California’s Fair Employment and Housing Council (“FEHC”) has proposed new regulations (revised regulations, really) addressing the state’s new ban-the-box and parental leave laws. The regulations are not yet final or in effect, but are being considered by the FEHC and likely will be adopted, potentially with some modifications based on input from public comments and public hearings in the near future, with the first hearing scheduled for April 4, 2018.
Articles about California Labor And Employment Law.
California Supreme Court Determines How Flat Sum Bonuses Factor into Overtime Calculation
The California Supreme Court recently decided the question of how an employee’s overtime pay rate should be calculated when the employee has earned a flat sum bonus during a single pay period.1 In Alvarado v. Dart Container Corp. of California, there was no dispute that the bonus needed to be factored into the employee’s regular rate of pay. The question addressed by the court was whether the divisor for purposes of calculating the per-hour value of the bonus should be (1) the number of hours the employee actually worked during the pay period, including overtime hours; (2) the number of non-overtime hours the employee worked during the pay period; or (3) the number of non-overtime hours that exist in the pay period, regardless of the number of hours the employee actually worked.
Calculating Overtime Value of Flat-Sum Bonus Must Be Based on Actual Non-Overtime Hours Worked, California High Court Holds
The California Supreme Court has held that, under state law, when an employee earns a flat sum bonus during a pay period, the overtime pay rate will be calculated using the actual number of non-overtime hours worked by the employee during the pay period. Alvarado v. Dart Container Corp., 2018 Cal. LEXIS 1123 (Cal. Mar. 5, 2018).
Plaintiffs Cannot Bring PAGA Claims If They Fail to Give Notice of a Representative Action
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.”
California Transportation Industry Waives Goodbye to Enforcement of Federal Arbitration Act Provisions in Employment Contracts
In a loss for the California transportation industry, the Court of Appeal for California’s Fourth Judicial District recently found in Muro v. Cornerstone Staffing Solutions, Inc., that the Federal Arbitration Act (“FAA”) is unenforceable in employment contracts regarding employees who are engaged in transporting goods in interstate or foreign commerce, regardless of whether the employer itself is in the transportation industry.
California Supreme Court’s Recent Overtime Ruling Likely to Cause Payroll Problems
Executive Summary: On March 5, 2018, the California Supreme Court issued a ruling clarifying how employers must handle flat-sum bonuses (i.e., additional compensation that does not change depending on the number of hours worked by an employee) in the calculation of overtime. Under this ruling, an employer must calculate a non-exempt employee’s additional overtime by dividing the amount of the flat-sum bonus by the actual number of non-overtime hours worked by the employee; then multiplying that per-hour value by 1.5 (or 2, depending on the applicable multiplier to use) and by the number of overtime hours worked. The ruling clarifies an important technical aspect of overtime calculations and upends many employers’ previous understanding of what the law requires. Although this decision is limited to flat-sum bonuses and does not apply to other forms of non-hourly compensation, employers should promptly have their incentive/bonus compensation plans reviewed for compliance.
California Court of Appeals Holds Labor Code § 558 Claims Are Indivisible Claims and Not Arbitrable
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.
Exemption, Not Pre-Emption: California Federal Court Clarifies Meal and Rest Break Rules May Be Exempt From Labor Code Enforcement For Employers With Valid Collective Bargaining Agreements
In a recent decision, Judge Philip S. Gutierrez of the United States District Court for the Central District of California clarified an available avenue for employers with collective bargaining agreements (“CBAs”) to combat the growing trend of wage and hour lawsuits in California. In granting defendant Kiewit Infrastructure West Co. (“Kiewit”) motion for summary judgment (by way of a motion for reconsideration), Judge Gutierrez dismissed various Labor Code claims, including claims for meal and rest break violations, because the claims were exempted by (rather than pre-empted by) Kiewit’s existing CBA. See Peter Zayerz v. Kiewit Infrastructure West Co., 16-CV-6405-PSC (PJW)(January 18, 2018).
California Labor Department Releases Form for Employers Responding to Immigration Agency Inspection
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).
Trial Court Properly Denied Attorneys’ Fees To Plaintiff Who Proved His Termination Was Substantially Motivated By His Disabilities, But Was Not The Prevailing Party At Trial
In Bustos v. Global P.E.T., Inc., (E065869, Cal. Ct. App. January 16, 2018), Plaintiff William Bustos and a number of his co-workers were terminated by Global in an economic layoff. Bustos sued Global alleging his disabilities were a substantial motivating reason for his termination.
Court Affirms Denial of Class Certification for Business Bankers—Again
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.
Obesity Discrimination Claims Allowed to Proceed Under California Law
Is obesity a disability under California law? Are a supervisor’s alleged “fat remarks” sufficient evidence of disability discrimination? On December 21, 2017, a California Appellate Court published an extensive decision regarding obesity as a disability under California law and issued further guidance on both counts.
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.