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In Naranjo v. Spectrum Security Services, Inc., the California Supreme Court held that unpaid meal and rest break premiums are wages that can be the basis of derivative claims for waiting time penalties and wage statement penalties. The Court also ruled that the applicable rate of prejudgment interest for amounts due for the failure to provide meal and rest breaks is seven percent.
In Chamber of Commerce v. Bonta, the Ninth Circuit Court of Appeals affirmed the district court’s grant of a preliminary injunction barring enforcement of California’s Assembly Bill 51 (“AB 51”) with respect to arbitration agreements governed by the Federal Arbitration Act (“FAA”). AB 51 would have made it unlawful for California employers to require applicants and employees to sign arbitration agreements as a condition of employment beginning January 1, 2020. Violations of the law could not only lead to civil and criminal penalties but would also be considered an “unlawful employment practice.” In Chamber of Commerce v. Bonta, a majority of the Ninth Circuit panel concluded the FAA preempts AB 51.
The Occupational Safety and Health Standards Board voted to adopt non-emergency COVID-19 regulations that took effect on February 3, 2023. The regulations will remain in effect for two years, with the exception of recordkeeping subsections, which will remain in effect for three years. The non-emergency regulations include a number of requirements previously found in the Emergency Temporary Standards (“ETS”).
Beginning on January 1, 2023, California’s minimum wage increased to $15.50 per hour for all employers, regardless of size. A number of cities and counties have their own minimum wage requirements that exceed the state minimum wage. For example, minimum wage for the City of San Diego increased to $16.30 on January 1, 2023. Employers must pay the highest minimum wage applicable to an employee by comparing state and local minimum wages applicable to that employee. Remote hourly employees should be paid based on the location in which work is being performed.
At the close of each legislative cycle, California signs into law a host of new laws with significant impact on California employers. Below is a list of key pieces of legislation, arranged in order by bill number, for ease of reference.
In Killgore v. SpecPro Professional Services, LLC, the Ninth Circuit Court of Appeals reversed a district court’s grant of summary judgment against Plaintiff Aaron Killgore (“Killgore”), holding that the California Whistleblower Protection Act applied to Killgore’s claims of retaliation and wrongful termination.
Plaintiff Carolyn Callahan (“Callahan”) filed an action against Brookdale Senior Living Communities, Inc. (“Brookdale”), her former employer, pursuant to the California Private Attorneys General Act (“PAGA”). The parties attended mediation, after which a settlement was reached and, later, approved by the trial court. Appellant Mishelle Neverson (“Neverson”), a plaintiff in an overlapping PAGA case against Brookdale, filed a motion to intervene in Callahan’s action and an appeal of the PAGA settlement approval.
In a long-anticipated decision, the United States Supreme Court issued its ruling in Viking River Cruises, Inc. v. Moriana, offering, at least for the time being, a victory in favor of the enforcement of waiver of California’s Private Attorneys General Act of 2004 (“PAGA”) in arbitration agreements. Unfortunately, however, that victory may be short-lived.
Plaintiff Gustavo Naranjo (“Naranjo”) filed a putative class action on behalf of employees of Spectrum Security Services, Inc. (“Spectrum”), alleging that Spectrum had violated state meal break requirements under the Labor Code and applicable Industrial Welfare Commission (“IWC”) wage order. The complaint sought an additional hour of pay – commonly referred to as a “premium pay” – for each day on which Spectrum failed to provide employees a legally compliant meal break.
In Dario Martinez-Gonzalez v. Elkhorn Packing Co., the Ninth Circuit Court of Appeals reversed a trial court’s order refusing to enforce arbitration agreements between Dario Martinez-Gonzales (“Dario”) and his former employers.
In a decision that strikes a blow to California employers in favor of an alternate standard, in Lawson v. PPG Architectural Finishes, Inc., the California Supreme Court clarified that the appropriate standard for whistleblower retaliation claims brought under Labor Code section 1102.5 is that which is codified in Labor Code section 1102.6 (“section 1102.6”).
On January 25, 2022, Governor Gavin Newsom announced the legislature would reenact California’s COVID-19 supplemental paid sick leave law via SB 114 (adding Labor Code sections 248.6 and 248.7) (“2022 CA-SPSL”). Draft legislation was issued on February 2, 2022 and was signed on February 9, 2022.
In Garcia v. Expert Staffing West, California’s Second Appellate District concluded that an arbitration clause between a job applicant and her prospective employer does not apply to disputes between the applicant and her former employers, even despite the existence of a business relationship between the applicant’s prospective employer and former employers.
