Category Archives: Legal Update

Gov. Brown to Sign Law Increasing Minimum Wage Today

Governor Brown will sign AB 10 today at official signing ceremonies in Oakland and Los Angeles today. (These are invitation-only ceremonies. I wasn’t invited.)

AB 10 will raise California’s minimum wage in two one-dollar increments, from $8 per hour today to $9 per hour, effective July 1, 2014 and from $9 per hour to $10 per hour, effective January 1, 2016.

Walk on the Safe Side: Distribute Your Health Care Reform Notices to Workers by October 1, 2013


But Don’t Tear Your Hair Out if You’re Late

Here’s the executive summary: Under Health Care Reform, employers must give a notice to all workers that explains how the health insurance exchanges work and the impact of buying coverage off the exchange if the worker already has employer-provider coverage, among other things. But this week, the DOL said that while the notices must be provided, there is no penalty for not handing them out. We recommend you still distribute the notices.

Here’s a slightly more elaborate explanation:

The “individual mandate” under federal Health Care Reform will become effective on January 1, 2014. As of that date, all individuals must have health insurance coverage or pay a penalty.

To ease the purchase of coverage by individuals, state insurance exchanges will offer coverage commencing on January 1, 2014, with open enrollment beginning on October 1, 2013. California’s insurance exchange is called “Covered California.”

Notices due by October 1, 2013

Under the Health Care Reform law, employers must notify employees of their options for coverage under the law by October 1, 2013. The notice informs employees of the existence of the exchanges, the possibility that workers may be eligible for a tax credit if they buy coverage through an exchange, and that workers who purchase coverage through an exchange may lose their employer’s contribution toward coverage.

The deadline for the notice to existing employees is October 1, 2013. And employers are to give it to employees hired after that date within 14 days of their date of hire. The notice must be provided to each employee, regardless of plan-enrollment status or part-time or full-time status. Employers are not required to provide a separate notice to dependents or retirees, but an employer’s obligation to provide notice may extend to its independent contractors and leased workers, depending on the nature of their relationship with the employer.

The notice may be distributed by email or in hard copy, and the Department of Labor created a model notice that employers can use to satisfy their obligations under the law. The model notice, OMB No. 1210-0149, is available on the Department of Labor’s website Click here (if you offer coverage) and here (if you don’t).

There is no penalty (yet) if employers fail to distribute the notice!

The Health Care Reform law has a $100-a-day penalty for noncompliance with its provisions and we had assumed this penalty would apply to employers that fail to distribute the exchange notice. But in a “FAQ on Notice of Coverage Options” posted on the DOL’s website this week, the DOL writes:

Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act’s new Health Insurance Marketplace?
A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by Oct. 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.

The U.S. Small Business Administration repeated this point in a Sept. 12 online posting that stated: “If your company is covered by the Fair Labor Standards Act, you must provide a written notice to your employees about the Health Insurance Marketplace by Oct.1, 2013. However, there is no fine or penalty under the law for failing to provide the notice.”

You should still distribute the notice

While there is no penalty, you should still distribute the notice to your workers. (Okay, maybe you don’t need to work all weekend to get it out by October 1, but you should make an effort to get it out by then — or shortly thereafter.) In addition to it being “the rule”, the DOL’s position on the penalty could change – and maybe you are focusing on something else during that time and miss it. The DOL has directed employers to provide the information – Just Do It!

The employment lawyers at McPharlin Sprinkles & Thomas LLP are ready to help you with questions about compliance with health care reform. Give us a call!

When we win, we’ll get our attorneys’ fees, right? Right!??!?

file0001422084804Well, if you are an employer defending a wage and hour claim, probably not. Earlier this week, Governor Jerry Brown signed SB 462. The new law severely restricts the award of attorneys’ fees to employer-defendants in wage claim issues. Effective January 2014, employers that prevail in litigation will have to show that workers sued “in bad faith” over nonpayment of wages, benefits or pension contributions to secure attorney fees and costs. The same restriction will not apply to winning worker-plaintiffs.
The law amends Labor Code section 218.5, which previously permitted either the employee or employer to seek attorney’s fees as the prevailing party. The revised statute authorizes attorney’s fees to employers (or any other party that is not the “employee”) only if the court determines the lawsuit was brought in “bad faith.” That’s a high standard –meaning it is unlikely that employers will be awarded their fees.

Summer! Fun! Employment Law Update All Day Training June 27!


