California Peculiarities Employment Law Blog

Fasten Your Seatbelts and Enjoy the Ride: the 2015 Edition of Cal-Peculiarities is Coming Soon!

Posted in 2015 Cal-Peculiarities

As loyal Cal Pecs Blog readers, you probably know of our signature book Cal-Peculiarities: How California Employment Law Is Different, which we update on an annual basis.  The 2015 edition will be ready for release by April 15.

This edition is the most comprehensive to date.  It highlights the most recent court decisions and legislative developments for private employers who do business in California.

The 2015 edition will be available in a convenient, searchable eBook format as well as paper.  Look for Seyfarth Shaw’s announcement in your Inbox on or before April 15.

How Do We Treat the Leased Among Us? New Law on Joint Liability With Labor Contractors

Posted in 2015 Cal-Peculiarities, Labor Contractors

(Illustration) ProfileBy Laura Maechtlen and Dana Howells

As of January 1, 2015, new California Labor Code section 2810.3 requires a “client employer” to share civil liability with “labor contractors” (aka payrolling, temporary staffing, or employee leasing agencies) for (1) payment of wages of the contract employees, and (2) failure to procure worker’s compensation coverage. Client employers will also have non-delegable responsibilities for worksite occupational health and safety.

What Does The New Law Provide?

  • No Shifting Of Liability, But Indemnity Allowed. Although a client employer cannot shift away all liability to a labor contractor for either wage payments or workers’ compensation, client employers may seek contractual indemnity against a labor contractor for liability that the labor contractor creates.
  • Workplace Safety Compliance Cannot Be Shifted. Client employers cannot contractually make the labor contractor solely responsible for workplace safety compliance.
  • 30-Day Notice Requirement Before Filing Civil Action. A worker or his or her representative must notify the client employer of specified violations at least 30 days before suing the client employer. Because of this notice provision, client employers may want to include language in contracts requiring a process in which the labor contractor must attempt to remedy any violation, before a civil action is filed, within the notification period. Client employers should also consider language that allows the client employer to step in and remedy during the notice period, while reserving its right to be reimbursed by the labor contractor.
  • No Retaliation. Neither the client employer nor the labor contractor can take action against a worker for providing the 30-day notice or for filing a claim or civil action.
  • Records Inspection. While the client employer’s records are subject to inspection by state enforcement agencies, the law also expressly “does not require the disclosure of information that is not otherwise required to be disclosed by employers upon request by a state enforcement agency or department.”
  • Exempt Employees Not Covered. The statute excludes from the definition of contracted “workers” those exempt under California’s executive, administrative, or professional exemptions (see Labor Code Section 515).

What Can Client Employers Do To Minimize Liability Under This New Law?

To try to protect against potential liability under the new law, client employers can: Continue Reading

A One-Two Punch: New CFRA Regs and Abusive Conduct Training

Posted in 2015 Cal-Peculiarities, 2015 Legislative Updates

thumbnailBy Dana Peterson

Breaking News: New CFRA regulations will take effect July 1, 2015.

Mandatory paid sick leave will not be the only new rule affecting California employers this summer. Also effective on July 1 are amendments to the California Family Rights Act (CFRA) regulations, just approved by the Office of Administrative Law. These regulations will more closely align the CFRA with the federal Family and Medical Leave Act (FMLA) regulations. This is welcome news to California employers who have grappled with the overlay of the FMLA regulations (amended in 2008) and the pre-2008 CFRA regulations (which did not incorporate the FMLA’s 2008 amended regulations.)  Nonetheless, some differences still exist between state and federal family and medical leave laws, including how the CFRA coordinates with state pregnancy disability leave laws.

Quick preview: The amended CFRA regulations include guidance on certain definitions (such as how to determine when businesses will be considered joint employers under CFRA), include changes to the mandatory poster requirement, and change what information employers must include on the certification form they make available to health care providers who are asked to certify leave for serious health conditions.

Coming soon: A complete analysis of the new amendments will follow shortly, so that you can be prepared when the amendments “go live” in July. We will also be hosting a webinar on the subject, which you will not want to miss!

