Total Articles: 475
Dynamex Bites Back: Ninth Circuit Rules California's New Independent Contractor Standard Applies Retroactively
In April 2018, the California Supreme Court issued its landmark decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, making it much more difficult for businesses to classify workers as independent contractors in California through its adoption of the so-called ABC test. Under this expansive new standard, all workers in California are presumed to be employees subject to Industrial Welfare Commission Wage Orders unless the company can prove that the worker meets all three elements of the ABC test:
California keeps making privacy headlines for its trailblazing California Consumer Privacy Act (“CCPA”), set to take effect January 1, 2020, but there is another set of privacy bills making its way through the California state legislature, that, if passed, will provide consumers with further privacy protections.
After a one-day bench trial, a sales representative for a security company successfully established that his employer had failed to reimburse him for mileage expenses, using only his odometer reading as the basis to calculate the owed mileage. Plaintiff was a “High Volume Sales Representative,” meaning that he worked almost exclusively in the field making sales to new customers, canvassing neighborhoods, meeting with residential developers, and hosting promotion events.
The U.S. District Court for the Central District of California, applying de novo review due to California’s discretionary clause ban, ruled that an employee of Apple, Inc. was not entitled to long-term disability benefits because he did not satisfy the burden of proving that he was disabled. McCool v. Life Insurance Company of North America, et al., No. 17-cv-07766 (November 9, 2018).
Executive Summary: In 2018, the California Supreme Court adopted the “ABC test” for determining whether workers are independent contractors under California wage orders (the Dynamex decision). For a discussion of that decision, please see our May 3, 2018 Alert. The ABC test makes it more difficult in many cases for companies to classify a worker as an independent contractor than under the prior generally-applied common law test. As such, the adoption of the ABC test increases many California employers’ exposure for minimum wage, overtime, meal and rest periods, and other benefits owed to employees but not to independent contractors. On May 2, 2019, in Vasquez v. Jan-Pro Franchising International, Inc., the Ninth Circuit concluded that the ABC test should be applied retroactively to situations that arose before the Dynamex decision came out.
California employers were dealt another setback in the responding to claims of misclassification of independent contractor status for violations of the Industrial Welfare Commission Wage Order (“IWC Wage Orders”). Noting California’s “basic legal tradition” that “judicial decisions are given retroactive effect,” the U.S. Court of Appeals for the Ninth Circuit has held that the State’s recently-adopted “ABC” test, used in the employee-versus-independent contractor analysis in cases involving IWC Wage Orders, must be applied retroactively.
The worker-friendly test for independent contractors established by the California Supreme Court's 2018 Dynamex ruling can be applied retroactively, a federal appellate court has ruled.
In Big Loss For Gig Companies, 9th Circuit Says Dynamex And ABC Test Should Be Applied Retroactively
There’s no way to sugarcoat this one. Today the 9th Circuit handed a big loss to gig economy companies by concluding that last year’s Dynamex decision from the California Supreme Court and its wide-reaching ABC test should be applied retroactively. That means that the ABC test – which makes it very difficult for gig economy businesses to properly classify their workers as independent contractors rather than employees – will be applied to federal cases when evaluating relationships that businesses thought were to be adjudged under a much more flexible standard.
Despite its name, the California Consumer Privacy Act, which goes into effect Jan. 1, 2020, potentially could impose substantial compliance burdens on and create significant class-action exposure for every employer that employs California residents and has more than $25 million in annual gross revenues.
The Labor Commissioner fined a Southern-California car wash for more than $2.36 million for alleged wage and hour violations. These fines included both civil penalties and wages owed to employees. This appears to be a continuation of the agency’s enforcement actions against commercial car washes from 2012 and 2015.
How will the California Consumer Protection Act (CCPA) apply to us? This is a question 0rganizations have asked since the CCPA was first proposed. There remains a number of important questions about the scope of the Golden State’s sweeping privacy law that still need to be answered.
A measure currently pending in the California Legislature, and garnering wide bipartisan support, would provide that prohibited employment discrimination based on race under the Fair Employment and Housing Act (FEHA) also includes discrimination based upon hair texture and hairstyles. If enacted into law, this bill will require California employers to re-evaluate workplace grooming standards applicable to their work sites in order to ensure compliance with the law.
As we reported, in late February, California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson introduced Senate Bill 561, legislation intended to strengthen and clarify the California Consumer Privacy Act (CCPA).
On April 15, 2019, a California Court of Appeal affirmed summary judgment for the employer in an action alleging class-wide violations of the hyper-technical provisions of the federal Fair Credit Reporting Act (FCRA).1 Following just shortly after the Ninth Circuit’s pro-employee opinion in a similar case, Gilberg v. California Check Cashing Stores, the court’s opinion is a welcome development for embattled employers in California.2
As the January 1, 2020, effective date for the California Consumer Privacy Act (CCPA) draws closer, California lawmakers are still attempting to refine the law. In the latest proposed amendment, Assembly Bill 25, employees and job applicants are specifically excluded from the definition of “consumer” under the CCPA. The proposed amendment states the following:
In their bylined article for Beverage Master titled “Crafting Marijuana Policies? Managing Employees in the Wake of Legalized Marijuana,” San Diego Partner Amy L. Lessa and Associate Nicole E. Stenoish discuss how craft breweries can comply with conflicting state and federal laws on marijuana. Amy and Nicole explain that many employers are questioning whether to revise their workplace marijuana policies and practices, and they provide three key issues employers should keep in mind when determining the best marijuana policies for their workplace.
The federal appeals court that oversees cases arising from California recently handed down an opinion that helps provide guidance to those employers trying to comply with collective bargaining agreements while simultaneously being challenged to apply potentially inconsistent definitions in California’s overtime law.
California Senate Bill (SB) 188 seeks to provide a broader definition of “race” in California’s anti-discrimination law. The bill defines “race” as “inclusive of traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.” The bill is expected to become law, and employers may want to plan accordingly.
California Supreme Court Holds Employees Cannot Sue Their Employers’ Payroll Companies for Wage Claims
On February 7, 2019, the Supreme Court of California issued its decision in Goonewardene v. ADP, LLC, holding that employees may not sue their employers’ payroll companies for wage claims in connection with their employment. The high court’s ruling reversed a lower court’s decision, which had opened the door for employees to bring breach of contract and tort claims for unpaid wages against their employers’ payroll companies.
On March 26, 2019, proposed Assembly Bill 5, which would codify the California Supreme Court’s controversial Dynamex decision, was amended to exempt certain types of licensed workers. Just as noteworthy as the types of workers identified as exempt from the standard are the types of employees who were not identified. For example, the exemption does not appear to cover trucking companies and gig economy transportation companies. If there are specific statutory exclusions, it will be difficult for courts to find exclusions in the common law.
On February 7, 2019, the California Supreme Court determined that an employee cannot sue a payroll company for breach of contract under the third party beneficiary doctrine, and that it is inappropriate to impose a tort duty of care upon a payroll company with regards to the obligations owed to an employee under the applicable labor statutes and wage orders.
Disability Discrimination and Reasonable Accommodation under California’s Fair Employment and Housing Act (FEHA) 
If your business has five or more employees, your business is one of the millions in California that has a duty to provide reasonable accommodations for its employees with known disabilities.
The California Consumer Privacy Act (CCPA), which goes into effect January 1, 2020, is considered the most expansive state privacy law in the United States. Organizations familiar with the European Union’s General Data Protection Regulation (GDPR), which became effective on May 25, 2018, certainly will understand CCPA’s implications. Perhaps the best known comprehensive privacy and security regime globally, GDPR solidified and expanded a prior set of guidelines/directives and granted individuals certain rights with respect to their personal data. The CCPA seems to have spurred a flood of similar legislative proposals on the state level.
Start Planning Your Workplace Sexual Harassment Trainings Early – The Ins and Outs of the Training Requirements Going into Place in 2020
California employment law is changing once again. By January 1, 2020, an employer having five or more employees will be required to provide at least one hour of sexual harassment training to all of its employees, once every two years. The training will be required to start within six months of the employee’s assumption of a position.
Bruce Sarchet and Corinn Jackson with Littler’s Workplace Policy Institute review the key labor and employment measures introduced this year in the California legislature. Lawmakers have filed bills on a wide range of topics, from independent contractor classification to hairstyle discrimination – and beyond! Bruce and Corinn break down the most significant pending bills, identifying practical ramifications for employers and offering insights into the legislative history and process.
California legislators continue to advocate new legislation expanding employer requirements to provide lactation accommodations for employees. California Senate Bill 142 (SB 142) would amend the California Labor Code and the Health and Safety Code to require additional lactation accommodations for employees.
By now, most employers should be aware of the California Healthy Workplaces, Healthy Family Act which went into effect in 2015. Under California law, all employers (with very few exceptions), must allow employees to use up to 3 days or 24 hours of paid sick leave in a 12-month period. However, what many employers do not know is that several cities within the State of California have their own paid sick leave requirements, many of them more stringent than those required under the state law.
California courts have been busy since the start of the new year issuing decisions that affect employers with California employees. Here’s an update on the most significant of these decisions and how they impact employers and their policies and practices.
February 22 was the last day to introduce new legislative proposals for the 2019 California legislative year. A whopping 2,576 bill were introduced before the deadline, making for an extremely busy legislative year ahead. Although new ideas can be added later through the “gut and amend” process, we now have a fairly clear sense of the labor and employment issues the California legislature will be confronting in 2019.
On February 25, 2019, California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson introduced Senate Bill 561, legislation intended to strengthen and clarify the California Consumer Privacy Act (CCPA), which was enacted in June of 2018. If enacted, this would be the second amendment to the CCPA, following an earlier amendment in September of 2018 that Governor Jerry Brown signed into law Senate Bill 1121, which also clarified and strengthened the original version of the law.
California Assembly Bill 9 (AB 9), sponsored by Assembly Members Eloise Reyes, Laura Friedman, and Marie Waldron, would expand employee protections related to harassment and discrimination in the workplace.
California employers seemingly need a scorecard each year to keep up with all of the employment law changes afoot, but this is especially true in 2019.
What is CalSavers?
In a ruling that will have a significant impact on the retail and restaurant industries, among others in California, the California Court of Appeal ruled that a retail employer’s call-in scheduling policy—in which employees were required to call the employer in advance of a shift to find out if they needed to show up for work—triggered the reporting time pay obligation set forth in the California Industrial Welfare Commission’s (IWC) Wage Orders.
In Duffey v. Tender Heart Home Care Agency, LLC, the California Court of Appeal for the First District addressed whether an in-home caregiver was an independent contractor or employee. Reversing a trial court order dismissing the plaintiff’s overtime claim, the court of appeal concluded that an in-home caregiver may be an employee when the caregiver’s placement agency has control over the caregiver’s wages.
The International Brotherhood of Teamsters, Local 2785 has filed a petition for review to the Ninth Circuit Court of Appeals on the Federal Motor Carrier Safety Administration’s (FMCSA) determination that California’s meal and rest break rules are preempted as applied to drivers of commercial motor vehicles (CMVs) subject to the FMCSA’s hours-of-service (HOS) regulations. This primarily involves interstate truck drivers and some intrastate drivers who meet certain criteria under the HOS regulations who drive CMVs. The Teamsters are seeking to reverse the Agency’s administrative determination.
Happy Data Privacy Day from the Jackson Lewis Privacy, Data and Cybersecurity Team!
Data privacy and security regulation is growing rapidly around the world, including in the United States. In addition to strengthening the requirements to secure personal data, individuals are being given an increasing array of rights concerning the collection, use, disclosure, sale, and processing of their personal information.
In 2018, the California Supreme Court issued an opinion (Dynamex Operations West, Inc. v. Superior Court of Los Angeles County) establishing a new standard (“ABC test”) for determining whether an individual is an independent contractor or employee in the context of claims brought under the State’s Industrial Welfare Commission’s wage orders. The result is a broader definition of who qualifies as an employee for the purpose of a claim brought under a wage order.
A Roadmap for the Future of Work: California’s Little Hoover Commission Issues Report Highlighting the Importance of Building a "Human Infrastructure" to Ride Out the TIDE
The opportunities and challenges that artificial intelligence (AI) and automation are creating for the labor market are gaining increasing attention in both policy circles and society at large. The creation of the American Workforce Policy Advisory Board, whose members are expected to be announced early this year, is intended to “prepare Americans for the 21st century economy and the emerging industries of the future” in light of the rapid changes that “technology, automation, and artificial intelligence” are generating. These changes are expected to arrive soon. Kai-Fu Lee, a Chinese venture capitalist, recently predicted on 60 Minutes that AI could displace up to 40% of the world’s jobs within the next 15 years.
Two competing bills related to the classification of workers are in play in the California legislature.
Happy New Year! As we turn the calendar to 2019, employers across the country are taking stock of recently-enacted workplace regulations on a wide variety of topics.1
It’s a new year, and California SDI benefits will be increasing. The SDI withholding rate continues to be 1.0% of wages. But, the taxable wage limit will increase from $114,967 to $118,371.
In this podcast, Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, survey numerous wide-sweeping changes affecting California employers in 2019.
Developing a paid sick and safe time (PSST) policy that complies universally – or at the very least with two laws – has become increasingly challenging. Without fail, and despite some overlap, each new law seems to contain one provision that could interfere with the goal of establishing uniform practices.
What Happens If Landmark Appellate Court Decision Is Reviewed By State Supreme Court?
For decades, American employers have used the legally endorsed policy of rounding employees’ time to the nearest quarter hour. This has always been permissible, provided the policy was neutral in effect, meaning that on balance employees were not underpaid as a result. Back in the days not so long ago when payroll was calculated by scribes in green visors and sharp pencils, rounding made perfect sense, as trying to pay to the minute when someone on a 9:00 am – 5:00 pm shift clocks in a 8:57 am (so as not to violate the punctuality policy) and doesn’t leave their work station until 5:00 (again to not violate policy) and clocks out at 5:05, would have been far more cumbersome. So rounding to the nearest quarter hour was permitted, provided “it all comes out even in the wash” so as not to deprive employees, on balance, of time worked.
California Supreme Court Rebuffs Plaintiffs’ Attempt to Undo Their Agreements Waiving Second Meal Period
The California Supreme Court has upheld the ability of California health care workers who work more than twelve hours a day voluntarily to waive their second meal period, rebuffing plaintiffs’ argument that their voluntary waivers were unenforceable. (Gerard v. Orange Coast Memorial Medical Center (Dec. 10, 2018) Case No. S241655.)