Please join me as I moderate and present at the Employment Law Update in California training in San Jose on June 27, 2013. My partner Anne Stromberg and Marc Jacuzzi of Simpson, Garrity, Innes and Jacuzzi, P.C. will be talking about the following:
* Hiring, Counseling and Terminating Employees
* Wage and Hour Law Update
* FMLA, ADA, FEHA and Workers’ Compensation
* Sexual and Other Unlawful Harassment in the Workplace
* Harassment Investigations

The training will be at the San Jose Airport Garden Hotel (1740 North First Street in San Jose). 6.50 hours of HRCI credit are available – and there is also MCLE, CPE and CPP/FPC credit.

To sign up/ register, please click here.

March Madness!?!?!?!


Okay, not really madness (and the NCAA might come seek royalty fees from me now that I’ve used the term), but there are some employment law matters that you need to be on top of this month.

Form I-9
On March 8, 2013, the United States Citizenship and Immigration Services (USCIS) issued a new Form I-9 for use in verifying employment eligibility in the U.S. You can get the new Form I-9 here.

Start using the new form now. There is a grace period through May 7, 2013, but you’re busy, and it would not be good to forget. Also, be sure to get the new form in the hands of any staff that fill out Form I-9s at hiring.

The new Form I-9 is only for new hires, or if you need to reverify certain ID documents. Generally, you must reverify if evidence of employment authorization (List A or List C documents) expire. For reverification, an employee must present unexpired documentation from either List A or List C showing he or she is still authorized to work.

As a reminder, employees must complete Section 1 of the form at the actual beginning of employment. The employer must complete Section 2 within three days of starting work.

FMLA Poster

On February 6, 2013, the U.S. Department of Labor issued new final Family and Medical Leave Act (FMLA) regulations that take effect on March 8, 2013. Most of the new regulations relate to the FMLA’s military leave provisions, but they also make other minor changes and clarifications. The regulations also require covered employers to post a new, updated poster by March 8, 2013.

All covered employers are required to display and keep displayed a poster prepared by the Department of Labor summarizing the major provisions of The Family and Medical Leave Act (FMLA) and telling employees how to file a complaint. The poster must be displayed in a conspicuous place where employees and applicants for employment can see it. A poster must be displayed at all locations even if there are no eligible employees.

You can download a copy of the new FMLA poster here.

Human Trafficking

We’re still waiting for the model notice from the California Department of Justice addressing human trafficking. Effective January 1, 2013, new Civil Code § 52.6 requires certain specified businesses to post a notice, on or before April 1, 2013, containing information about organizations that provide services to eliminate slavery and human trafficking. The notice must be posted at those businesses that have general public premises licensees under the ABC Act, “adult” businesses, airports, rail stations, bus stations, truck stops and roadside rest areas, emergency rooms and urgent care centers, farm labor contractors, private job recruitment center, and businesses that offer massage or bodywork services for compensation.

Many businesses will be required to put up the notice — I’ll keep you updated when we get the language the DOJ wants.  And nothing prevents you from posting information now about Freedom House or other organizations dedicated to eliminating trafficking and helping survivors.

I’ll be at The 16th Annual Employee Benefits Symposium — Join me!


I’m excited to announce that on March 22, 2013 I will be presenting at The 16th Annual Employee Benefits Symposium at the DoubleTree in San Jose. This incredible all-day conference is the premier source of employee benefits information for Executives, HR and Benefit Professionals, and all plan fiduciaries. There are three education tracks – from “benefits 101” to a track geared to the high-level benefits professional. Addressing the unfolding Healthcare Reform law, there is an ACA track dedicated to unraveling the law and what it means to employers. The benefits speakers are some of the most knowledgeable in the industry.
I’ll be giving an employment law update during lunch, and then in the afternoon, I’ll be moderating a panel of HR experts – practitioners, lawyers and consultants—who will be discussing the Seven Mistakes That Employers Continue to Make in Employment Law. After the panel, there is a fun reception where participants can meet the speakers and their colleagues.
I highly recommend this conference! Here is the link:

Can a job duty be “essential” if the employee rarely has to do it? Yes!


I’ve presented a few “2013 Employment Law Updates” this month, and wanted to share with you some of the cases and rules that audiences have been most interested in talking about. This first article is to remind employers of the importance of accurate job descriptions.

Earlier this month, a California Appeals Court held that job duties that an employee does not regularly perform can still be essential to the position.  This means that if an employee cannot perform a rarely-needed, but still essential, function of his job, his employer does not need to accommodate him by excusing performance of that essential function.

In Lui v. City and County of San Francisco, a veteran San Francisco police officer (Lui) suffered a heart attack and could no longer perform physically strenuous work.

The job description for a police officer, even one performing administrative work, includes physically strenuous tasks, such as pursuing fleeing subjects and making forcible arrests.

Since Lui could not perform the physically strenuous tasks of chasing after suspects, or working in physically strenuous conditions, he could not perform as a police officer.  The Police Department offered to transfer him to a vacant “non-sworn officer” position, but Lui declined and retired. He then filed suit alleging disability discrimination.  Among other claims, he argued that in an administrative position, it was not really essential that he be able to perform the strenuous duties.

