Category Archives: Legal Update

New Laws, Part 4! (or really, some questions, answered).

You had questions, and now I have answers!

I gave a presentation today and the audience had some great questions that I couldn’t answer at the time. I thought I would share my answers about the Form I-9, the new salary history rule, and the new “Ban the Box” rule here:

How can an employer check the work authorization / complete the Form I-9s of remote employees?

The employer has a variety of options when dealing with remote employees – the company can designate an authorized representative to fill out Forms I-9 on behalf of your company, including personnel officers, foremen, agents or notary public. Except, as pointed out by my friend Nancy Nelson, below, if the remote employees are in California, then the company can only use a notary public who is a properly bonded immigration consultant – even if acting in a non-notary capacity.

The Department of Homeland Security does not require the authorized representative to have specific agreements or other documentation for Form I-9 purposes. Of course, if your authorized representative fills out Form I-9 on your behalf, you are still liable for any violations in connection with the form or the verification process.

The key is that you have someone who can physically examine each document presented and determine if it reasonably appears to be genuine and relates to the employee presenting it. Reviewing or examining documents via webcam (such as Skype, etc.) is not permissible.

If the employee is outside California, you can use a notary. The notaryshould just act as an authorized representative, not as a notary. This means you are using a notary, because you know that the notary understands the importance of looking at the physical documents and filling out the Form I-9 accurately and completely, but the notary public should not provide a notary seal on Form I-9.

The company using the authorized representative needs to pay any fees for those services. Don’t pass them on to the employee!

Special thanks to Nancy Nelson for pointing this out!

How should a company maintain its completed Form I-9s?

I like the old school method where an employer  keeps all the current employees’ Form I-9s in a binder and in a separate binder, the employer keeps those of former employees.   I like all the documents in one place and the ability to simply pull it out of a safe file cabinet when needed. But. . . you have other options!

Homeland Security allows for three methods of maintaining the records: paper, microfilm/ microfiche or electronic copy. DHS’ website explains the requirements for using each of these formats here.

Before selecting a method, keep in mind that Form I-9s contain a lot of personal information about employees, so you’ll want to maintain that information in a private, confidential place that cannot be accessed by anyone without a “need to know.”

No matter how you choose to store your Form I-9, you must be able to present them to government officials for inspection within 3 business days of the date when the request was properly and legally made.

What employers are exempt from the new “Ban the Box” law?

If your company has historically operated under an exception to the existing restrictions on questions about an applicant’s criminal history, you likely remain under an exception. As a threshold matter, only employers with 5 or more employees are covered by the new “Ban the Box” rules.

Also, the law states that it does not apply in any of the following circumstances:

  • a position for which a state or local agency is otherwise required by law to conduct a conviction history background check.
  • a position with a criminal justice agency
  • a position as a Farm Labor Contractor
  • a position where an employer or agent thereof is required by any state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.

Can employers ask applicants, “What is your salary expectation if you work here?” in light of the new Salary History rules?

Yes – so long as you don’t ask that in context with what the person’s salary history is. Don’t try to be too clever and ask this in a way that is really asking about salary history!

Can current employees ask for the pay scale for a position, like applicants now can?

Well, a current employee can ask – it cannot be against the rules or policies of the employer to ask! –but the employer isn’t required by law to provide the information.

 

New Laws ’18, part 3!?!

In our ongoing series of new laws for California employers, here’s a brief summary of some more . .

Salary History

A new law for 2018 is the addition of Labor Code §432.3, which bars employers from relying upon an applicant’s salary history as a factor in determining whether to offer to hire the person, or what compensation to offer.  Employers cannot ask, verbally or in writing, personally or through an agent/recruiter, about salary history.

If the applicant volunteers the information without prompting, the employer could consider it.  (But I suggest you make it clear you don’t want such volunteered information as you don’t want a dispute about whether the person felt pressured to volunteer by the company, or an agent).  Also, if the information is publicly available, the employer can consider it.

The law also incorporates the 2017 amendments to the Equal Pay Act to confirm that salary history, by itself, cannot justify any disparity in compensation based on race, gender, or national origin.

