I]mmediate control by the employer which is for the benefit of the employer must be compensated.”

The court continued to explain that in another opinion letter dated December 28, 1998, the DLSE summarized the factors relevant to this inquiry:

  1. Whether there are excessive geographic restrictions on the employee’s movements;
  2. Whether the frequency of calls is unduly restrictive;
  3. Whether a fixed time limit for response is unduly restrictive;
  4. Whether the on-call employee can easily trade his or her on-call responsibilities with another employee; and
  5. Whether and to what extent the employee engages in personal activities during on-call periods.

While the court’s decision is primarly dealing with class action issues, this analysis of what constitutes compensatable time is a good overview.