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Employment law trial attorney Alex Craigie has been selected to the 2021 Southern California Super Lawyers list, an honor reserved for those lawyers who exhibit excellence in practice. Only 5% of attorneys in Southern California receive this distinction.
In April 2013, the Super Lawyers selection process received a patent (U.S. Pat. No. 8,412,564) from The United States Patent and Trademark Office. This distinction is relevant to both attorneys and consumers, as it further demonstrates credibility as an impartial third-party rating system.
Bar associations and courts across the country have recognized the legitimacy of the Super Lawyers selection process. In July 2008, the New Jersey Supreme Court upheld the findings of a Special Master, who stated:
“[The Super Lawyers selection process] is a comprehensive, good-faith and detailed attempt to produce a list of lawyers that have attained high peer recognition, meet ethical standards, and have demonstrated some degree of achievement in their field.”
“Suffice to say, the selection procedures employed by [Super Lawyers] are very sophisticated, comprehensive and complex.”
I believe the answer is YES. Cities and Counties throughout California are increasingly ordering or recommending the use of non-medical masks or “cloth face coverings” to help stem the spread of COVID-19. This triggers two obligations. First, Cal/OSHA requires California employers to provide employees with all necessary safety equipment. Second, federal and state laws require employers to reimburse employees for all reasonably incurred business expenses. Whether an employer provides the protective gear or employees procure them independently but seek reimbursement, employers should be prepared to shoulder this responsibility.
On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA). Importantly, the FFCRA is actually two separate acts, each of which imposes different employer obligations: the Emergency Paid Leave Act (E-Paid Leave Act) and the Emergency Family and Medical Leave Expansion Act (E-FMLA). This Bulletin discusses these Acts, which take effect 15 days after the law is enacted.
The E-Paid Leave Act requires private employers who employ fewer than 500 employees, as well as government employers, to provide paid sick leave to employees who cannot work (or telework) for one of the following reasons:
The leave under the E-Paid Leave Act must be available to all employees and is in addition to leave already available under state and/or local laws. Full-time employees are entitled to 80 hours of paid sick leave. Part-time employees are entitled to paid leave equal to the average hours he/she works over a two-week period. There is no carryover from year to year and, once the employee returns to work, the employer is not required to provide any further paid sick leave under the E-Paid Leave Act.
The rate of pay depends on the reasons for leave from among the list above. If leave is for self-care (reasons 1, 2 or 3 above), the employee receives the higher of (1) the employee’s regular rate of pay, (2) the federal minimum wage, or (3) the local minimum wage. If time off is to care for a sick family member or a child who is not in school (reasons 4, 5 or 6), he/she receives two-thirds of their regular rate of pay.
There is a cap on E-Paid Leave Act amounts. For leave under reasons 1-3, the cap is $511 per day, up to an aggregate of $5,110. For leave under reasons 4-6, the daily cap is $200, up to an aggregate of $2,000.
Employers will be required to post an approved notice regarding the E-Paid Leave Act. To help employers cope with the financial burden of this additional leave, there are tax credits. The details of these credits are beyond the scope of this Bulletin and employers are encouraged to consult with their accounting professional to fully understand and take advantage of all available tax credits.
The E-FMLA Act expands the protections of the federal Family and Medical Leave Act (FMLA) to add Public Health Emergency Leave. Many smaller employers, with fewer than 50 employees, may be unfamiliar with the FMLA.
The E-FMLA Act expands coverage to include all employers with less than 500 employees, and is available to any employee who has been employed with the employer for at least 30 days. Unlike the ordinary FMLA, however, the E-FMLA is only available if an employee is unable to work (or telework) due to a need for leave to care for the employee’s child who is under 18 years of age because he child’s school or place of care has been closed or his or her childcare provider is unavailable due to a public health emergency.
