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Total Articles: 260

San Francisco and San Jose Pass Emergency Paid Sick Leave Measures

As discussed in our previous Legal Alerts, on March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”). Generally, the FFCRA requires that private employers with fewer than 500 employees provide emergency paid sick to the extent that employees are unable to work (or telework) due to certain COVID-19-related circumstances.

Legislature Considers More Time to Cure Wage Statement Violations

Employers all over the State of California have been waiting earnestly for over two years for the California Supreme Court to issue its opinion in Kim v. Reins International California. A ruling that will decide whether a settling employee remains an aggrieved employee for purposes of the Private Attorneys General Act (PAGA). The wait is not over. In the meantime, the California legislature is considering whether to ease some of the burdens of PAGA for employers.

A New Year, A Higher California Minimum Wage

It has become somewhat of an annual tradition in California: with every new year comes a further increase in the state’s minimum wage. And this year is no different. In 2020, the new state minimum wage for employers of 26 or more employees is now $13.00 per hour, and the state minimum wage for employers of 25 or fewer employees just increased to $12.00 per hour.

Is “Fair Pay to Play” Fair in College Sports? What California’s New Law Means for the Future of Amateur Athletics

On September 30, 2019, Governor Gavin Newsom signed California legislation—Senate Bill (SB) 206—that would permit college student athletes to benefit financially (for example, from endorsement deals) from their names, images, and likenesses while still in school. Governor Newsom signed the Fair Pay to Play Act, which Senator Nancy Skinner (D-Berkeley) and Senator Steven Bradford (D-Gardena) sponsored, with much fanfare, alongside a high-profile professional basketball player and several former college student athletes. The new law is scheduled to take effect in January 2023.

California Court Rules That Food And Beverage Service Charges May Qualify As Gratuities

A California appellate court just held that mandatory service charges added by banquet facilities to their contracts may need to be paid to banquet service employees essentially as a form of a gratuity. The October 31, 2019 decision changes up what some considered to be a settled area of law and may require you to immediately adjust your pay practices in order to get into compliance.

Meal and Rest Break Premiums Payable at Base Rate, Not Regular Rate of Pay

A California state appellate court has ruled that the correct rate for paying meal and rest period premiums is one hour of pay at an employee’s base hourly rate, not the regular rate of pay used for calculating overtime wages. This is the first published California case to make this distinction.

California Court of Appeal Clarifies Meal and Rest Period Premium Calculation and the Enforceability of Rounding Policies

California employers have long grappled with two wage and hour questions: What rate of pay should be used to calculate meal and rest period premiums in California? Does the facially neutral “rounding” of employee work time, which results in a small subset of employees being undercompensated, result in systematic undercompensation on a class-wide basis?

No California Waiting-Time, Inaccurate Wage Statement Penalties Based on Unpaid Meal Period Premiums, Court Rules

Do meal period premiums trigger derivative liability for waiting-time penalties and inaccurate wage statements? The California Court of Appeal has ruled in the negative on the oft-asked question. Naranjo et al. v. Spectrum Security Services, Inc., No. B256232 (Cal. Ct. App. Sept. 26, 2019).

California Supreme Court Rules that the “Underpaid Wages” Component of Labor Code Section 558 is Not a Civil Penalty under PAGA

In ZB, N.A. v. Superior Court of San Diego County (Lawson),1 the California Supreme Court held that unpaid wages are not civil penalties under California Labor Code section 558 and are therefore outside the reach of California’s Private Attorneys General Act (PAGA). This ruling clarifies the scope of PAGA remedies; it also confirms that no part of a PAGA claim may be compelled to arbitration.

Under Wage Order 5, On Duty Meal Periods Must Be At Least 30 Minutes in Length

By way of background, in Palacio v. Jan & Gail’s Care Homes, Inc. (2015) 242 Cal.App.4th 1133, the Fifth District Court of Appeal considered the interplay between subdivisions 11(A) and 11(E) of Wage Order No. 5.

Ninth Circuit Asks California Supreme Court: Is Absence of a Formal Meal and Rest Break Policy a Violation of California Law?

In Brinker Rest. Corp. v. Superior Court (Cal. 2012) 273 P.3d 513, the California Supreme Court explained that an employer must relieve the employee of all duty for the designated meal period, but need not ensure that the employee does not work. In other words, no policing of meal breaks by the employer is required; and employees can break themselves. Now, the Ninth Circuit is asking the California Supreme Court if employers must go further in spelling out formal policies on meal and rest breaks to comply with California law.

California Court Delivers Trucking Company a Meal/Rest Break Win and Limits the Application of the ABC Test

The U.S. District Court for the Eastern District of California recently ruled in an employment class action regarding misclassification of trucking industry owner-operators as independent contractors. The ruling is a win for numerous industries. Henry v. Central Freight Lines, Inc., No. 2:16-cv-00280-JAM-EFB (June 13, 2019).

Ninth Circuit Swiftly Rebuffs Attempted Expansion of California De Minimis Doctrine

On June 14, 2019, a panel of the Ninth Circuit Court of Appeals heard oral argument in consolidated appeals involving the compensability of pre-exit inspections of employee bags at two retail clothing store chains. While the district courts had granted summary judgment to the employers in both cases, they did so by holding that the federal de minimis doctrine applied to the plaintiffs’ claims under the California Labor Code.

Offshore Drilling Companies Can Rest Easy: Supreme Court Holds California Wage and Hour Law Inapplicable to Certain Rig Workers

On June 10, 2019, the United States Supreme Court unanimously ruled that state wage and hour laws do not apply to certain drilling rig employees working off the California coast. The rig workers argued that California law required employers to pay them for off-work time spent on the platform, including time spent sleeping. The Supreme Court disagreed. In Parker Drilling Management Services, Ltd. v. Newton, the Court held that the Fair Labor Standards Act (FLSA), and not state law, applies to drilling platforms located in open waters governed by the Outer Continental Shelf Lands Act (OCSLA). Because the FLSA addresses both standby and minimum wage claims raised by the workers, California law cannot be adopted as a surrogate federal law on the Outer Continental Shelf (OCS).

California Rules on Meal, Rest Breaks Preempted by Decision of Federal Trucking Regulator, Court Holds

Ruling it lacked jurisdiction to review the Federal Motor Carrier Safety Administration’s (FMCSA) decision barring enforcement of California’s meal and rest period rules with respect to interstate motor carriers, a federal district court in California has dismissed a driver’s meal and rest break claims based on California law. Ayala v. U.S. Xpress Enterprises, Inc., et al., No. 15-cv-00137-GW-KK (C.D. Cal. May 5, 2019).

Federal Law Preempts California’s Meal and Rest Break Laws for Commercial Drivers

Judge George H. Wu of the United States District Court for the Central District of California recently dismissed meal and rest break claims brought under the California Labor Code in a class action against motor carrier U.S. Xpress.

California’s Reporting Time Pay Applies to Telephone Calls to Confirm Scheduled Shifts

For more than 75 years, California’s Wage Order No. 7 has required employers to compensate employees with reporting time pay if employees are required to report for work and in fact show up, but are then provided less than an established minimum number of hours of work or are provided with no work at all. Instead of actually requiring appearance at the workplace, suppose employees are merely required to call in advance to confirm whether they are needed for a scheduled shift: have employees “reported for work,” such that they are entitled to reporting time pay if the employer tells them they do not need to come in? The answer is yes, according to the California Court of Appeal, Second Appellate District. Ward v. Tilly’s Inc., 2019 Cal. App. LEXIS 95 (Cal. Ct. App. Feb. 4, 2019).

California Court Ushers In Sweeping Changes For Scheduling Policies

A California Court of Appeal just announced a sweeping change in California’s reporting time pay rules which now prohibits a common scheduling practice used by employers throughout the state (Ward v. Tilly’s, Inc.).

Federal Agency Preempts California’s Meal and Rest Break Rules for Property-Carrying Commercial Drivers

In an order with significant implications for motor carriers, the Federal Motor Carrier Safety Administration (FMCSA) concluded that California’s meal and rest break rules are preempted by federal transportation law and may no longer be enforced by the State of California where the driver is subject to federal hours-of-service (HOS) requirements. Specifically, on December 21, 2018, the FMCSA found that “California may no longer enforce the [meal and rest break rules] with respect to drivers of property-carrying [commercial motor vehicles] subject to FMCSA’s HOS rules.” On December 28, 2018, the order was posted in the Federal Register.

A New Year’s Gift for California Trucking Companies: Meal Period and Rest Break Laws No Longer Apply

It’s official: California’s infamous meal period and rest break laws no longer apply to truck drivers regulated by the U.S. Department of Transportation’s hours-of-service requirements. Following a petition from the American Trucking Association (ATA), the Secretary of Transportation deemed California’s onerous meal and rest break laws to be preempted by federal law on December 21, and therefore no longer enforceable as to any driver whose hours of service are regulated by the Department of Transportation.

Ninth Circuit Asks California Supreme Court to Decide Question That Could Greatly Expand California’s Prevailing Wage Laws

Last week, the U.S. Court of Appeals for the Ninth Circuit in Mendoza v. Fonseca McElroy Grinding Co., Inc., et al., No. 17-15221 (January 15, 2019), requested that the California Supreme Court decide the following question:

California Piece-Rate Law Upheld by Court of Appeal

Rejecting an argument that the use of the phrase “other nonproductive time” rendered the statute unconstitutionally vague, a California Court of Appeal recently upheld the state’s law regarding compensation of piece-rate workers. Nisei Farmers League v. California Labor & Workforce Dev. Agency, 2019 Cal. App. LEXIS 10 (Cal. Ct. App. Jan. 4, 2019). Therefore, the method of pay calculation that has been in place since 2013 remains the law.

California State and Local Minimum Wage Rates to Increase in 2019

California's minimum wage rate increased on January 1, 2019, to $12.00 per hour for businesses employing 26 or more employees and $11.00 per hour for those with 25 or fewer employees. The increase is a result of California Senate Bill 3, which was signed into law in 2016. The law will increase California’s minimum wage to $15 per hour by 2023. Thereafter, the minimum wage will change based on cost-of-living increases.

California’s Minimum Wage Increases Again: What It Means for Employers

On January 1, 2019, the state minimum wage in California increased again. It is now $12.00 per hour for employers of 26 or more employees and $11.00 per hour for employers of 25 or fewer employees. Local minimum wages are increasing as well. On January 1, 2019, the minimum wage in the City of San Diego increased to $12.00 per hour for all employers, and the minimum wage in the City of Oakland increased to $13.80 per hour.

Employer Successfully Defends Rounding Policy by Showing It Did Not Disfavor Employees

A California appellate court held an employer’s use of a rounding policy for its non-exempt employees complied with California law because it did not disfavor employees. (Donohue v. AMN Services, LLC (Dec. 10, 2018) Case No. D071865.)

Closing the Unequal Pay Gap: California Releases Guidance to Employers on Complying with the California Fair Pay Act

Since passing the California Fair Pay Act (“CFPA”) on October 6, 2015, California has remained a trailblazer in its efforts to address and decrease gender pay inequity. The CFPA requires all employers pay employees performing “substantially similar work” the same wage regardless of gender, ethnicity or race. The CFPA also requires employers to provide the pay scale for a position to an applicant who makes a reasonable request for it, prohibits employers from requesting an applicant’s prior salary history and from relying on an applicant’s salary history alone to justify a disparity in compensation “based on sex, race or ethnicity.”

Stop and Go: California Court Holds that Company Vehicle Does Not Transform Commute into Working Time

A California court recently issued a decision clarifying when certain commuting time does not constitute work time under state law. In Hernandez v. Pacific Bell Telephone Company, the California Court of Appeal, Third Appellate District, held that an employer's provision of a company vehicle to employees to use in traveling from their homes to their first customer appointments of the day and home from the last appointments of the day did not transform commute time into "hours worked." This decision should come as welcome news to California employers that provide company vehicles for voluntary use.

New California Law Creates Narrow Rest Break Exemption at Petroleum Facilities

On September 20, 2018, California Governor Jerry Brown signed into law Assembly Bill 2605. This new law provides that unionized employees at petroleum facilities who hold safety-sensitive positions are exempt from the requirement that employees be relieved of all duties during rest periods. The bill went into effect immediately and will remain in effect until January 1, 2021 with the ability to be extended.

The Ghost of Borello Returns This Halloween! Court Holds Dynamex ABC Test Applies Only to Wage Order Claims

As we have covered extensively, the California Supreme Court dropped a proverbial bomb earlier this year in the Dynamex case when it adopted a new legal standard known as the “ABC Test,” making it much more difficult for businesses to classify workers as independent contractors. A few days ago, a California Court of Appeal held that the new test is limited to claims arising under the California Wage Orders, and that other claims continue to be governed by the prior (and more employer-friendly) standard known as the Borello test. This holding, if it stands, is good news for employers. However, it’s not all treats for employers on this Halloween. The new case has a few tricks of its own, as the good news appears to be tempered by some other less-favorable positions.

San Francisco's Amended Fair Chance Ordinance Takes Effect with Updated Notice Requirements

On October 1, 2018, San Francisco’s amendments to its Fair Chance Ordinance (FCO) took effect. The FCO is San Francisco’s “ban the box” equivalent that regulates employers’ use of applicants’ and employees’ arrest and conviction information.

California Court of Appeal Upholds Company’s Rounding Practices

Many California employers round employees’ clock-in and clock-out times to the closest quarter hour, tenth of an hour, or five-minute interval. This practice is commonly referred to as “rounding.” On June 25, 2018, California’s Second District Court of Appeal upheld an employer’s rounding system in AHMC Healthcare, Inc. v. Superior Court of Los Angeles County, No. B285655 (June 25, 2018). The decision reaffirms the Ninth Circuit Court of Appeals’ 2016 ruling on the subject and expands on the criteria used to evaluate whether a rounding policy is neutral in practice, and thus lawful.