For an employee to succeed on a claim for discrimination in which an employer asserts that the employee was discharged for legitimate, non-discriminatory reasons, the employee must present evidence demonstrating that the employer’s proffered reasons were pretextual, and that the discharge was in fact motivated by discrimination.
At the close of each legislative cycle, California signs into law a host of new laws with significant impact on California employers. Below is a list of key pieces of legislation, arranged in order by bill name, for ease of reference.
In Lim v. TForce, the Ninth Circuit Court of Appeals upheld a trial court’s denial of Transforce Logistic’s (“TForce”) motion to compel arbitration, holding that the delegation clause and arbitration provision were procedurally and substantively unconscionable under California law.
In a class action lawsuit filed on behalf of California-based flight attendants employed by Virgin America (“Virgin”), the Ninth Circuit Court of Appeals addressed whether certain provisions of the California Labor Code apply to an interstate transportation company’s relationship with its employees, and whether class certification was appropriate in light of that analysis.
Friday June 2, 2021 marked the last day of the legislative cycle for bills to move from their house of origin (whether the Senate or Assembly) into the other house for consideration. While significant amendment is possible, if not likely, the following proposed bills are those with the greatest potential impact on California employers:
On June 17, 2021, the Occupational Safety & Health Standards Board of California’s Division of Occupational Safety and Health (“Cal/OSHA”) voted to adopt revisions to the COVID-19 Emergency Temporary Standard (“ETS”). Governor Gavin Newsom issued an executive order making the revised ETS effective immediately. The regulations, which govern workplace safety, align with California’s mask and social distancing guidance for the general public.
In Franklin v. Community Regional Medical Center, the Ninth Circuit Court of Appeals considered whether a staffing agency employee assigned to work for a third-party client could avoid enforcement of her employer’s arbitration agreement by suing the third-party client.
In an anticipated recent opinion in California Trucking Association v. Bonta, et al., the Ninth Circuit Court of Appeals reversed a district court’s decision, holding that the “ABC Test” (later codified as AB5) is not preempted by the Federal Aviation Administration Authorization Act of 1994 (“F4A”).
The California Supreme Court recently issued a ruling in Vazquez v. Jan-Pro Franchising International, Inc., in which it held that the “ABC Test” used to classify workers as employees or independent contractors in Dynamex Operations West, Inc. v. Superior Court applies retroactively.
In a valuable decision for California employers, the United States Court of Appeals for the Ninth Circuit recently held in Bernstein v. Virgin America, Inc. that employers are not subject to heightened penalties for subsequent violations of the California Labor Code’s Private Attorneys General Act of 2004 (“PAGA”) until they have been notified of prior violations by either a court or the California Labor Commissioner.
Governor Gavin Newsom recently signed SB 95 (Skinner), which adds sections 248.2 and 248.3 to the California Labor Code and extends and expands the California COVID-19 supplemental paid sick leave statute that expired on December 31, 2020.
Plaintiffs Verna Clarke and Laura Wittman worked as traveling clinicians for healthcare staffing company AMN Services. On behalf of two certified classes of employees, Plaintiffs filed suit against AMN alleging claims for unpaid overtime under both the California Labor Code and the Fair Labor Standards Act (“FLSA”), as well as other derivative state law claims. After the district court certified California-wide classes for the state law claims and conditionally certified a nationwide FLSA collective, the parties filed cross motions for summary judgment focusing on the central question in the case: whether certain per diem payments to class member employees should be considered part of the employees’ “regular rate” and therefore considered when calculating overtime pay rates.
In September 2020, Governor Newsom signed Senate Bill 973, requiring California employers of 100 or more employees to report certain pay data (enumerated in Government Code §12999) to the Department of Fair Employment and Housing (“DFEH”). The deadline to comply with California’s pay data report is March 31, 2021, and no later than March 31 every year thereafter.
In Cindy R. Castillo v. Bank of America, a Ninth Circuit panel affirmed a trial court’s order denying a plaintiff’s motion to certify a class regarding her overtime wage claim under California law. This case arises from a dispute regarding the proper method of calculating overtime wages. Under California law, employers must pay non-exempt employees an overtime premium calculated based on a given employee’s regular rate of pay.
On November 19, 2020, the California Occupational Safety and Health Standards Board, the standards-setting agency of the California Division of Occupational Safety and Health (Cal/OSHA), adopted an emergency standard regarding COVID-19 prevention in the workplace.