The first 10 days of E-FMLA leave is unpaid, but an employee may elect or an employer may require the employer to substitute available vacation or paid sick leave (including E-Paid Leave Act pay) for the unpaid portion of E-FMLA leave. After 10 days, employers must pay at least two-thirds of an employee’s regular rate of pay for the number of hours the employee would otherwise be scheduled to work. For employees who have fluctuating working hours on a weekly basis, an employer is allowed to take an average over a six-month period. There are caps: paid E-FMLA leave may not exceed $200 per day and $10,000 in the aggregate.
The standard FMLA job restoration requirements apply to employers with 25 or more employees. Under certain circumstances, the job restoration requirements will not apply to employers with fewer than 25 employees.
As with the E-Paid Sick Leave Act, there are tax credits available to offset expenditures by employers to comply with the E-FMLA. Again, the mechanics of these credits are beyond the scope of this Bulletin and employers should seek advice from their accounting professional to understand and take full advantage of the tax credits.
Employers of health care providers and emergency responders are exempt from E-Paid Sick Leave requirements. Such businesses, as well as businesses with under 50 employees may be entitled to an exemption if the leave requirement would jeopardize the business as an ongoing concern. However, this is contingent on whether the Secretary of Labor grants such exemptions, which is currently unknown. Act or the E-FMLA.
Employers should act immediately to conform their policies and practices to the myriad requirements of the Families First Coronavirus Response Act. Employers with questions about this new law should contact their employment law professional.
Alex Craigie has been named a Southern California Super Lawyer in the area of Employment Litigation: Defense. Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. This selection process includes independent research, peer nominations and peer evaluations. The final published list represents no more than 5 percent of the lawyers in the state.
On October 10, 2019, California Governor Gavin Newsom signed a bill (AB 51) intended to prohibit employers from requiring employees to sign agreements that they will submit claims arising from their employment to binding arbitration (as opposed to resolution of the dispute in the civil court system, by judge or jury). The law takes effect January 1, 2020. The new law, if ultimately enforced, has important implications for any employer that requires employees to sign arbitration agreements.
What the Law Says
Assembly Bill 51 adds Section 432.6 to the California Labor Code. While it was packaged as a “sexual harassment” bill, AB 51 covers virtually any claim arising from the employment relationship (excluding workers’ compensation claims, which are not arbitrable in any event). The new law:
Why the New Law Might Ultimately Be Held Unenforceable
Most experts expect to see legal challenges to the new law, primarily on the grounds that it conflicts and is preempted by the FAA, which dates from 1925 and exists to further arbitration in cases involving interstate commerce. Individual state laws that “stand[] as an obstacle to” arbitration have been repeatedly struck down by the United States Supreme Court as preempted by the FAA. Whether the new law will survive these challenges is presently unclear.
What Employers Should Do
Given the uncertainty surrounding AB 51, it is important that employers who currently (or intend to) require workers to sign arbitration agreements take steps before the end of 2019 to ensure compliance if the law is ultimately enforced. No employer should want to be a “test case.”
Because the law specifically excludes FAA-governed agreements, certain employers (depending on industry) may still be able to require employees to sign an agreement to submit employment disputes to arbitration under the FAA (stating the basis for FAA jurisdiction).
Alternatively, employers could continue to include arbitration provisions, but exclude administrative charges that employees may file with the DFEH, EEOC, NLRB, DOL or the California Labor Commissioner from arbitration. Unfortunately, these exceptions would essentially remove the protections afforded by arbitration in the first place.
As the law in this area remains fluid, employers should not hesitate to consult with their qualified employment law professionals to ensure they remain compliant with all state and federal employment laws, including AB 51.
The Law Offices of Alex Craigie helps employers throughout California prevent, address and resolve employment disputes in a logical and cost-effective manner. Reach us at (323) 652-9451, (805) 845-1752 or at [email protected].
Certain California cities and counties are increasing the minimum hourly wage for nonexempt employees effective July 1st! Please see the list below to determine if your business or California-situated employees are affected. Many regulations differentiate between businesses with 25 or fewer employees and those with 26 or more employees.