Finally, if an applicant makes a reasonable request for the employer’s pay scale, the employer must provide it.

Employers will want to review their employment applications to remove any request for information about salary history (and information about criminal history per the new “ban the box” rules).

Additions to the Harassment Prevention Training Requirements

Government Code §12950.1 is amended to provide that Harassment Prevention trainings, required for companies with more than 50 employees, include training on the prevention of harassment on the basis of gender identity, gender expression and sexual orientation.   (Not to #humblebrag, but my trainings already incorporated this).

And a Reminder of Required Minimum Wage Increases  

On January 1, 2018, the minimum wage for employers with 26 or more employees will increase to $11.00 per hour. The minimum annual salary for an exempt employee at a “larger” employer will increase to $45,760.

For smaller employers (25 or fewer employees), the minimum wage will increase to $10.50, and the minimum salary for an exempt employee will be $43,680.

The Computer Software Professional minimum wage will increase to $43.58 (or $7,565.85 per month; $90,790.07 per year).  Don’t forget, this is a very specific exemption that requires strict compliance with the defined duties.  And. . . it is only an exemption from overtime; these employees must still be provided meal and rest breaks.

This blog is not intended to be an exhaustive list of all new laws, but rather is to highlight some of the new changes. 

Employment Law Update Webinar

California Labor Commissioner says an Uber driver is an employee, not a contractor

Shocking News! (Really? Actually, no, not really.) Last night, Uber filed an appeal in San Francisco Superior Court.  The appeal is to challenge a ruling of the California Labor Commissioner that an Uber driver should be classified as an employee, not an independent contractor. Uber claims that its drivers are not employees; instead, Uber facilitates logistics for contractors who sign on to its service.   Drivers and passengers use the app for “private transactions.”   But behind that app is, well, a fleet of drivers: earlier this month, Uber announced it has 26,000 drivers in New York City, 15,000 in London, 22,000 in San Francisco, 10,000 in Paris and 20,000 in Chengdu, China. Uber’s position is that does not exert any control over the hours its drivers worked and does not require drivers to complete a minimum number of trips. The Labor Commissioner reviewed the ways Uber does act more like an employer – providing drivers with phones and deactivating the driver app if the individual is inactive for a period of time.  And when it comes to determining whether a worker is an employee or a contractor, the Labor Commissioner, the IRS, the EDD, etc., see the default to be an employment relationship when work is performed. What does this mean for  you – even if you aren’t a facilitator of private transactions? You should take a close look at any contractors you use. It is critical to review what the contractor is actually doing on behalf of your business and what rights the business has retained in controlling that “contractor.”

On June 18, 2015 I presented a webinar on independent contractors and the Uber case. You can view it at the HR Options webinar archive site here.   You can read more about the webinar here. For more on the Uber matter, the New York Times has a short article here with a link to the underlying ruling.

Whoa! It is almost the end of February! Have you completed these 2015 action items?

Here’s a list of action items to make sure your 2015 is off to a fantastic, compliant start!

Paid Sick Leave

For most California employers, there has been a lot of focus, and some tough choices, in preparing for the July 1, 2015 “start date” for California’s Paid Sick Leave law. (AB 1522, the “Healthy Workplaces, Healthy Families Act of 2014”)

The legislation is confusing and difficult to implement and this short blog entry is just meant to provide a brief overview. Basically, every employee is eligible for paid sick leave that starts accruing the first day of employment. This means every full time, every part time, every temporary employee is entitled to the benefit.

The paid sick leave must accrue at the rate of no less than 1 hour for every 30 hours worked. For exempt employees, you can assume a 40-hour workweek to track this. But for non-exempt employees, the law reads that the accrual is for every hour worked.

The employer can delay use of the time until 90 days have elapsed. And there is also the rule that the employee is eligible only if they work 30 days in California. But this “30 day rule” does not trump the “accrue from the first day of employment” so you need to be mindful of how these rules work together.