In an important decision for employers in the healthcare industry, the California Supreme Court just approved the Industrial Welfare Commission’s long-standing exemption for health care workers in relation to second meal period waivers. The Gerard v. Orange Coast Memorial Medical Center case, released earlier today, had already been the subject of another decision from the California Supreme Court, and the California legislature even passed legislation in the middle of the case directly affecting the court’s decisions—which means this decision was a long timing coming for the California healthcare community.
December 3 was the first day of the new legislative session in California. It was a day of festivities and ceremony, as new members were sworn into office and Democrats had their first taste of the “super-duper majority” dominance in both houses of the legislature.
Lawsuit Filed Against California’s Attorney General Alleging the Private Attorney General Act (“PAGA”) is Unconstitutional
On November 28, 2018, the California Business & Industrial Alliance (an association that represents the interests of small and mid-sized businesses in California and which was formed for the specific purpose of accomplishing the appeal or reform of the Private Attorney General Act (“PAGA”)) filed a lawsuit against Xavier Becerra in his official capacity as the Attorney General for the State of California for injunctive and declaratory relief in the Orange County Superior Court.
Oakland, California Passes Ballot Measure Targeting Hotel Employers and Creating New Enforcement Mechanisms for Employment-Related Ordinances
Voters in Oakland, California recently approved ballot "Measure Z," titled the "Oakland Minimum Wage Charter Amendment." The measure imposes new minimum wages and employment standards for some hotel workers, authorizes the City to administratively enforce its employment standards through investigations and penalties, and will create a Department of Workplace and Employment Standards (DWES) to carry out such enforcement activities.
2019 is Coming: California Employers Need to Brace Themselves for the Flurry of New Laws Set to Take Effect January 1, 2019
California Governor Jerry Brown recently signed a slew of employment-related bills into law, many of which will take effect on January 1, 2019. These laws will have an immediate impact on the workplace and will require employers in the Golden State to revamp existing practices and procedures.
The Other Shoe Drops: Court of Appeal Decision Narrows Use of Employee Non-Solicitation Provisions in California
It is well-established that restrictive covenants are prohibited by statute in California. Since the decision by the California Supreme Court that partial restraints like customer non-solicitation clauses were void under Business and Professions Code Section 16600, the courts have been strictly interpreting any covenant that impinges on employment opportunities.
One of our firm’s most prolific writers and most astute analysts of all things related to workplace law in California, Ben Ebbink (Sacramento) wrote a recent post-election entry for the firm’s California Employers Blog entitled “What Will A Governor Newsom Mean For California Employers?” The entire post is worthy of your review, but two portions of his blog entry particular focus on the gig economy.
California Court Voids Nonsolicit Agreement, Defeats Trade Secret Claims and Awards Attorneys’ Fees to Defendants
A California Court of Appeal concluded that what appeared to be a standard nonsolicitation of employees provision was, in fact, an unenforceable noncompete that prevented its former employees from carrying out their chosen profession. The Court of Appeal in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. upheld summary judgment in favor of employee defendants and their employer defeating an 11 count complaint that asserted claims of breach of contract, misappropriation of trade secrets, interference with prospective economic advantage, aiding and abetting misappropriation of trade secrets, and unfair business practices after four of AMN’s recruiters were hired by Aya and recruited other of AMN’s employees to work for Aya. In addition, the Court of Appeal upheld an injunction against the former employer from attempting to enforce such agreements in the future and awarded the defendants $190,000 in attorneys’ fees.
While much of the attention this midterm election has been focused on Congress and federal issues - the “blue wave” and a “referendum” on the Trump presidency - California employers know all too well that employment and labor policy is largely being driven at the state and local level. The split in Congress between the Republican-led Senate and the Democrat-controlled House means that we can expect continued gridlock and lack of significant federal legislation on employment issues.
Do New California Restrictions on Confidentiality Provisions Tie Employer Hands on Releases and Other Employee Contracts?
Bruce Sarchet and Corinn Jackson, with Littler’s Workplace Policy Institute, chat with Betsy Cammarata of the firm’s Knowledge Management team about major upcoming changes to California laws governing employee release and confidentiality agreements. Bruce and Corinn explore three new laws (AB 3109, SB 820, and SB 1300) that nullify certain common contractual terms. SB 820, for example, generally outlaws provisions in settlement agreements that would prevent the disclosure of facts related to claims of sexual harassment. Bruce and Corinn discuss steps that employers can take now to prepare for compliance with these laws by the January 1, 2019 effective date.
Under the Family Medical Leave Act, eligible employees are entitled to take time off for due to a “qualifying exigency” arising from the deployment of the employee’s spouse, parent, or child for active military duty to a foreign country. Examples of “qualifying exigencies” include attendance at military events, making childcare arrangements arising from a military member’s covered active duty, making or updated financial and legal arrangements to attend a military member’s absence on covered active duty, and accompanying the military member during a rest and recuperation leave during deployment.
Many businesses will temporarily increase staffing levels for the upcoming holiday season, during which an uptick in colds and other illnesses is common. Employers may be concerned that seasonal workers will be absent on multiple occasions during their brief period of employment. Below we briefly highlight some issues for employers to consider when managing seasonal employees and paid sick and safe time (PSST).
The #MeToo movement has sparked new legislation aimed at tackling the problem of sexual harassment, especially in the workplace. California Governor Jerry Brown has signed several of these bills into law, set to take effect on January 1, 2019. Employers should review their policies in preparation for the changes.
On September 27, 2018, California enacted Senate Bill 970 establishing a minimum threshold for human trafficking awareness training and education in the hospitality industry. Under the law, hotels and motels are required to provide 20 minutes of classroom or other interactive training regarding human trafficking awareness to each employee likely to interact or come into contact with victims of human trafficking. Employees required to receive training are those who have recurring interactions with the public, including those working in the reception area, performing housekeeping duties, helping customers move their belongings, and driving customers.
The end of the California legislative year was marked by a flurry of last-minute bill signings by the governor affecting employers. Many of these bills enact new laws or amendments that address major employment law issues, such as several amendments to the state Fair Employment and Housing Act (FEHA) to combat harassment and the new law limiting the use of confidentiality provisions in settlement agreements.
On the last day for Governor Brown to sign or veto bills this legislative session, here is the list of key employment-related bills that have been signed into law, along with a list of bills that were vetoed. All new laws take effect January 1, 2019 unless noted.
Employers looking for greater transparency on prescription drug pricing and pharmacy benefit manager (PBM) services will soon have a powerful new tool from an unlikely source: California lawmakers.
New CA Case Confirms: No Absolute Rule to Permit Leave to Amend to Substitute Class Representative If Named Plaintiff Is Found Inadequate
In Jones v. Farmers Ins. Exchange (2013) 221 Cal.App.4th 986 (“Jones”), the California Court of Appeal held that “[t]he lack of an adequate class representative … does not justify the denial of the certification motion. Instead, the trial court must allow Plaintiff[ an opportunity to amend [his] complaint to name a suitable class representative. [Citation & fn. omitted.] The court should then grant the certification motion if it approves a class representative.” Id. at 999.
The California Consumer Privacy Act (CCPA) is a new law that California Governor Jerry Brown signed on June 28, 2018, and will become effective on January 1, 2020. Amendments to the law are still being proposed, and the law will likely be amended and clarified. Here is what we know today.
Executive Summary: On September 30, 2018, California Governor Edmund J. Brown, Jr. signed into law eight new bills involving gender and sexual harassment training and related issues. The Governor also signed into law two bills amending California’s lactation accommodation requirements. These laws were submitted by the legislature on the heels of the #MeToo movement, and the majority of these new laws were largely written to address workplace issues with respect to sexual harassment in particular.
California requires an employer to provide employees who works more than five hours with a 30-minute uninterrupted, off-duty meal break (and another meal break if they work more than 10 hours). State law also requires an employer to provide employees with a 10-minute uninterrupted, off-duty break every four hours.1 Regulations issued by the U.S. Department of Transportation (DOT), on the other hand, require only that a commercial driver not drive more than eight hours without first taking a 30-minute, off-duty meal break.2
That’s a Wrap! Fisher Phillips Comprehensive Guide to New California Employment Laws Enacted by Governor Brown
This past Sunday (September 30) represented the deadline for Governor Brown’s final actions on legislative measures, and his final term as California’s governor will come to an end in a few short months.
New California Sexual Harassment Legislation Will Make It More Difficult for Employers to Resolve Claims
In the waning days of his final term of office and on the last possible day under the legislative calendar, on September 30, 2018, California Governor Jerry Brown signed a trio of bills into law that should have a dramatic effect on the ability of workers to bring claims for harassment and discrimination in the workplace. The new legislation makes it significantly more difficult for employers to resolve such claims, either by way of settlement or by motion for summary judgment, and it also attempts to increase education and training regarding harassment in California’s entertainment industry.
Once again, Governor Jerry Brown ends the legislative year by signing a flurry of employment-related legislation. This year, however, is Governor Brown’s last year to do so, and next year we will report about the employment-related legislation that the new governor (whoever that is) undoubtedly will have signed.
California Governor Jerry Brown recently signed Senate Bill 826 into law which requires publicly-held corporations with principal executive offices in California to have a certain number of females on their boards of directors.
Effective January 1, 2019, California's breastfeeding breaks law will be amended to:
Two new California laws seek to combat human trafficking through required training and mandatory notice postings. These steps are intended to provide education and resources for employees who believe they, or someone they know, are the victims of human trafficking. The new laws apply to various industries that may be particularly vulnerable to human trafficking.
Governor Brown has been busy in the last year of his term signing and vetoing many employment-related bills. We are pleased to report that he vetoed California Assembly Bill 3080 (AB 3080). AB 3080 sought to amend the California Fair Employment and Housing Act (FEHA) and the California Labor Code making it an unlawful employment practice to require an applicant, employee, or independent contractor to agree in any contract entered into, modified, or extended on or after January 1, 2019 to arbitrate claims arising under FEHA or the Labor Code. AB 3080, if signed into law, would have prohibited, penalized, and criminalized (under Labor Code § 433) most employment arbitration agreements in California.
Today was the last day for Governor Brown to sign or veto bills this legislative session. Below is the list of key employment-related bills that have been signed into law, along with a list of bills that were vetoed. All new laws take effect January 1, 2019 unless noted in the blog.
Wrapping up a whirlwind weekend, California Governor Jerry Brown just signed several pieces of legislation that will create new employer obligations in the areas of sexual harassment and gender discrimination. Specifically, you will no longer be able to enter into non-disclosure agreements involving claims of sexual assault, sexual harassment, or sex discrimination; will be required to significantly increase your sexual harassment prevention training initiatives; and will be restricted in your ability to enter into certain settlement agreements related to harassment and discrimination claims.
Appeasing The 3-Headed Monster For Incentive-Paid Employees
On September 23, 2018, Governor Jerry Brown signed into law SB-1121 amending certain provisions of the California Consumer Privacy Act of 2018 (CCPA) which was enacted in June of this year.
Am I My Brother’s Keeper? New California Law Says If You Do Business With a Port Trucking Company Then, “Yes You Are!”
On September 22, Governor Brown signed SB 1402, a bill that establishes joint and several liability for customers who contract with or use port drayage motor carriers who have unpaid wage, tax and workers’ compensation liability. SB 1402 is effective January 1, 2019.
Governor Signs Legislation to Provide Post-Augustus Rest Period Relief to Unionized Petroleum Facility Employees
On September 20, Governor Brown signed AB 2605, which provides that petroleum facility employees in safety-sensitive positions and are covered by a valid collective bargaining agreement are exempt from the requirement that employees be relieved of all duty during rest periods. The bill contained an urgency clause, which means it went into effect immediately upon signing.
CAFA Amount In Controversy Is Not Limited To Damages Incurred Prior To Removal And Includes Future Attorneys’ Fees Recoverable By Statute Or Contract
In Fritsch v. Swift Transp. Co. of Ariz., LLC, No. 18-55746 (Aug. 18, 2018), the Ninth Circuit clarified, in a unanimous published decision, that, where a party may recover its attorney’s fees by statute or contract, the Court must include future fees as well as those already incurred in assessing whether a case meets the amount-in-controversy threshold under the Class Action Fairness Act (“CAFA”).
An amendment to Section 1122 of the California Evidence Code on mediation confidentiality requires attorneys representing clients in connection with mediation to provide written disclosures to their clients about mediation confidentiality beginning January 1, 2019.
September 1, 2018 marked the last day for the California legislature to pass bills and forward them to Governor Jerry Brown (D) for his consideration. Governor Brown has until September 30 to sign, veto, or otherwise decline to act upon these bills. The bills that become law will take effect on January 1, 2019, unless otherwise specified in the text of the measure. As always, the long list of bills crossing the governor’s desk includes numerous labor and employment items that could impact the operations of private employers in the Golden State.
It’s been a long legislative year. But now all of the flurry of activity is behind us and hundreds of bills now wait on Governor Jerry Brown’s desk for either a signature or a veto.
How can a company manage its overtime policy in compliance with California law? A recent decision by a federal district court in California certified a class action involving claims of unpaid overtime, and the court’s reasoning shows what factors employers may want to consider—and to avoid—when designing an overtime policy. In Shaw v. AMN Healthcare, Inc., a putative class of traveling nurses (employed by a labor contractor, AMN Healthcare, Inc., that recruits and places traveling nurses at healthcare facilities nationwide) claimed that they were not paid for overtime when they worked at Kaiser hospitals in California. The court certified the class action, finding that the plaintiffs met the commonality and predominance requirements as to their overtime claims.
The #MeToo movement and the national focus on sexual harassment have sparked significant legislative activity at the state level designed to address these issues. Here in California, lawmakers introduced over two dozen bills to tackle such issues.
While businesses, chambers of commerce, local leaders, and others have put the full-court press on the California legislature to take action to somehow lessen the impact of the new ABC Test for determining misclassification in light of the state Supreme Court’s recent Dynamex decision, it appears there is no relief in sight. For the foreseeable future, California employers need to adjust to the new reality and assume things aren’t going to be changing.
In a case involving the potential overlap between the Investigative Consumer Reporting Agencies Act (ICRAA) and the Consumer Credit Reporting Agencies Act (CCRAA), the state’s high court ruled that employers must comply with the more restrictive of the two laws.
California’s pay equity law has been amended to clarify certain ambiguities regarding proper interview questions, disclosure of pay scales, and the application of the law to existing employees.
Bruce Sarchet and Corinn Jackson of Littler’s Workplace Policy Institute discuss recently-adopted amendments to the California salary history ban. Although the ban took effect this past January, the original statute left open numerous important questions. Bruce and Corinn review the new definitions included in the amendments, which clarify when employers must provide pay scale information to applicants and when the wage history of internal candidates may be considered. They also address how these amendments, effective January 1, 2019, fit in with the Golden State’s existing equal pay laws.