Is California Poised to Be the First State to Outlaw Workplace Bullying? Or Will New York Beat Us to It? 

Following an amendment (AB 2053) to the Fair Employment and Housing Act (FEHA) that took effect January 1, 2015, California employers that are subject to the mandatory sexual harassment training requirement for supervisors must now include an additional training topic: prevention of “abusive conduct.” Read the text of the bill here.

Readers will recall that existing law (AB 1825, codified at Cal. Gov’t Code § 12950.1) requires employers with 50 or more employees to provide all California supervisory employees with at least two hours of effective interactive training on sexual harassment prevention. New supervisors must be trained within six months of being promoted or hired into a supervisory position and, thereafter, every two years.  The required training must include “information and practical guidance” regarding federal and state laws concerning sexual harassment, remedies available to victims of harassment, and practical examples to instruct the supervisors participating in the training. Now, in addition to the previously required topics, employers must include a segment aimed at the prevention of abusive conduct in the workplace.

What does that mean? Continue Reading

Post-Cochran BYOD Class Actions: Who’s an Employer To Call?

Posted in 2015 Cal-Peculiarities

Keyboard Illustration BYODBy Kristen Verrastro and Michele Haydel Gehrke

Loyal readers will recall our discussion of the perplexing Cochran v. Schwan’s Home Services, Inc. cell phone reimbursement case in this space (initially here, and then again here).

We’ve yet to see any other California appellate decision that confirms or challenges Cochran’s holding that, under California Labor Code section 2802, employees are entitled to reimbursement for “some reasonable percentage” of their personal cell phone bill if they must use their personal cell phone for work. And that “reasonable percentage” seems to apply irrespective of whether (1) the employee actually incurs any additional charges for the work-related portion of the total cell phone use, (2) a third party pays the employee’s bill, or (3) the employee has made any voice, text, or data plan changes because of the employee’s work-related usage.

But hold the phone—though California appellate courts have not addressed employer reimbursement for personal mobile device usage post-Cochran, we have seen Cochran-inspired class actions. In Araiza v. The Scotts Company, LLC, Los Angeles Superior Court Case No. BC570350 (filed January 26, 2015), the plaintiffs bring class claims alleging a failure to reimburse employee business expenses, in violation of Section 2802, and also allege a violation of Section 17200 of the Business and Professions Code. The plaintiffs expressly cite Cochran, arguing that Cochran requires the defendant employer to “maintain an expense reimbursement policy and/or practice stating that Defendant will affirmatively reimburse Class Members for a reasonable portion of their monthly personal cell phone bills and expenses necessarily incurred in their discharge of their duties.”

This case joins the many pre-Cochran class actions already invoking Section 2802 to claim expense reimbursement for work-related personal mobile device usage.

Cochran and cases of its ilk have many employers calling for guidance on how to reconcile their California expense reimbursement practice with their Bring Your Own Device (BYOD) policy.

We are here to help. We track all of these developments, so continue to check back here. In the meantime, we continue to encourage employers to assess their current expense reimbursement and cell phone policies and practices in light of this evolving legal landscape.

Additionally, join the authors of this post as they present a Seyfarth Shaw webinar on June 23, 2015, when they will discuss the impact of Cochran and highlight compliance issues for California employers to consider when crafting their BYOD and reimbursement policies.

Edited by Chelsea Mesa

CA Paid Sick Leave Update: Labor Commissioner Issues More FAQs

Posted in 2015 Cal-Peculiarities, 2015 Legislative Updates, California Leaves, Sick Leave Series

(Illustration) Sick PayBy Kristina M Launey

The Labor Commissioner has issued a new and updated set of FAQs interpreting California’s new Paid Sick Leave Law (AB 1522 of 2014).

If you’ve been following along, you know that after passage of the new law last year, the Labor Commissioner issued a template Poster and Wage Theft Prevention Notice for employers to use and post, as well as a first set of FAQs.

