Category Archives: Uncategorized

Review Your Settlement Agreement Templates to Revise the “Waiver of Unknown Claims” Language

If you have template settlement agreements, release agreements or severance agreements, it is time to pull them up and make some quick amendments to what is often language in ALL CAPS – what is called the “1542” language. (And, of course, check with your employment counsel – there may be some other modifications needed if you are using a template.)

Effective January 1, 2019, Section 1542 now reads (with new language in bold):

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

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Basically, California Code of Civil Procedure Section 1542 precludes the waiver of unknown claims unless the protections of the section are expressly released. To make that waiver of unknown claims effective, the actual language of Section 1542 must be included in any agreement, and the parties to the agreement must acknowledge that they are waiving their rights under the law. All this has been around for years, but now there are the slight changes highlighted above in the language of the statute. And since the language must be included (exactly), you need to update your agreements!

E-Verify is part of the Government Shutdown

Who knew? Actually, well, most of us who actually have to use E-Verify or support those who do. . .  (Snarky comments thus limited).

In the event you use E-Verify, and have tried to process new hires, this is to let you know that it is not you (the company), its them (DHS). E-Verify is not available – it is part of the federal government shutdown. Here is a link to the E-Verify announcement.

The Department of Homeland Security is “not actively managing the website.” A large red banner at the top now reads: “Information on this website may not be up to date. Transactions submitted via this website might not be processed and we will not be able to respond to inquiries until after appropriations are enacted.”

Until the shutdown is over, funding is authorized, and DHS has a chance to ramp the program back up, employers cannot enroll in E-Verify. Those already participating cannot access their E-Verify accounts; create a case; view or take action on any case; add, delete, or edit accounts; reset passwords; edit company information; terminate accounts; or run reports.

Workers will not be able to resolve questions about their status.  They cannot resolve E-Verify Tentative Nonconfirmations (TNCs) during the shutdown. In addition, myE-Verify will be unavailable, and employees will not be able to access their myE-Verify accounts.

During the shutdown, DHS announced the following as the status:

• The three-day rule for creating E-Verify cases is suspended for cases affected by the unavailability of the service (but see below about employer’s continuing obligation to verify new employees).

• The time period during which employees may resolve TNCs will be extended. The number of days E-Verify is not available will not count toward the days the employee has to begin the process of resolving their TNCs.

• Additional guidance regarding the three-day rule and time period to resolve TNC deadlines will be provided once operations resume.

The Big News to remember is this:

The availability or unavailability of the E-Verify website / program does not change employers obligation to complete work authorization. Employers must complete the Form I-9 no later than the third business day after an employee starts work for pay, and comply with all other Form I-9 requirements.

2019 Employment Law Update

A New Year is Coming! Which means. . . new laws for California employers!  Here is a brief summary of the new rules for your business.  Please do not hesitate to contact me with questions.

Compensation

Minimum Wage. Effective January 1, 2019, California employers with at least 26 employees must pay minimum wage at the rate of $12.00 per hour. For employers with 25 or fewer employees, minimum wage will increase to $11.00 per hour.

Employers are generally subject to federal, state and local minimum wage laws and must follow the stricter standard; that is, the one that is the most beneficial to the employee. Here is a not-exhaustive list of local minimum wages as of January 1, 2019: San Francisco, Sunnyvale, San Jose, Emeryville, Palo Alto, Milpitas, and Berkeley all require a minimum wage of $15.00 per hour as of January 1, 2019 (it may already be that for a particular location). Milpitas will join the $15.00 per hour list in July 2019.

Exempt employees. The minimum salary that must be paid to exempt employees in California corresponds to the state minimum wage. Exempt employees must earn at least twice the state’s minimum wage for full-time employment, e.g. $49,920 annually for employers with 26+ employees.  This minimum salary increases as minimum wage increases. As always, the “duties” tests must be satisfied for any employee classified as exempt. 

Independent Contractors. Every year, courts and government agencies give more and more warnings that employers must confirm that an independent contractor is really an independent contractor, or suffer the consequences. Generally, complying with the California Supreme Court’s 2018 Dynamex “A-B-C test” can help employers reduce liability. Under the test, a worker is an employee unless:

  • she is free from the control and direction of the hirer in performance of the work; and
  • she performs work that is outside the usual course of the hiring entity’s business; and
  • she is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Fair Employment

Sexual Harassment. The biggest list of changes in California law is in the area of sexual harassment.