California Clarifies Ambiguous Language of Salary History Ban

California has enacted new legislation aimed at clarifying its law banning an employer from inquiring about a job applicant’s salary history information

De Minimis No More? California Supreme Court Finds Modern Technology Requires Employers to Better Track and Compensate Employees for Minimal Amounts of Off-The-Clock Work

Today, the California Supreme Court issued its ruling in Troester v. Starbucks Corporation, and departed from federal law’s more employer-friendly version of the de minimis rule, which it characterized as stuck in the “industrial world.” In holding that Starbucks Corporation must compensate hourly employees for off-the-clock work that occurs on a daily basis and generally takes four to ten minutes after the employee clocks out at the end of their shift, the California Justices announced they were ensuring California law was in line with the modern technologies that have altered our daily lives. De minimis means something is too minor or trivial to take into account, and the Court clarified what is trivial and what is not.

California Supreme Court Rejects the FLSA’s De Minimis Rule

On July 26, 2018, the Supreme Court of California ruled that the state’s wage and hour rules and regulations have not adopted the Fair Labor Standards Act’s de minimis doctrine and that the de minimis rule does not apply to a wage and hour claim brought under a state wage order. The de minimis rule permits employers to disregard “insubstantial or insignificant periods of time beyond the scheduled working hours” when recording an employee’s hours worked for purposes of compensation.

Governor Brown Signs Legislation to Clarify California’s Ban on Salary History Information

s many of you will recall from last year, Governor Brown signed legislation to prevent employers from asking about or relying on salary history information when making hiring decisions. That legislation, Assembly Bill 168 (Eggman) went into effect on January 1, 2018. Check out our recap of that bill here.

California Court Holds Rounding Employee Time Punches to Nearest Quarter Hour OK—Under the Circumstances

Executive Summary: Under California law, employers are required to pay employees for “all hours worked” when subject to the employer’s “control.” This raises the question: if an employer uses a timekeeping system that automatically rounds employee time punches up or down to the nearest quarter hour, is that lawful? The California Court of Appeals recently said “yes”—depending upon whether the rounding policy and practice are both neutral.

No Meal Break Violation Where Employees Are Incentivized to Stay Onsite Through Offer of Discounted Meal

Today, the Ninth Circuit issued its opinion in Rodriguez v. Taco Bell Corp., upholding the district court’s grant of summary judgment in favor of Taco Bell on class claims for alleged meal break violations. In this case, Taco Bell authorized and permitted employees to take meal breaks during which they were relieved of duty and free to leave the premises. However, Taco Bell offered employees the option of purchasing a discounted meal at Taco Bell, in which case they had to remain on site to eat it (in order to prevent theft/abuse associated with employees bringing discounted food to third parties outside the restaurant). Because no good deed ever goes unpunished in California, a class action lawsuit was filed against Taco Bell alleging that their practices violated California law by denying employees lawful meal breaks.

6 FAQs on California’s Meal and Rest Break Rules

California’s meal and rest break rules are extremely technical and nuanced—and a failure to properly comply with them can result in penalties. Here are answers to six frequently asked questions (FAQs) regarding compliance with this intricate area of California labor and employment law.

California’s 2018 Midyear Minimum Wage Increases

On July 1, 2018, a number of localities in California saw their minimum wages increase. The chart below summarizes locality mid-2018 minimum wage increases, as well as Berkeley’s impending minimum wage increase, which will occur on October 1, 2018. Note that California employers are prohibited from paying a lesser cash wage payment to tipped employees and offsetting their minimum wage obligations with a tip credit.


Whether you celebrated the Fourth of July with fireworks, hot dogs, hamburgers, or reciting the Declaration of Independence (“We hold these truths to be self-evident, that all men are created equal, that they are endowed, by their Creator, with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness"), remember that many California city and local governments increased the minimum wage hourly pay requirements on July 1, 2018.

Santa Monica to Implement New Minimum Wage Law

It’s summertime in the City of Santa Monica and with sunny days and cool ocean breezes also comes an increase in the minimum wage commencing on July 1, 2018. Each year on July 1, Santa Monica employers must comply with the City’s minimum wage law, which was enacted in 2016 and currently runs through 2021. On July 1, 2018, Santa Monica’s new minimum wage will increase to $12 per hour for employers with 25 or fewer employees; to $13.25 per hour for employers with 26 or more employees; and $16.10 per hour for hotel workers.

California’s Pay History Ban: Common Questions; Practical Suggestions

In this podcast, Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, consider the compliance twists and turns of California’s salary history ban, which took effect on January 1, 2018. They look at if and how employers can consider salary history when making employment and salary decisions, even when that pay history has been voluntarily disclosed by applicants. Bruce and Corinn also discuss how the law impacts employers that do not maintain physical locations in the Golden State, and how employers may need to adjust their application and hiring protocols to comply with the new restrictions.

The Implications of Dynamex Operations West v. Superior Court: California's Adoption of the ABC Test for Purposes of the Wage Orders

The California Supreme Court’s adoption of a strict ABC test for purposes of the wage orders is likely to cause significant problems for California businesses that use independent contractors. Of particular concern is the “B” prong of the test and the contours of the putative employer’s business. While at present the ABC test applies only to the wage orders, which means that only non-exempt employees are subject, businesses may find it difficult to implement the ABC test without implicating other aspects of the relationship, such as taxes or workers’ compensation, such that conversion for all purposes may be necessary. Nonetheless, there are many unresolved issues, and it remains to be seen how adoption of the ABC test will play out in California.

San Francisco Revises Paid Sick Leave Ordinance Rules

On May 7, 2018, the San Francisco Office of Labor Standards Enforcement (OLSE) published revised rules concerning the city’s generous Paid Sick Leave Ordinance (PSLO). The new rules come more than 10 years after the original groundbreaking rules were published in 2007. In the interim, a statewide paid sick leave law was created,1 effective July 2015,2 and the San Francisco ordinance was amended, effective January 2017.3 Aside from a handful of changes, the final substantive PSLO rules mirror the rules proposed in mid-March. Below we discuss the more notable new rules.

San Francisco Amends Fair Chance Ordinance, Restricts Employer Inquiries About Marijuana-Related Convictions

On April 3, 2018, San Francisco amended its Fair Chance Ordinance. The amended ordinance, which will take effect on October 1, 2018, will significantly impact employers that employ, or seek to employ, individuals to work eight hours or more per week in San Francisco. As with the existing ordinance, the amended ordinance will apply to employers that employ full-time, part-time, temporary, seasonal, contract, contingent, and commission-based employees. The amended ordinance, however, will dramatically increase the number of employers to which it applies. While the existing ordinance applies to employers that employ 20 or more employees, the amended ordinance will apply to employers that employ as few as 5 employees worldwide. The amended ordinance will also apply to job placement agencies, referral agencies, and other employment agencies, as well as city contractors and subcontractors.

In 2010, Massachusetts enacted the Criminal Offender Record Information (CORI) Reform Act, which includes a “ban-the-box” component. Among other things, the law prohibits an employer from requiring an applicant to check a box if he or she has a criminal history.1 The law also prohibits an employer from requiring an applicant (or employee) to disclose the following specific types of criminal information: (i) arrests that did not result in a conviction; (ii) first convictions for certain misdemeanors (drunkenness, simple assault, speeding, minor traffic violations, affray or disturbing the peace); and (iii) convictions for misdemeanors where the date of the conviction or completion of incarceration occurred five or more years from the date of the application, unless there was an intervening conviction.2

Darting Ahead: California Supreme Court Adopts New Formula for Flat Sum Bonuses

For decades, many employers across California relied upon established federal law governing the calculation of overtime compensation on bonuses. Under federal law, the same set of rules apply to flat sum bonuses (i.e., set bonus amounts that cannot increase with additional productivity or employee effort) and other bonuses.

California Supreme Court Determines How Flat Sum Bonuses Factor into Overtime Calculation

The California Supreme Court recently decided the question of how an employee’s overtime pay rate should be calculated when the employee has earned a flat sum bonus during a single pay period.1 In Alvarado v. Dart Container Corp. of California, there was no dispute that the bonus needed to be factored into the employee’s regular rate of pay. The question addressed by the court was whether the divisor for purposes of calculating the per-hour value of the bonus should be (1) the number of hours the employee actually worked during the pay period, including overtime hours; (2) the number of non-overtime hours the employee worked during the pay period; or (3) the number of non-overtime hours that exist in the pay period, regardless of the number of hours the employee actually worked.

Calculating Overtime Value of Flat-Sum Bonus Must Be Based on Actual Non-Overtime Hours Worked, California High Court Holds

The California Supreme Court has held that, under state law, when an employee earns a flat sum bonus during a pay period, the overtime pay rate will be calculated using the actual number of non-overtime hours worked by the employee during the pay period. Alvarado v. Dart Container Corp., 2018 Cal. LEXIS 1123 (Cal. Mar. 5, 2018).

California Supreme Court's Recent Overtime Ruling Likely to Cause Payroll Problems

Executive Summary: On March 5, 2018, the California Supreme Court issued a ruling clarifying how employers must handle flat-sum bonuses (i.e., additional compensation that does not change depending on the number of hours worked by an employee) in the calculation of overtime. Under this ruling, an employer must calculate a non-exempt employee’s additional overtime by dividing the amount of the flat-sum bonus by the actual number of non-overtime hours worked by the employee; then multiplying that per-hour value by 1.5 (or 2, depending on the applicable multiplier to use) and by the number of overtime hours worked. The ruling clarifies an important technical aspect of overtime calculations and upends many employers’ previous understanding of what the law requires. Although this decision is limited to flat-sum bonuses and does not apply to other forms of non-hourly compensation, employers should promptly have their incentive/bonus compensation plans reviewed for compliance.

California Supreme Court Embraces Employee-Friendly Formula For Calculating OT Pay

In a unanimous decision, the California Supreme Court today issued a ruling that will have far-reaching effects for employers who pay employees a flat rate bonus and overtime. Specifically, the court ruled that when calculating overtime in pay periods in which an employee earns a flat rate bonus, employers must divide the total compensation earned in a pay period by only the non-overtime hours worked by an employee.

Dear Littler: Does Equity Compensation Count as Wages under Federal and California Law?

Dear Littler: We need to hire some key personnel for our new tech company. We intend to offer them equity in the enterprise as compensation. The equity should be very valuable in the long run, and the deal we have in mind is reasonable for our industry. But we figured we should double-check with a lawyer first: this plan is legal, right?

California Statewide and Local Minimum Wage Rates to Increase in 2018

California's minimum wage rate increased on January 1, 2018, to $11.00 per hour for businesses employing 26 or more employees and $10.50 per hour for those with 25 or fewer employees. The increase is a result of California Senate Bill 3, which was signed into law in 2016. The law will increase California’s minimum wage to $15 per hour by 2023. Thereafter, the minimum wage will change based on cost of living increases.

DLSE Reverses Its Position on California Rest Breaks

In November 2017, the California Labor Commissioner’s office, Division of Labor Standards Enforcement (“DLSE”), published updated guidance on employer provided paid 10-minute rest breaks.

California to Hold Direct Contractors Jointly Liable for Subcontractor’s Unpaid Wages and Fringe Benefits

Beginning with contracts entered into on or after January 1, 2018, direct (general) contractors in California will be held jointly liable for their subcontractors’ unpaid employee wages, fringe benefit or other benefit payments or contributions under Assembly Bill 1701, signed into law by Governor Jerry Brown on October 14th. This joint liability requirement is codified in Labor Code Section 218.7.

California on Brink of Further Expansion of Fair Pay Protections

California’s legislature is close to passing three bills to expand the state’s fair pay laws. The bills, introduced in early 2017, were designed to expand upon, or clarify, the amended California Fair Pay Act (CFPA).

San Francisco Imposes New Lactation Accommodation Requirements

On June 30, 2017, San Francisco Mayor Ed Lee signed the city’s new Lactation in the Workplace Ordinance. The ordinance will take effect January 1, 2018, and imposes lactation accommodation requirements that go beyond those that federal and California law currently impose.

San Francisco to Ban Employers From Considering Salary History

On July 19, 2017, San Francisco became the latest jurisdiction to enact a law banning employers from asking job applicants about their salary histories. The San Francisco “Parity in Pay” Ordinance will become effective on July 1, 2018. The city will begin assessing penalties for noncompliance on July 1, 2019.

San Francisco Joins the Salary History Inquiry “Ban” Wagon

The City of San Francisco (SF) is the latest governmental entity to join the trend towards prohibiting employers from asking job seekers about current or prior salary or wage rate or pegging starting pay to prior pay. The SF Ordinance is based on the following premise:

Pay Equity at the Local Level: San Francisco Bans Salary History Inquiries

Under current California law, employers may ask job applicants about their wages in current or former jobs. A new ordinance in San Francisco, however, will make such inquiries illegal.

Another San Francisco Treat: Mayor Lee Signs Salary History Ban

On July 19, 2017, Mayor Ed Lee signed an ordinance that will significantly affect the hiring practices of San Francisco employers. When Ordinance No. 170350 becomes operative on July 1, 2018, it will be illegal for employers to inquire about a job applicant’s salary history or to provide such information about current or former employees.1

San Francisco Becomes Latest to Ban Salary History Inquiries

Joining a growing list of state and local governments, San Francisco Mayor Ed Lee today signed an ordinance which will ban employers from asking job applicants about their salary histories. The new ordinance will go into effect on July 1, 2018.

San Francisco Employers Face New Gender Equality Laws

The San Francisco Board of Supervisors has just added two new employment ordinances to the burgeoning list of employment-related ordinances in the City by the Bay. First, the Parity in Pay Ordinance prohibits employers from inquiring about an applicant’s salary history.