The new FAQs obligate employers to inform existing employees of the new sick pay law and changes in policy via the Wage Theft Notice, provide guidance regarding when such notice must be given to existing employees, and provide guidance regarding sick leave eligibility for seasonal or break-in-service employees, as well as part-time and alternative work schedule employees.

Wage Theft Prevention Notices: Employees hired before January 1, 2015 must receive a new Notice that contains the new information regarding paid sick time under amended Labor Code section 2810.5, even if there is no change in employer policy.

Employers must give all employees (not just those hired after January 1, 2015) a new Wage Theft Prevention Notice, announcing any change to paid sick leave, within seven days of the actual change. Although the FAQs are silent on this point, note that Labor Code section 2810.5,  which requires Wage Theft Prevention Notices, applies only to non-exempt employees.

The “date of actual change” would depend on when the employer either establishes a paid sick program under the paid sick leave law or changes an existing paid leave program to comply with this law, but would be no later than July 1, 2015. Thus, the last date to provide notice of changes would be no later than July 8, 2015 (seven days after the July 1 sick leave entitlement effective date).

Employers who do not want to issue new Wage Theft Prevention Notices to all current employees may instead inform those employees of the change to paid sick leave by using an alternative method authorized by Labor Code section 2810.5(b)(1) or (b)(2) (e.g., giving notice of change in a pay stub or itemized wage statement). Employers who choose this route should take care to follow the requirements of these alternatives and keep records of having provided those employees with the notice.

Even employers whose existing policy satisfies the minimum requirements of the law must still provide notice—via the new Wage Theft Prevention Notice or an alternative method—regarding the new paid sick leave law. The notice must contain information about the new paid sick leave law and how the employer intends to meet its requirements for the particular employee. For example, a timely writing provided to each employee that refers to or summarizes the existing policy and contains the points of information specified in the revised Wage Theft Prevention Notice would comply with the individual notice requirement. Continue Reading

More Alphabet Soup: A SF-Style Retail Workers Bills of Rights, A Proposed OSHA Regulation for Healthcare Workers, and an Update to the ABCs of the ACA

Posted in 2015 Cal-Peculiarities, 2015 Legislative Updates, San Francisco Ordinances

ABC Soup

 

California legislators and regulators continue their efforts to expand employee protections, and the IRS permits a temporary subsidy for separating employees who want to sample the small business exchanges for health care.  Read on for highlights.

 

 

San Francisco Retail Workers Bill Of Rights Redux: The State Legislature Is Cooking Up Trouble Outside Of San Francisco

By Kristen Verrastro and Jason Allen

The same old soup, just reheated?  State Assemblymember né San Francisco Supervisor David Chiu, along with Assemblymember Dr. Shirley Weber, recently introduced statewide legislation called the Fair Scheduling Act (AB 357), a bill meant to provide more predictable and stable work schedules to food and retail workers throughout California.  The full language of AB 357 has not yet been released, but the bill is expected to require food and retail establishments with 500 or more California employees to give at least two weeks’ notice of employee scheduling and provide extra pay for schedule changes made last minute.

As our loyal CalPecs blog readers know, San Francisco recently passed two ordinances—“Hours and Retention Protections for Formula Retail Employees” and “Fair Scheduling and Treatment of Formula Retail Employees”—which, together, are informally known as the “San Francisco Retail Workers’ Bill of Rights.”  (Click here, here, here, and here for our previous coverage.)  Then-Supervisor Chiu introduced the latter of the two ordinances.  Is Assemblymember Chiu simply modifying his recipe for statewide consumption?

Stay tuned and we will keep you posted as more information is released about this proposed legislation.

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This just posted by our Seyfarth Shaw’s Environmental and Safety Law Update:

CA Proposes New Workplace Violence Regulations for Health Care Employers, Home Health Providers and Emergency Responders

By Meagan Newman, Brent I. Clark, and Mark A. Lies, II

A draft proposed regulation from the California Division of Occupational Safety and Health (Cal/OSHA) would require health-care employers, home health and hospice providers and emergency responders to develop workplace violence-prevention plans, train their employees and keep records related to workplace violence incidents.  To read on, click here.