If your company already has a sick leave policy, or “PTO” or something similar with a more creative name, it might comply with the rules, but you must carefully review the accrual rates, annual caps, etc., to make sure. And be mindful of any “attendance policy” that may punish an employee for taking paid sick leave – you don’t want to walk yourself into a violation of the rule due to in artful language.

Some collectively bargained situations are “exempt” from the rule if the agreement provides for specific benefits to all covered employees, such as paid time off, arbitration of certain disputes and a higher minimum wage. There are some other exceptions – for the construction industry and in-home supportive services, for example – that must be reviewed carefully before applying.

If you have any employees in San Francisco or Oakland, you must comply with the paid sick leave rules specific to those cities. For example, the annual cap for both cities is likely higher for your company than the 48 hours in the state law. And in Oakland, there is no option to grant three days with no accrual.

To do:
•   Notify employees of their rights to paid sick leave under state and local law (once you’ve decided how you’re going to implement the new rules)
•   Post notices in common areas of employees’ rights to paid sick leave
•   Begin tracking accrual for all employees July 1, 2015 (or earlier if in SF or Oakland)
•   Confirm that every employee will receive written notice of his or her current accrual/use every pay period. The pay stub is likely the simplest writing to convey this information.

Employer Policies

In addition to the paid sick leave changes, you should:

•  Confirm that any computer use policy explicitly states that it is not intended to restrict your employees’ rights to discuss the terms and conditions of his or her employment, as provided by law.

•  Update any language in your policies that describes protected time off for volunteer “emergency duty.” California law previously prohibited employers from terminating or discriminating against employees for taking time off due to their emergency duty as a volunteer firefighter, reserve peace officer or emergency rescue personnel. AB 2536 amended the definition of “emergency rescue personnel” to include an officer, employee, or member of a disaster medical response entity sponsored or requested by the state. This definition includes an officer, employee, or member of a political subdivision of the state, or of a sheriff’s department, police department, or a private fire department.

•   If you use unpaid interns, volunteers or apprenticeship trainees (and if you do, you should definitely talk to your employment counsel), be sure that they know that FEHA’s – and your company’s — harassment and discrimination protections extend to them.

•   If your employees use cell phones for work-related matters, including email, you should review all aspects of this use. For one, the company is likely obligated to reimburse at least a portion of your employees’ cell phone bills under Labor Code §2802. And there are a host of other issues you should regularly review: such as, are non-exempt employees using cell phones (or other remote access) after hours? Are employees able to nick confidential information with a simple email? What security is in place to prevent unwanted access to your system?

Having the above items under control is a great start. Since this is California, we’ll definitely have more to talk about soon. And my New Year’s resolution was to update my blog more. . . so. . . better late than never. Here we go!

Are you on board with the Bay Area Commuter Benefits Program? Today’s the Day!

Just a reminder that today is the day that Bay Area employers must get on board with the Commuter Benefits Program.

You probably already know that getting commuters out of single occupancy vehicles can significantly reduce carbon emissions. That’s the best reason for this blog entry.

September 30, 2014 is the day covered Bay Area employers are to register with the Bay Area Air Quality Management District. In essence, the rule is that employers with 50 or more full-time employees within the nine Bay Area counties (Alameda, Contra Costa, Napa, Solano, Sonoma, Marin, Santa Clara, San Mateo, and San Francisco) must offer certain commuter benefits to eligible employees.

A “covered employer” is: “Any public, private, or non-profit entity (person, corporation, partnership, business firm, government agency, special purpose agency, educational institution, health care facility, etc.) for which an average of 50 or more full-time employees per week perform work for monetary compensation within the geographic boundaries of the District. . . The term excludes seasonal/temporary employees.”

A “covered employee” is an employee “who performed an average of at least 20 hours of work per week within the previous calendar month within the geographic boundaries of the District, excluding a seasonal/temporary employee.”

