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
Employee Handbooks
Costly Mistake of Misclassifying Independent Contractors
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…
Noncompetition Agreements In California Are Narrowly Construed
In Edwards v. Arthur Andersen LLP (link to PDF), the California Supreme Court ruled on the following issues: (1) To what extent does Business and Professions Code section 16600 prohibit employee noncompetition agreements; and (2) is a contract provision requiring an employee to release “any and all” claims unlawful because it encompasses nonwaivable statutory protections…