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The Separation Anxiety Continues, But A New IRS Regulation Answers One Question

By Dana Howells and Ben Conley

On February 18, we noted in this space (“Separation Anxiety:  The ABCs of Affordable Care Act & Covered California at Separation From Employment”) that employers are prohibited, in almost every instance, from reimbursing employees for individual health insurance premiums (either through the Covered California marketplace or otherwise).  This is in stark contrast to employers subsidizing COBRA, which is not only permitted but encouraged by being tax free to employers and employees (subject to IRS rules prohibiting discrimination in favor of highly compensated employees, where applicable).  Wouldn’t you know it, the same day we published, the IRS released additional guidance relaxing this limitation for some employers, albeit temporarily.

Specifically, the IRS created a limited transition period during which small employers (generally, those with no more than 50 full-time equivalent employees) may reimburse employees (or former employees) on a pre-tax basis for individual insurance market premiums.  The transition relief only extends through the end of 2015 when, as the IRS notes, the small business exchanges should be operating more smoothly, which provides an alternative to this practice.

For larger employers wishing to subsidize individual exchange coverage for departing employees, options are limited and complex.  Plans covering fewer than two participants who are current employees on the first day of the plan year are exempt from these prohibitions (meaning a plan covering only former employees could reimburse those former employees for individual insurance premiums).  Employers exploring this approach should exercise caution to ensure they have established a truly separate ERISA plan (including a plan document, summary plan description and, although unlikely, an annual report where applicable) to cover this population.  The exemption is not available if the reimbursements are treated as part of the active employee health plan (either intentionally or by default because the employer failed to establish a separate plan).

Separation Anxiety: The ABCs of Affordable Care Act & Covered California at Separation From Employment

Posted in 2015 Cal-Peculiarities

cartoon businessman run away from vaccinationBy Dana Howells and Ben Conley

Post-termination medical coverage costs can be a powerful inducement for some employees losing their jobs to sign a separation agreement releasing legal claims. In the past, it has been common for employers to offer to pay all or part of the ex-employee’s COBRA premium for a fixed period of time, such as 3 months. With the Affordable Care Act and Covered California (the Golden State’s insurance marketplace) now part of the landscape, there are more options—but more complications.

Coverage through Covered California can be much less expensive than COBRA. But, there are key differences between traditional COBRA and Covered California that both ex-employees (making coverage choices) and employers (drafting separation agreements) should consider. Moreover, the Affordable Care Act prohibits, in almost every circumstance, employers from reimbursing employees for individual insurance premiums (for policies issued through Covered California or otherwise). Thus, an employer wishing to include payment for continued medical coverage as part of a severance package must consider whether it is willing to offer (i) payment or reimbursement for COBRA, or (ii) an unconditional cash payment that the employee can choose to apply to the cost of Covered California, or COBRA, or some other non-health care related purpose.

So how do the Affordable Care Act and Covered California impact separation agreements with a traditional COBRA reimbursement or subsidy feature?  Unlike some states, California embraced healthcare reform. California’s insurance exchange, Covered California, is on line, in storefronts and functioning. Anecdotally, paying for Covered California is potentially much cheaper than paying an ex-employee’s COBRA premium. (Both COBRA and Covered California plans qualify as coverage for avoiding the new tax penalties for failing to purchase coverage at all.)

But comparing COBRA to Covered California is like comparing a Washington apple to a California orange, especially when you are talking about potential gaps in coverage. This is virtually impossible to avoid when the event that triggers special enrollment in Covered California is loss of employer coverage. Consider the following: Continue Reading

California Supreme Court: What It Did To Employers In 2014 And What’s Pending

Posted in 2015 Cal-Peculiarities, Case Update

By Daniel Whang

In plaintiff-friendly California, it may be surprising to learn that the California Supreme Court threw a few bones to employers during 2014. First, although lower courts seem determined to make it easier for plaintiffs to obtain certification in wage and hour class actions, the California Supreme Court’s decision in Duran v. U.S. Bank signaled that certification of wage and hour claims has become too perfunctory.