A covered employer must:

1. Offer Commuter Benefit Options. The employer must offer one or more of the following commuter benefit options to eligible employees by September 30, 2014:

a. Pre-Tax Option. Under this option, an employer allows employees to elect to exclude commuting costs incurred for transit passes or vanpool charges from their taxable wages (this must also be consistent with IRC 132(f)). These are basically “commuter checks.” Vendors can provide these to you and help you manage the program – email me if you need suggestions!

b. Employer-Paid benefit. For this option, an employer offers employees a subsidy equal to the monthly cost of commuting via public transit or vanpool, or $75, whichever is lower. Employers may also choose to provide a subsidy for bicycle commuting costs.

c. Employer-Provided transit. You can have your own Google bus! For this option, the employer must give employees at no or low cost (as determined by the Air Pollution Control Officer) a vanpool, bus or similar multi-passenger vehicle operated by or for the employer.

d. Alternative commuter benefit. Finally, an employer can be creative and provide a pre-approved alternative employer-provided commute benefit that is as effective as getting employees out of single occupancy vehicles as the other options (AKA the wild card!).

2. Notify eligible employees of the options available and how to take advantage of them

3. Designate a Commuter Benefits Coordinator and register. The Coordinator (you, lucky reader?) must register with the Bay Area Air Quality Management District through the commuter benefits program website (I fixed the link!).

So. . .a reminder of your obligation to give your employees options to encourage commute alternatives, thus improving air quality, is my primary reason for this post.

The second best reason? It lets me link to an old Onion article: “Report: 98 Percent Of U.S. Commuters Favor Public Transportation For Others.” Makes me laugh every time.

“But we couldn’t make it without our volunteers!” — A very expensive trap for the unwary business owner (even if you don’t think of it as a “business”)

As you may gather from the very title of this blog, I focus on California employment law (!). This past week, a colleague whose practice has a focus on helping wineries and breweries with legal issues gave me a heads up on a confluence of our practice areas: the use of volunteers at wineries. While you, dear reader, may not operate a winery, you may use volunteers – read on!

For most people, getting to work for a small winery is that rare chance to do something you love. Some even perform the work for free because it is fun, or because volunteering is a great opportunity to get a foot in the door, or because it is a chance to help a friend. Many wineries rely upon volunteers to work in the tasting room, pour at festivals, and help with the bottling line. And while months, or years may go by where this creates a seemingly symbiotic system, with rewards for both the volunteer and the winery, the employment concerns are a ticking time bomb of penalties and unpaid wages.

In general, both California and federal laws that govern how people are to be paid prohibit most private sector, for-profit employers from using volunteers. For the most part, only public sector and non-profit organizations can use volunteers and only when the volunteer is performing civic, charitable, or humanitarian work.

An important thing to remember about California’s employment laws is that, for the most part, they apply to every employer — from every “new economy” tech company with the latest killer app to every small business started 40 years ago. Needless to say, there is no exception for small, medium or large wineries.

In California, an individual is an employee if he or she works in the service of another person (the employer) and that employer has the right to control the details of the employee’s work performance. There are a few, very limited exceptions to the rule that California expects workers to be paid as employees. These exceptions include bona fide independent contractors (bona fide being a key phrase!), educational internship programs and immediate family members of the employer (spouse, parent, child). There are also limited exceptions for certain types of jobs. Except for those limited exemptions to the general rule, California requires that an employee be paid at least minimum wage for all hours worked, be paid overtime for all hours worked over eight in a day (and 40 in a workweek), and to be provided the opportunity to take meal and rest periods of a minimum length. This means that, at a minimum, a winery or any other employer must make the appropriate arrangements to properly hire, pay and employ workers.

Before someone can begin working, the employer must require the individual to show that he or she is legally authorized to work in the United States. The employee must complete a Form W4 to determine withholdings for income tax purposes. The employer must track the hours worked by the employee on a daily basis to ensure overtime is paid. The employer must issue paychecks at least every two weeks, and the paystubs must include specific information such as the hours worked, the overtime earned, and the rate of pay, among many other pieces of information. A written offer letter and/or a letter setting forth certain terms and conditions of employment can be invaluable – and sometimes required. This is just a short summary of the requirements for being an employer, but it is a good starting point.