Earlier this month, Californians voted to pass Proposition 22 (“Prop 22”), the App-Based Drivers as Contractors and Labor Policies Initiative. Pursuant to Prop 22, app-based drivers may be lawfully classified as independent contractors as opposed to employees and are expressly exempt from AB 5’s ABC Test.
AB 685 requires employers to provide written notice and instructions to employees who may have been exposed to COVID-19 at their worksite and enhances the Division of Occupational Health and Safety’s ability to enforce health and safety standards to prevent workplace exposure to and the spread of COVID-19. This law becomes effective January 1, 2021.
In response to a federal court’s invalidation of certain provisions of the regulations interpreting the Families First Coronavirus Response Act (“FFCRA”), the U.S. Department of Labor (“DOL”) has issued new guidance for employers and workers.
Effective August 8, 2020, the San Diego County Public Health Order was amended to require employers to take affirmative steps to notify local officials and employees when workers are diagnosed with COVID-19. Once an employer becomes aware of an employee’s diagnosis, the employer must:
Pursuant to SB 1343, employers with five or more employees must provide sexual harassment prevention training to all employees by December 31, 2020. SB 1343 also required the Department of Fair Employment & Housing (“DFEH”) to publish compliant training materials for use by employers.
Today, Governor Gavin Newsom reintroduced mandatory shutdown orders for certain California businesses. Effective July 13, 2020, all counties must close indoor operations in the following sectors: dine-in restaurants; wineries and tasting rooms; movie theaters; family entertainment centers (such as bowling alleys, miniature golf, batting cages, and arcades); zoos and museums; and cardrooms. Bars, breweries, and pubs must close all operations—both indoor and outdoor—across the state.
On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act, which expands the benefits available under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) for businesses struggling to meet their financial obligations during the COVID-19 pandemic. Under the CARES Act, employers were afforded up to eight weeks to use Paycheck Protection Program (“PPP”) funds to cover certain enumerated expenses, such as payroll costs.
California has entered a new phase in response to the COVID-19 crisis. In Early Stage 2 of the state’s Resilience Roadmap, each county is authorized to determine the details of the restrictions for the operation of the permitted retail, manufacturing, warehouse, and logistics companies.
The California Legislature returned from recess on May 4, 2020. Prior to recess, a number of bills were proposed to assist Californians during this crisis. There will certainly be other proposed bills.
On April 16, 2020, Governor Gavin Newsom signed Executive Order N-51-20 to extend two weeks of paid sick leave for food sector workers.
The San Diego County Public Health Officer has issued new orders affecting persons who have been diagnosed with COVID-19, are likely to have COVID-19, or who have been in close contact with someone who has or is likely to have COVID-19. These orders may impact an employee’s entitlement to federal, state, and/or local paid sick leave.
With the new legislative session under way, there are a number of proposed bills that, if signed into law, will impact California employers and employees. These bills include:
Effective at midnight on Friday, April 3, 2020, the San Diego County Public Health Officer amended her previous order dated March 27, 2020 (the “March 27 Order”) to add further provisions for businesses still in operation and employees interacting with the public.
The City of Los Angeles has adopted its own expanded paid sick leave benefits—referred to as “Supplemental Paid Sick Leave”—for eligible employees affected by the COVID-19 pandemic. The purpose of the Ordinance is to extend sick leave benefits to employees of larger employers that are not covered by the Families First Coronavirus Response Act (“FFCRA”). The City Council passed the Ordinance on March 27, 2020; Mayor Eric Garcetti has until April 7, 2020 to sign the Ordinance and is expected to do so. The Ordinance will become effective immediately upon publication following the mayor’s signature and will remain in effect until December 31, 2020.
On April 1, 2020, the U.S. Department of Labor (“DOL”) published a draft of its regulations for implementing paid sick leave under the Emergency Paid Sick Leave Act (“EPSLA”) and expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act (“EFMLEA”). These regulations are scheduled to become published in their final form on April 6, 2020. A summary of the key takeaways from the regulations is provided below:
The Department of Labor (“DOL”) has published guidance for the Families First Coronavirus Response Act (“FFCRA”) signed by President Trump on March 18, 2020. On March 25, 2020, Pettit Kohn Ingrassia Lutz & Dolin published an update summarizing the preliminary guidance issued by the DOL regarding the FFCRA. Since that update was disseminated, additional guidance has been published on the DOL’s website. This update summarizes the key takeaways of both the preliminary guidance and the additional guidance, providing a comprehensive description of the information provided by the DOL. Information that has been revised or added since the March 25 update is marked as such below.