By January 2020, employers with five or more employees must provide harassment prevention training to all employees every two years. Supervisors must attend a two-hour training and non-supervisory employees must attend a one hour training.

The Fair Employment and Housing Act was amended to make it an unlawful practice for an employer to require an employee to release a FEHA claim in exchange for a bonus, raise, or continued employment. FEHA now also makes employers liable for any kind of unlawful harassment by non-employees (not just for sexual harassment as under existing law) where the employer knew or should have known of the harassment and failed to take appropriate remedial action. FEHA now also includes statements of legislative intent to make it harder for employers to prevail on harassment claims, such as a declaration that a single act of harassment may suffice to support a finding of a hostile work environment.

Any provision of a contract or settlement agreement that prevents a party to the contract from testifying about criminal conduct or harassment in an administrative, legislative or judicial procedure is void and unenforceable.

Also, settlement agreements entered into after January 1, 2019 cannot prevent disclosure of factual information about claims of sexual assault, sexual harassment, gender discrimination or related retaliation that have been filed in court or before an administrative agency (but does not apply to settlements reached before any filing). The parties may limit disclosure of the amount of a settlement. And the claimant can request that the agreement protect his or her identity (and facts that would lead to the discovery of his or her identity).

A Civil Code section defining privileged communications has been amended to state that a sexual harassment complaint cannot be the basis of a defamation claim. The rule now protects three new categories of communications: Sexual harassment complaints by an employee to an employer based on credible evidence and made without malice; Communications during a harassment investigation between an employer and interested persons (witnesses, etc.) regarding a sexual harassment complaint; Responses by an employer to a reference check as to whether the employer would rehire an employee and, if not, whether that decision is based on the employer’s determination that the former employee was involved in sexual harassment. The rule is not particularly clear as to what the former employer should disclose during a reference check, so it is our recommendation that you work with your employment law counsel to craft a thoughtful response in each situation. Of note, this rule is only about sexual harassment claims; it does not similarly protect from a defamation claim complaints for other forms of harassment (race, religion, national origin, age, etc.).

Pay Equity. Last year, California enacted rules to limit the ongoing effect of salary history on future salary in an effort to reduce the gender pay gap. Last year’s bill required California employers to provide “applicants” with the “pay scale” for a position upon “reasonable request.” These terms were undefined and thus open to interpretation. This past summer, the legislature clarified parts of this rule. The term “applicant” or “applicant for employment” means an external individual seeking a position with the employer. Current employees are excluded. The term “pay scale” means a salary or hourly wage range. It does not include bonus or equity ranges. And the term “reasonable request” is a request made only after an applicant has completed an initial interview with the employer. The new law also clarified that an employer may ask an applicant what they expect or want to be paid, but may not ask what they were paid at a previous job.

National Origin Discrimination. California’s Fair Employment and Housing Council enacted new regulations to help employers better understand the long-protected characteristic of national origin. National origin is defined to include, without limitation, the following actual or perceived characteristics of an individual or her ancestors, including physical, cultural, or linguistic characteristics associated with a national origin group; marriage to or association with persons of a national origin group; tribal affiliation; membership in or association with an organization identified with the interests of a national origin group; participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group; and a name that is associated with a national origin group. The section defines “national origin groups” to include “ethnic groups, geographic places of origin, and countries that are not presently in existence.”

Finally, the new rules address “English-only” policies. Before, the rules allowed such policies where “justified by business necessity.” Now, the rules specifically prohibit any policy that “limits” the use of any language in the workplace unless the employer can show the restriction is “narrowly tailored” and justified by business necessity, and making clear that customer or co-worker preferences do not suffice. Also, English-only rules are never lawful during an employee’s non-work time (e.g., meal and break periods, unpaid employer-sponsored events). In fact, such restrictions during nonworking hours could lead to wage and hour violations. Employers cannot discriminate based on an employee or applicant’s “accent” unless it “interferes materially” with job performance. The new rules also specifically state that it is unlawful retaliation to threaten to contact immigration authorities.