On August 13, 2018, the California Fourth District of Appeal held in Monster Energy Company v. Schechter that an attorney who signed his client’s settlement agreement under the phrase “approved as to form and content” was entitled to the granting of an anti-SLAPP motion in a case against him for breaching the confidentiality provision of the settlement, finding that he was not a party to that agreement.
On January 1, 2018, California’s salary history ban (A.B. 168) took effect. Under A.B. 168, California employers are prohibited from “seek[ing] salary history information” from an applicant.1 The statute also prohibits employers from relying on an applicant’s prior salary history “as a factor in determining whether to offer employment . . . or what salary to offer an applicant.”2 In short, employers cannot ask applicants what they made at their last job, and, if the information is involuntarily disclosed, cannot rely on this information—in any way—in determining the terms of an employment offer. On July 18, 2018, Governor Jerry Brown signed AB 2282, the Fair Pay Act Bill, which takes effect on January 1, 2019, and clarifies the application of California’s Equal Pay Act.
On July 1, 2018, the newly implemented Hotel Housekeeping Musculoskeletal Injury Prevention Program (MIPP) regulation took effect.1 This program requires all California hotel/motel employers to institute and maintain written policies and training practices regarding housekeeping-related workplace hazards. The new Cal-OSHA regulation, which is intended to prevent and reduce work-related injuries to housekeepers in the hospitality industry, specifically requires that the MIPP be part of the employers Injury Illness and Prevention Program (IIPP) and that it be in writing, readily accessible to employees during their shift, and include the following components
Today, the California Supreme Court issued its opinion in Troester v. Starbucks, refusing to hold that the well-established de minimis doctrine applies under California law. The de minimis doctrine is a principle of law that has long been endorsed and applied by both federal and California state courts (as well as California’s Division of Labor Standards Enforcement), holding that employers need not compensate employees for insignificant amounts of time spent performing work-related tasks off the clock where such time is administratively difficult to track. Today, the state’s high court held that, although the doctrine is widely accepted under the federal FLSA, California wage orders are more protective of employees and require payment for “all hours worked.” The Court held that the de minimis doctrine cannot be used to allow an employer to avoid paying for tasks that take, on average, 4-10 minutes at the end of an employee’s shift. However, the Court stated that is was not prepared to hold that the doctrine could never be applied under California law on potentially different facts involving smaller amounts of time spent off the clock and/or only sporadically.
You remember the game-changing, earth-shattering, monumental decision from the California Supreme Court a few months ago that fundamentally changes the test to determine whether your workers are independent contractors or employees, don’t you? For those who had put it out of their minds hoping it was all just a nightmare, here’s the quick summary: rather than applying a balancing test that took into a number of factors, the California Supreme Court said that hiring entities need to prove that all of their workers satisfy the “ABC test” in order to properly classify them as employees. The test appears notoriously difficult to overcome, especially because Prong B of the test requires you to prove that the worker is performing work outside the usual course of your business. We’ve written about this test extensively; you can read more about it here.
Federal Court Both Affirms and Invalidates Enforceability of California's Immigrant Worker Protection Act
Introduction: Last February, we provided an overview of California's Immigrant Worker Protection Act, AB 450. The law, which took effect on January 1, 2018, was a response to anticipated increases in federal immigration enforcement efforts under the Trump administration and was aimed at providing workers some protections from federal immigration enforcement actions in the workplace. AB 450 regulates three things: (1) the level of workplace access employers are permitted to give immigration enforcement officials, (2) notice to employees about immigration enforcement efforts, and (3) reverification of an employee’s employment eligibility.
New California Law Protects Victims, Witnesses, and Employers From Damages to Alleged Sexual Harassers’ Reputations
On July 9, 2018, California Governor Jerry Brown signed Assembly Bill 2770 (AB 2770) into law. The new statute amends California Civil Code Section 47, which designates certain communications as “privileged,” meaning that individuals cannot be liable for defamation (including libel and slander) based on those communications.
On July 4, 2018, Judge John Mendez of the United States District Court for the Eastern District of California preliminarily enjoined California from enforcing some provisions of Assembly Bill 450 (AB 450), known as the “Immigrant Worker Protection Act.” The judge did so in response to the federal Department of Justice’s (DOJ) challenge to AB 450, Senate Bill 54 (the California Sanctuary State Law), and Assembly Bill 103, which directs the state attorney general to review and report on detention facilities housing noncitizens within California for civil violations of federal immigration laws. The court did not sustain the DOJ’s challenges to the other two statutes.
A federal district judge in California issued a preliminary injunction preventing the State of California from enforcing certain provisions of Assembly Bill (AB) 450, a state statute that, among other things, prohibits private employers from cooperating with federal immigration enforcement agencies in the absence of a judicial warrant or a subpoena. The law, which is also known as the Immigrant Worker Protection Act, went into effect on January 1, 2018. The U.S. Department of Justice (DOJ) filed a lawsuit in March 2018, alleging that AB 450, and two other California immigration statutes, preempt federal law and interfere with the government’s ability to carry out its duties.
District Court Preliminarily Enjoins Some Components of California Sanctuary Laws Impacting Employers
On July 4, 2018, the U.S. Department of Justice obtained a partial victory in its challenge of California’s Immigrant Worker Protection Act ("Assembly Bill 450" or "AB 450") and other sanctuary laws when a California federal court held that certain provisions of AB 450 violated the Supremacy Clause of the Constitution.
A key issue for any business facing class action litigation in response to a data breach is whether the plaintiffs, particularly consumers, will have standing to sue. Standing to sue in a data breach class action suit, largely turns on whether plaintiffs establish that they have suffered an “injury-in-fact” resulting from the data breach. Plaintiffs in data breach class actions are often not able to demonstrate that they have suffered financial or other actual damages resulting from a breach of their personal information. Instead, plaintiffs will allege that a heightened “risk of future harm” such as identity theft or fraudulent charges is enough to establish an “injury-in-fact”.
Executive Summary: California has become the first state to introduce privacy protection for individuals’ personal data comparable to that provided under the European Union’s General Data Protection Regulation (GDPR). The California Consumer Privacy Act of 2018 (“CCPA” or “the Act”), which takes effect January 1, 2020, is a sweeping digital privacy law that creates new protections and rights for consumers’ personal data. The CCPA will grant California consumers the following rights: (1) to know what personal information is being collected about them; (2) to know whether their personal information is sold or disclosed and to whom; (3) to say no to the sale of personal information; (4) to access their personal information; and (5) to equal service and price, even if they exercise their privacy rights (e.g., businesses may presumably offer tiered pricing for goods and services, such as offering higher prices for increased privacy); and in addition, to hold companies liable for data breaches.
Unraveling The Newest Development In The Data Protection Juggernaut: What Does The "California Consumer Privacy Act of 2018" Mean For Employers?
By Philip L. Gordon and Andrew Gray on July 9, 2018 With the May 25, 2018 effective date of the European Union’s General Data Protection Regulation (GDPR) barely in the rear-view mirror, California’s Governor Jerry Brown, on June 28, 2018, signed into law the “California Consumer Privacy Act of 2018”1 (CCPA or “the Act”). The law flashed onto the scene after a concerned and wealthy California citizen funded, and obtained the approval of, a ballot initiative for a similar law to be placed on the November 2018 electoral ballot. The initiative’s backer used that approval as leverage in the waning days of June to force the California government to enact an alternative law in exchange for his withdrawal of the initiative from the November 2018 ballot before the June 30 publication deadline. The CCPA is aimed at granting individuals more control over their personal information and more insight into how businesses use and disclose their personal data.
Immigration has, and continues to be, a major flashpoint between California and the Trump administration. In 2017, the California legislature passed significant legislation (AB 450) impacting how California employers deal with federal immigration authorities. The Trump administration sued over these policies, putting California on a collision course with the federal government—with California employers stuck squarely in the middle.
Federal District Judge Puts On Hold Parts of AB 450 Which Prohibited Employers From Voluntarily Consenting To A Federal Immigration Agent’s Request To Enter Nonpublic Areas or For Voluntarily Providing Records
On July 4, 2018, Federal District Judge John A. Mendez granted a preliminarily injunction enjoining the State of California, Governor Brown, and Attorney General Becerra from enforcing parts of AB 450, the controversial new law that limited employer conduct when dealing with federal immigration enforcement. Specifically, the Judge stopped the enforcement of the California Government Code Sections 7285.1 and 7285.2 and California Labor Code Section 1019.2(a)&(b) as applied to private employers. The Judge upheld two other sanctuary state laws and part of AB 450. The Judge stated in his decision:
New ABC Test For Independent Contractors Sends California Employers Reeling
In recent years, medical marijuana has been used extensively and has gained acceptance amongst California residents. In keeping up with the trend, lawmakers recently introduced a bill that would amend California’s employment discrimination laws to impose liability on employers for alleged discrimination against medical marijuana users. Assembly Bill 2069 (AB 2069) was aimed at prohibiting employers from engaging in employment discrimination against a person on the basis of his or her status as a qualified patient or person with an identification card.
Robots, Automation and A.I., Oh My – California Proposes to Establish “Commission on the Future of Work”
The “future of work” is the topic du jour these days for pundits, academics, policy makers, employers and unions alike. Numerous conferences, white papers, academic studies, and media investigations have all explored this subject in recent years – the U.S. Department of Labor even held a symposium in 2016 on “the future of work.” Whether these concerns - what all of this technological advancement means for employment - are hype or reality remains to be seen. It appears certain that rapid technological advancements are transforming the workplace and the economy in innumerable ways.
California's Fair Employment and Housing Council Broadens the Definition of National Origin, Including Specific Provisions Relating to Language Restrictions and Employees' Immigration Status
The California Fair Employment and Housing Council published new regulations on May 17th relating to national origin discrimination. The regulations will take effect in just a few weeks, on July 1, 2018, and will be codified in the California Code of Regulations sections 11027 and 11028.
On July 1, 2018, new regulations from California’s Fair Employment and Housing Council (FEHC) that clarify protections from national origin discrimination will go into effect. The new regulations are extensive and include clarifications on the definitions of “national origin” and “national origin groups,” the permissible and prohibited types of employer policies governing language restrictions in the workplace, the permissible and prohibited inquiries regarding immigration status, and the permissible and prohibited types of height and weight requirements for work.
According to the California Division of Occupational Safety and Health (Cal/OSHA), even though California has not adopted its own state rule on the matter, California employers should submit their Form 300A data for 2017 using the federal Occupational Safety and Health Administration (OSHA) online portal by July 1, 2018. Entities that must submit information under the federal rules include “[e]stablishments with 250 or more employees that are currently required to keep OSHA injury and illness records, and establishments with 20-249 employees that are classified in certain industries with historically high rates of occupational injuries and illnesses.”
As we discussed in our last blog post, California employers received some rare good news in recent days. Bills to expand California’s paid sick leave requirement and to require employers to accommodate medical marijuana use both failed to advance and are dead for the year.
Since my last blog post about SB 1121, the California Senate voted to send SB 1121 to the state Assembly. The May 30 vote was very close, 22-13, only one above the 21-vote threshold for passing the bill and strictly along party lines. Twenty-two Democratic senators voted Yay, 13 Republican senators voted Nay, and four Democratic senators did not cast a vote.
In its May 24, 2018 opinion in the matter of Diaz v. Grill Concepts Services, Inc. (Case no. B280846, 2nd Dist.), the California Court of Appeal shed further light on the standard to impose so-called “waiting time penalties” on employers who neglect to pay wages due upon discharge or resignation. Diaz affirmed the maxim that “ignorance of the law is no excuse,” holding that an employer’s failure to investigate a change in the local wage scale constituted a “willful” failure to pay, exposing it to waiting time penalties under the Labor Code. Diaz also held that courts do not have discretion to relieve the employer from such penalties on equitable grounds.
First, The Good News: California Bills to Expand Paid Sick Days and Require Employers to Accommodate Medical Marijuana Fail to Advance
It’s not often that we get to report good news on this blog. But last week, two significant bills that would have imposed new requirements on California employers failed to advance past the Assembly Appropriations Committee.
SB 1121, which is making its way through the California Legislature, would allow businesses to be sued for data breaches even when no one was actually injured. This includes being sued for failing to implement and maintain reasonable security procedures as well as for failing to properly notify affected individuals of a breach of their personal information. Opponents of this bill are calling it a “job killer”.
Diverging from decades-old precedent, the California Supreme Court has broadened the definition of “employee” in the context of the State’s Industrial Work Commission (IWC) wage orders when undertaking the employee-versus-independent contractor analysis. Dynamex Operations West, Inc. v. Superior Court of Los Angeles County, 2018 Cal. LEXIS 3152 (Cal. Apr. 30, 2018).
Executive Summary: On April 30, 2018, in the landmark decision Dynamex Operations West, LLC v. Superior Court of California, the California Supreme Court established a new test for determining who qualifies as an independent contractor under California’s Wage Orders. Under the new test, known as the “ABC test,” workers will be considered employees who are “suffered or permitted to work” under the Wage Orders unless an employer can establish three factors:
A new California Supreme Court ruling makes it significantly more challenging for companies to classify workers as independent contractors rather than employees.
Yesterday, the California Supreme Court issued its decision in Dynamex Operations West, Inc. v. Superior Court (Lee), adopting a very broad view of the workers who will be deemed “employees” as opposed to “independent contractors” for purposes of claims alleging violations of California’s Wage Orders. This is a surprising decision that magnifies the risk of classifying workers as independent contractors in California, and is likely to lead to increased claims (in an already litigious area) challenging such classifications in this state. This is particularly true because the Court’s decision makes it easier for plaintiffs to succeed in getting a class certified in an independent contractor misclassification case.
On Monday, April 30, 2018, the California Supreme Court issued a landmark decision establishing the presumption that a worker is an employee in that state unless the employer meets a three-prong “ABC” test. The Court’s ruling in Dynamex v. Superior Court is a shift from the more flexible multi-factor test California courts have used since 1989, and now imposes an affirmative burden on businesses to prove that workers are properly classified as independent contractors.
My colleague Ashton Riley described it as the “contractor apocalypse.” Yesterday the California Supreme Court issued its long-awaited decision in Dynamex Operations West, Inc. v. Superior Court, and, unfortunately, the wait wasn’t worth it. The state Supreme Court scrapped the flexible legal test used since 1989 to determine whether a worker was an independent contractor or employee and installed a rigid three-pronged test that will appear in the nightmares of your average gig economy business executives for the foreseeable future.
In a groundbreaking decision, the California Supreme Court adopted a new legal standard today that will make it much more difficult for businesses to classify workers as independent contractors, drastically changing the legal landscape across the state. The decision will directly affect the trucking and transportation industry because the workers involved in the case were delivery drivers, but also has the potential to affect nearly every other industry—including the emerging gig economy. Specifically, the court adopted a new standard for determining whether a company “employs” or is the “employer” for purposes of the California Wage Orders.
Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, discuss developments from the ongoing California state legislative session. Bruce and Corinn review key labor and employment measures under consideration in Sacramento, including a spate of bills aimed at curbing sexual harassment. They highlight numerous noteworthy measures on a range of topics, covering wage and hour proposals, potential updates to the Private Attorneys General Act, and assorted anti-discrimination bills.
The Sacramento County Board of Supervisors has approved an Ordinance requiring hotel and motel operators in Sacramento County to provide employees with a panic button or notification device that can be used to call for help when an employee reasonably believes sexual harassment activity is occurring in the employee’s presence. The panic button is designed to be used in emergency situations to summon hotel security or other appropriate staff to the employee’s location.
Fueled by the need of legislators to politicize the “me-too” movement, there has been a lot of media attention in recent months on proposed legislation in many states to limit arbitration and/or confidentiality of sexual harassment-related claims.
A decision out of the Northern District of California serves as a reminder that service industries need to carefully balance their commitment to client care with wage and hour obligations. A case manager at a large medical facility filed a class action claim under the California Private Attorneys General Act (“PAGA”) against the facility for multiple violations of federal and California law, including failure to pay overtime wages and failure to provide meal and rest breaks. The crux of her complaint was that she and other employees felt pressured to work off-the-clock in order to adequately tend to a larger number of patients after “cost-cutting measures” increased each employee’s workload.
Just three years after the enactment of California’s paid sick leave law under the Healthy Workplace Healthy Family Act of 2014 (AB 1522), a new bill has been introduced seeking to increase the amount of sick leave employers must provide employees under California law. The bill, AB 2841, was introduced on February 16, 2018, by Assemblywoman Lorena Gonzalez Fletcher. Assemblywoman Gonzalez Fletcher authored California’s existing paid sick leave law.
Proposed California Law Would Establish Portable Benefits For Gig Companies And Address Misclassification Issue
As we have previously discussed, one of the hottest gig economy issues to dominate political and public policy debate has been “portable” benefits – the concept that gig economy workers should have flexible, portable benefits that they can take with them from job to job. States and local governments are increasingly moving forward on their own with proposals to explore the provision of benefits to individual performing work in the gig economy. Most notable are proposals that have been set forth in the state legislatures in Washington, New York and New Jersey. The movement also got a boost in January when Uber and SEIU announced a joint call for the state of Washington to develop a portable benefits system that would cover gig economy workers.
In 2014, San Francisco enacted its ban-the-box law, which significantly restricted the ability of employers to inquire into, and use, criminal records for hiring and other employment purposes.1 This Fair Chance Ordinance (FCO) lists specific types of convictions and information that employers can never inquire into, including convictions more than seven years old. The FCO also bars employers from asking about an applicant’s conviction history (or requesting a background check) until after either (1) a live interview with the applicant, or (2) a conditional offer of employment made to the applicant. Moreover, if the employer intends to make an employment decision based on conviction history, the FCO requires the employer to first conduct an individualized assessment of whether the conviction is job-related.
As most employers in California know, meal and rest period litigation has been a hot area for more than a decade, troubling employers across all industries. This is largely because state law provides extremely rigid requirements for meal and rest periods—and extremely large financial damages for failure to comply. However, for those California employers with a unionized workforce, there could be a welcome reprieve available that you might not know about.
Southern District Court of California Affirms that Employees Are Not Entitled to Multi-Month, Indefinite Medical Leaves of Absences
California employers can breathe a sigh of relief in light of a recent decision from the Southern District Court of California. In Ruiz v. ParadigmWorks Group, Inc., the Court held that an employer is not required to extend an employee’s “multi-month” medical leave of absence where the employee is totally disabled and cannot provide a definite end date to her leave.
Beware the Bureau of Field Enforcement (BOFE) investigation in 2018. The California Labor Commissioner’s Office has ramped up investigations by its BOFE unit to enforce wage and hour compliance. The Bureau investigates complaints and takes enforcement actions that can include audits of a company’s payroll records and workers’ compensation insurance coverage, and the issuance of citations for violations of California Labor Code sections. From 2010 to 2016, the ratio of citations to inspections increased from 45 percent to 85 percent, and the assessed wages per inspection increased from around $2,400 to more than $15,000.
The ever-escalating dispute between the Trump Administration and the State of California over immigration policy is starting to resemble a Shakespearean drama.
In Hamid H. Khan v. Dunn-Edwards Corporation (January 4, 2018), the California Court of Appeal for the Second Appellate District held that the plaintiff failed to comply with required administrative procedures prior to bringing a claim under the California Private Attorneys General Act (“PAGA”) because he failed to provide sufficient notice to the California Labor and Workforce Development Agency (“LWDA”) and the employer that he sought to bring the PAGA claim on behalf of, not only himself, but on behalf of a group of “aggrieved employees.”
Recently, the California Fair Employment and Housing Council (FEHC) proposed new draft regulations to implement provisions of two key employment statutes enacted last year.
February 16 was the deadline to introduce new bills in the California Legislature. By that date, nearly 2,200 bills were introduced. While that may seem like a staggering amount of legislative proposals (especially for a legislative body with only 120 members), this number is consistent with the volume of bills that have been introduced in recent years.
In Lawson v. ZB, N.A. (2018) 18 Cal.App.5th 705, California’s Fourth District Court of Appeal recently ruled that the two elements comprising damages under Labor Code § 558 – (a) underpaid wages and (b) denominated assessments – are indivisible. Because a claim under Labor Code § 558 is indivisible and it is a civil penalty encompassed by the California Private Attorneys General Act (“PAGA”), the entire claim under Labor Code § 558 is not subject to any arbitration agreement between an employee and an employer, even if the employee waived his or her right to bring a class or representative claim against his or her employer.
Pending California Legislation Alert! Recently Introduced Bill Seeks to Protect Medicinal Marijuana Users from Employment Discrimination in California
Although both medicinal and now recreational consumption of marijuana have been legalized in California, this legalization did not impact an employer’s right to discipline or even terminate employees for marijuana use. That could change for medical marijuana users if a bill pending before the California legislature becomes law.
During the November 8, 2016 statewide general election, California voters enacted the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA). The AUMA authorizes licensed sellers to sell recreational use marijuana, or cannabis, per certain requirements and limitations. State authorities began issuing licenses to sell recreational use marijuana on January 1, 2018, and Californians over 21 years of age have been able to lawfully purchase recreational cannabis in California since that date.
The California Labor Commissioner’s Office has released a template notice form to help employers comply with the posting requirements under California Labor Code section 90.2(a)(1), also known as the Immigrant Worker Protection Act or AB 450, which requires employers in California to notify their workforces within 72 hours of any immigration law compliance inspection or audit initiated by federal agencies.
California’s public and private employers are prohibited from voluntarily consenting to a federal immigration enforcement agent’s request to enter nonpublic areas in the workplace or to voluntarily allow the agent access to employee records unless the agent provides a judicial warrant. Labor Code 90.2(a)(1).
Last year Governor Jerry Brown signed Assembly Bill 450 – the “Immigrant Worker Protection Act” – to prohibit employers from voluntarily consenting to federal immigration agency access to worksites without a judicial warrant, or to specified employee records without a subpoena. As we discussed recently, an uptick in federal immigration enforcement activity may force California employers to deal with the new law’s requirements sooner than anticipated.
California is a state of pioneers. It is in the vanguard of new legislation, often adopted later by other states. It is also known for its financial ventures into new technologies and research—ventures in amounts greater than the next 10 states combined. In 2018, California’s legal and investment landscapes will likely be blazing the same trail on issues of sexual harassment and gender inequality in the workplace.
Glimmers of Hope? Pair of Recent PAGA Cases Provide Rare Procedural Victories for California Employers
If you’re a California employer, perhaps no single law strikes fear into your heart quite as much as the Labor Code Private Attorneys General Act of 2004 (PAGA). PAGA allows individual “aggrieved employees” to bring representative actions on behalf of themselves and other aggrieved employees to recover civil penalties for Labor Code violations, sometimes extracting staggering amounts from employers. However, a pair of recent appellate court cases in California granted significant procedural “wins” to employers in PAGA cases. While these are limited victories, California employers should celebrate any good news on the PAGA front.
As discussed in our previous article, “California Governor Signs Law Banning Salary History Inquiries,” as of January 1, 2018, California employers are required to comply with California Labor Code Section 432.3, which prohibits employers from asking job applicants about their salary histories. Below are the answers to some common questions being raised by employers as they review their hiring practices.
The ICEman Cometh? Recent War of Words Puts California Employers in the Crosshairs of National Immigration Debate
Immigration has been a major flashpoint between California and the Trump Administration during the past year. In 2017, the California Legislature passed significant legislation impacting how California employers deal with federal immigration authorities. These actions appeared to put California on a collision course with the federal government, with California employers stuck squarely in the middle. A recent escalation in rhetoric between state and federal officials may portend that such a collision may be imminent.
The First Appellate District had a second occasion to rule upon class certification issues in the case of Duran v. U.S. Bank (“Duran II”), and again ruled that class treatment was improper because Plaintiffs failed to demonstrate that common issues predominated or that the case would be manageable as a class action, thereby affirming the trial court’s ruling denying class certification. CDF represented U.S. Bank during the entire pendency of this case, including this most recent appeal.
Reminder! California Employers Must Provide Notice of the Federal and California Earned Income Tax Credit
California employers should remember that they must revise their notice to employees regarding the federal Earned Income Tax Notice to include California’s version of it. Effective January 1, 2017, employers must revise their notice to employees regarding the earned income tax credit when issuing W-2 or 1099 forms.
Sexual Harassment Takes Center Stage – California Legislature Responds With Flurry of Proposed Bills
The California Legislature reconvened on January 3 to begin the second year of the 2017-18 legislative session. As anticipated, sexual harassment appears to be the “hot topic” for the Legislature this year, with nearly a half-dozen bills introduced to address this issue in the first two days of the legislative session alone.
A PAGA Case Cannot Stand Without Standing: Court of Appeal Affirms Trial Court’s Dismissal of PAGA Action After the Plaintiff Settles His Individual Labor Code Claims In Arbitration
In Kim v. Reins International California, Inc. (B278642, Cal. Ct. App., December 29, 2017), the State of California Court of Appeal for the Second Appellate District addressed for the first time the question of whether an employee-plaintiff, who had settled and dismissed his individual claims under the Labor Code against his employer, was able to maintain a representative action under the Labor Code Private Attorneys General Act (the “PAGA”) on behalf of other “aggrieved employees”. The Court held that because of the settlement and dismissal of his individual claims, the employee-plaintiff was no longer an “aggrieved employee” and therefore did not have standing to represent other “aggrieved employees” under the law.
In addition to fueling the filing of more sexual harassment lawsuits across the country, the recent sexual harassment scandals involving high-powered public figures have led to legislative efforts to prevent settlements of sexual harassment suits from being “confidential,” and to disallow individuals or entities from taking tax deductions for attorneys’ fees and/or settlements related to such claims. This will have the perhaps unintended consequence of hampering settlement of these cases and instead fueling continued costly litigation in courts whose dockets are already overburdened (particularly in California).
It’s a new year, and there is a lot of publicity about recreational marijuana now being legal in California. However, many people seem to have the mistaken belief that they cannot be fired or refused a job for smoking marijuana (since it’s legal and all). Wrong. It is important for both employers and employees to understand that the new law does not impact employers’ rights to maintain and enforce drug-free workplace policies and drug testing policies that make a positive test for marijuana a terminable offense (or a bar to hiring).
As discussed in a prior article, unsuccessful bills proposed in the California legislature in 2017 can carry over into the 2018 session. State lawmakers may revive measures that did not make it through both chambers of the legislature —or reintroduce bills that Governor Brown vetoed.
As any experienced class action litigator knows, the main issue driving the direction of a case is not always the merits of the claims themselves. Instead, the central question is often whether the claims can be certified as a class action; that is, whether the court will permit the plaintiff to represent other workers on the same claims. For example, while individual wage and hour claims can appear at first glance to be insignificant, they have proven to reach monumental proportions when certified as class claims.
Several of our clients have operations in California and their HR teams are often tasked with supporting facilities and employees that are based in California. Yet another important California difference is what employers must do, and must not do, when faced with a Federal immigration compliance inspection, and important considerations as to how the company currently maintains its Form I-9 records.
Soon after ringing in the New Year, California employers will need to spend the beginning of 2018 coming to grips with a significant new law that will require an immediate adjustment to immigration-related business practices. California Assembly Bill 450, also known as the Immigrant Worker Protection Act, will go into effect on January 1, 2018, bringing about strict new requirements for all employers in the state regarding the handling of a government audit or investigation of premises or employee records. The new law includes mandatory notice requirements and additional prohibitions against access to public workspaces that goes above and beyond what is required under federal law.
With the turn of the year comes a wave of new California disability and leave laws. Employers should review their existing policies and procedures to determine if they will be compliance with these new laws—many of which will go into effect on January 1:
Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, review the status of the California Private Attorney Generals Act, which authorizes employees to recover penalties for many Labor Code violations. They discuss how PAGA currently operates, explore open questions concerning the law, and summarize the recent employee-friendly Lopez v. Friant & Associates appellate court decision. Bruce and Corinn also look ahead, addressing possible legislative clarification of PAGA as well as ballot initiatives that might put PAGA amendments to a vote in 2018.
California employers have recently seen an increase in the number of citations issued by the California Division of Occupational Safety and Health (Cal/OSHA) for violations of a General Industry Safety Order requiring that employers’ first aid materials be approved by a consulting physician. Specifically, California Code of Regulations, Title 8, Section 3400 (c) states, in pertinent part, “There shall be adequate first-aid materials, approved by the consulting physician, readily available for employees on every job.” (Emphasis added.)
The California Division of Occupational Safety and Health (Cal/OSHA) recently posted an advisory notice regarding the wildfires that have been afflicting Southern California.
While parts of Northern California are still reeling from damaging wildfires there two months ago, multiple fires are currently threatening Santa Barbara/Ventura, Los Angeles and Northern San Diego Counties. Fueled by high winds, the Southern California blazes are far from being contained. Without a doubt, safety and security are the highest priorities at present as this dangerous situation unfolds.
Our California offices reported that local governments are provided N 95 dust masks to citizens because of the wild fires. Such masks may not actually help all users and the smoke and particulate may not exceed permissible levels. Nevertheless, these masks do often provide comfort when exposed to dusty conditions which are uncomfortable but do not present a hazard.