The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law by President Trump today. There are numerous sections of the CARES Act that impact California employers. These sections include:
The Department of Labor has provided additional guidance for the Families First Coronavirus Response Act (“FFCRA”) signed by President Trump on March 18, 2020. We have summarized the key takeaways below.
The Department of Homeland Security (“DHS”) announced a temporary relaxation of the rules for reviewing I-9 documents in person with new employees. Under normal circumstances, a representative of the employer must review the employee’s identity and employment authorization documents in the employee’s physical presence. Per the DHS announcement, employers operating remotely due to COVID-19 precautions may now inspect these documents by remote means (e.g., by videoconference, fax, or email) and obtain, inspect, and retain copies of the documents (as opposed to originals) within three business days.
As previously reported in our March 20, 2020 update, Governor Gavin Newsom issued Executive Order N-33-20 (the “Order”) requiring all individuals living in the State of California to stay home or at their place of residence, “except as needed to maintain continuity of operation of the federal critical infrastructure sectors” or to obtain critical needs, such as food, healthcare, or prescriptions.
On the evening of March 19, 2020, Governor Gavin Newsom issued Executive Order N-33-20, which takes effect immediately and will remain in place until further notice, ordering Californians to begin sheltering in place at their homes (or places of residence). Exceptions to this order exist only for individuals employed in specified industries previously deemed by the federal government as essential to critical infrastructure.
On March 18, 2020, President Trump signed legislation extending paid sick leave and paid family leave benefits to millions of Americans in an effort to slow the spread of the COVID-19 pandemic. This legislation contains the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, both of which become effective on April 2, 2020.
Employers the world over are struggling with the impact of the novel coronavirus and the infectious disease it causes (known as COVID-19). It is believed that the virus originated in China in late 2019; it has since spread across the globe. The World Health Organization (“WHO”) has declared the COVID-19 outbreak a pandemic. Although the situation remains fluid and new information is released daily by public health and government authorities, we offer the following guidance for employers, particularly those in California, coping with the upheaval caused by the outbreak.
On January 12, 2020, the U.S. Department of Labor (“DOL”) announced a “final rule” that narrows the definition of “joint employer” under the Fair Labor Standards Act (“FLSA”). Prior to this update, the DOL was guided by an interpretive regulation, codified in 29 CFR part 791, which explained that joint employer status depends on whether multiple persons are “not completely disassociated” or “acting entirely independently of each other” with respect to the employee’s employment.
In the recent decision Cacho v. Eurostar, Inc., a California Court of Appeal ruled that a class action lawsuit brought by two former retail workers for wage and hour violations did not meet class certification requirements. This ruling affirmed a trial court’s denial of class certification because the named plaintiffs’ claims were not typical of the proposed class and common questions of law or fact did not predominate. This case is notable because facially non-compliant and inexhaustive written policies were not dispositive on the question of class certification.
The U.S. Department of Labor’s final rule amending the Fair Labor Standards Act (“FLSA”) regulations for white collar overtime exemptions for employees goes into effect on January 1, 2020.
In Donald Davis et al. v. TWC Dealer Group, Inc. et al., a California Court of Appeal affirmed an order denying employer Defendant TWC Dealer Group, Inc.’s (“TWC”) petition to compel arbitration against three former employees (“Plaintiffs”) and awarded costs to Plaintiffs.
The U.S. Department of Labor announced a final rule changing the regulations governing the white-collar overtime exemptions for executive, administrative, and professional employees under the Fair Labor Standards Act.
Governor Newsom has signed into law SB 778, which extends the deadline for employers to comply with the new harassment training requirements that went into effect last year. Under the prior law, employers with five or more employees were required to provide at least two hours of harassment training to all supervisory employees, and at least one hour of harassment training to non-supervisory employees by January 1, 2020. The prior law also specified that an employer that had provided this training to employees after January 1, 2019 would not be required to provide harassment training again by the January 1, 2020 deadline.
Governor Newsom has signed into law SB 83, which will extend the maximum duration of Paid Family Leave (“PFL”) benefits from six to eight weeks beginning on July 1, 2020. Employees can obtain and use PFL benefits, which provide partial wage replacement, to care for a seriously ill child, parent, grandparent, spouse, grandchild, sibling or domestic partner; or to bond with a minor child within one year of the birth or placement of the child through foster care or adoption.