The Duran decision, covered in far more detail in a client alert, requires trial courts to consider an often neglected requirement for class certification: that the trial of the certified claims would be manageable. Duran is one of the few wage and hour class actions that went to trial, and the disastrous consequences of a poorly planned trial provided a powerful lesson that courts need to be far more careful in certifying class actions.

If Duran provided a useful weapon to oppose class certification, the California Supreme Court threw employers another bone by solidifying an employer’s ability to enforce class action waivers in arbitration agreements. In Iskanian v. CLS Transportation Los Angeles, LLC, the California Supreme Court acknowledged that, under the United States Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, class action waivers in arbitration agreements are enforceable.

But this was not a total employer victory. The California Supreme Court also held that claims under the Private Attorneys General Act of 2004 (“PAGA”) are not subject to mandatory arbitration, because the State (and not the employee) is the real party in interest and the State is not a party to an employer’s arbitration agreement. While employers were hopeful that the United States Supreme Court would grant the petition to review the PAGA exception that the California Supreme Court had created, the U.S. Supreme Court declined to hear the petition, leaving Iskanian good law for now, and permitting employees to pursue PAGA claims in court even if they have signed arbitration agreements that waive the right to pursue class and representative actions.

Continue Reading

SF Retail Workers’ Bill of Rights Update – Operative Date is July 3, 2015!

Posted in San Francisco Ordinances

By Dana Peterson, Laura Maechtlen, Kristen Verrastro, and Duwayne Carr

As our loyal readers know, we have been writing about the comments and activities surrounding the San Francisco ordinances known as the “Retail Workers’ Bill of Rights” for a few months, with our most recent blog post here and our Management Alert here.  As promised, we have our first update to share regarding the implementation of these ordinances.

The San Francisco Office of Labor Standards Enforcement (OLSE) has released a preliminary information page on its website.  So far, no new specifics have been provided (stay tuned), but the OLSE has confirmed the operative date for the Retail Workers’ Bill of Rights is July 3, 2015.  Therefore, all affected employers must be in compliance with the ordinances by July 3rd, just in time for the long holiday weekend.  

Contact your Seyfarth attorney if you have questions about compliance with the ordinances.  We can help ensure that the only fireworks you’re apt to encounter are those in celebration of July 4th! 

We will continue to provide further updates as new information becomes available.

Edited by Julie Yap

U.S. Supreme Court Declines to Referee Slugfest Between Federal and California Courts on Enforceability of Arbitration Agreements

Posted in 2015 Cal-Peculiarities, Case Update, PAGA Series

By David Kadue

On Tuesday, January 20, 2015, the Court declined to take the case of CLS Transportation Los Angeles, LLC v. Iskanian, in which an employer asked the Court to reverse a ruling of the California Supreme Court. At issue was whether an employee who has agreed to submit all employment-related claims to arbitration, and who has also agreed to waive participation in class and representative actions, can evade that agreement and sue the employer under California’s Private Attorney General Act (“PAGA”). The California Supreme Court in June 2014 had sided with the suing employee.

Many observers expected that the case would be the latest episode in a drama that features a complicated relationship between two supreme courts. To simplify a bit, the U.S. Supreme Court traditionally has read the Federal Arbitration Act (“FAA”) to require the enforcement of private arbitration agreements by their terms. The California Supreme Court, meanwhile, has often searched creatively for some Cal-centric reason to deny enforcement to arbitration agreements.

Recent examples of the contrasting supreme viewpoints have occurred in the context of arbitration agreements that waive the procedural right to proceed or participate in a class action. The California Supreme Court once held, in both the consumer-claim context and in the employee-claim context, that a class-action waiver in an arbitration agreement is unenforceable, because any such waiver offends the California public policy favoring class actions. But then the U.S. Supreme Court, in Concepion v. AT&T Mobility, ruled in 2011 that the FAA preempts the California ban on class-action waivers. Concepion involved a consumer complaint. For several years, California courts resisted the clear implication that Concepcion also applies to employee complaints. Finally, in Iskanian, the California Supreme Court relented, acknowledging that, under the FAA, class-action waivers in arbitration agreements are enforceable, even in California. Continue Reading