Location 25 or fewer employees 26 or more employees
California statewide
(no change) $11.00 $12.00
Los Angeles city $13.25 $14.25
Los Angeles county $13.25 $14.25
Malibu city $13.25 $14.25
Pasadena city $13.25 $14.25
San Diego (no change) $12.00 $12.00
San Francisco $15.59 $15.59
Santa Monica $13.25 $14.25
Palo Alto $15.00 $15.00
What Employers Should Do
Last fall, the California Legislature broadened the obligations of employers to provide sexual harassment and abusive conduct prevention training to their workforce. This Bulletin briefly explains these changes.
Expanded Scope for Sexual Harassment Prevention Training
For many years, only California employers with 50 or more employees were required to provide supervisors with sexual harassment and abusive conduct prevention training every 2 years. However, Senate Bill (SB) 1343, signed into law in 2018, changed this requirement in two important ways.
First, SB 1343 now requires employers with just five (5) or more employeesto provide sexual harassment and abusive conduct prevention training every two years.
Second, the law previously required only that supervisorsreceive sexual harassment prevention training. SB 1343 expands this requirement, as well, so that all employees, including seasonal and temporary workers, must receive sexual harassment and abusive conduct prevention training every two years.
What if You Provided Training to Supervisors in 2018?
Many employers reading this may have complied with the then-existing law and provided sexual harassment prevention training to their supervisors in 2018. Common sense would dictate that, at least as to these supervisors, these employers have met their obligation until 2020, right?
WRONG! In its FAQs, the California Department of Fair Employment and Housing (DFEH) states that, “[e]mployees who were trained in 2018 or before will need to be retrained.” “Employees” in this context applies to supervisors trained in 2018.
Additional Rules Regarding Sexual Harassment Prevention Training
What Should Employers Do
Employers should take steps to ensure allemployees, including part-time, temporary and seasonal workers, receive the required sexual harassment and abusive conduct prevention training sometime this year. Employers with questions about these changes or needing help finding a sexual harassment and abusive conduct training provider should contact their qualified employment law counsel.
On September 30, 2018, Gov. Jerry Brown signed into law several bills that greatly expand the rights of employees to pursue sexual harassment lawsuits in California. The majority of these laws require immediate attention as they become effective January 1, 2019. This discusses these laws and provides recommendations for how employers can act to avoid liability.
SB 1300 makes numerous changes to existing law with regard to liability for alleged sexual harassment. In serial form, beginning on January 1, 2019, employers will:
• Be prohibited from requiring a release of Fair Employment and Housing Act (FEHA) claims in exchange for a bonus, raise, employment or continued employment;
• Be prohibited from recovering fees and enhanced costs through use of statutory (Cal. Code of Civil Procedure §998) offers to compromise, except where the employer can show (1) the lawsuit was frivolous, unreasonable and/or without merit; or (2) the employee continued to litigate a claim after becoming aware his/her case had no merit;
• Be potentially liable for any kind of unlawful harassment by nonemployees;
• Be potentially liable even where the harassment was a single instance or “stray remark” by a non-decision-maker;
• Be less likely to prevail on a sexual harassment case through a motion for summary judgment.
The statute of limitations refers to the “window” of time following an event within which an alleged victim can bring a civil action. Claims of sexual harassment can include a claim of sexual assault, in which the victim claims he/she was sexually touched without consent, or coerced or forced to engage in a sexual act. AB 1619 expands the limitations period for sexual assault claims to 10 years after the act, or 3 years after the alleged victim discovers the injury, whichever is later.
SB 224 expands the list of professional relationships which can form the basis of a claim for sexual harassment. To the previous list, which included physician, psychotherapist, dentist and real estate agent, the bill adds individuals who present themselves as able to assist one in establishing a business, service or professional relationship. The law specifically identifies lobbyists, elected officials, directors, producers and investors.