Governor Newsom has signed into law SB 188 (Mitchell), which prohibits employers from discriminating against employees on the basis of their hairstyle. Under the Fair Employment and Housing Act, it is unlawful for employers to engage in specified discriminatory employment practices, including hiring, promotion, and termination based on certain protected characteristics, including race, unless based on a bona fide occupational qualification or applicable security regulations.
The Ninth Circuit decided Vazquez v. Jan-Pro Franchising International, Inc., a putative wage and hour class action. In Vazquez, the Ninth Circuit analyzed whether Jan-Pro’s franchisees were in fact employees, as opposed to independent contractors. The Ninth Circuit held that the California Supreme Court’s intervening decision in Dynamex v. Superior Court is controlling and applies retroactively.
There are numerous bills pending in the 2019-2020 legislative session which, if signed into law, would impact California’s employers and employees. These bills include:
In Furry v. East Bay Publishing, a California court of appeal held that imprecise evidence by an employee can provide a sufficient basis for damages when the employer fails to keep accurate records of the employee’s work hours.
The U.S. Department of Labor (“DOL”) recently issued its long-awaited replacement of the Obama administration’s overtime rule, raising the minimum salary threshold required for workers to qualify for the Fair Labor Standards Act’s white collar exemptions to $35,308 per year.
With the new legislative session under way, there are a number of proposed bills that, if signed into law, will impact California employers and employees. These bills include:
California legislators sent Governor Jerry Brown 1,217 bills to consider in his final opportunity to sign bills. Governor Brown signed 1,016 bills into law. Of these new laws, many address sexual harassment in California. These new laws include:
In Fritsch v. Swift Transp. Co. of Ariz., LLC, Plaintiff Grant Fritsch (“Fritsch”) filed a wage-and-hour class action in state court. Fritsch worked as a driver for Swift Transportation Company of Arizona, LLC (“Swift”), a trucking and transportation company. Fritsch alleged that Swift denied him and other employees proper overtime pay, meal periods, and appropriate wage statements. Fritsch sought wages and premiums owed, prejudgment interest, statutory penalties, attorneys’ fees, costs of suit, and statutory damages under the Private Attorneys General Act (“PAGA”).
Governor Brown has signed into law Assembly Bill 2770 (Irwin), which expands categories of communications that are privileged and protected for purposes of a defamation action. AB 2770 will be codified in Civil Code section 47. Under previous law, communications concerning an employee’s job performance or qualifications of a job applicant that were made without malice by a current or former employer to a prospective employer were privileged. The new law establishes protections from defamation actions for communications of complaints of sexual harassment by an employee, without malice, to an employer based on credible evidence. Communications between the employer and interested persons regarding a complaint of sexual harassment are also protected by privilege for purposes of a defamation action. The bill also authorizes an employer to disclose, without malice, whether the employer would rehire an employee and whether or not a decision to not rehire is based on the employer’s determination that the former employee engaged in sexual harassment.
A recent decision handed down by a California Court of Appeal emphasizes why it is important for employers to have policies and procedures that immediately address sexual harassment complaints.
California-based janitorial workers are entitled to certain rights under California law. The Property Service Workers Protection Act (“PSWPA”) has its first compliance date on July 1, 2018. The PSWPA can be found at California Labor Code sections 1420 et seq. and has its next compliance date of July 1, 2018. By way of background, commencing January 1, 2017, janitorial employers were required to keep accurate records for three years consisting of: (A) names and addresses of all employees engaged in rendering actual services for any business of the employer, (B) daily hours worked, including the times the employee begins and ends each work day, (C) wages paid each payroll period, (D) ages of any minor employees, and (E) any other conditions of employment (job descriptions, workplace injuries, and similar type of records). In the case of subcontractors, under probable application of Labor Code section 2810.3, if the employer is considered a “client employer” under California’s joint employer statute, a copy of the same records should be maintained by the client employer for the subcontractor employees, together with proof of workers’ compensation insurance, for every subcontractor performing work for the client employer from and after January 1, 2017.
The United States Supreme Court held that class action waivers in mandatory employment arbitration agreements are valid and enforceable, rejecting arguments that such waivers violate the National Labor Relations Act (“NLRA”). The decision enveloped three cases: Epic Systems Corporation v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc. In each of the three cases, employees signed arbitration agreements requiring them to arbitrate employment disputes individually, thus waiving their right to bring class and collective actions in court. However, the employees filed class and/or collective claims against their employers under the federal Fair Labor Standards Act and a number of state laws.