San Francisco Passes “Lactation in the Workplace Ordinance”

On June 30, 2017, San Francisco Mayor Ed Lee signed the “Lactation in the Workplace Ordinance” (“Ordinance”), increasing protections for nursing mothers working in San Francisco. The Ordinance becomes effective January 1, 2018, and applies to anyone employed within the “geographic boundaries” of San Francisco.

Court May Make Reasonable Inferences about Employee’s Exempt, Non-Exempt Activities

A trier of fact can make reasonable inferences about employees’ duties to determine status for overtime pay under California labor law, the California Court of Appeal has ruled, affirming the trial court’s holding. Batze v. Safeway, Inc., No. B258732 (Cal. Ct. App. Apr. 4, 2017).

The City of Los Angeles Quietly Updates Its Rules and FAQs Regarding the Minimum Wage and Paid Sick Leave Ordinance

The sick leave landscape is constantly evolving, and the City of Angeles is no exception to that rule. This past month the City of Los Angeles Office of Wage Standards (“OWS”) revised its rules and regulations (“Revised Rules”) as well the FAQs regarding its Minimum Wage and Paid Sick Leave Ordinance (the “Ordinance”).

California Seeks to Raise Minimum Salary for White Collar Exemptions

The minimum salary to qualify for a "white collar" overtime exemption in California has been higher than that required under federal law for many years. Because California's exempt salary threshold is tied to the state minimum wage (an exempt employee generally must earn a salary of at least two times the state minimum wage), it goes up as California's minimum wage goes up. The current minimum salary for exempt executive, administrative, or professional status in California is $43,680 per year. However, as employers know, last year the federal Department of Labor enacted regulations increasing the minimum salary to qualify for exempt status under the federal Fair Labor Standards Act ("FLSA") to $47,476 per year. California employers would have had to comply with the higher salary threshold under the FLSA, except that the regulations were blocked by a Texas court late last year. The Texas court's ruling is now on appeal, but most believe that the overtime regulations will not be reinstated -- at least in current form -- under the Trump administration. California is now seeking to accomplish what the Obama administration could not accomplish at the federal level, by proposing to raise the minimum annual salary to qualify for exempt status in California to $47,472. AB 1565 (Thurmond) is a spot bill that was amended on Tuesday to propose the salary hike. Under the bill, the minimum salary for exempt executive, administrative, or professional workers would be $47,472 or twice the state minimum wage, whichever is greater. As California's minimum wage continues to rise, a salary of twice the state minimum wage eventually will be a number greater than $47,472. Until that time, $47,472 would be the minimum salary for exempt status in California.

California Court Approves $700,000 Settlement for Seating Claim Brought By Retail Employees

Executive Summary: The effects of the California Supreme Court’s latest interpretation to provide seating to workers are beginning to show, as the United States District Court for the Central District of California recently approved a $700,000 settlement against a major retail clothing company for failure to provide seating in a representative action involving the Private Attorneys General Act of 2004, California Labor Code Section 2698, et seq., (PAGA).

It Ain’t Over Till It’s Over – California Bill Would Increase Overtime Exemption Salary Threshold

Employers nationwide breathed a collective sigh of relief when a federal district court judge in Texas enjoined the U.S. Department of Labor’s (USDOL’s) implementation of new minimum salary threshold requirements for the executive, administrative and professional overtime exemptions under federal law. However, that respite may be short-lived for employers here in California. Legislation just introduced in the California Legislature would raise the salary thresholds for these overtime exemptions under California law to the same levels that were proposed by the Obama administration.

California Court of Appeal Clarifies Wage Statement Requirements for Use of Unique Employee Numbers, Hourly Rates for PTO or Vacation

The California Court of Appeal has held that: (1) the use of payroll service provider generated unique employee file numbers on employee wage statements, in lieu of the employer’s internal employee identification number or last four digits of employee social security numbers, is legally permissible under California law; and (2) employers are not required to state applicable hourly rates for payments of accrued paid time off or vacation on exempt employee wage statements. Blaire v. Dole Food Co., No. B263695, 2017 Wage & Hour Cas.2d (BNA) 46,633 (Cal. Ct. App. Feb. 15, 2017) (unpublished).

California’s Expanding Fair Pay Act

The California Fair Pay Act (CFPA) took effect a little over a year ago (January 2016) but already has been expanded to

Separate Compensation for Rest Breaks and Non-Productive Time Required for Non-Exempt Commissioned Employees

On February 28, 2017, in Vaquero, et al. v. Stoneledge Furniture LLC, the California Court of Appeal, Second Appellate District ruled that Wage Order 7-2001 (mercantile industry) requires employers to separately compensate non-exempt commissioned employees for rest breaks. It further held that the same analysis applies to “any other compensation system that does not separately account for rest breaks and other nonproductive time.” A link to the opinion can be found here.

Employer Discretion Advised: The Latest on San Francisco’s Cutting-Edge Parental Leave Ordinance

San Francisco’s Paid Parental Leave Ordinance (PPLO) became effective on January 1, 2017, for employers with 50 or more employees. Effective July 1, 2017, the PPLO also applies to employers with 35 or more employees and, on January 1, 2018, to employers with 20 or more employees.

Paying Most Sales Employees Purely on Draw and Commission No Longer Lawful In California

Last month a California appellate court held that an employer violates California law by paying inside sales employees on a draw against commission. In Vaquero v. Stoneledge Furniture LLC, the court held that such a pay arrangement does not compensate employees for their mandatory paid rest breaks and other non-selling working time.

California Court Rejects Verbal Rent Credit Agreement, Finds Building Managers Are Not Exempt From Check Stub Law

On December 1, 2016, a California Court of Appeal, in an unpublished decision, issued a ruling addressing the scope of both California Industrial Welfare Commission Wage Order 5-2001’s minimum wage rent credit and California Labor Code Section 226’s wage statement exemption for household employees. Rolfes v. Mei (No. B266929).

Commissioned California Employees Must Be Separately Compensated for Rest Periods

On February 28, 2017, the California Court of Appeal issued a significant decision in Vaquero v. Stoneledge Furniture LLC (No. B269657). The decision, which was certified for publication, is the first ruling by a California appellate court requiring employers to separately compensate commissioned employees—as opposed to employees paid by piece rate—for rest periods.

California Court Confirms Healthcare Meal Waivers Have Always Been Valid

In a somewhat unusual ruling last week, a California Court of Appeal announced that its previous February 2015 decision in the case of Gerard v. Orange Coast Memorial Medical Center, which partially invalidated healthcare meal waivers, was wrong. Accordingly, as a result of the March 1, 2017 ruling, healthcare employers in California will not face retroactive liability if they used waivers prior to October 5, 2015.

California Auto Dealers Beware: Commission-Paid Dealership Employees Entitled To Separate Rest Period Pay

A California appellate court ruled on February 28, 2017, that employees paid on a commission basis must be separately compensated for legally required rest periods (Vaquero v. Stoneledge Furniture LLC). Although this decision did not specifically involve automobile dealerships, this decision could impact any dealerships in California compensating individuals completely or partially on a commission basis (e.g., salespersons, finance managers, service advisors). If your dealership is in this category, you should review this decision to determine whether you need to immediately adjust your pay practices.

California Court Rules Commission-Paid Employees Are Entitled To Separate Rest Period Pay

A California appellate court ruled yesterday that workers paid on a commission basis must be separately compensated for legally required rest periods (Vaquero v. Stoneledge Furniture LLC). When combined with a state Supreme Court ruling late last year requiring employers to provide workers with duty-free rest breaks, this one-two punch of court decisions will force many California employers to alter their pay practices or face potentially devastating financial consequences.

Commissioned Employees Must Be Paid Separately for Rest Breaks

This week, a California Court of Appeal issued its decision in Vaquero v. Stoneledge Furniture LLC, holding that an employer violated California law by failing to pay commissioned employees for rest breaks. California law requires that employees be provided with a paid 10-minute rest break for each four hours, or major fraction thereof, worked. In this case, the employer, which operates retail furniture stores in California, provided rest breaks to its sales associates but the court held that the employer’s commission pay plan did not compensate associates for these rest breaks. The employer’s commission plan provided that associates would be paid a guaranteed minimum hourly rate ($12 per hour) for all hours worked and that this minimum would operate as a draw against commissions.

Local and State Developments Impact San Francisco Paid Parental Leave Obligations

Developments at the local and state level have affected what employers must do to comply with the San Francisco Paid Parental Leave Ordinance (“SF PPLO” or the “Ordinance”).1 The SF PPLO took effect on January 1, 2017 (for employers with 50 or more employees), and the San Francisco Office of Labor Standards Enforcement (“SF OLSE”) has also adopted final rules implementing the SF PPLO,2 published a required form and poster, and issued supplemental compensation calculation instructions. Additionally, the California Employment Development Department (“EDD”) has increased the maximum weekly benefit under the California Paid Family Leave (“CA PFL”) insurance program, which impacts the SF PPLO supplemental compensation amount that must be paid to employees.

California Court Provides Additional Guidance on Timekeeping Rounding, Grace Period Claims

Under California law, employers’ policies may permit rounding of employee timecard entries to the nearest tenth of an hour (six minutes), the Fourth Appellate District of the California Court of Appeal has affirmed. Silva v. See’s Candy Shops, Inc., No. D068136 (Dec. 9, 2016, published Jan. 5, 2017) (“See’s Candy II”). The Court also offered guidance on the circumstances that comply with the timekeeping standards.

Part-Time Employees Get First Chance at Extra Hours under New San José Ordinance

Employers in San José, California, must offer additional work hours to existing qualified part-time employees before hiring new employees beginning March 13, 2017, under the Opportunity to Work Ordinance.

California’s New “Two-Tier” Minimum Wage

Starting January 1, 2017, California now has two different minimum wages – $10.00 per hour for “small” employers, and $10.50 for “large” employers. This “two-tier” minimum wage structure will remain in place for the next seven years, and will provide several ongoing challenges for employers in the Golden State. In this podcast, California Littler Shareholder, Bruce Sarchet, breaks down the impact of this two-tier approach on businesses and provides guidance on employer compliance with these new obligations.

Why Learning How to Count to 26 Just Became Important: Recent Changes to California and Local Minimum Wage Laws

Recently California’s Division of Labor Standards Enforcement (“DLSE”) issued an FAQ concerning 2016 legislative changes that impact the state minimum wage in 2017 and future years. The most notable change was the creation of a two-tier system in which a $10.50 minimum wage rate applies to employers with 26 or more employees and a $10.00 minimum wage rate applies to employers with 25 or fewer employees. The FAQ do not provide concrete guidance as to how employer size is calculated, but do provide a glimpse into how DLSE might interpret the law. The lack of clarity in the FAQ will particularly frustrate some Southern California employers that must also comply with local minimum wage laws which, like their state counterpart, use a 26/25 employee cut-off, but a different test to determine employer size.

New Year, New Minimum Wage – Or Maybe Not

Time was, answering the question “What is the minimum wage?” was simple. There was the federal minimum wage and the state minimum wage, and for most California employers, only the latter number really mattered. Now the answer to the question is “It depends.” As California employers begin a new year they face a confusing patchwork of laws regarding the minimum wage.

California Wage/Hour Update (No. 1, January 2017)

The past several years have been a difficult time for many California employers when it comes to wage and hour compliance. But if enterprising plaintiffs’ attorneys have their way, times will get even worse in the coming years. By examining what we have experienced in the recent past along with current trends shaping the future of wage and hour law, you can be ready to handle the expected onslaught of new claims that could be heading your way.

California Supreme Court Tells Employees To Rest Assured

Executive Summary: After a years-long battle, the California Supreme Court finally issued a ruling defining what it means for an employer to provide a rest break to non-exempt employees under California law: rest breaks cannot be “on-duty” or “on-call,” as employers must relieve their employees of all duties and relinquish any control over how employees spend their break time. This includes a prohibition against requiring employees to keep work cell phones, pagers, and walkie talkies on during breaks, but it may also prohibit other policies such as requiring employees to stay on the premises during breaks or single/limited staffing models.

Employees on Rest Breaks Must Be Off Duty, California Supreme Court Rules

A class of security guards received an early holiday present from the California Supreme Court on December 22.

California Supreme Court: On-Call Rest Breaks Are Not Permissible

Today the California Supreme Court issued a surprising and unfortunate decision in Augustus v. ABM Security Services, Inc., holding that employers cannot require employees to remain “on-call” during rest breaks, even though these short breaks are part of the employees’ paid hours worked. The Court held that the same standard that applies to off-duty meal breaks applies to paid rest break time. More specifically, California law requires that during unpaid, off-duty meal breaks, employees must be relieved of all duties and free from employer control as to how they spend their time. The Court today held that this is also true for paid rest break time and that an employer does not comply with this standard if it requires employees to remain “on-call,” i.e. viligant and available for possible interruption during rest breaks. This ruling results in the potential reinstatement of a $90 million verdict against the security company, whose security guards remained on-call during rest breaks and carried radios or other communication devices in the event they needed to return to work. Even though the record showed that breaks were rarely interrupted and that this on-call requirement was tied to the nature of the work as a security guard, the Court held that the on-call requirement invalidated the rest breaks.

California Employers Issuing W-2 or 1099 Must Revise Earned Income Tax Credit Notice

For several years, California employers have been required to notify employees regarding the federal Earned Income Tax Credit. Beginning January 1, 2017, new California law (AB 1847) requires those same employers to also notify employees that they may be eligible for the California Earned Income Tax Credit (“EITC”).

Twice in Two Years: California Expands the Fair Pay Act for the Second Consecutive Year

Starting January 1, 2017, companies of all sizes doing business in California will need to take extra care to ensure they are not paying employees differently based on their race or ethnicity or basing new employees’ compensation solely on their prior salary. California Governor Jerry Brown recently signed two pieces of legislation that significantly expand the state’s recently revamped Fair Pay Act (FPA). Employers seeking to reduce legal risk amid the growing pay equity movement should take note.