After my colleague told me about this issue for local wineries, I did the heavy research of looking up the matter on the internet. I found some commentators suggesting that wineries simply pay the (former) volunteers as “1099 workers” or as contractors. This decision could get the winery into different, and expensive trouble with the workers and government agencies. It is the rare winery worker who is properly classified as an independent contractor because a critical factor in assessing that status is the degree of control over the worker. For example, the individuals who work in the tasting room pouring your wine the way you want it poured, talking about your wines, and selling them, is an employee. The workers who come every two weeks to maintain the landscaping are contractors.

In the end, many wineries—and other types of companies! – have used volunteers to supplement their paid work force. They have done this without any evil intent. The law, however, is set up to protect workers from, well, “other” companies – the ones that force workers to volunteer for a period before they may consider being hired, the ones that don’t pay at least minimum wage, etc. In any event, no matter how generous you are with your volunteers in ways other than wages, it could be a very detrimental decision to continue using them in this manner. Volunteers can seek back wages for four years’ time, along with substantial penalties, interest and attorneys fees. It is not uncommon for the penalties and fees to exceed the underlying wages owed. And these situations are ripe for the dreaded, financially crippling class action.

If you think you may need to take a close look at how you pay (or don’t pay) people who work at your company, give any of the attorneys at McPharlin Sprinkles & Thomas LLP a call!

(And for a link to my colleague who can help with your winery, brewery and distillery legal issues, click here.)
Whew. I need a drink!

Interested in Applicants Criminal History? Steer Clear. . . and “Ban the Box”

I finally decided on a great, interesting blog topic – and one that I get questions about often: Asking about applicants’ criminal history. And then I remembered why I thought it was such a great, interesting blog topic: because one of my favorite employment lawyers already wrote about it. So, I am turning my attention to a new topic and in the meantime, here is a link to Mary L. Topliff’s very informative article on the “Ban the Box” movement.

For leaves of absence, be open minded!

LOA Chart

Employers can get into trouble in a lot of ways. An easy way to mess up is to “hide the ball” and not let employees know that they might be entitled to a protected leave of absence. It is important to remember that a protected leave of absence is usually just the right to take unpaid time off and then come back to work. It is generally not paid time off, and is generally not meant to be used for a trip to Aruba. Employers should be mindful of all the different types of protected leaves an employee could be eligible to take –and provide information about the protections. Do not wait until an employee uses magic words to ask for the time off (like, “I note that we have more than 50 employees, and I’ve worked here for over 1,250 hours this year, and over 12 months for you in total. . . I’d like to take protected time off under the federal Family and Medical Leave Act and the California Family Rights Act…”).
I have a short chart I use to remind myself of the leaves of absence that can come into play here in California. It is, of course, not intended to replace looking at the actual statute, or talking to your legal counsel! It is just meant to remind you that “there [may be] a protected leave for that!” So. . .click the link at the top of this post, print it out, scribble on it, keep it close at hand, train your managers to look out for situations where leave may be appropriate – in other words, Enjoy!

So, Where Are We? California’s New Employment Laws for 2014 – and an Extra from SF!

While there will be new cases, and maybe some administrative action — like last year’s December 30 issuance of the pregnancy regulations! — I am on pretty firm footing to say that we know what the new employment laws will be in California. Governor Brown’s deadline for signing bills was October 13, 2013. Below I summarize a few of the new rules you’ll need to be ready for in 2014. The minimum wage increase starts on July 1, 2014. The rest of the new laws will kick in on January 1, 2014.

Minimum wage increase over the next two years, beginning with the first increase to $9 per hour on July 1, 2014.

The rate will increase to $10 per hour on January 1, 2016.

Note that the increase in minimum wage increases the minimum amount employers must pay most exempt employees (“no less than two times minimum wage. . . “). If you pay your exempt employees a salary of about $33,280 per year, you’ll need to adjust this next summer to preserve the exempt status.

Fair Employment and Housing Act (“FEHA”) amended to extend protections to military and veterans.

“Military and veteran status” are to be added to the list of protected classes under FEHA in order to increase employment discrimination protections for the 1.8 million California residents who are military members and veterans. This law will not affect other state laws allowing employers to consider military or veteran status for purposes of awarding a veterans’ preference.