It is a familiar pattern to many employers: an employee takes a medical leave of absence that is subsequently extended for an indefinite period of time. Does the law require an employer to accommodate this indefinite leave of absence? Two recent federal cases provide much needed (employer-friendly) guidance.
The 2018 California legislative session has introduced numerous bills that, if signed into law, would impact California employers and employees. These bills include:
SB 224 (Jackson): This bill would amend the Unruh Civil Rights Act to include investors, elected officials, lobbyists, directors, and producers among other professionals who may be liable to a plaintiff for sexual harassment if the elements are proven. The bill passed the Senate and is currently in the state Assembly.
Section 13307 of the “Tax Cuts and Jobs Act,” which went into effect on December 22, 2017, amends section 162 of the Internal Revenue Code (“IRC”) pertaining to “ordinary and necessary” business expenses that may be deducted from income. Pursuant to new section 162(1) of the IRC, payments made pursuant to a confidential settlement of sexual harassment allegations are no longer permissible tax deductions for businesses. The new provision does not specify whether a company may deduct legal fees incurred before settlement, or whether some or all of the fees are deductible if there are claims in addition to a claim of sexual harassment. Employers are encouraged to consult with their tax advisors regarding the tax implications of any sexual harassment settlement.
In Douglas v. Xerox Business Services, the Ninth Circuit Court of Appeals (“Ninth Circuit”) clarified that the Fair Labor Standards Act (“FLSA”) permits minimum wage compliance to be measured by weekly per-hour averages.
“Ban the box” laws seek to restrict when an employer may consider criminal conviction history information concerning applicants for employment. Nationally, 29 states and over 150 cities and counties have enacted some type of “ban the box” law. Some of these laws only apply to government sector employers when they hire their own employees. However, nine states and 15 cities have gone further and adopted “ban the box” laws that apply to private sector employers. In California, this includes San Francisco and Los Angeles, which have already adopted their own local ordinances to “ban the box.”
Below is a summary of bills the California legislature passed that may impact California employers and employees. Governor Jerry Brown has until October 15, 2017 to sign or veto bills.
In McKeen-Chaplin v. Provident Savings Bank, the Ninth Circuit Court of Appeals (“Nint Circuit”) held that a group of mortgage underwriters were improperly classified as exempt. Gina McKeen-Chaplin (“McKeen-Chaplin”) was employed by Provident Savings Bank (“Provident”) as a mortgage underwriter, responsible for analyzing the viability of mortgage loan applications. While Provident’s mortgage underwriters were generally required to abide by a set of guidelines regarding loan worthiness, they exercised some leeway in applying those guidelines and, occasionally, were permitted to make suggestions outside of their bounds. Ultimate decisions regarding loan-worthiness, however, were ultimately made by higher ranking employees.
Effective July 1, 2017, California adopted new regulations governing an employer’s ability to seek out and consider information pertaining to employees’ and applicants’ criminal history. Below is a summary of the key points outlined in the regulations:
Pursuant to the California Labor Code’s “day of rest statutes” (Cal. Lab. Code sections 550-558.1), an employee cannot be required to work more than six consecutive days, unless that employee works fewer than 30 hours in a week and no more than six hours in a day during that span. In Mendoza v. Nordstrom, the California Supreme Court looked more closely at this legal standard to clarify that employers are only bound to abide by these provisions during each workweek, thereby alleviating the potential scheduling difficulty associated with coordinating compliance across multiple workweeks.
In Rizo v. Yovino, a math consultant sued the Fresno County Superintendent of Schools (“the County”) for violation of the federal Equal Pay Act, arguing that it was improper for the County to consider her prior salary history when setting her starting compensation. Federal law generally prohibits employers from paying employees of one sex more than employees of the other sex for performing the same work. However, a pay differential is permissible where it is based on: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; or (4) a differential in pay based on any factor other than sex.
The California Legislature is currently considering Assembly Bill (“AB”) 1565 (Thurmond). AB 1565 would add section 514.5 to the California Labor Code. The bill proposes to raise the minimum monthly salary to qualify for white-collar exempt status in California to $3,956. The minimum annual salary for exempt executive, administrative, or professional workers would be $47,472, or twice the state minimum wage, whatever is greater.
There are a number of pending bills, which, if passed and signed into law, would impact California employers and employees.