California Statewide and Local Minimum Wage Rates to Increase in 2017

The California minimum wage is scheduled to increase on January 1, 2017 to $10.50 per hour for businesses employing 26 or more employees. Small employers with 25 or fewer employees will not see an increase until 2018. The increase is a result of SB-3, which was signed into law earlier this year. The law will increase California’s minimum wage to $15 per hour over 6 years, with cost of living increases scheduled thereafter.

Soto v. Motel 6 Operating, L.P.: Employees’ Wage Statements Need Not Include Accrued Vacation Time Prior to Termination

All California employers should know by now that if they have a paid vacation policy, the vacation benefits constitute a form of “wages” under California law. (See Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103; Suastez v. Plastic Dress-Up Co. (1982) 31 Cal.3d 774, 784.) California employers are also likely readily familiar with the requirements of Labor Code section 226(a), which require employees’ wage statements to contain certain information, including gross wages earned.

Monetary Amount of Accrued Vacation Need Not Be Included on Wage Statements

As election day approaches, employers are reminded that California law requires them to post a notice 10 days before the election informing employees of their voting rights under state law. Specifically, employees must be informed that if they do not have sufficient time outside of working hours to vote, they may take off enough working time that, when added to the voting time available outside of working hours, will enable them to vote. Up to two hours of this time must be paid. The employer can require that the time off for voting be taken at the beginning or end of the employee's shift, whichever allows the most free time for voting and the least time off from the regular working shift.

New Laws Enhance California’s Equal Pay Act

On September 30, 2016, California Governor Jerry Brown signed into law two bills designed to address ongoing concern of pay inequity. A.B. 1676 amends the California Fair Pay Act by prohibiting employers from relying on an employee’s prior salary to justify a disparity between the salaries of similarly situated employees. S.B. 1063 extends the Fair Pay Act by providing additional protections on the basis of race and ethnicity. A.B. 1676 and S.B. 1063 are effective January 1, 2017.

California’s New Fair Pay Act: Employer’s Compliance Action Plan

In this podcast, Littler Shareholder Bruce Sarchet provides historical insight into California’s Fair Pay Act and breaks down the recent major changes in the law. He discusses the impact of those changes on your workplace now, and what specific steps you can be taking to help limit liability in this area. Bruce’s basic, nuts and bolts approach to breaking down the Fair Pay Act will help your team make sense of this otherwise confusing law, and his five action steps will provide guidance to all employers to develop an approach to the challenges presented by this revised law.

Minimum Pay for Exempt Computer Professionals and Hourly-Paid Physicians Set for 2017

On October 5, 2016, the Director of California’s Department of Industrial Relations set new minimum pay rates for next year for certain professionals exempt from overtime. Effective January 1, 2017, exempt computer professionals must be paid at least $42.39 per hour, or a minimum salary of $7,359.88 monthly or $88,318.55 annually.

San Francisco Paid Parental Leave Becomes Effective in Less Than 3 Months

Beginning January 1, 2017, employers with 50 or more employees who have employees in San Francisco will need to begin providing payments to eligible employees who take time off to bond with a newborn child.

Should You Still Be Worried About Meal and Rest Breaks?

Meal and rest breaks are important because missed breaks create significant liability. An employee who misses a meal period or takes a late meal period or a short meal period is owed a penalty.

California Legislature Adds Extra Set Of Teeth To Fair Pay Act’s Protections

On September 30, 2016, California Governor Jerry Brown signed the Wage and Equality Act of 2016 (SB 1063) into law, which will prohibit employers from paying employees of one race or ethnicity a lower wage than employees of different races or ethnicities. The bill is a virtually verbatim extension of the Fair Pay Act’s requirements that apply between workers of opposite genders. It will go into effect on January 1, 2017.

San Francisco Amends Paid Parental Leave Law to Adapt to State Law Changes and to Clarify Requirements

On September 14, 2016, San Francisco amended its Paid Parental Leave Ordinance (PPLO). The law will go into effect on January 1, 2017 for employers with 50 or more employees.1 The law requires private employers to provide supplemental compensation to employees who use California paid family leave (PFL) benefits for new child bonding. The amendments both respond to changes the California Legislature made to the PFL benefits program and attempt to clarify an employer’s PPLO supplemental compensation obligations.

California Agricultural Industry Wage Pains Not Just A Phase

On September 12, 2016, Governor Jerry Brown signed the Phase-In Overtime for Agricultural Workers Act of 2016 (AB 1066) into law, providing more stringent overtime protections for agricultural workers. California law currently requires that employers only pay agricultural workers overtime when they work more than 10 hours in a day, but under the new law, sponsored by the United Farm Workers’ union, employer compensation obligations will increase considerably.

Wage and Hour Self-Audit: Five Steps To California Compliance

In this podcast, Littler Shareholder Bruce Sarchet unveils his personal “5-Step Self-Audit” process to help California employers and Human Resources departments avoid wage and hour class actions and related claims. Although Bruce’s process will not guarantee that your company won’t get sued, it will provide an overview of wage and hour litigation along with a very short and simple way to double check your compliance efforts. Bruce’s methodology can help reduce the chance that you are hit with a wage and hour claim in the first place.

California Supreme Court to Address De Minimis Time

Last week, the California Supreme Court agreed to review Troester v. Starbucks, a case involving the issue of whether de minimis work time must be compensated under California law. In Troester, the plaintiff was a former employee of Starbucks who sued the coffee giant because he was not paid for certain closing-related activities such as time spent walking out of the store after activating the alarm and time spent locking the door -- activities that took a minute or two and effectively had to be performed after the plaintiff clocked out on Starbucks' timekeeping software. Plaintiff sued for unpaid wages under California law. A federal district court in California granted summary judgment in favor of Starbucks, ruling that this "work" time was de minimis and that Plaintiff was not owed compensation for it. Plaintiff appealed to the Ninth Circuit.

California Cities and Counties Can Now Join the Effort to Enforce State and Local Wage Payment Laws

California S.B. 1342 is a new law which allows cities and counties to work with the California Division of Labor Standards enforcement (“DLSE”) to enforce wage payment laws. The new measure was intended to give local enforcement programs the tools required to conduct wage claim investigations in order to recover unpaid wages including the ability to issue subpoenas. The law encourages cities and counties to develop specific measures to target and remedy wage theft. Many cities have already adopted city minimum wage and paid sick leave laws and the list is growing.

California Assembly Bill 2535 Further Limits the California Pay Stub Requirement for Reporting Total Hours Worked

On July 22, 2016, the Governor approved California Assembly Bill 2535 (“AB 2535”), which relates to itemized wage statements (more commonly known as pay stubs). Specifically, AB 2535 revises California Labor Code Section 226. The prior version of Labor Code Section 226 required employers to include on a pay stub total hours worked by the employee unless the employee was paid a salary and exempt from overtime. AB 2535 expands on Labor Code Section 226 and alters reporting requirements by asserting that employers do not need to report total hours worked on a pay stub for employees who are “exempt from the payment of minimum wage and overtime” under specified statutes or any applicable order of the Industrial Welfare Commission.

Employers Subject to California Prevailing Wage Beware! California Will Resume Enforcement of The Requirement To Electronically Submit Certified Payroll Records

On July 20, 2016, California Department of Industrial Relations (“DIR”) issued a press release stating DIR enforcement of a contractor and subcontractor’s requirement to submit certified payroll records(“CPRs”) using DIR’s online system will resume on August 1. DIR clarified that the requirement to keep CPRs has not changed. Previously, DIR suspended enforcement of filing CPRs electronically because of problems with the system and improvements.

Are My California Pay Stubs Compliant?

Nearly all California employment wage and hour class action lawsuits assert a cause of action under California Labor Code Section 226 as plaintiffs’ attorneys almost always automatically include such cause of action when there are other alleged underlying wage violations, i.e. failure to pay overtime.

Update on San Diego Minimum Wage and Paid Sick Leave

On July 11, 2016, the results of San Diego’s June election were certified, meaning that the minimum wage and paid sick leave ordinance that was approved by San Diego voters on the June ballot officially took effect on Monday. Our prior post on this new ordinance is here. If you are not already in compliance, you must begin compliance with both the minimum wage increase and the paid sick leave provisions this week. The City has released a FAQ on the new ordinance, available here. San Diego employers should also be aware that the San Diego City Council is already making changes to the paid sick leave requirements. The City is doing so pursuant to a provision in the ordinance that requires the City to create and issue an “implementing” ordinance. Under that implementation authority, the City has determined that it can also revise/clarify the paid sick leave requirements. The City has proposed an implementation ordinance that includes some significant changes to the paid sick leave provisions of the original ordinance.

Los Angeles One-Two Punch Revisited: More FAQs on the New Minimum Wage and Paid Sick Leave Ordinance

On June 1, 2016, the Los Angeles City Council passed an ordinance impacting employers in the city of Los Angeles and mandating paid sick leave beyond that which is required under the recently passed California statute (Cal. Labor Code section 245, et. seq.).

REMINDER: City of Los Angeles and Unincorporated Areas of Los Angeles County Minimum Wage Increases to $10.50 Per Hour on July 1, 2016

Effective this Friday, July 1, 2016, employers with 26 of more employees, must pay employees who perform at least two hours of work within the geographic boundaries of the City of Los Angeles within a particular week at least $10.50 for each hour worked.

California Wage/Hour Update (No. 3, July 2016)

California employers continue to struggle with how to comply with their obligation to provide meal and rest periods to their non-exempt employees.

Los Angeles Approves Minimum Wage Increases and Mandates Employers to Provide 48 Hours of Paid Sick Leave

Employers in the City of Los Angeles will need to review their current minimum wage and paid sick leave policies to ensure they comply with the new City ordinance increasing the minimum wage and extending paid sick leave benefits to employees working in the City.

San Diego Earned Sick Leave and Minimum Wage Ordinance Approved by Popular Vote

Employers in the City of San Diego will need to review their current paid sick leave and minimum wage policies to ensure they comply with a voter-approved ordinance extending paid sick leave and raising the minimum wage for workers in the City.

What Do the Obama Administration’s Overtime Regulations Mean for California Employers?

On May 18, 2016, the U.S. Department of Labor (DOL) released its long-anticipated revisions to the federal overtime regulations governing the so-called white-collar exemptions to the federal Fair Labor Standards Act (FLSA). Most notably, the revisions more than double the minimum salary threshold needed to qualify for the executive, administrative, and professional exemptions. The revised regulations also make other significant changes to the amounts that must be paid, including allowing employers to count nondiscretionary bonuses and commissions to satisfy a portion of the salary threshold, scheduling automatic adjustments to the salary threshold every three years, and increasing the annual salary threshold for the “highly compensated employee” exemption. Fortunately, the new regulations do not make changes to the duties tests for the white-collar exemptions. The new regulations will go into effect on December 1, 2016.

Ninth Circuit Upholds Time Rounding Policy

Yesterday, the Ninth Circuit issued its decision in Corbin v. Time Warner-Advance Newhouse, rejecting an employee’s claim that he was unlawfully denied compensation for hours worked due to his employer’s poilcy of rounding time entries to the nearest quarter hour. The Ninth Circuit further rejected the employee’s claim that the trial court erroneously denied class certification on the rounding claim.

Bonding by the Bay: San Francisco Mandates Paid Parental Leave

On April 21, 2016, Mayor Ed Lee signed an ordinance making San Francisco the first municipality to require private employers to compensate employees while on parental bonding leave. Under the law, when covered employees use California paid family leave (PFL) benefits for new child bonding – bonding with a minor child during the first year after birth or placement through foster care or adoption – covered employers must pay “supplemental compensation.” The new ordinance, operative on January 1, 2017, continues San Francisco’s legacy of progressive employment standards.1

A Typo In Your Paystubs Could Cost You Millions

Imagine being sued by every single one of the employees who worked for you over the past four years because your paystubs have an extra comma in your company’s name. Or because the zip code is missing from your company’s address. Or perhaps because the paystub includes the pay period end date but not the beginning date.

Recent Ruling Means You May Need To Revise Your Tip-Pooling Plan

In a recent decision by the federal 9th Circuit Court of Appeals, a 2011 U.S. Department of Labor (USDOL) regulation that significantly restricts the common practice of “tip pooling” among wait staff and other service employees was revived. As a result, you should now review your tip-pooling practices and procedures to ensure compliance with the regulation, even if you already comply with California state tip-pooling rules.

San Francisco Becomes First U.S. City to Approve Fully Paid Leave for New Parents

On April 5, 2016, San Francisco, California's Board of Supervisors approved a measure mandating that San Francisco employers provide six weeks of fully paid leave during a calendar year for new parents, including mothers, fathers, and same-sex couples, who either bear or adopt a child. It is another in a long line of employee-friendly laws recently passed both in California and around the country.

San Francisco Will Require Employers To Provide Paid Parental Leave: FAQs For Employers

The City of San Francisco just became the first city in the country to pass legislation requiring many employers to provide workers with paid parental leave, entitled the “Paid Parental Leave Ordinance.” Starting in 2017, many businesses in San Francisco will be required to provide up to six weeks of fully paid parental leave to most workers after certain conditions are met. This groundbreaking law will force employers to revamp their administrative policies and practices, while adjusting their budgets to foot this new bill. The following Frequently Asked Questions will assist employers who operate in San Francisco in determining the specifics of coverage under the new law:

San Francisco on the Verge of Imposing Employer-Funded Paid Parental Leave: FAQs on the Groundbreaking Ordinance

On April 5, 2016, the City of San Francisco moved one step closer to imposing paid parental leave on certain employers when the city’s Board of Supervisors passed the “Paid Parental Leave Ordinance.” The Board will vote again at its next meeting and, if it passes, will send the ordinance to Mayor Ed Lee.