Settlements of sexual harassment claims have historically included nondisclosure clauses, preventing the alleged victim from disclosing details about the claim and settlement. SB 820 prohibits provisions that prevent the disclosure of factual information relating to certain claims of sexual assault, sexual harassment, or discrimination based on sex, that are filed in a civil or administrative action.
The bill makes such provisions in a settlement agreement on or after January 1, 2019, void as a matter of law and against public policy. The bill creates a limited exception for a provision that shields the identity of the claimant and facts that could lead to the discovery of his or her identity, if that provision is included in the agreement at the claimant’s request.
Additionally, AB 3109 renders void and unenforceable any clause that prevents a party to a settlement agreement from testifying about alleged criminal conduct or sexual harassment in an administrative, legislative or judicial proceeding.
California law currently requires employers with 50+ employees to provide their supervisors with sexual harassment prevention training every 2 years. Effective January 1, 2020, SB 1343 requires any employer who employs 5 or more employees, including temporary or seasonal employees, to provide at least 2 hours of sexual harassment prevention training to all supervisory employees, and at least 1 hour of such training to all nonsupervisory employees, once every 2 years. The bill also requires the Department of Fair Employment and Housing (DFEH) to develop or obtain 1-hour and 2-hour online training courses on the prevention of sexual harassment in the workplace.
Many of these new laws will impact how employment lawyers do their job, and will likely make it more difficult to resolve sexual harassment claims and lawsuits without a trial. However, employers remain primarily responsible and should examine their practices to ensure they maintain a harassment-free workplace.
Consideration should be given to getting a head start on sexual harassment prevention training, including for non-supervisory personnel. Employers with questions about how to reduce their chances of being targeted by a sexual harassment claim should contact their qualified employment law counsel.
On April 30, 2018, the California Supreme Court, in Dynamex Operations West, Inc. v. Superior Court, clarified the proper test for California companies to apply before treating any worker as an independent contractor. This post discusses this important new holding.
Background on “Employee” vs. “Independent Contractor”
For some businesses and their workers, the question whether the worker is properly classified as an “employee” or an “independent contractor” is both important and challenging. For employees, the hiring business pays federal Social Security and payroll taxes, unemployment insurance taxes and state employment taxes, provides worker’s compensation insurance and must comply with numerous state and federal statutes and regulations governing the wages, hours, and working conditions of employees. The worker obtains the protection of the applicable labor laws and regulations, including protections against unlawful discrimination, harassment and retaliation.
If, on the other hand, a worker should properly be classified as an independent contractor, the business avoids those costs and responsibilities, the worker obtains none of the numerous labor law benefits, and the public may be required in some circumstances to assume additional financial burdens with respect to such workers and their families.
The proper classification analysis is, in the first instance, up to the hiring business. The decision is often made without the assistance of counsel and, where the classification lands on independent contractor, is frequently wrong. The consequences may not become known for months or even years. However, disgruntled employees misclassified as independent contractors often ultimately bring claims or suits under wage-hour laws. Worse, the California Employment Development Department (EDD), which administers unemployment insurance claims, can audit a business suspected of widespread misclassification and, in extreme instances, impound funds without notice to the business. Therefore, it is critical before a business classifies any worker as an independent contractor that it ensures the classification is accurate.
The DynamexCase and the ABC Test
Since 1989, California courts were historically guided in deciding the independent contractor question by “the seminal California decision on the subject,” S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations. This case provided employers, their lawyers, the state and the courts with several non-exclusive factors to consider in the employee/independent contractor analysis.
In the Dynamexlawsuit, two delivery drivers sued the company on behalf of themselves and similarly situated workers claiming that the company misclassified its drivers as independent contractors rather than employees. The California Supreme Court expressed the view that the multi-factor test previously announced in the S.G. Borellocase “makes it difficult for both hiring businesses and workers to determine in advance how a particular category of workers will be classified.” Therefore, the Supreme Court adopted a test previously adopted by some other courts known as the “ABC Test.”