California Supreme Court Upholds $90 Million Class Action Judgment Against Employer who Required Employees to Remain “On-Call” During Rest Periods
On November 8,2016, California voters passed Proposition 64, also known as the “Adult Use of Marijuana Act.” As of November 9, 2016, it became legal for adults over 21 years old to possess and use marijuana for recreational purposes. Additional licensing and taxing provisions become effective January 1, 2018. Despite the legalization of recreational marijuana use, the law does not impact an employer’s right to maintain a drug and alcohol free workplace, require an employer to permit or accommodate the use of marijuana in the workplace, or affect an employer’s ability to have policies that prohibit the use of marijuana by employees and prospective employees.
In Penilla v. Westmont Corporation, a California Court of Appeal reaffirmed courts’ unwillingness to enforce arbitration agreements that are procedurally or substantively unconscionable. Although not an employment case per se, the court’s ruling contemplates the same issues that are analyzed in employment claims, highlighting the close judicial scrutiny given to arbitration agreements.
Governor Jerry Brown has signed Assembly Bill 1066 (Gonzalez), also known as the “Phase-In Overtime for Agricultural Workers Act of 2016.” Existing law sets wage, hour, meal break requirements, and other working conditions for employees, and requires an employer to pay overtime wages to an employee who works in excess of eight hours in a workday or 40 hours in a workweek. However, existing law exempts agricultural employees from these requirements, providing them overtime only when they work more than 10 hours in a workday or 60 hours in a workweek.
In Morris v. Ernst & Young, the Ninth Circuit Court of Appeals (“Ninth Circuit”) concurred with an administrative decision issued by the National Labor Relations Board (“NLRB”), in which the NLRB determined that class action waivers in employment arbitration agreements violate the National Labor Relations Act (“NLRA”). According to the Ninth Circuit and the NLRB, an employer cannot require an employee to waive his or her right to pursue class or collective claims, whether in arbitration or in court, for such a requirement defies the NLRA’s mandate that employees be permitted to engage in “concerted activity”—the right to work together to address workplace grievances.
The City of San Diego has published the required posters and employee notice for the Earned Sick Leave and Minimum Wage Ordinance, which took effect on July 11, 2016. Among other things, the Ordinance increases the City’s minimum wage to $10.50 per hour and requires employees who work at least two hours within the City’s geographical boundaries during a year to accrue paid sick leave.
On July 11, 2016, the San Diego City Council voted to adopt the June election results, rendering San Diego’s Earned Sick Leave and Minimum Wage Ordinance effective immediately. The ordinance sets the minimum wage for employees working within the city of San Diego at $10.50 per hour. On January 1, 2017, the City’s minimum wage will increase again to $11.50 per hour. Beginning in 2019, the local minimum wage will be tied to the Consumer Price Index and adjust as necessary based on the cost of living. Moreover, the ordinance requires employers to provide a more generous sick leave policy than required by state law (five days rather than three days).
Earlier this month, San Diegans voted to approve Proposition I, San Diego’s Earned Sick Leave and Minimum Wage Ordinance. The ordinance raises San Diego’s minimum wage above the state minimum wage and requires employers to provide a more generous sick leave policy than the state law mandates.
In Mendoza v. The Roman Catholic Archbishop of Los Angeles, a bookkeeper brought a disability discrimination claim under the Americans with Disabilities Act (“ADA”) against her employer, a small parish. The bookkeeper alleged that her employer engaged in discrimination by failing to offer her a full-time position upon her return from a ten-month leave of absence. The church argued that its pastor performed plaintiff’s duties while she was on leave and determined that the role could be fulfilled by a part-time employee. The church offered the bookkeeper a part-time role upon her return from leave, which she declined.
Governor Jerry Brown has signed into law SB 3 (Leno) which amends sections 245.5, 246, and 1182.12 of the Labor Code. The new law raises the state’s minimum wage to $10.50 per hour on January 1, 2017, and then annually thereafter until reaching $15.00 per hour on January 1, 2022. The timeline of minimum wage hikes for employers with fewer than 25 employees will run from January 1, 2018 to January 1, 2023.
The California legislature is currently considering various pieces of legislation that, if passed and signed into law by Governor Brown, may impact California’s employers as well as employees.
On January, 29, 2016 the Equal Employment Opportunity Commission announced that it was proposing revisions to the Employer Information Report to include pay data. The announcement took place on the seventh anniversary of the passage of the Lilly Ledbetter Fair Pay Act, a federal statute extending the time period for filing complaints of employment discrimination regarding compensation.
What better way to ring in the new year than to review some of the laws that impact California employers beginning in 2016. This is an opportune time for employers to review their policies and procedures regarding these recent changes.