San Francisco Passes Fully Paid Parental Leave Ordinance

Today, San Francisco became the first city in the nation to pass an ordinance requiring employers to provide paid parental leave to employees. To be clear, the ordinance does not require employers to provide 100% of the employee’s pay, but rather requires employers to bridge the gap between the employee’s regular compensation and the wage replacement benefit the employee receives from the State EDD under the state’s paid family leave program. Under that program, employees generally receive 55% of their wages for up to six weeks when they take leave to bond with a new child (and/or for other covered reasons).

California Raises its Minimum Wage and Expands Paid Sick Leave

When it wants to, the California Legislature can act with impressive speed. It did so last week on a minimum wage increase bill (SB 3)1 when, in less than 96 hours, it amended the legislation and sped it through two committee hearings and two final floor considerations. On Monday, April 4, 2016, California Governor Jerry Brown signed the bill, which will eventually raise the statewide minimum wage to $15 per hour, into law. The bill’s proponents said that under this measure, nearly six million California workers—more than one-third of the Golden State’s workforce—will receive a raise.2

California Approves Nation's First Statewide $15.00 Minimum Wage

Today California Governor Jerry Brown signed into law a sweeping plan that will eventually increase the statewide minimum wage from $10.00 to $15.00 per hour. While the state of New York announced a deal last week that will also increase the state minimum wage to $15.00 in most areas (while preserving the possibility of a suspension in the rate growth depending on economic factors), California becomes the first state to implement a statewide rate at that level.

Governor Brown Signs California’s $15 Minimum Wage Bill

On April 4, 2016, Governor Brown—as expected—signed a bill to raise the state minimum wage rate to $15.00 per hour by 2022. The new law will increase the minimum wage for large and small businesses according to two schedules. It will also have the effect of increasing the minimum exempt salary requirement for exempt California employees.

California $15 Minimum Wage Bill Awaits Governor’s Signature

On March 31, 2016, the California legislature approved the nation’s highest statewide minimum wage. SB-3, approved in both the State Senate and Assembly, will increase the state’s minimum wage to $15.00 per hour by 2022. Governor Jerry Brown has already signaled that he intends to sign the bill into law on Monday, April 4, 2016.

California Governor Agrees To Unprecedented $15.00 Minimum Wage

On Monday, March 28, 2016, California Governor Jerry Brown, flanked by union and state government officials, announced an agreement with state legislators to increase the statewide minimum wage from $10.00 to $15.00 per hour.

California Lawmakers Reach Deal to Raise California Minimum Wage to $15/Hour by 2022

Last week, we reported on two labor-backed measures to increase California’s minimum wage that may be on the November ballot in California. Now, it appears that California’s lawmakers have struck a deal with labor groups to raise the minimum wage without sending the minimum wage hike proposals to the voters to decide. Governor Brown’s office issued a press release today describing the “landmark agreement.”

Santa Monica Adopts Minimum Wage and Sick Leave Ordinance

In January of 2016, the Santa Monica City Council adopted a wide-reaching ordinance that will raise the city’s minimum wage and impose paid sick leave requirements that exceed the state’s paid sick leave statute. The ordinance also establishes an even higher minimum wage for hotel workers. The city established a minimum wage working group to make further recommendations on the ordinance. Absent working group consensus on specific changes, the ordinance will take effect on July 1, 2016.

Pasadena Joins Growing List of California Cities Imposing City Minimum Wage

On March 14, 2016, the Pasadena City Council adopted an ordinance to increase the city’s minimum wage. Beginning on July 1, 2016, employers with 26 or more employees must pay a minimum wage of $10.50 per hour to all employees who work at least 2 hours per week within the city’s geographic bounds. The minimum wage will increase to $12.00 per hour on July 1, 2017, and $13.25 per hour on July 1, 2018.

California Lawmakers and Unions Agree to $15 Minimum Wage

According to media and government reports, California lawmakers have struck a deal with labor unions to increase the statewide minimum wage to $15.00 per hour over several years.

Measure to Further Increase California Minimum Wage on November Ballot

An initiative backed by labor union SEIU-United Healthcare Workers West to raise California’s minimum wage is slated to be on the November ballot, after backers gathered more than 400,000 signatures supporting the measure. The measure, dubbed The Fair Wage Act of 2016, proposes increasing California’s minimum wage to $11 per hour in 2017, with further one dollar per hour increases each year thereafter until reaching $15 per hour in 2021. A competing measure backed by another branch of the same labor group, SEIU-State Council, may also make it on the November ballot as the largest labor union in the state continues to gather signatures for that initiative. This rival measure seeks to increase the minimum wage to $15 per hour by 2020 (a year earlier than the SEIU-UHW backed measure) and also seeks to mandate that California employers provide employees with 6 days of paid sick leave per year (double the amount currently required). We will keep you posted of any significant developments related to these measures.

Ruling May Change Tipping in California

A three-judge panel of the 9th U.S. Circuit Court of Appeals recently sent shockwaves throughout the hospitality industry, specifically restaurants, when it decided Oregon Restaurant and Lodging Association v. Perez and consolidated case Cesarz, Ngoc Tang v. Wynn Las Vegas LLC, 14-15243 (Feb. 23, 2016). 2016 DJDAR At issue was the legality of "tip pooling."

Santa Monica, California, Joins Patchwork of Minimum Wage and Paid Sick Leave Laws

California’s City of Santa Monica’s City Council has adopted an ordinance that enacts minimum wage and paid sick leave requirements for covered employees as well as new regulations pertaining to service charges and surcharges. Ordinance Number 2509 became effective on February 25, 2016, although its provisions will not be implemented until July 1, 2016.

Santa Monica Jumps on the Minimum Wage and Sick Leave Bandwagon

With little fanfare or advance notice, Santa Monica, California, became the latest municipality to enact its own minimum wage and sick leave ordinance (“Ordinance”), proposed by the City Council on January 12, 2016, and approved shortly thereafter on January 26, 2016.

California Employers Beware: Many California Cities Have Enacted Minimum Wage Ordinances

California’s minimum wage increased to $10 per hour effective January 1, 2016. This is the second increase in just 18 months under legislation originally signed by Governor Jerry Brown in 2013. Unfortunately, this latest increase to the statewide minimum wage is not the only one facing California employers. More than a dozen cities across California have already enacted their own minimum wage ordinances requiring employers to pay workers at rates as high as $15.37 per hour – and several other cities are looking to follow suit. It is a hodgepodge environment in our state, when it comes to minimum wage regulation.

A New Year’s Resolution for California Employers: Fair Pay Act Compliance

California employers are preparing for the effects the Fair Pay Act—the new law signed by Governor Brown last October that significantly changes California’s gender equality pay law. Senate Bill 358 (SB 358), which went into effect on January 1, 2016, requires employers to pay employees of the opposite sex equivalent wages for “for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” This is a significant change from the law’s former requirement that employees of the opposite sex receive equal pay for “equal work.”

California’s New Piece-Rate Compensation Requirements and a New Affirmative Defense Take Effect January 1, 2016

On October 10, 2015, California Governor Jerry Brown signed Assembly Bill 1513, which added new requirements with regard to employees who work on a piece-rate basis. The new law, which amends California Labor Code section 226.2, changes the way employers are required to pay employees paid on a piece-rate basis. The new section 226.2 goes into effect on January 1, 2016.

Pair of Decisions On FLSA Retaliation and Work Comp Retaliation

Two new employment decisions were issued today, one by a California Court of Appeal and the other by the Ninth Circuit. In Prue v. Brady Company, the California court held that a plaintiff who suffered a work-related injury and subsequently was fired stated a valid legal claim against the employer for wrongful termination in violation of public policy. The employer argued that the plaintiff’s claim was invalid because it effectively was a Labor Code section 132a retaliation claim that could only be brought before the Workers’ Compensation Appeals Board, not in court. The court disagreed, reasoning that the plaintiff adequately alleged that he was wrongfully terminated for having a disability, in violation of the public policy of the Fair Employment and Housing Act, and therefore the claim was not barred by the doctrine of workers’ compensation exclusivity. The employer argued that even if the claim was based on the public policy of FEHA, the claim would be barred by the one-year statute of limitations applicable to FEHA claims. The court rejected this argument as well, ruling that a wrongful termination in violation of public policy claim is governed by a two-year statute of limitations and not by the statute of limitations applicable to FEHA claims. This decision is not particularly novel, but is a good reminder for employers that employees who believe they have been fired for reasons relating to a work comp injury can sue their employer in court and seek punitive damages (under a disability discrimination theory) and are not limited to the remedies set forth in Labor Code 132a.

What You Need To Know About California's Amended Fair Pay Act That Takes Effect January 1, 2016

Executive Summary: California's amended Fair Pay Act goes into effect on January 1, 2016, and is considered the most stringent law in the nation. The new law received broad support from both Republicans and Democrats in the Legislature. It arises out of their finding that "in 2014, the gender wage gap in California stood at 16 cents on the dollar. A woman working full time year round earned an average of 84 cents to every dollar a man earned. This wage gap extends across almost all occupations reporting in California. This gap is far worse for women of color; Latina women in California make only 44 cents for every dollar a white male makes, the biggest gap for Latina women in the nation." California's equal pay law has been on the books since 1949, and prohibited employers from paying a woman less than a man when they are both doing "equal work" at the same establishment. The amended law requires equal pay for "substantially similar work." (The law specifically prohibits discrimination based on sex, but in light of the Legislature's focus on the gender wage gap, this article addresses pay discrimination allegations made by women.)

Sacramento Minimum Wage Increases

Anyone paying attention to national politics knows increasing the minimum wage is a hot topic being debated by employee and business groups. While the debate rages, the Sacramento City Council decided not to wait for the feds or the state to act, and recently voted 6-3 to increase the Sacramento city minimum wage, as follows:

House Passes Transportation Bill with Meal and Rest Break Implications

On November 5, 2015, the House of Representatives approved a transportation funding bill with an amendment that would reverse a 2014 Ninth Circuit decision that California's meal and rest break laws are not preempted under the Federal Aviation Administration Authorization Act of 1994 (FAAAA). This amendment is of critical importance to truck operators in California as well as the rest of the country.

California Court Deems Truck Drivers Employees, Not Independent Contractors

Companies that classify workers as independent contractors are facing increasing scrutiny in court and before administrative agencies. A recent unpublished California Court of Appeal decision in a case titled Garcia v. Seacon Logix, Inc. highlights the factors considered by a court in determining worker status.

California Strengthens Current Equal Pay Law – Is This Fair Warning to Employers in Other States?

With the recent passage of the California Fair Pay Act, California strengthened its existing equal pay law by requiring employers pay men and women the same for not only “equal work,” but also for “substantially similar work.” As a result, employees may now challenge the fairness of their pay by drawing comparisons to “substantially similar” jobs with different titles.

California Expands Fair Pay Act Protections

Requiring employers to prove an employee’s higher pay is determined on factors other than gender and allowing workers to sue if they are paid less than co-workers of a different gender with different job titles doing “substantially similar” work highlight California’s expanded Fair Pay Act (SB 358), signed by Governor Jerry Brown on October 6, 2015.

California Governor Signs AB 1513, Severely Limiting Piece-Rate Compensation but Throwing a Liability Life Raft to Employers

On October 10, 2015, Governor Edmund Gerald Brown, Jr. signed into law legislation that re-writes the definition and rules governing the payment of piece-rate compensation in California. Assembly Bill (AB) 1513 creates new California Labor Code section 226.2 and sets forth requirements for the payment of a separate hourly wage for “nonproductive” time worked by piece-rate employees, and separate payment for rest and recovery periods to those employees.

Health Care Workers Allowed to Waive Meal Period

On October 5, 2015, Governor Jerry Brown signed into law a bill confirming that employees in the health care industry can waive one of their two meal periods when working a shift of over eight hours in a workday. This law clarifies confusion caused by a recently decided appellate case, Gerard v. Orange Coast Memorial Medical Center, 234 Cal.App.4th 285 (C.A. 4th, 2015) (review granted). The Gerard case is currently under review by the California Supreme Court.

Ninth Circuit Addresses When Commuting Time May Be Compensable Under California Labor Code and What Must be Included in a PAGA Notice

The U.S. Court of Appeals for the Ninth Circuit recently addressed the compensability of commute time under the California Labor Code and the content required in a Private Attorneys General Act of 2004 (PAGA) letter.

New California Law Eases Employees’ Burdens in Proving Gender-Based Pay Claims and Creates Additional Protections for Employees to Discuss Their Wages

On October 6, 2015 Governor Jerry Brown signed Senate Bill 358 (“SB 358”), a law that substantially eases California employees’ burden in proving gender-based pay claims. This law also increases the number of years that employers must retain employee records, and creates additional protections for employees who wish to discuss or disclose their wages.

Legislative Update: Fair Pay Act, Right to Cure Wage Statement Defects, Paid Sick Leave, and More

As California’s current legislative process heads into its final days, we have a few updates on employment-related matters relating to paid sick leave, wage statement violations, meal period waivers in the health care industry, and the Fair Pay Act.

California Passes Law Aimed to Bridge the Gender Wage Inequality Gap

On October 6, 2015, California's Governor Edmund G. Brown, Jr. signed into law Senate Bill (SB) 358, legislation intended to increase wage transparency and which will make it more difficult for an employer to defend against an equal pay claim. This measure, which amends Section 1197.5 of the California Labor Code relating to private employment, will take effect on January 1, 2016. When it takes effect, California's law on this subject will be one of the strongest equal pay laws in the nation.