Under state and federal disability discrimination laws, an employer may terminate an employee whose disability makes him unable to perform the essential duties of his job, even with reasonable accommodations. To determine whether an employer’s claim that certain job duties are “essential functions,” a court may take into account factors such as the employer’s judgment, written job descriptions, the amount of time spent performing the functions, the consequences of not requiring the employee to perform the functions, the terms of a collective bargaining agreement, work experiences of past employees, and the current work experiences of employees in similar jobs.

In Lui, the Court disagreed with Lui and found that the requirement that police officers working in administrative positions to be able to perform physically strenuous duties was an accurate reflection of essential functions of the position. The Court noted that the City had shown that the number of officers available for duty in the streets had substantially decreased. In addition, the City demonstrated that all of its sworn officers, including those in administrative positions, must be able to respond to large-scale, infrequent emergencies such as demonstrations, earthquakes and mass celebrations (Go Giants! Go 49ers!). Based on these factors, the Court found that the ability to perform all the duties of a police officer, including the ability to engage in strenuous tasks such as making arrests, pursuing suspects and responding to emergencies, are essential for all police officer positions. Lui could not perform the strenuous activities required of a police officer, so the Department was not required to accommodate him by relieving him from those duties.

While the facts and circumstances in Lui are unique, this case helps employers understand what makes a function “essential” to a job. The case should also serve as a reminder for every employer to regularly review the essential functions of each position and confirm the accuracy of the related job description.   To explain to the Court what the Police Department had determined were essential functions of the police officer position, the City produced the job description,  which stated that the ability to perform the physically strenuous activities applied to officers on the beat as well as on a desk.

The value of a well-crafted, accurate job description cannot be underestimated when resolving a wide variety of employment issues, including accommodation of employees, performance assessments, and wage and hour classification questions.


San Jose’s $10 Minimum Wage Takes Effect March 11, 2013

As I mentioned in a previous post, San Jose voters approved a new minimum wage of $10.00 per hour for work performed within the City of San Jose. The election was certified yesterday by San Jose’s City Council and the new rule takes effect 90 days later.

The only exceptions to the minimum wage ordinance will be for employers who don’t have a facility within San José, or are not subject to the San José business tax. It also won’t apply to employees who work less than two hours a week within the city.

Covered employers will need to post a notice about the minimum wage alongside the other labor law postings you surely already have up. The city will provide the notices that will explain the wage rates and employee rights. Employers will also be required to maintain payroll records for a period of four years.

San Jose’s minimum wage will be enforced on a complaint basis, just as it is at the state level.

Here’s a link to the city’s minimum wage website:

California Legal Update – Upcoming Live Presentation!

On January 16, 2013, I will present a two-hour 2013 California employment law update to my colleagues at CVHRMA (Central Valley Human Resource Management Association). The program will start at 11:15 a.m. at the SOS Club in Modesto.  HRCI credits are pending.

Please join us!

Here’s the link for more information and to RSVP:

Attention Bay Area Employers — San Jose Voters Approve $10 Minimum Wage

San Jose joins four other cities –  the Bay Area’s own San Francisco, along with Washington D.C., and Santa Fe and Albuquerque, N.M. –that have set their own minimum wage.  San Jose voters raised the city’s hourly minimum wage to $10 — $2 above the statewide minimum (and $2.75 above the federal rate).   Employers must pay the highest of the local, state or federal wage.

Under the new rule, employers must pay their employees a minimum wage of $10.00 per hour for work performed within the City of San Jose. The new minimum wage rate will be effective 90 days after certification of the results of this election –I’ll update this entry when that date is certain.  The City must also adjust the wage each year beginning January 1, 2014 based on increases in a specified Consumer Price Index.

The new law will apply to most employers in San Jose.  The basic exceptions are employers that (1) do not “maintain a facility” in the City of San Jose and (2) are exempt from the Business License Tax  under the Municipal Code. The minimum wage requirement would not apply to a person who works less than two hours per week.  And if you employ workers under a Santa Clara County welfare-to-work program, other exceptions may apply.

Covered employers must post the minimum wage rates, notify employees of the minimum wage rates, and maintain certain payroll records.  The Code will prohibit retaliation or discrimination against any person seeking to enforce the rights provided by the ordinance. The City will administer and enforce the law including, investigating possible violations, issuing administrative citations and compliance orders, and filing a lawsuit in court. Remedies include back wages, penalties, equitable relief, and – the tail that wags the dog – payment of reasonable attorneys’ fees and costs. Any person harmed by a violation of the minimum wage requirement, or any member of the public, may sue in court to enforce the requirement.