In Garrido v. Air Liquide Industrial U.S. L.P., a California Court of Appeal determined that the rule set forth in Gentry v. Superior Court is still good law – at least in some situations.
Ninth Circuit Gives a Thumbs-Up to the California Supreme Court, Holds the Iskanian Decision Is Not Preempted by Federal Law, Employer Successfully Challenges PAGA Claim Based on Insufficient Notice Letter, California Court Appeal Instructs Trial Court to Re-Examine Its Denial of Class Certification
Legislature Amends PAGA to Limit Employers’ Exposure for Certain Technical Violations of the Labor Code; Court of Appeal Invalidates Employer’s Training Reimbursement Policy
Governor Signs Bill Clarifying That Employee Immigration Status is Irrelevant to Employer Liability for Illegal Conduct
Unpublished Opinion Demonstrates Viability of Discrimination and Harassment Claims Brought by Non-Minorities; Court of Appeal Affirms Order Denying Employer’s Motion to Compel Arbitration
California Paid Sick Leave Law Amended and Clarified; Appellate Court Holds Inability to Work for Particular Supervisor is Not a “Disability” Under the FEHA
EEOC Issues Proposed Regulations Regarding Employer Wellness Programs
Department of Labor Issues Final Rule Revising Definition of “Spouse” Under FMLA
California Supreme Court Punts on Viability of “Honest Belief” Defense
First Circuit Court of Appeals Protects Employer in ADA Claim Where Employee Fails to Engage in Interactive Process
U.S. Supreme Court Holds Employees Need Not be Compensated for Time Spent Waiting for Security Screenings
NLRA Reaffirms on D.R. Horton and Unenforceability of Class Action Waivers
Court of Appeal Holds That Trial Court, Not Arbitrator, Must Decide Class
New California Laws: Governor Jerry Brown signed into law a number of bills that will impact California employers.
Governor Brown Signs Bill Mandating Paid Sick Leave in California
Several bills that could impact California employers and employees are pending before the California legislature.
Ninth Circuit Rules that Home Delivery Drivers are Not Independent Contractors
California Supreme Court Issues Opinion Criticizing “Trial by Formula”
in Class Actions
Comments on Proposed CFRA Amendments Due by June 2nd
There are a number of bills in the legislature that, if signed into law, would impact California employers and employees.
The California Legislature is considering a number of bills which, if enacted, would impact California’s employers and employees. These bills include
California Court of Appeal Confirms That Sexual Harassment Need Not Be Motivated by Sexual Desire
Ninth Circuit Upholds Sizeable Attorneys’ Fee Award Despite Plaintiff’s Modest Victory
Ninth Circuit Denies Employer’s Petition to Compel Arbitration Pursuant to “Unconscionable” Arbitration Agreement
New Law Increases Minimum Wage
Employers Must Now Provide Notice Required by Patient Protection and
Affordable Care Act
New Law Confirms that Sexual Harassment Need Not Be Motivated by Sexual Desire
Court of Appeal Addresses Compensable Time Issues
U.S. Supreme Court Rules Defense of Marriage Act Unconstitutional, Effectively Nullifies California’s Proposition 8
U.S. House of Representatives Passes “Comp Time” Bill
Legislature Considers Bill Expanding Protections for Victims of Domestic Violence, Sexual Assault and Stalking
U.S. Citizenship and Immigration Services Publishes New I-9 Form
U.S. Department of Labor Issues Final Rule Expanding Family and Medical Leave Act Protections
Department of Fair Employment and Housing (“DFEH”) Begins Enforcing New Disability Regulations
Congress Avoids Fiscal Cliff by Passing American Taxpayer Relief Act
Department of Industrial Relations Announces 2013 Rates for Overtime
Governor Signs Bill Clarifying the Definition and Scope of “Sex” Under the FEHA
Governor Signs Bill Implementing New Social Media Privacy Rules
Bills Expanding the FEHA and the CFRA Lose Traction in the Senate
California Assembly Rejects Bill Targeting Class Action Waivers
House and Senate Seek to Lower Bar for Class Certification in Employment
Assembly Passes Bill Prohibiting Discrimination Against Unemployed Job Applicants
Assembly Bill Targets Use of Social Media By Employers During Hiring Process
Congress Targets Employee Misclassification with Fair Playing Field Act
Congress Approves Extension of Payroll Tax Cut
California Assembly Considers Raising Minimum Wage
IRS Announces 2012 Standard Mileage Rates