Effective January 1, 2018, Senate Bill 306 amends Labor Code § 98.7 and adds Labor Code §§ 98.74, 1102.61 and 1102.62 to provide the Division of Labor Standards Enforcement (“DLSE”) with expanded authority to enforce the retaliation provisions of the Labor Code. Specifically:
Under legislation recently signed by Governor Jerry Brown, beginning January 1, 2018, all California employers are required to display a workplace poster related to transgender rights. The legislation, Senate Bill 396, requires the poster to be posted “in a prominent and accessible location in the workplace.”
A new addition to California law changes the definition of commission pay for licensed employees of beauty salons and barber shops. Under the new law, certain common arrangements, such as agreements to pay stylists on a commission-only basis or on a minimum wage plus commissions basis, are no longer considered to be commission-based pay.
The grace period is over. Effective January 1, 2018, the City of Santa Monica’s minimum cap on accrued sick leave for eligible employees will increase from 40 to 72 hours for businesses with 26 or more employees. The accrual-cap for businesses with 25 or fewer employees will increase from 32 to 40 hours.
California Court Rules PAGA Plaintiffs Need Not Assert Injury, or Employer Knowledge, to Collect Penalties for Paystub Violations; Where Do Employers Go From Here?
A California Court of Appeal dealt another blow to employers in a recent ruling interpreting the state’s Private Attorneys General Act (PAGA). In Lopez v. Friant & Associates, the court considered the proof required for a PAGA plaintiff to succeed on a claim based on underlying violations of Labor Code section 226(a).1 In short, the court held that PAGA plaintiffs asserting such claims need not show that the violation caused “injury” or resulted from “knowing and intentional” conduct, as required for a penalty award under a related Labor Code provision.
Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, explore the nitty-gritty details of California’s new salary history inquiry ban. The new law – which takes effect January 1, 2018 – prohibits employers from relying on, or seeking out, pay history information about job applicants. Bruce and Corinn discuss the evolution of California’s salary history inquiry ban, the compliance challenges it creates, and how California employers can prepare for this sea-change in hiring practices.
Popular legislative proposals sometimes generate competition among legislators for who will be the first to introduce a bill on a given subject, or who will get credit for a bill’s final passage and enactment into law.
Effective January 1, 2018, new obligations will be imposed on California employers to shield their employees from immigration enforcement efforts in the workplace. Governor Jerry Brown signed AB 450 along with Senate Bill 54, a “sanctuary state” legislation that limits California state and local law enforcement agencies’ authority to hold, question, and transfer individuals at the request of federal immigration authorities.
In the days leading up the October 15 deadline, Governor Brown signed and vetoed a number of California labor and employment law bills that had recently passed by the September legislative deadline. Here is an overview on the newest laws and the bills that are gone for now.
On October 5, 2017, Governor Brown signed Assembly Bill (AB) 450, which will prohibit employers, under some circumstances, from providing consent to immigration agents to enter certain areas of the workplace. The law will go into effect on January 1, 2018.
While most think of October for fall foliage, Halloween and perhaps playoff baseball, in California it’s also the month when big employment law changes became official.
As discussed in our prior article, Governor Jerry Brown recently signed several significant labor and employment measures into law in California, including a statewide ban-the-box provision1 and an expansion of parental leave requirements to smaller employers.2
High Alert for California Employers and Employers Nationwide for the Second Wave of FCRA Class Actions
The flurry of Fair Credit Reporting Act (“FCRA”) class actions against employers started in or about 2012 and was not limited to California.1 Many of those lawsuits resulted in significant payouts for violations of one or more of the FCRA’s no-harm, hyper-technical requirements. The U.S. Supreme Court’s most recent opinion on Article III standing and “concrete injury-in-fact” (Spokeo) has helped employers slow down, but not stop, the FCRA juggernaut.2 Employers across the U.S., and particularly in California, should remain vigilant about their compliance with the FCRA and related state laws.3 The dozens of class action filings in California make the threat even more acute in the Golden State.4
On October 5, 2017, California Governor Jerry Brown signed into law Assembly Bill 450 (“AB 450”), imposing new requirements for public and private employers regarding immigration worksite enforcement actions by Immigration and Customs Enforcement (“ICE”).1 Generally, unless otherwise required by federal law, AB 450 prohibits employers from consenting to ICE access to worksites and employee records in certain circumstances; requires employers to provide specified notices to current employees and any authorized representative regarding ICE inspection of employment records; and expressly prohibits employers from re-verifying a current employee’s employment eligibility when not otherwise required by federal law. This new law takes effect on January 1, 2018.
On October 14, 2017, the governor of California signed a statewide ban-the-box law that goes into effect on January 1, 2018. For California individuals, the law places statewide limitations on most pre-conditional offer inquiries into an applicant’s criminal history; prohibits the consideration of certain criminal history information, at all times; and creates a robust pre-adverse and adverse action process.
Construction One-Minute Read: California Officials Put Additional Pressure on General Contractors to Prevent Wage Theft
General contractors’ top priorities on a construction project are completing the work on time, completing the work within budget, and guarding against future construction defect claims. New and pending laws in California, however, have added one more item to that list: serving as guarantor for the wages and fringe benefits owed not only to their employees but to each of its subcontractor’s employees as well.
California Governor Jerry Brown has signed into law two measures that restrict employers from asking job applicants about salary and criminal history. Both laws are effective January 1, 2018.
Executive Summary: California has passed a number of employment laws this year, including the expansion of baby bonding leave to small employers, prohibiting inquiries into an applicant’s salary history, and restricting the use of applicants’ criminal background information. These new laws, which go into effect January 1, 2018, are expected to have a significant impact on employers operating in California. Below is a brief overview of five of the most notable new laws affecting businesses in California.
The October 15, 2017 deadline has come and gone for Governor Jerry Brown to weigh the bills passed by the California legislature this year. Governor Brown has now signed into law a jaw-dropping number of bills that pertain to labor and employment issues, ranging from teacher retirement funding to hazardous materials notification.
On October 14, 2017, Governor Jerry Brown signed Assembly Bill 1008, which will add a section to the California Fair Employment and Housing Act (FEHA) containing new state-wide restrictions on an employer’s ability to make pre-hire and personnel decisions based on an individual’s criminal history, including a significant and far reaching “ban-the-box” component.1 AB 1008 is effective on January 1, 2018.
Effective January 1, 2018, California will be the next jurisdiction to implement statewide “ban the box” legislation. On October 14, 2017, Governor Jerry Brown signed into law Assembly Bill 1008, which prohibits pre-offer inquiries regarding applicants’ conviction histories and regulates employers in their decisions to deny employment to an applicant based on his/her conviction history. For more details regarding this important law, please see our earlier post.
California employers will soon need to adjust themselves to a new reality once again as a number of new workplace restrictions have been passed by the state legislature and just signed into law by Governor Jerry Brown. State lawmakers were quite active this year, with almost 2,500 bills introduced and over 1,000 making it to the Governor’s desk. Of those approved by yesterday’s October 15 deadline, a substantial number relate to the workplace, and several will be quite significant for employers.
On October 12, 2017, Governor Jerry Brown signed AB 168, prohibiting California employers from asking job applicants about their salary histories.
On October 12, 2017, Governor Jerry Brown signed the New Parent Leave Act into law, extending unpaid leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement to employees of businesses with as few as 20 employees. Commenting on Senate bill (SB) 63, Governor Brown stated, “today’s actions will make a positive difference for women, children and families across the state.”
California Will Require Small Businesses to Provide 12 Weeks of Unpaid, Protected Leave for Baby Bonding Purposes
On October 12, 2017, California Governor Jerry Brown signed the New Parent Leave Act (SB 63) ("the Act") into law, requiring employers with at least 20 employees to provide employees with 12 weeks of unpaid, job-protected parental bonding leave.
It’s difficult to glean much from a veto message. However, in vetoing a recent California bill meant to regulate certain aspects of the “innovation” economy, Governor Jerry Brown used some pointed language that some in the innovation or gig economy are viewing favorably as a signal of possible broader support by the Governor.
On October 12, 2017, Governor Brown approved a new law that will expand parental leave benefits to employers with 20 or more employees. The new law will take effect on January 1, 2018.
On October 5, 2017, California Governor Jerry Brown signed 11 bills essentially making California a sanctuary state. The California Values Act (SB 54) aims to protect undocumented immigrants living in California. Brown stated that “this bill strikes a balance that will protect public safety while bringing a measure of comfort to those families who are now living in fear every day.” The law, which will become effective on January 1, 2018, stops state and local enforcement agencies from using state resources to enforce federal immigration laws.
Employers in California will soon face several new requirements involving workplace inspections by US Immigration and Customs Enforcement (ICE).
We recently reported on several employment bills that were passed by the California Legislature and sent to the Governor for approval. Most of those bills are still pending the Governor’s review, but he has already signed two bills into law. Those two bills, which relate to the subjects of immigration and retaliation, are as follows:
What's All the Fuss About? An Overview of Fair Scheduling Requirements, and a Few Tips for Staying on Top of Them All
Predictive or fair scheduling laws have taken hold on the West Coast in the cities of Emeryville, California; San Francisco, California; San Jose, California; Seattle, Washington; and the entire state of Oregon. On the opposite side of the country, New York City has also adopted fair scheduling requirements.
On October 5, Governor Brown signed AB 450, which will go into effect on January 1, 2018. Among other things, AB 450 prohibits employers from voluntary consenting to ICE access to the worksite without a judicial warrant, requires employers to provide their workers with notice of certain immigration enforcement actions, and imposes new statutory penalties for violations of the law.
Marital Status Discrimination Claim Fails in Light of Workplace Violence Concerns, California Court Rules
In a recent, unpublished opinion, a California Court of Appeal found in favor of an employer on a marital status discrimination claim than an employee brought under the Fair Employment and Housing Act (FEHA). The court held that FEHA did not protect an employee against marital status discrimination based on his marriage to a relative of the employer’s CEO when it was rumored that the employee posed a threat of violence to his colleagues. Nakai v. Friendship House Association of American Indians, Inc., No. A147966 (August 10, 2017).
In February 2017, five California assembly members introduced Assembly Bill 1008, which proposes to add a section to the California Fair Employment and Housing Act (FEHA) containing new state-wide restrictions on an employer’s ability to make pre-hire and personnel decisions based on an individual’s criminal history, including a significant and far reaching “ban-the-box” component. The bill has passed both houses and will now be forwarded to Governor Jerry Brown (D). While the governor has until October 15, 2017 to sign, veto, or otherwise not act upon all bills that passed both houses as of September 15, he is expected to sign AB 1008.1
The California Legislature recently passed AB 1461 which, if signed into law, would require all food-handling employees of food facilities that provide meal subscription plans to obtain food handler cards in accordance with existing requirements. All for-profit food facilities that offer meal subscription plans would be subject to the new law.
With the flurry of action by California lawmakers in the final weeks of the legislative session, there are approximately 640 bills waiting for action by California Governor, Jerry Brown. Here is a list of legislation which California employers should be watching.
September 15 was the last day in 2017 for bills to pass both houses of the California Legislature and be forwarded to the governor. Governor Jerry Brown (D) has until October 15, 2017 to sign, veto, or otherwise not act upon these bills. Those bills that become law will take effect on January 1, 2018 unless a bill specifies an earlier or a later effective date. Included on the list of bills on the governor’s desk are numerous labor and employment items that could impact private employer operations. Below we briefly identify and summarize the more notable measures, and flag other bills employers were watching that did not progress – this round – but which could again be taken up when the legislature reconvenes on January 3, 2018.
September 15, 2017 was the last day for the California Legislature to pass bills and send them to the Governor for approval. This post contains the list of key labor and employment bills that passed and will either be vetoed or signed into law by the Governor.
The Legislature worked into the wee hours of the morning Saturday as it hit its deadline to pass legislation and send bills to Governor Brown for signature or veto.
Does an employment offer letter that expressly supersedes any oral statements on the part of supervisors concerning conditions of employment preclude verbal wage promises made after the employee is hired? Chen v. M&C Hotel Interest, Inc., No. B266461 (August 11, 2017).
Several California labor and employment law bills passed in both the state assembly and senate on or before the September 15, 2017, legislative deadline. Governor Brown will have until October 15, 2017, to sign or veto these bills.
The City of San Diego joined a growing list of state and local jurisdictions by enacting a pay equity ordinance on July 31, 2017.
Last week, a California Court of Appeal held that a unionized employee’s statutory wage and hour claims (meal and rest breaks, overtime) had to be arbitrated pursuant to the grievance-arbitration provisions of the applicable collective bargaining agreement (CBA). The employee had filed claims in court on behalf of a class of similarly situated employees alleging meal and rest break violations, overtime violations, and failure to timely pay wages on termination of employment. The employer moved to compel arbitration pursuant to an arbitration provision in its collective bargaining agreement with the employee’s union. The employee argued that the CBA’s arbitration provision did not apply to his statutory wage and hour claims.
This week, a California Court of Appeal confirmed that employment arbitration agreements require arbitration not only of employment claims filed in court but also of administrative wage claims filed before the Department of Labor Standards Enforcement (“DLSE”). Employers may recall that in 2013, the California Supreme Court held (after effectively being directed to do so by the U.S. Supreme Court) in Sonic-Calabasas v. Moreno that there is no blanket exemption for wage claims from an otherwise enforceable arbitration agreement, and that employees are not necessarily entitled to have their wage claims adjudicated in an administrative hearing (known as a “Berman hearing”) before the DLSE. However, the California Supreme Court left some wiggle room in its opinion by qualifying it to say that if an arbitration agreement provides an “affordable and accessible” alternative forum for resolution of the wage claim, then the agreement is enforceable and applies to require the wage claim to be arbitrated. Because of this wiggle room, lawyers continue to litigate the issue of whether administrative wage claims are subject to arbitration. In Oto, LLC v. Kho, the court held that the answer is yes.
Our weekly California Legislature “hot list” provides you with a preview of the bills that are up (as well as other important legislative action) the following week.
There has been a lot of media attention recently over companies firing employees based on their political views and activities, or otherwise making known to employees that company leadership is of a particular political mindset and that contrary beliefs are not welcome. Based on these publicized stories, there may be a growing tendency for other companies to want to “jump on the bandwagon” and take similar action to distance themselves from employees with unpopular or extreme political views. If you are a California employer, that is not a great idea.
Our weekly California Legislature “hot list” provides you with a preview of the bills that are up (as well as other important legislative action) the following week.
It’s no secret that California is often at or near the forefront when it comes to new developments to expand employee protections.
The situation is a familiar one. Disgruntled current or former employees leave negative and harmful comments about their employer on online workplace review websites such as glassdoor.com or vault.com, or on customer review sites such as yelp.com. Until recently, employers had little recourse. Website operators are generally immune from liability under the federal Communications Decency Act of 1996, and they historically have objected strenuously, on First Amendment and privacy grounds, to identifying persons who post defamatory comments anonymously on their websites.