FEHA amended to clarify the definition of sexual harassment.

FEHA is now clarified to state that sexual harassment need not be motivated by sexual desire. The new law clarifies the legal standard that had been muddied by the 2011 case Kelley v. The Conco Companies. In that case, the court dismissed claims of same-sex harassment because the plaintiff could not show the harasser was sexually interested in him. This result was absurd, and not particularly helpful to employers trying to make it clear to employees what behaviors are not permitted in the workplace.

With the change, plaintiffs can demonstrate harassing conduct by showing one of the following:
• Sexual intent or desire by harasser to plaintiff.
• General hostility by harasser towards particular sex of which plaintiff is member.
• Through comparative evidence about how harasser treated members of both sexes in workplace.

Overtime compensation for domestic workers.

Employers of domestic employees must pay time and a half for each hour worked over nine hours in one day or 45 hours in one week. The law applies to all employees engaged in “domestic work,” including nannies, housekeepers, and those who provide care for people with disabilities (“personal attendants”).

Paid Family Leave expansion.

Currently, California provides wage replacement of up to six weeks when an eligible worker took permitted time off to care for a seriously ill spouse, domestic partner, child or parent. Under the new law, eligible employees are eligible for wage replacement when taking permitted leave to care for siblings, grandparents, grandchildren, and parents-in-law. As before, the Paid Family Leave is a means for employees to receive wage replacement while on permitted leave. It does not create a protected leave of absence.

And an Extra from San Francisco!

San Francisco’s Family Friendly Workplace Ordinance

Last week, San Francisco passed the Family Friendly Workplace Ordinance. Mayor Ed Lee announced that San Francisco is the first city in the nation to “adopt policies that protect its talented workforce and keep San Francisco a city for the 100 percent.”

If you have employees in San Francisco, you need to be aware of this new law and comply. And if you don’t have employees in San Francisco, I suggest that you at least read the rest of this post for sheer fun: we have seen with many workplace reforms passed by San Francisco, they tend to spread across the state and then the country.

San Francisco’s Family Friendly Workplace Ordinance will give employees the right to request flexible work arrangements to assist with caregiver responsibilities. San Francisco employers will be required to consider and respond to all such requests in a formal manner.

Effective January 1, 2014, the Ordinance will apply to employers and their agents who regularly employ 20 or more employees. Under the rule, employees who have been employed for six or more months and work as little as eight hours per week have the right to request a flexible work arrangement to assist with caregiver responsibilities for: (1) a child; (2) a parent age 65 or older; or (3) a spouse, domestic partner, parent sibling, grandchild or grandparent with a serious health condition. Employees can request accommodations in terms of their hours, schedule, work location, work assignment and the predictability of their work schedule.

The employee’s request must be in writing and must explain how the change will help them meet their caregiver responsibilities. The employer must then meet with the employee and respond in writing within 21 days. If the employer denies the request, it must explain in writing the reason for the denial and notify the employee of his or her right to request reconsideration.
In any written denial of a request for a flexible work arrangement, the employer must be clear as to why it cannot accommodate the request. The employer is required to provide a “bona fide business reason” for the denial, such as productivity loss, a detrimental effect on meeting customer demands, an inability to organize work among employees or insufficient work during the time the employee proposes to work. An employer denying a request also must provide the employee with the text of the Ordinance granting reconsideration rights.

The Ordinance allows eligible employees to make two requests per year. However, an employee may make additional requests following the birth of a child, the placement of a child through adoption or foster care, or an increase in the employee’s caregiving duties for a family member with a serious health condition.

The San Francisco’s Office of Labor Standards Enforcement (OLSE) will be responsible for enforcement of the Ordinance. The OLSE intends to publish mandatory posters providing employees notice of their rights under the Ordinance. Employers will be required to post notices in English, Spanish, Chinese and any other language spoken by at least 5% of employees at that site. The OLSE also will manage compliance with the Ordinance through employer audits and handle claims of retaliation or interference with employees’ rights under the Ordinance. Accordingly, employers are required to maintain documentation of employee requests for 3 years.

Okay – you got all that? More to come!