New California Law Allows Employers to Correct Wage Statements to Avoid Litigation—Review Your Wage Statements Now

On October 2, 2015, Governor Jerry Brown signed into law Assembly Bill 1506 (AB 1506). The new law amends the California Private Attorneys General Act (PAGA) to allow employers the right to “cure” certain commonly litigated defects in employee wage statements within 33 days of notice by the employee in order to avoid litigation. The cure provisions for wage statements, which can be onerous, apply only to California Labor Code section 226(a)(6)—which requires employers to specify the inclusive dates of the period for which the employee is paid—and section 226(a)(8) —which requires employers to state the name and address of the “legal entity” that is the employer. AB 1506 is urgency legislation and therefore effective immediately.

How Employers Can Combat Timecard Fraud And Employee Wage Theft

There is nothing so central to wage-hour laws than the sacred domain of “hours worked.” The concept is simple: employees record the time they spend working, and from this data employers generate labor budgets and employee pay checks.

California Minimum Wage Bill Stalls in Legislature

A controversial bill to increase California’s minimum wage has failed to pass in the state legislature. The bill would have phased in a $3.00 per hour increase to the minimum wage rate and also would have imposed annual cost of living increases.

Copycat Ordinance: Los Angeles County to Adopt $15 Minimum Wage Similar to Recent Los Angeles Citywide Ordinance

On July 21, 2015, the Los Angeles County Board of Supervisors approved a motion directing County Counsel to prepare a “Countywide Minimum Wage Ordinance” to incrementally increase the minimum wage for Los Angeles County employees and employees working in unincorporated areas within the county. The motion calls for raising the minimum wage in ways that match the recently enacted Los Angeles City Minimum Wage Ordinance.1 If the county follows through, both Los Angeles City and Los Angeles County would require all covered employers to provide a minimum wage of $15 per hour by 2021.

Ninth Circuit Finds That Insurance Claims Adjusters Are Exempt Administrative Employees Under California Law

Applying California’s administrative exemption test, the U.S. Court of Appeals for the Ninth Circuit recently concluded an insurance company properly classified its claims adjusters (who handled and processed disability claims) as exempt from the overtime provisions of the California Labor Code, notwithstanding the clerical duties the adjusters performed and their characterization of their work as “routine”. See Bucklin v. Zurich Am. Ins. Co., 2015 U.S. App. LEXIS 12497 (9th Cir. July 20, 2015).

Cheerleaders in California Have Something to Cheer About!

On July 15, Governor Jerry Brown signed into law AB 202, which requires California-based minor or major league sport teams in certain sports to treat cheerleaders as employees, not independent contractors.

California Appellate Court Holds Employer Must Withhold Taxes on Back Pay

On June 26, 2015, a California appellate court rendered a precedential opinion1 that should hopefully put to rest the issue of whether an employer must withhold taxes on settlements or judgments made to former employees in employment-related litigation. The case, Cifuentes v. Costco Wholesale Corporation, is typical of many of these kinds of employment-related disputes. The plaintiff won a judgment for lost wages against his former employer, which then withheld federal and state payroll taxes from the award. The former employee claimed the judgment was not satisfied, citing to Lisec v. United Airlines.2

Burdensome San Francisco Retail Workers Bill of Rights Takes Effect Next Week

Next week, on July 3, 2015 the ordinances collectively known as the “Retail Workers Bill of Rights” - passed unanimously by the San Francisco Board of Supervisors in November 2014 - will go into effect in the City of San Francisco and the City will begin enforcing its provisions. The ordinances require the covered employers to ensure that they meet five major requirements.

The New Highest Minimum Wage in the Country: Emeryville Expected to Reach $16 Per Hour by 2020

As of this week’s vote, the small California city of Emeryville, which is located in San Francisco’s Bay Area, is slated to have one of the highest minimum wage rates in the country. As expected, on June 2, 2015, the Emeryville City Council voted unanimously in favor of a minimum wage ordinance that will raise Emeryville’s minimum wage rate to over $16.00 per hour by 2020.

Yet Another Municipal-Level Paid Sick Leave Measure Passes in California

In addition to implementing a minimum wage rate increase, the ordinance that the Emeryville City Council unanimously approved on June 2, 2015 will provide paid sick leave to employees in Emeryville—over and above what is already provided to employees under state law. The “Minimum Wage, Paid Sick Leave, And Other Employment Standards” ordinance includes a provision—similar to that of the San Francisco and Oakland paid sick leave laws—requiring employers to allow employees to designate a non-family member for whom they may use their sick leave. It also permits employees to take leave to care for an ill guide dog, signal dog, or service dog. Below are the key components of the new law.

$15 Per Hour Minimum Wage? Los Angeles and Emeryville Give Seattle a Run for the Money

On May 19, 2015, the Los Angeles City Council voted, 14-to-1, to raise the minimum wage to $15.00 per hour in increments over the next five years. As a result, the city council will draft a proposal to raise the wage rate from $9.00 per hour to $15.00 per hour by 2020.

California Supreme Court Agrees to Consider Whether California Health Care Workers Can Lawfully Waive a Second Lunch Period

This week, the California Supreme Court agreed to review the decision in Gerard v. Orange Coast Memorial Center, No. G048039 (February 10, 2015), where the California Court of Appeal partially invalidated the Industrial Welfare Commission (IWC) wage order provision that allows employees in the health care industry to waive one of two required meal periods on shifts longer than eight hours.

The Trend Continues: Los Angeles City Council Tentatively Approves Citywide $15 Minimum Wage and Proposes Sick Leave Ordinance

On May 19, 2015, the Los Angeles City Council approved a proposal for a gradual establishment of a citywide minimum wage of $15.00 per hour by July 1, 2020. Once adopted, Los Angeles will join other large U.S. cities, including Chicago, Seattle and San Francisco, to establish local minimum wage ordinances that far exceed the federal minimum wage of $7.25. The State of California has already raised the statewide minimum wage to $9.00 per hour effective July 1, 2014, with an increase to $10.00 per hour set to go into effect on January 1, 2016.

Answering The Call

California leads the nation in vigilantly regulating the conditions which constitute “hours worked.” Definitions are established, modified, and expanded by the California Labor Code, its Wage Orders, and decisions by appellate courts. The California Supreme Court recently made clear that California’s standard defining “hours worked” is more protective of employees than the rules set forth under the federal Fair Labor Standards Act (FLSA).

New FLSA Overtime Exemption Regulations Still Under Consideration By Department of Labor

Earlier this week, Secretary of Labor Perez announced that her agency is still working hard on revising the regulations governing the existing white collar overtime exemptions. These regulations were originally expected to be published in early 2015. However, that did not happen. Secretary Perez now expects that the regulations will be finalized and published this spring.

California Court Decision on Meal Breaks May Cause Health Care Industry To Go To Code Blue

Executive Summary: A new California Court of Appeal decision has invalidated a 22-year-old healthcare industry exception that had given the industry some flexibility with respect to how it provided its employees working extra-long shifts with meal breaks. The decision is expected to have serious and immediate ramifications for employers in the patient care industry not only because of its invalidation of a long-standing exception but also because of its retroactive effect on previously existing practices.

New California Court of Appeal Opinion Provides Guidance on Rest Breaks

Executive Summary: On January 29, 2015, a California appeals court published a modified version of an opinion examining, in part, an employer's obligation under the state's rest break requirements. Critically, the opinion concludes that the rest break requirement only prescribes that an employee not be required to work on a rest break, not that he or she be relieved of all duties. The opinion provides much needed guidance to employers in understanding the distinction between California's meal and rest break requirements.

California Supreme Court Rules On-Duty Guards Entitled to Pay for On-Call and Sleep Time

On January 8, 2015, the California Supreme Court issued a decision holding that the on-call hours for security guards who work 24-hour shifts constituted compensable hours worked. Further, the court ruled that the guards’ employer could not exclude “sleep time” from the guards’ 24-hour shifts and in doing so rejected the analysis under earlier California decisions, Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 Cal.App.3d 16 and Seymore v. Metson Marine, Inc. (2011) 194 Cal.App.4th 361. Mendiola v. CPS Security Solutions, Inc., No. S212704, California Supreme Court (January 8, 2015).

Approved San Francisco Retail Workers Ordinance Means More Restrictions For Employers

The San Francisco Board of Supervisors has voted unanimously to approve a city ordinance, which will create a number of obstacles for many businesses – including retail stores, restaurants, and banks. The ordinance, referred to as the “Retail Workers Bill of Rights,” will severely limit employers’ flexibility and discretion in hiring and allocating work hours among employees. In addition, employers will be penalized if they fail to meet the burdensome and intricate requirements established by the ordinance.

Beware of How you Pay Your Employees You May Pay More

Todd Scherwin and Jonathan Liu’s article “Beware of How you Pay Your Employees You May Pay More” was featured in California Clubs of Distinction’s Third Quarter Newsletter.

Calif. Employers Must Take Care With Overtime Exemptions

For those of us who work with employees in highly specialized fields, it is important to never lose track of the recurring issue of whether exempt classification of employees for overtime purposes is appropriate. While all employers should make it a practice to evaluate the classification of employment positions, employers in the professional and technical industries, such as engineers, architects and contractors, should pay close attention to whether the professional exemption correctly applies to certain skilled employees.

FAAAA Does Not Preempt California Meal and Rest Period Requirements

In Godfrey v, Oakland Port Services Corp., which was decided on October 28, 2014, the California Court of Appeal issued a published decision holding that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt California’s meal and rest period requirements. The case is significant because it is the latest California decision holding that the FAAAA does not preempt California’s wage and hour laws

Voters Approve Minimum Wage Hikes In San Francisco And Oakland

On Tuesday, San Franciscans overwhelmingly voted to raise the City’s minimum wage to $15.00 over the next few years. The San Francisco current minimum wage of $10.74 is already higher than both the federal minimum wage of $7.25 and California’s minimum wage of $9.00. Under the new law, wages will rise to $11.05 on January 1, 2015, then to $12.25 in May 2015, before increasing every year until they reach $15.00 in 2018.

It's Payback Time: Reimbursement Of Employee Expenses Is A Hot Issue In California

As class actions continue to plague employers in California, one area that is often overlooked is expense reimbursement. The California Labor Code makes clear that employers must indemnify employees for all necessary expenditures or losses incurred as a direct consequence of discharging their duties, or obedience to the directions of the employer. This is so even if the duty is unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

Federal Court Limits California's Wage-Hour Laws

Three years ago, the California Supreme Court addressed the scope of California’s overtime regulations contained in the California Labor Code and Wage Orders promulgated by its Industrial Welfare Commission. Sullivan et al v. Oracle Corporation. The Supreme Court held that work performed in California by nonresident employees of Oracle was covered by the California Labor Code.

California Appellate Court Rules That California’s Prevailing Wage Laws Do Not Apply to Off-Site Fabrication

On August 27, 2014, the California Court of Appeal issued its decision in the long-anticipated Russ-Will case, Sheet Metal Workers’ International Association, Local 104 v. Duncan; Russ Will Mechanical, Inc., Court of Appeal of the State of California, First Appellate District, Division Three, No. A131489 (August 27, 2014). The court held that the California prevailing wage law does not apply to employees who fabricate materials for a public works project at a permanent, offsite manufacturing facility that is not exclusively dedicated to the project. It is a published decision, which means it is binding upon the California trial courts, the California Department of Industrial Relations (DIR), and the Division of Labor Standards Enforcement.

Is the Los Angeles Minimum Wage Increasing to $13.25 per Hour?

On Monday, September 1 in a Labor Day speech, Los Angeles Mayor Eric Garcetti announced his proposal to increase the city’s minimum wage to $13.25 per hour by 2017, and to tie the minimum wage to the Consumer Price Index going forward. California’s minimum wage increased this summer to $9 per hour, and will increase again to $10 per hour in January of 2016.

Employer Required to Reimburse Employees for Personal Cell Phone Use Despite Unlimited Minutes Plans

Cell phones are ubiquitous. At some companies, employees use their personal phones to make business calls. Does an employer need to “pay” for that use of the phone, even if the employee did not incur any extra expenses for doing so? Yes, according to an appellate court in a recent California case, Cochran v. Schwan’s Home Service, Inc., Court of Appeal of California, Second Appellate District, Division Two, No. B247160 (August 12, 2014).

Motor Carriers Face Uphill Battle After California Supreme Court Decision

Harris v. Pac Anchor Transportation, Inc., No. S194388 (July 28, 2014): In a unanimous decision, the California Supreme Court has held that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) does not preempt an action brought under California’s Unfair Competition Law (UCL) when the action does not relate to the prices, routes, or services of a motor carrier with respect to the transportation of property. As a result, the state of California can proceed with its action against a trucking company and its owner for allegedly misclassifying their drivers as independent contractors and for other alleged violations of California’s labor and unemployment insurance laws.

Are Further Increases In California Minimum Wage Laws On The Horizon?

Existing law requires that California’s minimum wage for all industries be no less than $9 per hour effective July 1, 2014 and $10 per hour effective January 1, 2016. Even before the second-tier increase goes into effect, new legislation has been introduced seeking to further increase California’s minimum wage.

California Supreme Court: Undocumented Worker May Recover Lost Wages for Period Up to Employer’s Discovery of Immigration Status

Salas v. Sierra Chemical Co., S196568 (June 26, 2014): On June 26, the California Supreme Court issued a decision holding that federal immigration law does not preempt a California law that extends state law protections to all workers regardless of their immigration status. However, the court held that federal law does preempt state law on the issue of liability for lost wages for any period after an employer discovers that an employee is not authorized to work in the United States.

The Alternative-Workweek: Oasis Or Mirage?

California employers are acutely aware of the typical schedule worked by employees: eight hours a day, five days a week. As we have become accustomed to doing, California law generally requires employers to pay employees overtime wages for hours worked in excess of eight hours during any 24-hour period. But in many cases, limiting employees to working only eight hours a day is not the most convenient for either the employee or the Company. End of the story? Not so fast.