Over the last several years, San Francisco has enacted a number of local ordinances imposing new mandates on employers who have employees working in the City. City lawmakers are at it again, this time concerning the issue of lactation accommodation in the workplace. Even though there are already state and federal laws requiring employers to provide lactation accommodations to nursing moms, San Francisco has (unnecessarily) adopted its own local ordinance on the topic. Under the local ordinance, which takes effect January 1, 2018, private employers who employ workers in the City of San Francisco (including part-time workers) are required to provide a reasonable amount of break time to any such worker for the purpose of expressing breast milk for the employee's child. The break time will run concurrently with any paid rest break time already required to be provided to the employee. However, if more break time is required for purposes of expressing milk, such break time may be unpaid.
Emeryville, California Adopts Rules Implementing Its Minimum Wage, Paid Sick Leave, and Hospitality Service Charge Ordinance
A little over two years after Emeryville, California’s Minimum Wage, Paid Sick Leave, and Other Employment Standards Ordinance took effect on July 2, 2015, the City Manager adopted implementing regulations. In many respects, the regulations codify positions the City historically took in its frequently asked questions (FAQ). For example, all hospitality service charge-related regulations were previously included in the FAQ. However, some regulations clarify or expand the ordinance’s requirements.
If you’re gearing up for your fantasy football draft, you might be interested to know that the California Legislature is considering a proposal to legalize sports gambling. Assembly Constitutional Amendment No. 18 is a resolution to amend the California Constitution (particularly, Section 19 of Article IV) to authorize the legislature to allow gambling on sports “only if a change in federal law occurs to authorize sports wagering in this state.”
Employers Lawfully May Prohibit Employees From Earning Vacation During Their First Year of Employment
California has a unique law regarding vacation benefits. Unlike the laws of many other states, California law requires an employee to be paid for all earned but unused vacation benefits at the time of termination of employment. California law thus prohibits “use it or lose it” policies and policies that otherwise provide for forfeiture of earned vacation benefits. That said, California law does not require employers to provide paid vacation benefits to employees, and employers generally are permitted to decide whether to provide paid vacation, how much to provide, and which employee classifications will be eligible for the benefit. Employers may impose reasonable “caps” on the maximum carryover and accrual of vacation benefits and may control the scheduling of vacations. Employers may also choose to pay out accrued, unused vacation benefits at the end of each year in lieu of allowing carryover of unused benefits. As long as an employer provides clear written notice of its vacation policy terms and conditions to employees, those terms generally will be enforced – as long as they do not provide for a forfeiture of earned vacation. This sounds simple enough, but sloppy drafting of a policy can lead to a claim that a policy operates to cause an illegal forfeiture of vacation benefits.
Top Ten List – Track These 10 Important Employment Bills as the California Legislative Year Comes to a Close
When the Legislature reconvenes from its summer recess on August 21, it will have only a few short weeks to finish work on legislation for this year. All bills must be passed and sent to Governor Brown by September 15, who will have until October 15 to sign or veto bills.
California Employers Face New Notice Requirement for Domestic Violence, Sexual Assault, and Stalking Time Off
The California Division of Labor Standards Enforcement (DLSE) has published a new form that must be added to the growing list of documents that employers are required to provide to employees at the time of hire.
California’s Equal Restroom Access Act, which requires some establishments with single-occupancy restrooms to display signs indicating that the restroom is gender-neutral, has been in effect since March 1, 2017. Assembly Bill No. 1732 (AB 1732), which Governor Jerry Brown signed on September 29, 2016, requires these restrooms “to be identified as all-gender toilet facilities” and that the signs used to designate these restrooms comply with Title 24 of the California Code of Regulations.
Our weekly California Legislature “hot list” provides you with a preview of the bills that are up (as well as other important legislative action) the following week.
Veeva Systems, a California-based, cloud-based software provider for the life sciences industries, has filed a claim in the superior court of California against three companies that use post-termination non-compete, confidentiality and nondisparagement clauses in employment agreements. Veeva alleges that those practices restrict fair competition and violate California law. The claims were filed against New York-based Medidata, Connecticut-based QuintilesIMS and New Jersey-based Sparta Systems. All three of these companies are rivals that have sought court orders against former employees seeking to work for Veeva, as well as filing claims against Veeva itself.
Emphasizing the broad right of discovery and the remedial nature of the California Private Attorneys General Act of 2004, the California Supreme Court has ruled that, in pretrial discovery, plaintiffs under PAGA has a right to employer records containing other employees’ names and contact information. Williams v. Marshalls of California, LLC, No. S227228 (July 13, 2017).
As Littler has reported, the number of class action lawsuits against employers alleging violations of the Fair Credit Reporting Act (FCRA) has continued to spike. Most lawsuits proceed in federal court, but the FCRA allows plaintiffs to file in either federal or state court. On July 13, 2017, a class action was certified in state court in Los Angeles. The suit alleges violations of the FCRA’s disclosure and notice provisions. The state court judge did not decide any issues of liability, but rather that those questions can be decided in one proceeding on behalf of the class members. The court’s opinion serves as another reminder of the importance of vigilance with regard to FCRA compliance.
In a unanimous decision, the California Supreme Court ruled late last week that plaintiffs in lawsuits brought pursuant to the California Private Attorneys General Act (PAGA) can seek the contact information for their fellow “aggrieved employees” at the outset of their lawsuit, without a showing of good cause for the potentially private information. As any employer who has faced a PAGA action knows, a list of contact information for all employees can be a treasure trove of information that should be protected from disclosure at all costs, so this decision could have serious repercussions.
California Supreme Court Gives PAGA Plaintiffs Broad Right to Contact Information; Recognizes Employee Burden to Show “Manageability”
On July 13, 2017, the Supreme Court of California issued a unanimous opinion in Williams v. The Superior Court of Los Angeles County (Marshalls of CA, LLC), holding that a representative plaintiff in a Private Attorneys General Act (PAGA) case does not need to show good cause at the outset of litigation before the employer is required to produce the names and contact information of other allegedly aggrieved employees.
Beyond the labor and employment developments taking place at the state level in California, employers must keep an eye on breaking news at the local level as well.1 In recent years, municipalities up and down the coast have passed ordinances affecting employers, such as wage increases and scheduling ordinances. This article highlights some of the gnarliest laws that have been enacted, or are currently in the pipeline, in several major California cities.
There are a variety of situations that may require your employees to handle on-call shifts after finishing their regular shift, most commonly if you need to provide certain services at irregular frequencies and intervals.
As workplace regulations spread among California cities, employers confront a tangled web of local rules – particularly those companies with operations in multiple locations. Addressing this compliance challenge with practical suggestions, Corinn Jackson with Littler’s Workplace Policy Institute (WPI) and Sacramento Shareholder Bruce Sarchet, also a member of the WPI team explore new regulations in Emeryville, San Jose, and San Francisco that mandate advance notice of work schedules and require offering additional work hours to part-time employees before hiring from the outside. Corinn and Bruce encourage employers to carefully evaluate whether the laws apply to their operations and, if so, provide training and guidance to supervisors and managers who will need to implement the requirements. Additionally, Bruce and Corinn note that ongoing monitoring of compliance will be critical, along with legal consultation.
California’s Department of Fair Employment and Housing (DFEH) has approved new regulations to protect transgender individuals, effective July 1, 2017.
Both California and the City of Los Angeles have enacted regulations effective July 1, 2017 governing employer use of applicant and employee criminal history in making employment decisions. Below we summarize these upcoming changes as well as the City of San Francisco’s ordinance already in effect.
An Insider’s Look at California’s New Gender Identity Regulations: Restroom Access, Pronoun Preference, and More
Regulations drafted by California's Fair Employment and Housing Council addressing issues related to gender identity will become effective July 1, 2017. These first-of-their-kind California regulations will seek to do what other council regulatory projects have also attempted to do: provide information beyond the legislative language and case law rulings that emphasizes California’s strong commitment to protecting employee rights while also providing guidelines for employers to comply with the law and provide a safe and fair workplace for all Californians.
There has been a lot of animated discussion in the news recently about immigration status, national security policy, and country of origin as these issues relate to federal policy. Think “travel ban” and “extreme vetting” – both new terms in our national lexicon. In addition to making for awkward dinner conversation, these topics also raise issues for employers as both state and federal law prohibit discrimination based on national origin.
Do Read the Fine Print – California’s Recent Budget Makes a Number of Labor and Employment Policy Changes
Last week, (by their constitutional June 15 deadline) the California Legislature passed and sent to the Governor a $184.5 billion budget for fiscal year 2017-18. Most of the media attention focused on tobacco tax expenditures, efforts to reform the Board of Equalization, and an attempt to revise the election procedures to protect a sitting State Senator who is facing a recall effort.
Several California labor and employment law bills passed in the state assembly or senate before the June 2, 2017, legislative deadline. The legislature now has until September 15, 2017, to pass these bills in the second house. Thereafter, the governor will have until October 15, 2017, to sign or veto any bills that pass in both houses.
Ilyse Schuman, Co-Chair of Littler’s Workplace Policy Institute, talks with Sacramento Shareholder Bruce Sarchet about two new bills pending in the California legislature dealing with the concept of equal pay for equal work. One would prohibit employers from asking about salary history during the job application process, and another would require large employers to file reports regarding pay for men vs. pay for women. Bruce provides background on California’s current equal pay law, discusses national - as well as California state and local - legislative trends surrounding equal pay, and outlines potential future legal challenges.
When it comes to legislation, for California employers it's the final countdown. June 2 was the last day for bills to pass out of their house of origin. September 15 is the deadline for these bills to pass both legislative houses, and the governor will have until October 15 to sign or veto bills. Generally, California laws take effect January 1 the following year. Below we briefly highlight notable pending Golden State labor and employment measures.
In recent months, the California Fair Employment and Housing Council (FEHC) has finalized two new sets of regulations that will both go into effect on July 1, 2017. California employers should pay close attention to these new rules touching on criminal history use and transgender discrimination; you may need to adjust your policies and practices for compliance in the very near future.
At the California Legislature, last Friday was the last day for bills to be passed out of their house of origin. As is usually the case in the Golden State, the bills that California’s legislators approved are largely bad for employers, with the helpful bills having been killed early on in committee. The bills that passed their house of origin are still far from becoming law (they still have to be passed by the second house and signed into law by the Governor), but they are on that path at this time. This post includes the list of bills moving on for consideration by the second house of the Legislature.
Last week, the Sixth Circuit Court of Appeals issued its decision in NLRB v. Alternative Entertainment, Inc. holding that a mandatory employment arbitration agreement prohibiting class or collective claims violates the NLRA. With this holding, the Sixth Circuit is now aligned with the Ninth and Seventh Circuits, both of which issued similar decisions last year. The Second, Fifth, and Eighth Circuits, by contrast, have held that class and collective waivers in mandatory arbitration agreements do not violate the NLRA and are enforceable. In January of this year, the U.S. Supreme Court agreed to review this issue and to resolve the Circuit split. Briefing is underway in the three consolidated cases before the Supreme Court. Briefing is currently scheduled to be completed in August, making oral argument likely in the fall, with a decision shortly thereafter. Given that the Supreme Court will be issuing the definitive answer on this issue in the near future, the timing of the Sixth Circuit's decision to enter the fray now (rather than staying its pending case) is odd to say the least. In any event, employers litigating in federal courts in states that are part of the Sixth Circuit (as well as the Ninth and Seventh Circuits) will not succeed in enforcing class or collective action waivers in mandatory employment arbitration agreements unless and until the U.S. Supreme Court issues a decision confirming, once and for all, that such waivers do not violate the NLRA.
Assembly Bill 1008 is the Icing on the Cake for Proponents Seeking to Prevent Employers from Considering Criminal Convictions in the Hiring Process
Assembly Bill 1008 is making its way through the California legislature, after being passed in its amended form by the Committee on Appropriations on May 26, 2017. The Bill would repeal Labor Code section 432.9 and make it unlawful for an employer to include on an application for employment any question regarding the applicant’s criminal history or to inquire into an applicant’s criminal history until after the applicant receives a conditional offer. The justification offered for the bill is that employment of formerly incarcerated individuals is essential to reintegrating them into society and reduces recidivism.
So which big labor and employment bills made the cut?
San Francisco’s notoriously employee-friendly ordinances continue to set the standard for its neighboring cities. Emeryville, which is across the bay from San Francisco and neighbors Oakland, recently passed a fair workweek ordinance that patterns itself off of San Francisco’s Retail Workers Bill of Rights. The Emeryville ordinance applies to larger retail and fast food employers, and has strict scheduling requirements as set forth below.
In the California Legislature, bills first are referred to the appropriate policy committee for hearing. Labor bills are referred to the Labor Committee, crime bills are referred to the Public Safety Committee, health bills are referred to the Health Committee. You get the picture.
On February 23, 2017, Waymo (Google’s self-driving car subsidiary) sued Uber, under the DTSA in the Northern District of California, alleging that Waymo’s former star engineer, Anthony Levandowski, conspired with Uber to steal its trade secrets to allow Uber to make a technological leap forward on its self-driving car project. Early litigation has been complicated by a separate arbitration against Levandowski and Levandowski invoking his Fifth Amendment rights that stymied document production and discovery. This heavily litigated matter has over 447 separate docket entries since it was filed a couple of months ago.
The Ninth Circuit recently issued is decision in Rizo v. Yovino, reversing a district court ruling holding that an employer violated the federal Equal Pay Act through its bright-line policy of paying new employees 5% more than their prior salary. According to the district court (and the stated position of the EEOC), basing compensation on an applicant's prior compensation only serves to further historical wage disparity between men and women, and therefore violates the Equal Pay Act. The Ninth Circuit surprisingly (given its notoriously liberal bent) disagreed.
California employers can now schedule employees with more confidence when the press of business requires employees to work beyond their normal work schedule. The California Supreme Court has clarified California’s “day of rest” statute. The ruling affords employers flexibility in scheduling employees and clarifies some of the law’s ambiguities while leaving a few unanswered issues.
In an unanimous decision, the California Supreme Court held today that California’s law requiring one day of rest in seven looks only at the employer’s defined workweek when determining the applicable period of time to be analyzed for compliance and liability purposes, and does not specifically require employers to provide one day of rest after six preceding calendar days of work. This decision is a big relief for those employers who schedule employees week-by-week without necessarily considering when the employees worked the previous week, outlining a clear and direct way that employers can comply with the state’s Labor Code.
A California law guarantees employees a "day of rest" for each workweek. But that doesn't mean that employees are prohibited from working for more than six consecutive days, as long as those periods of work stretch across more than one workweek, a court has ruled.
