I always thought that “The Strongly-Worded Letter” would be a decent name for an indie rock band. Right up there with “The Wheelchair Assassins.” It would have been fun to be a rock star. But I hawked my drums and went to law school, so I do that thing now instead. Plus, I’d look silly with a mohawk.

This post is about the strongly-worded letter we write as litigators, though no one calls it that. Sometimes it is a “cease and desist letter” or it could be a “demand letter.” In each instance, it is often the first opportunity the opposition–and their lawyers–have to see what they’re up against. In my view, it is not an opportunity to squander.

Why is this letter so important? Well, in my experience sending a cease and desist or demand letter rarely achieves its stated goal. While our clients would like nothing more than to immediately get their way, it almost never occurs that someone undertakes any major action after receiving a cease and desist or demand letter. It just doesn’t work that way. Even in those rare instances in which an entity knows it did the wrong thing, knows it will have to pay eventually, and–rarest of all–the demand contained in the letter is not all that unreasonable, it would be contrary to human nature to receive a demand letter, sit down and just write a check. And everybody knows this.

As a result, while these letters ostensibly demand a stated change or outcome, they are fundamentally dishonest in that they are written by a writer, and intended for an audience, that implicitly understand that that stated change or outcome is not going to come without a fight. A letter alone won’t do it. In my view, then, such letters should be written, not with any expectation they will be heeded and their demands will be immediately met. Rather, they should be approached for what they really are, and what they really do. So, what do they really do?

-They alert a party that he/she/it has been found out. They serve notice.

-They identify our client, whether an individual, a family, an organization or a corporation.

-They attempt to describe a set of facts and circumstances that require redress.

-They educate the opposition and its lawyers who we are, who our clients have chosen to represent them in this dispute.

But this is superficial. The letters do these things, but they do more. They can create leverage (or not). Most importantly:

-They give the opposition an idea how serious our client is about the issue.

-They paint a picture of our client’s financial resources. Who can they afford to hire? How much can they invest in this controversy.

-They can educate the opposition (or not) about how much our clients know about the facts underlying the controversy. Are our clients grossly misinformed?

-They establish credibility.

It’s this last point that I feel is most important. The letter establishes our client’s credibility and our own, as well. It is this credibility that sets the stage, establishes relative power and will remain important throughout the life of the dispute. Is your client serious about this dispute, serious about getting his/her/its way and serious about doing what it takes, and spending what it costs, to achieve its desired result? This first letter will communicate much of this.

In my next post, I will discuss what you and your client should and should not do to gain credibility in any strongly-worded letter.

On September 17, 2020, Governor Gavin Newsom signed into law Senate Bill (“SB”) 1383, which expands the California Family Rights Act (CFRA) family and medical leave law. This Bulletin discusses these changes, which take effect January 1, 2021.

Understanding The California Family Rights Act

The California Family Rights Act provides up to 12 weeks of unpaid job-protected leave for eligible employees to care for themselves and a wide variety of family members. More specifically, under the current CFRA:

• An eligible employee may take an unpaid leave to bond with an adopted or foster child or to bond with a newborn.
• An eligible employee may take unpaid leave to care for a parent, registered domestic partner, or child with a serious health condition.
• CFRA leave may also be taken for the employee’s own serious health condition.
• Full-time employees may take leave of up to 12 work weeks in a 12-month period. Part-time employees may take leave on a proportional basis.
• The leave does not need to be taken in one continuous period of time.
• An employer may require a 30-day advance notice of the need for a CFRA-qualifying leave. When this is not possible due to the unexpected nature of the qualifying event, notice should be given as soon as practicable.
• The employer may require written communication from the health-care provider of the child, parent, registered domestic partner, or employee with a serious health condition stating the reasons for the leave and the probable duration of the condition. However, the health care provider may not disclose the underlying diagnosis without the consent of the patient.

 What’s New

 Most importantly, SB 1383 expands the range of covered employers under the CFRA to employers with just 5 or more employees. Previously, a covered employer had to have at least 50 employees within a 75-mile radius of the workplace where the leave-seeking employee worked.

The new law also expands the range of family members for whose care CFRA leave may be taken. Effective January 1st, employees may take CFRA leave to care for grandparents, grandchildren and siblings.

If both parents work for the same employer, SB 1383 eliminates the current requirement that the parents split the 12-week leave time. Effective January 1st, each employee-parent will be entitled to his/her own 12-week leave.

Finally, SB 1383 makes it an unlawful employment practice for any employer to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period due to a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.

What Employers Should Do Now

With just 24 days before SB 1383 takes effect, employers that were not previously covered under the CFRA should take immediate steps to become familiar with the Act and revise their employee handbook and policies to reflect the change. Employers already covered by CFRA should understand the changes and revise their handbook and policies accordingly.

Employers seeking to better understand this new law should contact their employment law professional.