San Francisco Passes Fair Chance Ordinance Restricting Employers’ Ability to Use Criminal History Information

San Francisco has “banned-the-box” on employment applications and has added other restrictions on private employers’ ability to obtain and use criminal history information. The City and County of San Francisco Board of Supervisors passed Ordinance number 131192 on February 11, 2014, and the mayor signed it on February 14, 2014. The ordinance will become effective on August 13, 2014. San Francisco joins Buffalo, Newark, Philadelphia, and Seattle as the fifth major municipality to “ban the box” on employment applications for private employers. Four states “ban the box”: Hawaii, Massachusetts, Minnesota, and Rhode Island.

Happy 2014 – Gear Up For New Wage And Hour Laws

As the new year begins, California employers, already weary from added wage and hour laws and regulations enacted over the past several years, have yet more to comply with. Here are the highlights.

San Francisco's New Flextime Ordinance

Under the San Francisco Family Friendly Workplace Ordinance signed on October, 30, 2013 by Mayor Edward Lee, parents and caretakers have been afforded the right to request modified work schedules, such as a change in start times, part-time and part-year schedules, telecommuting and schedule predictability.

How the New California Laws Will Impact Your Business in 2014 and Beyond, Part 1: Wage and Hour Legislation

In 2013, Governor Jerry Brown signed into law approximately 9 out of 10 bills presented to him. This three-part blog series summarizes the new legislation and captures the key employment law related bills that are likely to affect the most private employers in California. The first part of this series focuses on the newly-signed wage and hour legislation in California. Parts two and three will focus on the EEO, disability, leave, and immigration-related bills that the governor recently signed. Unless otherwise specified, all of the newly enacted legislation will become effective on January 1, 2014.

New California Law Requires Overtime Pay for Personal Attendants

On September 26, 2013, Governor Jerry Brown signed into law a bill which entitles personal attendants in California to overtime pay. Previously, Industrial Welfare Commission Wage Order 15 provided a complete overtime exemption for all such workers. Beginning January 1, 2014, AB 241 mandates that personal attendants be paid one and one-half times their regular rate of pay for all hours worked in excess of nine hours in any workday and 45 hours in a workweek. Personal attendants include any persons employed by a private householder or by any third-party employer recognized in the healthcare industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision.

California's Regular Rate: Getting It Right Can Save Money

With the increasing focus on wage-and-hour litigation, the issue of an employee’s “regular rate” arises in most every case involving alleged unpaid overtime. It also factors into an employer’s payroll, each and every pay period. Here’s a brief roadmap through this sometimes rocky terrain.

California Increases Minimum Wage Next Year October 1, 2013

Governor Jerry Brown recently signed into law a bill that will increase California’s minimum wage in two phases. Beginning July 1, 2014, the minimum wage for California employees will rise from the current $8 per hour to $9 per hour. On January 1, 2016, the minimum wage will increase to $10 per hour.

BREAKING NEWS: California’s Minimum Wage Goes Up—But There Are Some Pitfalls Employers Need to Avoid

Minimum wage earners across the state are celebrating.

California State Supreme Court Denies Review Of Piece-Rate Case: Lower Court Ruling To Stand

The California Supreme Court denied review of a California Court of Appeal case, which held that piece-rate-paid employees are entitled to separate hourly pay for “waiting” time. Gonzalez v. Downtown LA Motors.

Managerial Exemption And Class Actions

On March 20, 2013 a California Appellate court reinforced the fact that employees who attempt to certify class claims of “misclassification” of exempt employees (and related meal- and rest-period claims) face an uphill battle. William Dailey v. Sears, Roebuck and Company.

Late Breaking News

As most California employers know, the state generally requires that all employees who work more than five hours must be provided an unpaid, duty-free meal period of no less than 30 minutes, to commence before the end of the fifth hour of work, and a second meal period of similar length if employees work more than 10 hours, to commence before the end of the tenth hour of work. In most cases, the employee must be free to leave the premises, and the meal period must be documented on the employee’s time record.

New Rules For Commission-Paid Employees Take Effect January 1, 2013

Effective January 1, 2013, a new California law requires that employees entering into employment agreements which involve compensation, even in part, on a “commission” basis must be provided a written contract which sets forth the method by which the commission is computed and paid. Employers must provide the employee with a signed copy of the commission agreement and obtain a signed acknowledgment of receipt of the copy. We first reported on this in a Legal Alert, which you can access here.

New California Law Affects Commission-Paid Employees

Beginning January 1, 2013, a new California law requires that employees who are paid on commission must be provided a written contract which sets forth the method by which the commission shall be computed and paid. This new law further requires that the employer provide a signed copy of the commission agreement to the employee and obtain a signed receipt for it.

Is It OK To "Round" An Employee's Worktime?

For many years, some employers have chosen to "round" non-exempt employees' time entries in computing their wages. News items in recent days have reported on a California appellate court's ruling in See's Candy Shops, Inc. v. Superior Court and Silva that a properly administered "rounding" practice does not violate California wage-hour law.

Decision Provides Greater Flexibility In Scheduling Meetings

Employers in California have been perplexed by various state regulations that have confusing and inconsistent provisions. One regulation addresses the "reporting-time" premium which requires employers to pay a minimum amount of hourly wages when employees report to work. Different standards apply depending on whether an employee reports for the first or second time within a single calendar work day.

Commissioned-Salesperson Ruling Is Big Win For Employers

Employers who have commission-sales employees working under two California Wage Orders recently received good news from a California appellate court which essentially clarified and strengthened the commission-sales exemption contained in Section 3D of Wage Orders 4-2001 (certain listed occupations) and 7-2001 (mercantile). Muldrow et al v. Surrex Solutions Corporation.

A Closer Look At The Brinker Decision

On April 12, 2012, the California Supreme Court decided Brinker Restaurant Corporation v. Superior Court (Hohnbaum), pending since 2008. We reported on the decision in a Legal Alert, and in an extended webinar, which you can access here and here. Because it's such a significant decision, more remains to be said.

Is Immoos A Bigger Win For Employers Than Brinker?

On April 12th, 2012, the California Supreme Court issued its long-awaited decision in Brinker Restaurant Corp. v. Superior Court. The decision finally determined that employers do not need to ensure that their employees take advantage of legally-mandated meal and rest periods. Employers need only provide employees the opportunity to do so. An employer is not liable for a missed meal or rest period if such a break is provided but the employee voluntarily chooses not to take one – or voluntarily chooses to work during the break or end the break early. We reported on the decision in a Legal Alert, which you can access here.

California Supreme Court Hands Down Major Decision On Meal And Rest Periods

On April 12, 2012 the California Supreme Court clarified the meal- and rest-period laws, as well as standards for class certification for these claims, and for off-the-clock claims. This case has been pending before the court since 2008, and its legal impact of the decision is far reaching. Brinker Restaurant Corp. v. Superior Court of San Diego.

California Supreme Court Issues Major Victory For Employers In Brinker Case

Today, the California Supreme Court finally issued its opinion in Brinker v. Superior Court, a case that had been on its docket since 2008. In what has generally been acknowledged as a major victory for California employers, the court issued clear rules on how and when meal and rest periods must be provided. In addition, the justices provided additional important comments on the standards to be applied by trial courts in considering motions for class certification in cases generally. Brinker Restaurant Corp. v. The Superior Court of San Diego County

Good News, Bad News: Appeals Court Clarifies Penalties For Violations Of Wage Orders

The California Court of Appeal, Fourth Appellate District, handed employers a mixed blessing in a recent case, holding that employees cannot make a Private Attorneys General Action (PAGA) claim based upon alleged violations of Industrial Wage Commission (IWC) Wage Orders. Rather, PAGA claims can only be based upon statutory rights.

Court Finds Meal And Rest Period Rules Preempted For Some Employers

California law mandates that employers provide employees who work more than five hours with a 30-minute meal break prior to the sixth hour of work, and a second 30-minute meal period for employees who work more than 10 hours. Employees are also entitled to a 10-minute rest period for every four hours, or major portion thereof, worked. A recent court ruling held that these regulations are preempted by a federal law which covers motor carriers. Dilts v. Penske Logistics.

[CA] State High Court Clarifies Administrative Employee Exemption

On December 29, 2011, the California Supreme Court issued its long-awaited decision in a case involving the application of the “administrative/production dichotomy” in determining if an employee meets the requirements for the administrative employee exemption from overtime under the California Wage Orders.

Landmark Decision Limits "Reporting-Time" Pay and Clarifies "Split-Shift" Premium Requirements

A California appellate court has just handed down a major decision on reporting-time pay in California, limiting situations where such pay would be due, and rejecting an enforcement guideline used by the California Labor Commissioner. The court also clarified the law regarding split-shift premiums. Michael Aleman, et al v. AirTouch Cellular.

"Wage Theft Prevention Act" Takes Effect January 1, 2012

A recently-passed piece of California legislation that will impact employers is the Wage Theft Prevention Act of 2011 (WTPA), which takes effect January 1, 2012. This law adds a new section to the Labor Code and is similar to a law passed in New York this year.

The 9th Circuit Does Their Part On Oracle Case, Extending California Labor Laws

One of the issues that I think has the potential to cause a lot of trouble for employers is the application of one state's labor and employment laws to employee who travel to work in another state. In today's mobile world that is a lot of folks, especially employees located near state borders.

Appeals Court To Employee: "You're Kidding Us, Right?"

California's Sixth Appellate District recently issued a decision upholding an employer's right to modify the compensation terms of an at-will employment agreement where the employee never made a written protest to the modification and the employee continued to accept the modified compensation offered. Foust v. San Jose Construction Company, Inc.

How Do You Recapture Debt From An Employee's Final Paycheck? Very Carefully

Employers continue to be challenged with claims from terminated employees who received payroll deductions for debts they owed the employer. In a recent case employees brought a collective action in a California federal court seeking remedies for violations of California law and the federal Fair Labor Standards Act (FLSA) for deductions taken from their final pay checks for debt balances. The federal court ruled in favor of the company on all claims.

California Overtime Laws Extended To Visiting Employees

A unanimous California Supreme Court recently held that California-based employers must pay out-of-state resident employees pursuant to the more restrictive provisions of the California Labor Code even if these employees only visit the state on a limited, temporary basis. The unanimous decision held that the state's overtime laws were intended by the California legislature to apply broadly to "protect" workers visiting California (even temporarily); therefore, California's laws trump the laws of states in which employees actually reside and primarily work.

Take A Break: Meal and Rest Break Court Rulings Demand Caution From Franchise Employers

Almost five years ago, in April 2006, nearly 59,000 employees obtained class certification in a lawsuit claiming that Brinker Restaurant Group violated California labor laws by failing to ensure that its non-exempt employees took meal and rest breaks. In July of 2008, the appeals court vacated the class certification based upon a finding that employers need not ensure that meal and rest breaks are taken. The California Supreme Court then vacated the decision and granted review on October 22, 2008. Much to the chagrin of California employers and employees seeking clarity on the issue, the Supreme Court has yet to issue its ruling in Brinker Restaurant Group v. Superior Court.

California Supreme Court Expands Reach Of State Overtime Laws

On June 30, 2011, the California Supreme Court ruled that work performed in California by nonresident employees for California-based employers is covered by the California Labor Code and its unfair competition laws. That means that employees residing in states outside California but working (even occasionally) in California may bring lawsuits against their California employers for unfair competition based on violations of California's generous overtime requirements. This is not good news for employers.

Court Clarifies Meaning Of "Commissions"

California Industrial Welfare Commission (IWC) Wage Orders exempt from California's overtime-compensation requirement "any employee whose earnings exceed one and one-half (1 ½ ) times the minimum wage if more than half of that employee's compensation represents commissions." State courts have looked to the Labor Code section that addresses automobile dealers, in defining "commissions," as: "compensation paid to any person for services rendered in the sale of such employer's property or services and based proportionately upon the amount or value thereof." (Italics added.)

Court Rules On Premium Payments For Denied Meal And Rest Periods

California law regulates meal and rest periods, requiring employers to provide their employees an unpaid 30-minute meal period after working for five hours, and a second meal period after 10 hours, with a 10-minute rest period for each four hours of work or major fraction thereof. Employees required to work through their breaks are entitled to a premium payment subject to a limit each day.

New Ruling Makes It More Difficult To Avoid Seventh-Day Premium

A recent California appellate decision precludes California employers from defining workweeks under a recurring work schedule that avoids payment of the "seventh day" premium. Seymore v. Metson Marine.

Do California State Overtime Laws Apply to Visiting Workers?

Do you have employees who visit California for business? If so, now may be a good time to brush up on California wage and hour law. On June 30, 2011, the California Supreme Court ruled that the California Labor Code's overtime provisions applied to three non-resident employees of Oracle Corporation who performed work within the state.

California Supreme Court Extends Reach of State’s Wage and Hour Laws to Out-Of-State Employees Temporarily Working Within the State

On June 30, 2011, a unanimous California Supreme Court ruled that California-based employers must pay out-of-state resident employees pursuant to the more restrictive provisions of the California Labor Code even if these employees visit the state on a limited, temporary basis. The unanimous decision held that the state’s overtime laws were intended by the California legislature to apply broadly to “protect” workers visiting California even temporarily and, therefore, this state’s laws trump the laws from the states in which employees actually reside and primarily work. Sullivan v. Oracle Corp., No. S170577, California Supreme Court (June 30, 2011).

"Pay Stub" Rulings Continue

Earlier this year, a case reinforced yet again the need for employers to pay close attention to the specific requirements of the California Labor Code – this time, the itemized wage statement requirement in Labor Code section 226(a). Heritage Residential Care, Inc. v. Division of Labor Standards Enforcement.