Under the ABC Test, a worker is presumed to be an employee, unless the worker:
What Should Employers Do
If anything, the stakes get higher all the time for companies that misclassify workers as independent contractors. Claims brought before the Division of Labor Standards Enforcement (DLSE), as well as civil lawsuits, including class action and private attorney general (PAGA) lawsuits are on the rise.
Before classifying one or a class of workers as independent contractors, companies should be sure they meet the applicable criteria. Additionally, the role of workers currently classified as independent contractors should be evaluated under the ABC Test. Given the complexity of this area of employment law, employers should consider working with their employment counsel to make sure they are in compliance.
On March 5, 2018, the California Supreme Court, in Alvarado v. Dart Container Corp., announced a new formula to determine an employee’s “regular rate” for overtime purposes when the worker received a flat bonus during the pay period. This post discusses this important new holding.
Background on Overtime Compensation and the “Regular Rate”
Most employers understand that, in California, employees are entitled to be paid overtime after working eight hours in any workday, 40 hours in any workweek, and on the seventh consecutive day of work in any workweek. The overtime rate is calculated at 1.5 times the employee’s “regular rate” after 8 hours and 2 times the “regular rate” after 12 hours on any workday or after the eighth hour on the seventh consecutive day in any workweek.
But many employers do not have a strong grasp of the formula involved in determining an employee’s “regular rate” used to calculate her overtime premium pay. Many improperly assume it is simply the worker’s base hourly rate. However, when calculating the “regular rate,” employers must also consider “remuneration” for work performed, with specific payments excluded—such as reimbursed expenses, reporting-time premiums, vacation or holiday pay, or discretionary bonuses—divided in any pay period by the total number of hours actually worked.
The following example, drawn from a guide provided by the Society for Human Resources Management (SHRM) is instructive:
For example, if an employee works 32 hours at $12.00 per hour and 10 hours during the same workweek at $10.50 per hour, the weighted average (and thus the regular rate for that workweek) is $11.64. This amount is calculated by adding the employee’s $489 straight-time pay for the workweek ((32 hours x $12.00/hour) + (10 hours x $10.50/hour) = $489) and dividing it by the 42 hours the employee worked ($489 / 42 hours =$11.64 per hour regular rate). The overtime premium of $5.82 (half the regular rate) is added to the employee’s wages for each one and a half overtime hour worked, and an additional overtime premium of $11.64 is added to hourly wages for each hour of double time earned.
Against this background, we discuss the California Supreme Court’s holding in Alvarado v. Dart Container Corp.regarding how to calculate an employee’s “regular rate” when she has received a flat rate bonus during the pay period.
The AlvaradoCase and the Flat Rate Bonus
The plaintiff, Hector Alvarado, worked in the warehouse of Dart Container Corporation. To incentivize employees to work on weekends, Dart offered a $15 attendance bonus when any employee worked a full shift on a weekend day. The $15 “flat rate” bonus was paid regardless whether the employee worked any overtime hours. Alvarado sued Dart, claiming it had used an improper formula to calculate his “regular rate” for overtime in those pay periods in which he received at least one $15 attendance bonus.
Dart moved for summary judgment, which was granted and affirmed on appeal. However, after considering the formula Dart applied, as well as the formula set forth in the Division of Labor Standards Enforcement (DLSE) Manual, the California Supreme Court reversed, and embraced the following calculation methodology:
This formula differs from the method used by Dart solely in that Dart divided the bonus amount by the total hours worked—both overtime and non-overtime. While this difference appears trivial, a failure to apply the proper formula will support a claim or lawsuit for unpaid wages. To make matters worse, the Supreme Court, acknowledging the “liberal construction” of California’s labor laws, held the new formula would be applied retroactively, as well as going forward.
What Should Employers Do
Employers who provide any type of nondiscretionary “flat rate” bonus, should immediately review and ensure their overtime “regular rate” calculation methodology is consistent with the new formula announced by the Alvarado v. Dart Container Corp. court. Given the complexity of this area of employment law, employers should consider working with their employment counsel in revising policies and methodology.