Lactation accommodation. Existing law requires employers to make reasonable efforts to provide a location other than a toilet stall to be used for lactation. Under the new law, the location should be something other than a bathroom. (This is a slight change and puts a higher obligation on the employer for the facility). In addition, the location should be a permanent one, but it can be a temporary location under certain conditions.

Military Discrimination. California expanded discrimination protections to members of the Federal Reserve components of the Armed Forces of the United States and members of the State Military Reserve. California law already protects members of the military or naval forces of the state or of the United States or a person ordered to military duty or training or by reason of being a member of the military or naval forces of the state or U.S. In addition, the law specifically provides that no business and other covered establishments may deny a member of the Armed Forces of the United States entrance when the member is dressed in uniform.

Sexual Orientation Discrimination. As a reminder, the U.S. Supreme Court’s decision in Masterpiece Cakeshop, Inc. v. Colorado Civil Rights Commission (the “wedding cake decision”) does not grant businesses the right to discriminate.  In that case, the Court ruled that a baker’s Free Exercise Clause rights under the Constitution were not properly considered by the Colorado Civil Rights Commission when that agency held that the baker was legally required to bake and sell a wedding cake for a same-sex couple. This was actually a very narrow decision focused on the Commission’s impermissible hostility toward the baker’s religious beliefs. The ruling does not give businesses or employers the right to discriminate against customers, guests, or employees due to their sexual orientation or any other protected class status.

Hiring

Background Checks. With a few exceptions, most California employers cannot ask job applicants about their criminal histories until a conditional offer is made. Then, employers can ask job applicants about criminal convictions, including expunged records, for certain roles, particularly if such inquiries are mandated by federal or other state laws. SB 1412 requires employers to ensure that they are not receiving or considering information about convictions beyond the particular conviction that would disqualify the applicant for the role.

In addition, this past year saw several courts give expensive reminders to employers that they should always err on the side of giving written notice and acquiring written consent before doing background checks. And make sure you are the type of employer that can (or should) even do particular background checks. Be thoughtful (and talk with your employment law counsel) about what your goal is in getting background information.

Employee Post-Employment Non-Solicitation Restrictions. In early November, a California Appeals Court invalidated an employer’s contract that restrained former employees from soliciting current employees for a one-year period. These types of restrictions had been a gray area. California’s general rule against noncompetition agreements is that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” In a ruling directed at medical industry recruiters, the Court held that provisions barring solicitation of employees also violate the non-compete rules.  And, more importantly, the Court indicated that any employee non-solicitation provisions are void under the law.

Arbitration Agreements. Recently, Facebook and Google announced that they will no longer require employees to arbitrate sexual harassment cases. Please note, our current aim with such agreements is not to compel arbitration of harassment or discrimination cases, but to limit the crushing financial consequences to the employer of wage and hour collective actions.

Questions? Please do not hesitate to contact me!

jdebacker@mstpartners.com • 408.293.1900

 

What to do if ICE comes to your worksite

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The San Francisco Chronicle reported Tuesday that Immigration and Customs Enforcement officials plan a major sweep in Northern California. The article, which cited an unnamed source familiar with the operation, said the raids could occur in the coming weeks and would aim to arrest more than 1,500 undocumented immigrants.

As a California employer, you must know that just because an ICE officer visits your workplace, that does not mean that the agent has permission to talk to your employees or walk the premises without a proper warrant.  In fact, you must prevent this from happening! 

Also, ICE agents are not allowed to simply get documents without complying with notice obligations.  While perhaps not the most pleasant encounter, you and your employees don’t need to be combative or aggressive in order to prevent ICE from entering your workplace. You just need to be prepared and follow your procedure.  

As mentioned in this blog before, this year the Immigrant Worker Protection Act (AB 450) provides California workers with protection from immigration enforcement while on the job.  The new rules apply to all employers, regardless of size.

Employers must comply with strict rules limiting when ICE can be given access to the worksite or employee records. Employers must also comply with new notice obligations.

California employers cannot voluntarily allow ICE to enter nonpublic work areas or to access company records. Instead, ICE must present legal documentation in the form of a judicial warrant or subpoena before you can allow access. This is a warrant or subpoena issued by a court, not just a document issued by ICE itself.