On September 17, 2020, California Governor Gavin Newsom signed into law two critical pieces of legislation. Assembly Bill (AB) 685, which imposes certain notification obligations on employers when one or more employees test positive for COVID-19, takes effect January 1, 2021. Senate Bill (SB) 1159 expands employees’ rights to workers’ compensation benefits and also imposes a significant new reporting deadline when an employee tests positive for COVID-19. SB 1159 takes effect immediately.

AB 685 Notice Requirements

Assembly Bill 685 imposes important notification requirements when employers discover that one or more employees have been diagnosed with COVID-19. More specifically, the new law sets forth the following notice requirements:

Within one (1) business day of a “potential exposure” based on a confirmed case of COVID-19 in a workplace, an employer must:

• Provide written notice to all employees, employers of subcontracted employees and employee representatives, including unions who were at the worksite within the infectious period who may have been exposed o COVID-19.

• Provide written notice to employees and/or their representatives regarding COVID-19-related benefits that employees may receive, including workers’ compensation benefits, COVID leave, paid sick leave and the employer’s anti-discrimination, anti-harassment and anti-retaliation policies.

• Provide notice to employees regard the employer’s disinfection protocols and safety plan.

Written notice under the law may be made by personal delivery, text message and/or email, provided that it can be reasonably anticipated to be received within one (1) business day. It must also be in English and the language understood by the majority of employees.

AB 685 also requires employers who have a sufficient number of COVID-19 positive cases that meet the definition of a COVID-19 outbreak (as defined by the Cal. State Dept. of Health), to report certain information to the employer’s local health agency within forty-eight (48) hours of learning of the outbreak.

The requirements of AB 685 do not apply when the employee(s) who test positive for COVID-19 work remotely. Again, AB 685 takes effect January 1, 2021.

SB 1159 – Disputable Presumption

SB 1159 has two important components related to employees who test positive for COVID-19. First, it creates a “disputable presumption” that an illness or death resulting from COVID-19 arose out of and in the course and scope of employment for workers’ compensation purposes. This presumption covers cases in which the worker tested positive from July 6, 2020 through January 1, 2023. Thereafter, the presumption will no longer apply.

In order for the presumption to apply: (1) the positive test for COVID-19 must occur within 14 days after a day that the employee worked at the employer’s place of employment; (2) the day of work was on or after July 6, 2020; and (3) the positive test must have occurred during a period of an outbreak at the employee’s place of employment.

Important for this presumption, an “outbreak” exists if, within 14 days, one of the following occurs at the place of employment: (1) if the employer has <100 employees at a specific site, 4 employees test positive for COVID-19; (2) if the employer has >100 employees, 4% of the employees test positive for COVID-19; (3) a specific place of employment is ordered to close by a local public health department, the State Dept. of Public Health, Div. of Occupational Safety and Health or a school superintendent due to a risk of infection with COVID-19.

SB 1159 – Reporting Requirements

SB 1159 also creates new reporting requirements. When an employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer must report that fact to its workers’ compensation claims administrator within three (3) business days, via email or fax.

The information to be reported includes: (1) that an employee has tested positive (no personally identifiable information regarding the employee, unless he/she asserts the infection is work-related or has filed a claim); (2) the date the employee tested positive; (3) the address of the specific place of work during the 14-day period preceding the positive test; and (4) the highest number of employees who reported to work at the employee’s specific place of employment in the 45-day period preceding the last day the employee worked at each specific place of employment.

What Employers Should Do Now

Employers should immediately become familiar with these new requirements. Employers with any questions about these new laws should contact their employment law professional.

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].

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.

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:

• Prohibits any person (including employers) from requiring, as a condition of employment or employment-related benefits, that employees “waive any right, forum, or procedure” for violations of the California Fair Employment and Housing Act (FEHA) or the California Labor Code.
• Prohibits employers from including arbitration agreements/clauses that provide an “opt-out” clause, requiring an employee to affirmatively opt-out of mandatory arbitration.
• Creates a new private right of action (aka “claim”) against any employer that violates the new law. In addition to injunctive relief, the law permits a prevailing employee to recover her attorney’s fees.
• Does not apply to any agreement entered into before January 1, 2020.
• Is not intended to invalidate an agreement otherwise enforceable under the Federal Arbitration Act (FAA).
• Does not apply to post-dispute settlement or severance agreements.

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

• Make sure that, by July 1st, your nonexempt employees are paid at least the minimum wage applicable to your California city or county.
• Make sure that any employees you classify as “exempt” are properly classified, based on the applicable state and federal criteria. If in doubt, consult with your qualified employment law counsel.
• Be aware that, out-of-state employers with in-state employees must comply with California state, as well as any applicable county or city laws for those in-state employees.

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:

1. Is free from the employer’s control and direction;
2. Performs a service that is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
3. Customarily engages in an independently established trade, occupation or business.

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.

Employers must begin using a new version of the Form I-9 issued by the U.S. Citizens and Immigration Services (USCIS) no later than September 18, 2017 or face potentially large fines. The Form I-9 is the document employers must use to verify the identity of new hires to ensure they are authorized to work in the United States.