Labor Commissioner Hearings Cannot Be Waived By Arbitration Agreements

The Labor Code gives aggrieved employees the right to file a claim for unpaid wages and other similar violations with the Division of Labor Standards Enforcement. These claims are decided by a deputy labor commissioner in an administrative hearing, sometimes called a "Berman" hearing. The process is more streamlined than a proceeding in court, and is "designed to provide a speedy, informal, and affordable method of resolving wage claims." If either party does not agree with the deputy labor commissioner's decision, they can appeal to the superior court in a process called a "trial de novo."

Non-Exempt Employees Can Agree To A Salary That Includes Overtime

A California appellate court ruled that Labor Code section 515 does not outlaw clear wage agreements that provide for salaries that include fixed amounts of overtime. Arechiga v. Dolores Press, Inc.

Several Recent Wins for California Employers in Wage and Hour Cases

In the past few weeks, appellate courts in California have issued a number of opinions in wage and hour cases, which have been helpful to employers. As all too many of our clients are aware, we have seen an explosion in the number of such cases filed in our trial courts. And, as these cases make their way through the litigation process, we also are seeing this subject predominate at the appellate level. While it seems we mostly bring you bad news on this topic, in this issue we recap four cases that will be helpful to employers as they mount their defenses to wage and hour claims.

Employers on the Hot Seat

Employers with a California presence already know that they need to monitor their wage and hour practices carefully. Now that many employers have reached compliance in areas such as meal- and rest-period laws, plaintiff attorneys are on the prowl for new battlegrounds for litigation. For example, two recent California appellate decisions added yet another hurdle for California employers to leap and additional fuel for employees (and their lawyers) looking to file class actions.

New Exemption to the Meal-Period Requirement

On September 30, 2010, Gov. Arnold Schwarzenegger signed a bill providing an additional exemption to the current meal-period requirements. Existing law requires that all employees in California, with certain exceptions, receive a meal break of at least 30 minutes beginning before the fifth hour of work. The new exemption will apply to employees in certain occupations or industries who are covered by collective bargaining agreements.

Avoiding California Wage & Hour Class Action Suits

Most employers with business operations in states outside of California are generally aware of the employment practices that can lead to collective actions under the federal Fair Labor Standards Act (FLSA). These include:

Employers Who Win Meal and Rest-Period Claims Can Recover Fees and Costs

Employees and their attorneys have good reason to be more cautious in filing certain wage claims against employers. If they lose, they could be ordered to pay an employer's defense costs and attorneys' fees. California Labor Code § 218.5 permits prevailing employers to recover their fees and costs for any "action brought for the nonpayment of wages.…"

Minimum Wage As Class Warfare: A Creeping Activism.

Most of us who know the work history of our ancestors appreciate the gains made over the past 100 years with regard to fewer hours of work, a higher standard of living, and the opportunity to enjoy family time. However, many employees and their advocates, and some judges, are promoting causes calculated to further help workers but which actually are job killers. This creeping activism is destroying business across the country and, if not checked, could lead to greater unemployment, lower wages, and increased homelessness.

Dealing With The Labor Commissioner.

California wage/hour law is governed by the California Labor Code, the Industrial Welfare Commission's Wage Orders, and appellate or California Supreme Court decisions which interpret these laws. These laws are enforced by the California Labor Commissioner. Any employer doing business in California must be familiar with the Labor Commissioner's enforcement agency, the Division of Labor Standards Enforcement (DLSE). This article takes a closer look at an employer's dealings with the Labor Commissioner.

State Supreme Court Clarifies The Definition Of "Employ"

Recently the California Supreme Court held that third-party merchants were not "employers" as defined by the Industrial Welfare Commission, in part because they did not control the conditions of employment for the subject agricultural employees (strawberry pickers), i.e., did not hire them, fire them, or even have a right to tell them what to do or direct their work. The practical effect in this litigation was that the employees could not obtain unpaid wages from third-party merchants after the uncontested employer became insolvent. Martinez v. Combs.

Annual Bonuses: Are They Factored Into Overtime?

Many employers question whether annual bonuses must be considered in overtime compensation. Although California law has more protective overtime laws than most states, it sticks with federal law with regard to what is included in the "regular rate" when calculating overtime. Federal law requires "all remuneration" to be included in the regular rate except for seven specified types of payments. Among these excludable payments are discretionary bonuses, gifts and payments in the nature of gifts on special occasions, contributions by the employer to certain welfare plans and payments made by the employer pursuant to certain profit-sharing, thrift and savings plans.

Avoiding "Reporting-Time" Claims.

In California, conditions of employment, including standards governing compensation, are set forth in the Wage Orders promulgated by the Industrial Welfare Commission. These Wage Orders are generally given legal effect to the extent that they are consistent with the California Labor Code. Unfortunately, many of these provisions go unheeded by employers despite the fact that they are published in the California Code of Regulations and have been in effect for many years.

DLSE Issues Guidance On Deductions.

On November 28, 2009, the Division of Labor Standards Enforcement (DLSE) issued an opinion letter which should help shed some light on an area of the law which has long plagued California employers due to its ambiguity -- namely, under what circumstances may employers make deductions from exempt employees' salaries without running afoul of the law?

Button Up Those Commission Plans.

An employer recently found itself in the unenviable position of defending a lawsuit brought by a former sales employee, who alleged that the employer owed him a commission of 20% on a $12 million deal he brokered with AT&T. After three and a half years of litigation, an appellate court ruled in the employer's favor because the salesperson's employment agreement contained two critical provisions. Would your company's commission plan pass the same test? Nein v. HostPro, Inc.

Documentation Beyond Timekeeping Saves Dollars.

California employers continue to learn the hard lessons resulting from the failure to adequately keep time records or monitor off-the-clock activities. Timekeeping errors that occur systematically and continue unchecked can accumulate hundreds of thousands of dollars in liability, not to mention potential penalties and attorneys' fees in defending class action complaints addressing such deficiencies. The failure to keep accurate time records almost certainly is the direct result of an employer's failure to train, retain, and monitor effective first line supervisors.

Defending Wage Claims Before the California Labor Commissioner.

Most employers doing business in California are familiar with wage claims brought by current or former employees before the Division of Labor Standards Enforcement (DLSE), which is the state agency charged with enforcing the California Labor Code and the state's wage-hour laws and regulations. This article highlights the rules and procedures in defending a wage claim in California.

Some Key Points for Wage/Hour Compliance.

Whether the economy is still declining or on the rebound, one thing is clear: the storm of wage & hour litigation continues to buffet employers, an increasing trend that began long before the current recession and plague of unemployment in California. Two key historical facts have contributed significantly to the rise of such litigation in California beginning this decade.

Federal Court Withdraws Decision Awarding Overtime to Non-Residents Who Work In California.

As we reported in our last issue (California Wage/Hour Update, No. 1, January 2009), the U.S. Court of Appeals for the 9th Circuit recently ruled that the overtime provisions of California's Labor Code apply to work performed in California by non-resident employees. Sullivan v. Oracle Corporation.

San Francisco Mandates New Transportation Benefit.

A new San Francisco Ordinance went into effect January 20. It requires employers with 20 or more employees (regardless of where they are located) to provide incentives for their San Francisco employees to use public transportation. The San Francisco based employees must work at least 10 hours per week to qualify.

Federal Decision Awards Overtime to Non-Residents Performing Work in California.

A federal appeals court recently handed down a significant decision addressing the application of the overtime provisions of California's Labor Code to work performed in California by non-resident employees. The case has important consequences for employers who hire non-residents to perform work in California Sullivan v. Oracle Corporation.

The Explosion of Overtime Claims (Part 2).

In our last issue we looked at some of the most important timekeeping problems that employers should be aware of, in order to keep from being engulfed in the virtual tsunami of overtime claims being filed in recent years.

Big Win for Employers in Wage-Hour Litigation: Punitive Damages Ruled Improper

On December 3, 2008, in a long-awaited decision, the California Court of Appeals for the Fourth Appellate District addressed the issue of punitive damages in the context of a wage-and-hour lawsuit. This case represents a victory for employers in an area where the laws and penalties in California tend to be draconian.

Restaurant Association Challenge to SF Healthcare Ordinance Fails.

In what may become a trend statewide, or even nationwide, the San Francisco City Council passed what is called the Health Care Security Ordinance (HCSO). The purpose of the ordinance is to require employers to pay certain monetary amounts for health care, based on the number of persons employed.

Meal And Rest Period Decision to Be Reviewed by High Court.

Last July we reported on Brinker Restaurant Corp. v. Superior Court, an employer-friendly decision by a California Appeals court which addressed the legal standards under California's laws on meals and rest periods for employees.

State Reduces Thresholds for California Computer Professionals' Overtime Exemption: Changes Take Effect Immediately.

Last week Gov. Arnold Schwarzenegger approved an amendment substantially changing the law concerning overtime pay for certain computer software professionals. The law amends the California Labor Code and restores the overtime exemption for qualifying computer programmers, analysts and engineers who are paid a monthly salary equivalent to at least $75,000 per year, or who continue to be paid at least $36 per hour for all hours worked. The bill was passed as urgency legislation and took effect on September 30, 2008.

The Explosion of Overtime Claims (Part 1)

Employers in California are still being pummeled with claims by current and former employees seeking compensation for allegedly unpaid overtime. Employers should tackle this problem by conducting self-audits and improving internal procedures for eliminating overtime complaints. The fact is, many overtime claims have identifiable causes and are completely avoidable.

Pay Stub Payoffs: Check Yours Now to Make Sure You're in Compliance.

There is a California law which costs employers millions of dollars each year, all of which could be avoided with almost no effort on the employer's part – no lengthy training, no notices to post, and no changes to employee handbooks.

California - New Wage and Hour Ruling Welcomed by Employers.

The California Court of Appeal recently overturned a class certification order in a lawsuit brought by a group of hourly, non-exempt employees who claimed that they were denied rest and meal periods and were forced to work off the clock. In a key ruling, the court held that employers “need not ensure meal breaks are actually taken, but need only make them available.” The court also held that the employer’s practice of providing an “early lunch” within the first hour of an employee’s shift did not violate California law, even where the employee might then have to work in excess of five consecutive hours without an additional meal period. The court found such “rolling five-hour” meal periods to be inconsistent with the plain meaning of the Labor Code. In addition, the court found that employers are liable for off-the-clock work only if they “knew or should have known” employees were working.

California - New Law Changes Frequency of Payment To Temp Workers.

On July 22, Governor Arnold Schwarzenegger signed into law Senate Bill 940 which will change payroll practices applicable to "temporary service" workers. Under the new law, which will go into effect in January of next year, temporary service agencies must pay temps every week instead of every other week. The law also requires agencies to pay temps daily when they work for a client on a “day-to-day basis.” The new legislation creates another exception for workers on an assignment “for over 90 consecutive calendar days.” The weekly payment requirement does not apply to these employees unless their employers pay them weekly.

Appeals Court Decision Provides Clarity to Law Governing Meals and Rest Periods.

A California appellate court has handed down a long-awaited decision addressing legal standards for employee claims including meal and rest period violations. The court also overturned legal rulings regarding the employees' "off-the-clock" claims.

Tips on Tip Pooling.

In March a California court awarded more than $105 million to Starbucks baristas due to the company's practice of permitting supervisors to share the tips. The case is significant to all California employers that have tip-sharing arrangements.

Court Affirms: Holiday Pay Premiums May Be Credited Toward Overtime Obligations.

California law sets out basic overtime requirements for non-exempt employees in California. Among other things, the law requires an employer to pay an employee time and one-half of the employee's regular rate of pay for both 1) more than 8 hours of work in one workday, and2) more than 40 hours of work in any workweek. A double time premium is required for hours in excess of 12 in a work day, or in excess of 8 hours on the seventh consecutive day of work in a work week.

The California "Multiplier Effect": How Small Wage and Hour Violations Create Big Class Settlements in California.

Employers sued in California wage and hour class actions are all too familiar with the State’s “multiplier effect.” What is the California “multiplier effect,” you ask? Simply put, it is a small wage payment violation (e.g., for non-payment of overtime hours or off-the-clock work), that can trigger a range of penalties under the California Labor Code far exceeding the value of the original unpaid wage amount. In wage and hour class actions, minor wage violations can cost employers millions.

Start Me Up: New Case holds Start-Up Company Employee Qualifies for Administrative Exemption.

In California, unless specifically exempted, an employee is presumed to be non-exempt and subject to the provisions of the applicable Wage Order. Perhaps the most frequently mentioned exemptions are the "white collar" exemptions involving executive, professional, and administrative occupations. A white-collar exemption exempts an employee from entitlements under many sections of the Wage Order, including meal & rest periods, recordkeeping, and the minimum wage and overtime provisions.

California Wage & Hour: Understanding The "Tool Rate".

California employers are increasingly being challenged on whether they properly compensate and reimburse employees for usage of the employee's money or property in the course and scope of the employee's employment. Courts continuously acknowledge the California Legislature's intent that employers should not pass the cost of doing business onto employees such that the employees bear losses or incur expenses in conjunction with their employment.

Important Change to California's Pay Statement Requirements, Effective January 1, 2008.

As the New Year approaches, California employers should be mindful of an important change that will take effect on January 1, 2008, relating to information that can be listed on employee pay statements. Under California Labor Code section 226, employers must include certain itemized information on each employee’s pay statement. (This information must be provided separately for each pay period when the wages are paid by personal check or cash.)

New Year Brings Automatic Increases To California Payroll Costs.

Effective January 1, 2008, the California Minimum Wage will increase from $7.50 to $8.00 per hour, a 6.7% increase. This increase will trigger several automatic changes in your minimum-compensation requirements.

California Supreme Court Ruling Could Quadruple Potential Damages For Meal and Rest Period Violations.

The California Supreme Court has sent a shockwave through the California business community by ruling that premium pay issued to employees under California Labor Code section 226.7, to compensate them for missed meal and rest periods carries a three-year statute of limitations as opposed to a one-year statute of limitations.
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