If the ICE agent presents an ICE Notice of Inspection, ICE does not have the authority to simply enter the premises.  Rather, this Notice provides notice to the employer and a three-day response window to produce the Forms I-9 and other documents such as payroll records, list of current employees, articles of incorporation and business licenses.

Employers must follow specific requirements related to Form I-9 inspections. Within 72 hours of receiving a Notice of Inspection, California employers must post a notice to all current employees informing them of any federal immigration agency’s inspections of Forms I-9 or other employment records.

After the inspection concludes, employers have 72 hours to provide each “affected employee” a copy of the results and a written notice of the employer’s and employee’s obligations arising from the inspection. An “affected employee” is one identified by the inspection results as potentially lacking work authorization or having document deficiencies.

California employers must ensure that supervisors and any employees who may interact with ICE agents know the rules.  These employees must make sure that ICE agents are not simply voluntarily granted access without particular documentation –the judicial warrant or subpoena — in place.  You may want to train your public facing staff on their responsibilities and have a prompt response system in place. At a minimum, these individuals should be trained to ask for a judicial warrant or subpoena. (And not assume that any document is valid – even one with an ICE insignia. It must be a judicial warrant or subpoena).

In addition to the emotional havoc these ICE encounters have on your staff and the potential life-changing consequences if documentation is not deemed satisfactory, the penalties to California employers for violating the new state law can be up to $10,000 per violation. At the same time, federal penalties for Form I-9 violations can range from a $110 to $20,000.

Leaves of Absence – Updated Chart

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Happy New Year!  I updated my LOA Chart Jan 2018 PDF.  If you have a more clever way of saying something, or think this chart could be “better” – let me know!

New Laws ’18, part 2!

Two very significant new laws were signed by Governor Brown last week.  Here’s a quick summary.

Parental Leave for Employees of “Smaller” Employers

Last week, Governor Brown signed SB 63, the New Parent Leave Act.

The new law requires employers that have between 20 to 49 employees within 75 miles to hold eligible workers’ jobs when they take up to 12 weeks of parental leave.

The new law amends the California Family Rights Act (CFRA) to provide this protected time off. The new law will likely alleviate some of the confusion created by the (poorly) named Paid Family Leave program. That law provides wage replacement when an employee took family leave, but didn’t actually provide the protected time off. This created a lot of misunderstanding about who was entitled to take time off.

Ban the Box

AB 1008 was also signed by Governor Brown last week.

This law will make it an unlawful employment practice under for an employer with 5 or more employees to include on employment applications any question that seeks the disclosure of an applicant’s conviction history or to inquire into or consider the conviction history of an applicant until that applicant has received a conditional offer. The new law also prohibits employers from considering or distributing information about an applicant’s prior arrests, diversions, and convictions. If an employer intends to deny an applicant solely or in part because of conviction history, the employer must make an individualized assessment as to how the conviction has a direct and adverse relationship with the specific duties of the job, among other things. Notice to the applicant is required and the applicant must be given an opportunity to explain or dispute the accuracy of the information. There are, of course, exceptions to this rule – but don’t assume they will apply to your workplace!

Countdown to New Laws ’18! – Protections Against ICE Workplace Raids

On October 5, 2017, Governor Brown signed AB 450 into law. The law prohibits employers from allowing federal immigration agents on private business property without a judicial warrant.

If ICE shows up at your business, do not permit them access to non-public areas without a warrant.

The new law also requires business owners to give their employees public notice — within 72 hours — of federal immigration inspections of employee records. A template created by the Labor Commissioner can be used for the notice.

AB 450 also:

  • Requires an employer to provide affected employees (meaning employees who may lack work authorization or whose documents have deficiencies) a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms, upon reasonable request.
  • Requires employers to provide to affected current employees, and to an employee’s authorized representative, a copy of the immigration agency notice that provides for the inspection results and written notice of the obligations of the employer and the affected employee arising from the action.
  • Prohibits an employer from re-verifying the employment eligibility of a current employee at a time or in a manner not required by federal law.
  • Prescribes penalties for violations of the provisions of the new law from $2,000 – $10,000.

And in case you didn’t know. .. a new-NEW!- Form I 9 is now in effect (even newer than the one I wrote about in January).  You can pull it up here.