What’s Different?

The changes to the Form are subtle. There are changes to the instructions and the list of documents approved to verify eligibility. A Consular Report of Birth Abroad (Form FS-240) was added as a List C document, and all the certifications of report of birth issued by the State Department (Form FS-545, Form DS-1350, and Form FS-240) have been combined.

The List C documents have been renumbered, except for the Social Security Card. All changes are described in detail in the newly revised Handbook for Employers: Guidance for Completing Form I-9 (M-274).

Storage and Retention Rules

Employers must be able to present the Forms to government officials for inspection within 3 business days of a request. Employers who choose to keep paper copies of the documents their employees present may store them with the employee’s Form I-9 or with the employees’ records. However, the USCIS recommends that employers keep Form I-9 separate from personnel records to facilitate an inspection request.

Employers are required to retain an employee’s Form I-9 until the later of (1) the date the employee began work for pay + 3 years, or (2) the date employment was terminated + 1 year.

Potential Penalties for Failure to Follow Form I-9 Rules

In 2016, Immigration and Customs Enforcement (ICE) announced increases for Form I-9 violations. For example, the minimum and maximum fines for simple Form I-9 violations increased to $216 and $2,156, respectively. Additionally, minimum and maximum fines for first offenses of Unlawful Employment of Unauthorized Workers has increased to $539 and $4,313 per worker, respectively.

Employers with lingering questions about the new Form I-9 should contact their employment counsel.

Each new year brings challenges for employers and their Human Resources management, as a slew of new laws take effect, creating new traps for the unwary. 2016 is no exception. Here is a list of four new laws (or amendments) that can impact virtually every California employer.

The New Minimum Wage is $10.00

At first, this doesn’t seem like real news, as almost everyone has known the California minimum wage has been climbing since 2014. The information important to many employers, however, is the role the enhanced minimum wage plays in classification of salaried exempt vs. non-exempt employees.

Remember that an exempt employee in California must be paid a salary that is no less than two times the state minimum wage for full-time employment. Accordingly, as the state minimum wage increases from $9.00 to $10.00 per hour, the minimum annual salary for an exempt employee increases from $37,440 to $41,600. What you should do: Review compensation for all salaried exempt employees to ensure it equates to at least $41,600 annually.

Changes to Piece-Rate Compensation Requirements

Are some or all of your employees paid according to a piece-rate method? A business school definition of piece-rate compensation is: A wage determination system in which the employee is paid for each unit of production at a fixed rate. It is common in the automotive repair and garment industries, among others.

Assembly Bill 1513 added section 226.2 to the California Labor Code. It requires employers to pay piece-rate employees a separate hourly wage for “nonproductive” time, as well as “rest and recovery” periods. These hours and pay must be separately itemized on employees’ paystubs.

An additional challenge created by the new law relates to determination of the correct rate of pay. For “rest and recovery” breaks, employees must be paid the greater of (1) the minimum wage, or (2) the employee’s average hourly wage for all time worked (exclusive of break time) during the work week. For “nonproductive” time, the employee must receive at least minimum wage. What you should do: If you have employees paid on a piece-rate basis, make sure you understand and comply with the above. If not, contact your employment lawyer to get in compliance.

California Fair Pay Act

Senate Bill 358, amends California Labor Code Section 1197.5, which prohibits an employer from paying employees of one sex less than employees of the opposite sex for “substantially similar work.” Prior to the amendment, an employee seeking to prove unequal pay had to demonstrate that he or she was not being paid at the same rate as someone of the opposite sex at the same establishment for “equal work.” As amended, an employee need only show he or she is not being paid at the same rate for “substantially similar work” as measured by a composite of skill, effort and responsibility performed under similar working conditions.

Additionally, the amended law makes it unlawful for employers to prohibit employees from disclosing their wages to others, discussing their wages or inquiring about the wages of another employee. It also creates a new private cause of action whereby an employee may bring suit in court seeking reinstatement and reimbursement for discrimination or retaliation. What you should do: Audit your compensation structure to ensure both genders are paid equally for substantially similar work. Where changes are required, you may only increase the underpaid employee. Involve your employment lawyer if you need clarification or help.

Requesting Reasonable Accommodations is a Protected Activity

Assembly Bill 987 amends the California Fair Employment and Housing Act (FEHA) to expand the protections for employees who request a reasonable accommodation for disabilities or religious beliefs, regardless whether the request is granted. This means that, once an employee has requested a reasonable accommodation for a disability or religious belief, the employer may not take an adverse employment action (i.e., discipline, reduction in hours or pay, termination) in retaliation for the accommodation request. What you should do: Be sensitive to an employee’s request for accommodation, even if s/he does not use the term “reasonable accommodation.” If an employee tells you (or you perceive) s/he is disabled or has a particular religious belief/preference that requires accommodation, take the situation seriously. It may be a good idea to consult with your employment counsel.

Conclusion

Employers should remain mindful of these changes as we embark upon a satisfying and, hopefully, productive new year!