Today, the California Supreme Court issued its opinion in Mendoza v. Nordstrom, clarifying California's day of rest requirements. These requirements are set forth in Labor Code sections 551 and 552. Section 551 provides that “every person employed in any occupation of labor is entitled to one day’s rest therefrom in seven,” and Section 552 prohibits employers from "causing their employees to work more than six days in seven." However, Section 556 exempts employers from the duty to provide a day of rest “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.” While these provisions do not appear too complicated or hard to follow at first blush, compliance has been challenged in wage and hour litigation, raising several questions of what these provisions technically mean.
California employers may be able to breathe a sigh of relief – for now. One of the most controversial legislative proposals of the year – AB 5 by Assemblymember Lorena Gonzalez Fletcher (D-San Diego) – appears have been shelved for the year.
California Paid Sick Leave Update: Employer Attendance Policies May Interfere With Labor Code Rights
Many employers enforce attendance policies which assign an “occurrence” for unscheduled, unapproved absences. Although employers generally have discretion to implement attendance policies, such policies should be carefully crafted to avoid running afoul of antidiscrimination and antiretaliation provisions found in certain state and local paid sick leave laws
In what appears to be an issue previously undecided under the California Fair Employment and Housing Act (“FEHA”), the Second District Court of Appeals in California held that an employer’s refusal to allow an at-will employee to rescind her resignation is not a proper basis for a disability discrimination lawsuit.
Executive Summary: California’s Department of Fair Employment and Housing (DFEH) recently enacted regulations that impose additional burdens on employers’ use of criminal background checks in employment decisions. The new regulations are expected to go into effect on July 1, 2017. The new regulations apply state-wide and, ultimately, will make it difficult for any employer in California to maintain no-hire policies for persons with criminal convictions.
As we recently reported regarding the City of Los Angeles, both the City of San Diego and the California Department of Labor Standards Enforcement (“DLSE”) have updated their “Frequently Asked Questions” (“FAQs”) related to the respective local and state sick leave requirements. Below are some of the more salient points from each.
Effective July 1, 2017, new regulations will further limit employers’ ability to consider criminal history when making employment decisions.
In deciding whether California's overtime laws apply to nonresident employees who spend full days or weeks working in the state, the California Supreme Court has previously held that the state's labor code applies to overtime work "performed in California." By focusing on the location of the work performed, the Supreme Court signaled the state's strong interest in enforcing its overtime laws for work performed within its borders without regard to either party's residence as controlling factors.
Employers Being Pulled Into Battle Between California and Federal Government Over Immigration Policy?
It is no secret that California lawmakers and the Trump administration do not agree on immigration policy. With the Trump administration stepping up enforcement efforts against illegal immigration, California is trying to thwart those efforts, including through a new bill that seeks to throw California employers into the crossfire. AB 450 (Chiu) would prohibit California employers from providing federal government enforcement agents access to worksites or to employment records (including I-9 forms) without a judicial warrant or subpoena. The bill would authorize the Labor Commissioner to recover civil penalties of between $10,000-$25,000 for employer violations of these requirements.
Ah, spring. Birds are chirping. Flowers are blooming. Backyard gardens are awaking from their long winter slumber.
Many employers offer light duty programs to employees who are temporarily disabled. Reasonable accommodation obligations imposed by California’s Fair Employment and Housing Act (FEHA) may come into play when administering such programs. A recent California appellate court case, Atkins v. City of Los Angeles, No. B257890 (February 14, 2017), provides important lessons regarding light duty accommodations for employers.
In the past several days, there have been a few different employment-related developments in California. In this blog, we highlight the Criminal History Regulations, California Supreme Court's Arbitration Ruling and Safeway Prevailing in Proving Assistant Managers Are Exempt from Overtime.
In the past several days, there have been a few different employment-related developments in California. Here are the highlights:
Since the election of President Trump, the California Legislature has been vocal and active in efforts to resist announced or anticipated actions of the Trump administration. This includes efforts to make California a “sanctuary state,” measures to protect California’s environmental standards, legislative resolutions and statements against the travel ban and other Trump proposals, and actions to provide services and support to immigrants in California.
On March 14, 2017, with little to no fanfare, the City of Los Angeles Office of Wage Standards (OWS) revised its rules implementing the Minimum Wage Ordinance (MWO), which includes mandatory paid sick leave requirements. OWS also revised its frequently asked questions (FAQs). The revised FAQs provide that an employer’s business size is based on covered employees, i.e., individuals who perform at least two hours of work in a particular week within the City of Los Angeles and are entitled to the state minimum wage. Also, the revised FAQs specify that employers can use different sick leave methods for different employee classes, e.g., accrual-based system for part-time employees and frontloading for full-time employees. Per the revised FAQs, at the end of each year, employers—at their discretion—can pay out accrued but unused sick leave that exceeds the 72-hour overall cap.
Over the last several years, the level of employer complaints about PAGA has reached a deafening crescendo. For some time now, employers have expressed deep concern about abusive litigation tactics and “extortionate” PAGA claims over very minor violations. Unfortunately, these concerns have largely fallen on deaf ears in Sacramento, with only incremental changes to the law.
Each legislative session, there are a number of employment-related bills introduced -- some of which are helpful for California employers (and almost always get killed in committee early on) and others which are bad for California employers. This blog includes a list of notable bills that have been introduced this session.
As the 2017-18 legislative session gets underway in California, policy committees are beginning to hear and vote on bills – including numerous proposals that impact California employers.
Don’t Assume PAGA Claims Are Not Arbitrable: Ninth Circuit Reverses District Court Order Denying Motion To Compel Arbitration of PAGA Claim
On March 3, 2013, in an unpublished decision in Valdez v. Terminix International Company Limited Partnership, Case No.15-56236, the U.S. Court of Appeals for the Ninth Circuit reversed a District Court order denying defendant Terminix International Company Limited Partnership’s (Terminix) motion to compel arbitration of plaintiff Palcido Valdez’s (Valdez) claim for penalties for violation of the California Private Attorneys General Act of 2004, Labor Code section 2698 et seq. (PAGA).
The month of February and its immediate aftermath is always an exciting time for California legislation. That’s the month when legislators submit all of the new bills that will be sought for passage in the state legislature, and gives a clear window into what could be coming down the turnpike in new laws in the years to come. Some bills are proposed time and time again, only to be lost in committee or vetoed, but still showing up again the following year. Others disappear entirely. Some pass or fail, and cause shockwaves in the legislative landscape.
Governor Jerry Brown’s selection of Congressman Xavier Becerra to succeed (now Senator) Kamala Harris as the new Attorney General of California was a surprising move that brings into power in California a seasoned advocate of the economic prosperity of California, but one without a clear track record of privacy law enforcement. Mr. Becerra comes back to California after serving on the powerful House Ways and Means committee, and comes from a background of protecting social security, first and foremost, but also brings with him a strong track record of paying close attention to issues affecting California’s largest economic sectors, including technology, healthcare, and the entertainment industry.
Three of the top labor and employment law issues to watch in the beginning of the Trump administration include: (1) the U.S. Department of Labor’s (“DOL”) minimum salary requirements for overtime compensation; (2) mandatory, federal paid maternity leave; and (3) more rigorous state and local laws in the labor and employment arena.
A trio of bills introduced recently in the California Legislature seek to involve the lodging industry in efforts to combat human trafficking.
The Los Angeles Fair Chance Initiative for Hiring Ordinance (“FCIHO”) went into effect on January 22, 2017. The Bureau of Contract Administration (BCA), the Designated Administrative Agency responsible for enforcing the Ordinance, has issued “Rules and Regulations” (“Regulations”) for the FCIHO. These are published on the BCA’s Office of Contract Compliance/Equal Employment Opportunity website. (For detailed analysis of the Ordinance’s requirements, see our article, Los Angeles Enacts ‘Ban the Box’ Legislation.)
Effective March 1, California’s Equal Restroom Access Act (ERAA) will require some single-occupancy restrooms to have signs indicating they are gender-neutral.
The California legislature is off to a quick start with a large number of labor and employment law proposals. Currently, 71 bills propose to amend the California Labor Code, and several additional bills seek to modify antidiscrimination laws. Democrats not only control both the California State Senate and Assembly, but gained a supermajority with the power to override a gubernatorial veto in the last election. Party leaders have pledged to fight and counteract any changes in policy on the federal level. It seems that the time is ripe for a progressive labor agenda.
Executive Summary: In a complete reversal of its earlier decision, a California federal judge held that employees covered by a collective bargaining agreement (CBA) entered into in accordance with the provisions of the Railway Labor Act (RLA) are exempt from California’s statutory overtime requirements. The district court’s holding affirms the validity of a longstanding exemption applicable to the air and rail transportation industry.
The Good, The Bad, And The Ugly: A Quick Primer On Proposed California Employment Legislation In 2017
With the February 17 deadline to introduce bills in the California Legislature having come and gone, now is a good opportunity to take stock of what the coming year portends for labor and employment legislation in California. In short, the message for California employers is: “hang on – it’s going to be an interesting ride.”
In April 2012, the Equal Employment Opportunity Commission (EEOC) issued its long-awaited “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” (2012 Guidance). The 2012 Guidance does not prohibit employers from using criminal records, but outlines best practices that the EEOC advises employers to follow, including a recommendation that employers, among other things: (1) remove from employment applications the question that asks job applicants to self-disclose their criminal record; (2) not make an employment decision based solely on the fact of an arrest record; and (3) conduct an “individualized assessment” before rejecting an applicant or terminating an employee because of a conviction.
Last month, Governor Jerry Brown released his proposed state budget for the 2017-18 fiscal year. This move represents only the opening salvo in a months-long budget negotiation that will occur over the next six months between the Governor and the Legislature. The Governor will release a revised budget proposal in May, and the final budget will be negotiated and voted upon by June 15, 2017.
This week, a California Court of Appeal issued its opinion in Vasserman v. Henry Mayo Newhall Memorial Hospital, rejecting the hospital’s appeal of a trial court order denying its motion to compel the plaintiff to arbitrate wage and hour claims she brought against the hospital. The court acknowledged that the applicable collective bargaining agreement included a provision requiring arbitration of claims arising under the agreement, but held that it was not “clear and unmistakeable” from this provision that the parties intended to waive a judicial forum for claims based on statute (i.e. meal and rest breaks, overtime). As such, the plaintiff could not be required to arbitrate her wage and hour claims.
On January 10th, the California Fair Employment and Housing Council (FEHC) approved proposed regulations related to employer use of criminal history information. The regulations will be filed with the Office of Administrative Law and will likely go into effect July 1, 2017.
In just the last two years, there has been an explosion in the number of claims being brought against California employers under the state’s Private Attorney General Act (PAGA).
California Court Rules Sarbanes-Oxley Preempts California Law Regarding Privileged Communications in Suit by Former In-House Counsel
By determining that the Sarbanes-Oxley Act (“SOX” or the “Act”) preempts California’s ethical rules, the Northern District of California ruled that an in-house attorney can rely on privileged communications and confidential information to the extent they are reasonably necessary to assert a claim or defense. Wadler v. Bio-Rad Laboratories, Inc., et al., No. 3:15-cv-02356 (N.D. Cal. Dec. 20, 2016).
Although we have barely scratched the surface on 2017, the California Legislature is already active on the labor and employment front, with a number of new (or not so new) proposals being introduced in the first weeks of the legislative session.
Labor Code Section 925: Answers to 10 Key Questions About California’s New Limits on Out-of-State Choice of Law and Forum Selection Clauses
On January 1, 2017, California Labor Code Section 925 went into effect. This new provision limits an employer’s ability to require employees to enter agreements that include out-of-state choice of law and/or forum selection clauses. Below are 10 questions about the new law and the answers every employer should know.
In January of 2016, the Santa Monica City Council adopted an ordinance that would both raise the city’s minimum wage and impose paid sick leave requirements—in addition to those imposed by the state’s paid sick leave statute—on employers. The ordinance was initially scheduled to take effect on July 1, 2016. However, a subsequent amendment to the ordinance changed the effective date of the paid sick leave provisions to January 1, 2017.
On December 22, 2016, the Supreme Court of California ruled that California law prohibits on-duty and on-call rest periods. According to the court, “[d]uring required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.” Augustus v. ABM Security Services, Inc., No. S224853, Supreme Court of California (December 22, 2016).
On December 9, 2016, the City of Los Angeles enacted the Los Angeles Fair Chance Initiative for Hiring (LAFCIH), a “ban the box” law that is expected to go into effect on January 22, 2017, with monetary fines effective July 1, 2017. The ordinance (1) greatly restricts criminal history inquiries by employers on Los Angeles applicants, (2) creates a new “fair chance” pre-adverse action process, and (3) catapults Los Angeles to the vanguard of local jurisdictions, like New York City and Philadelphia, with the nation’s toughest ban the box restrictions.
Are you sick of sick leave yet?
On December 9, 2016, Los Angeles Mayor Eric Garcetti signed the “Los Angeles Fair Chance Initiative for Hiring,” the “Ban the Box” ordinance that bars certain City of Los Angeles employers from asking job applicants about their criminal history. Ban the Box goes into effect January 1, 2017, and Los Angeles becomes the fifteenth locality in the nation to adopt it. The ordinance will be codified as Article 9 to Chapter 18 of the Los Angeles Municipal Code and can be found here.
By April 1, 2017, all employers in California operating in the following areas will be required to comply with Section 3342, the Workplace Violence Prevention in Health Care rule: health care facilities; home health care programs; drug treatment programs; emergency medical services; and outpatient medical services to correctional and detention settings. This rule is far more expansive than Federal OSHA’s guidelines for the Prevention of Workplace Violence in Health Care settings.
On November 8, 2016, San Jose residents passed Measure E, known as the “Opportunity to Work” Ordinance. The Ordinance, which becomes effective on March 13, 2017, requires employers with 36 or more employees to offer additional work hours to existing part-time employees before hiring new employees (whether part-time, temporary, and/or through a staffing agency) or contractors, even when the hiring need is occasioned by the departure of an existing employee. One of the expressed intentions of the Ordinance is to prevent employers from hiring part-time workers in an effort to avoid providing health care and other employment-related benefits. However, the practical effects of this Ordinance will be to reduce employment opportunities for companies and industries that may be seasonal, and reduce flexibility of employers to meet customer demands.
Los Angeles is the latest in a growing list of jurisdictions to adopt an ordinance restricting employers from asking a job applicant about his or her criminal history during the application process. Under the Ordinance, private employers with at least 10 employees will be barred from inquiring about a job applicant’s criminal history until a conditional offer of employment has been made.
With the dust still settling from last month's unprecedented presidential election, California’s politicians have not stood still. In partisan terms, the election results in California could not be more different from that of the rest of the United States. Hillary Clinton received the votes of 62% of California’s voters; President-elect Donald Trump received 32%, with a 4.3 million-vote margin for Clinton in the Golden State. The most recently reported national percentages were 48% for Clinton, 46% for Trump, with a 2.6 million vote margin for Clinton.
Los Angeles just joined the ranks of other cities like San Francisco and New York City by enacting its own ban-the-box ordinance, prohibiting private employers from inquiring about criminal convictions during the application process.
An Early Holiday Boost to Low-Wage Silicon Valley Workers?: San José Passes “Opportunity to Work” Ordinance and Accelerates The City’s Minimum Wage Increase
The New Year will bring significant changes to the local employment laws affecting Silicon Valley-area employers, with measures aimed at reducing the expansion of the part-time workforce and increasing the minimum wage.
The Los Angeles City Council has overwhelmingly approved a "ban the box" ordinance prohibiting any employer in the city with 10 or more employees from asking about a prospective employee's criminal history until a conditional employment offer has been made. The ordinance also would apply to city contractors and employment agencies.
The new president will likely bring substantial shifts in federal government policy, but California employers will be less affected by the changes because California has so many of its own employment laws. Here are some predictions regarding how California employers might be affected by potential changes in the law under President Trump.
Senate Bill 1241: New Legislation Requiring Employment Disputes to be Adjudicated in California Under California Law
It is common practice for employers to utilize forum selection and choice of law provisions in employment agreements in order to require employees to have employment-related disputes adjudicated outside of California and/or under the law of a state other than California.
California voters have decided on a number of important Propositions yesterday. Of the Propositions receiving majority support, California employers may particularly wonder about the potential impacts of Proposition 64, which will legalize the recreational use of marijuana.
An amendment to California law expands state prohibitions against “unfair immigration-related practices” related to the hiring of foreign nationals. SB-1001 goes into effective on January 1, 2017.
For employers with California employees, there seems to be no way to avoid California’s complicated and protective employment laws, and things just got a bit more complicated.
Effective January 1, 2017, drivers participating with a Transportation Network Company (TNC) in California will be subject to mandatory criminal background checks, regardless of whether a driver is considered an employee or an independent contractor. California Governor Jerry Brown approved Assembly Bill 1289 on September 28, 2016. The new law adds Section 5445.2 to the Public Utilities Code, which regulates TNCs.
The California legislature and governor showed no signs of slowing down this year and enacted a long list of new employment laws. Below is a list of the most significant laws affecting private sector employers.
On Wednesday, October 5, 2016, the WPI gave a one-hour review of the year’s major California employment laws affecting private-sector employers.
As previously reported, September 30 was the last day for Governor Brown to sign or veto bills passed by the California legislature this session. This blog covers the final report on bills that were signed into law and vetoed.
California’s data breach notification law is already considered the most stringent in the United States. Based on a new amendment recently signed into law, the law will soon get even tougher.
Although the California Legislature sent Governor Jerry Brown bills on bed bugs, powdered alcohol, and making denim the official state fabric, the laws enacted in 2016 affecting the state’s private-sector employers were decidedly less exotic.
Perhaps no field of class action litigation in California is more fraught with complex certification issues than determining whether the administrative exemption applies to network, internet, and database administrators or related positions in IT departments.
The Department of Labor (DOL) has made it clear. Regardless of the reason, classification errors can be costly for employers, as the error often affects a number of employees having similar job titles and therefore lends itself to class treatment of the claim. Furthermore, if you are on the unlucky end of a DOL audit, you will likely be stuck paying payroll taxes, unemployment taxes, overtime, as well as a host of fines, fees and other costs.
Much like the agricultural harvest cycles it may affect, September 12, 2016, marks the planting season for the Phase-In Overtime for Agricultural Workers Act of 2016.
San Diego Issues Required Postings, Acknowledgement Form under Earned Sick Leave and Minimum Wage Ordinance
The City of San Diego’s Earned Sick Leave and Minimum Wage Ordinance went into effect on July 11, 2016. Beginning October 1, 2016, employers must post two new notices in the workplace and give employees and new hires a notice containing certain employer information. Failure to comply with these requirements may result in significant civil penalties.
In 2011, the California legislature passed Insurance Code Section 10110.6 which bans the use of discretionary clauses in any policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life insurance or disability insurance coverage. The district courts in California have enthusiastically enforced this ban, holding that discretionary clauses are unenforceable in group insurance policies and self-funded employee welfare benefit plans that provide disability benefits.
The California Legislature completed its substantive legislative work for the year in the very early morning hours of Thursday, September 1, 2016, with the usual frenetic, last-minute flurry of bill-passing, including some bills that had been amended at the end of August.
On August 31, 2016, the City of Berkeley, California joined the long list of local jurisdictions to create a local sick leave law when it enacted the “Paid Sick Leave Ordinance.” Berkeley also amended its minimum wage law1 and codified a new law concerning hospitality service charges. The Ordinance appears to be an effort by the Berkeley City Council to control the paid sick leave debate because two competing ballot measures – one proposed by advocates and another by the city – will appear on the upcoming November ballot.2 Whether this move is a coup de grace or merely the first strike in a prolonged legal battle over which law controls remains to be seen. Until voters weigh in, the Ordinance will be the applicable law employers are required to comply with when it becomes operative on October 1, 2017.3
California's Department of Industrial Relations (DIR) and its Division of Labor Standards Enforcement have launched an online system for reporting labor law violations. The agency anticipates the system will provide "real time leads on businesses that are breaking labor laws."
Throughout the year, we’ve reported on various employment-related bills being considered by the California legislature. The 2016 legislative session came to a close yesterday, so we are now reporting on the final status of bills that were passed by both houses and have now been sent to the Governor for either approval or veto. The Governor has until September 30, 2016 to approve or veto these bills.
Employee classification has always been difficult for employers in California due to differences between California law and federal law.
San Diego’s Earned Sick Leave and Minimum Wage Ordinance has been amended less than two months after its July 11, 2016 effective date.1 The amendments, instituted via the oddly-titled “Implementing Ordinance,” plug gaps the original law created, create an administrative enforcement system for receiving and resolving complaints, and impose additional obligations that require employers to review and potentially revise their notices, policies, and procedures. Below we briefly summarize the amendments, which will take effect September 2, 2016.2
California's Recreational Marijuana Initiative Is Not Expected To Impact Employer Workplace Drug Policies
California may be the next state to join Alaska, Colorado, the District of Columbia, Oregon and Washington in legalizing adult recreational use of marijuana. On November 8, 2016, California voters will decide whether to approve Proposition 64, the “Control, Regulate and Tax Adult Use of Marijuana Act” (the Act), which would legalize recreational marijuana for individuals over the age of 21. If voters approve the Act, however, it is not expected to interfere with the right or ability of California employers to implement and enforce their workplace drug policies, including drug-testing policies.
California Fair Employment & Housing Council Considers Proposed (and Recently Amended) Rules to Restrict Employer Use of Criminal History
In April 2012, the Equal Employment Opportunity Commission (EEOC) issued its long-awaited “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” (2012 Guidance). The updated guidance does not prohibit employers from using criminal records, but outlines what the EEOC considers recommended best practices, including a recommendation that employers, among other things: (1) remove from employment applications the question that asks job applicants to self-disclose their criminal record; (2) not make an employment decision based solely on the fact of an arrest record; and (3) conduct an “individualized assessment” before rejecting an applicant or terminating an employee because of a conviction.
Voters will have the opportunity this coming November to determine whether California joins a growing number of states that have legalized recreational marijuana. If so, what would this mean for employers?
There has been much litigation over the issue of whether an employment arbitration agreement validly may include a provision requiring the employee to waive class claims. It is well-established now that these waivers are, in fact, valid. However, not all agreements contain language explicitly stating that the employee is permitted to bring claims on a class basis. Where the agreement is silent on the issue, it becomes an issue of contract interpretation but this scenario generally supports a finding that class arbitration is impermissible because the parties did not clearly agree to it. Nonetheless, this does not stop plaintiffs’ lawyers from bringing class claims, typically in court.
The California Legislature will return from its July recess on August 1, and will devote that month to final consideration of legislation for 2016.
On Monday, July 25, 2016, the Fresno County Superior Court denied a request to postpone the deadline for qualified employers to notify the Department of Industrial Relations (DIR) of their election to participate in the affirmative defense, also known as the “safe harbor” provision, set forth in Labor Code §226.2. The request would have also extended the December 15, 2016 deadline to make back payments to current and former employees for rest and recovery periods and nonproductive time.
On July 26, the San Diego City Council ratified a minimum wage and sick pay ordinance approved by voters on June 7. Effective as of July 11, the ordinance imposes a citywide minimum wage rate and also obligates businesses to provide sick pay benefits to employees. As amended, the ordinance will allow employers to front load an annual sick pay allotment and also place a cap on accrual. Employers with workforces in San Diego will want to immediately update their pay practices and sick pay policies.
Department of Justice, California Employer Reach Non-Prosecution Agreement over Potential Criminal Violations of Immigration Laws
Gridley, California-based natural food company Mary’s Gone Crackers Inc. agreed and consented to payment of $1.5 million and establishment of a corporate compliance program under a non-prosecution agreement reached with the U.S. Attorney’s Office for the Eastern District of California on July 19, 2016. The agreement requires the company to establish a corporate compliance program covering its I-9 procedures and its E-verify system, in addition to requiring complete disclosure of immigration violations within 24 hours of discovery.
On July 7, 2016, Assembly Bill No. 1684 (“AB1684”), introduced in support California’s anti- human trafficking laws, passed both the Senate and the House of Representatives and was ordered enrolled.
On Monday, July 11, the San Diego City Council certified the Minimum Wage and Sick Leave Ordinance passed by voters last month and also passed amendments to the Ordinance. We published a summary of the law when it was passed by the voters last month. Fortunately, the amendments address many of the questions left unanswered by the original bill. Unfortunately, some of the amendments also include increased penalties.
The City of Los Angeles Office of Wage Standards (OWS) recently issued regulations providing clarification to the Minimum Wage and Paid Sick Leave Ordinance that went into effect on July 1, 2016. Last month, Mayor Eric Garcetti signed the Ordinance into law leaving employers with only a few weeks to coordinate their compliance efforts. The OWS’ regulations appear to bridge the gap and provide employers with necessary guidance and clarity in light of the increasing uncertainty regarding three key areas in the Ordinance.
Procrastinators Rejoice! Employers Handed Extra Time To File Safe Harbor Election Imposed By New Piece Rate Law
Right before the holiday weekend, a Fresno County Superior Court judge handed California employers some good news by issuing a temporary restraining order in the case of Nisei Farmers League v. California Labor and Workforce Development Agency, et al. The court’s June 30 decision eliminates the July 1, 2016 deadline which had been in place for qualified employers to notify the Department of Industrial Relations (DIR) of their election to participate in the affirmative defense (also known as the “safe harbor” provision) set forth in Labor Code §226.2.
On June 27, 2016, SB 836, a 96-page budget trailer bill, was signed into law. Sections 189-191 of this bill amend California’s Private Attorneys General Act (PAGA) (Labor Code sections 2699 et seq.) effective immediately. The changes are as follows:
Executive Summary: In City of Petaluma v. Superior Court (Andrea Waters), the California Court of Appeal recently held that outside counsel's fact investigation of an employee's harassment and discrimination claims conducted prior to litigation was protected by the attorney-client privilege and work product doctrine. Further, the employer's assertion of the avoidable consequences defense (i.e., that the employer took reasonable steps to prevent and correct harassment, but the employee failed to use those measures) in a subsequent lawsuit did not waive the privilege as to a post-employment investigation.
Effective this Friday, July 1, 2016, employees working at least two hours in a workweek in the City of San Francisco must be paid at least $13.00 for each hour worked. The new $13 hourly rate is an increase from $12.25 per hour.
In California, signatures are being gathered in support of the “Control, Regulate and Tax Adult Use of Marijuana Initiative.” The initiative is likely to qualify for the November 2016 ballot and, if passed by the voters, could legalize the recreational use of marijuana in California. In this podcast, Bruce Sarchet, Littler Mendelson Shareholder, explains the current status of California law in this area, the impact of Federal law, and the steps which employers can take now to prepare for this potential change in California.
On June 15, 2016, the California Legislature approved Governor Jerry Brown’s budget. As part of the budget, the Legislature passed SB 836. Included as part of this 96-page budget “trailer bill” are a number of amendments to the Labor Code Private Attorneys General Act (PAGA).
Los Angeles Approves Minimum Wage Increases and Mandates Employers to Provide 48 Hours of Paid Sick Leave
Los Angeles Approves Minimum Wage Increases and Mandates Employers to Provide 48 Hours of Paid Sick Leave
Los Angeles is once again in the spotlight as it implements changes in its laws that will impact many of its employers and their employees beginning July 1, 2016. On June 1, 2016, the City Council passed the Los Angeles Minimum Wage Ordinance (No. 184320), adopting both new minimum wage rules and paid sick leave benefits applicable to all employees who perform at least two hours of work in a particular week within the geographic boundaries of the City of Los Angeles. Many employers will have recently implemented new paid sick leave policies in compliance with the state law. But employers of 26 or more employers may need to pull out their handbooks once again and revise their policies—while also providing wage increases to their minimum wage earners effective July 1, 2016.
Like its neighbor Santa Monica and other major California cities including San Francisco and Oakland, the City of Los Angeles approved its own sick leave entitlement ordinance on June 2, 2016. The Los Angeles Ordinance (“Ordinance”) will provide employees working in the City of Los Angeles with the ability to accrue and use up to 48 hours of sick leave, twice the amount provided by state law. Enacted as an urgency matter, the new sick leave obligations become effective for employers on July 1, 2016, less than 30 days after being signed by Mayor Eric Garcetti.
After enduring years of drought, California employers find themselves in a phenomenon of equal concern: a cruel summer. In the span of one month, two new local paid sick leave laws were signed and amendments to two existing local measures were approved. On May 10, 2016, Santa Monica amended its law, about two months shy of its scheduled operative date.
On June 1, 2016, the Los Angeles City Council finalized the City’s paid sick leave ordinance. Effective July 1, 2016, Los Angeles employers with 26 or more employees must provide employees with paid sick leave benefits, while employers with fewer than 26 employees must do so as of July 1, 2017.
Voters in the city of San Diego overwhelmingly supported a June 7 ballot measure that imposes a citywide minimum wage and also obligates businesses to provide sick pay benefits to employees. Employers with workforces in San Diego will want to immediately update their pay practices and sick pay policies.
Carothers DiSante & Freudenberger LLP • June 14, 2016