Seyfarth Synopsis: As of March, all single-occupancy restrooms in California businesses, government buildings, and places of public accommodation must be gender neutral. This post reviews the annoyingly specific requirements regarding restroom signage to help employers remain compliant.

North Carolina achieved notoriety with its “Bathroom Bill,” restricting restroom access on the basis of gender. California has countered with its own bill, AB 1732, the Equal Restroom Access Act, signed by Governor Brown in September 2016.

Single-occupancy restrooms once could be designated as being either for males or for females. The Equal Restroom Access Act, applying to single-occupancy restrooms in businesses, government buildings, and places of public accommodation, requires that they be available to everyone. The Act defines a single-user restroom as a “toilet facility with no more than one water closet and one urinal with a locking mechanism controlled by the user.” Assemblyman Phil Ting provided context in stating that “this bill sends a simple message that everyone’s rights must be respected and protected…restricting access to single use restrooms defies reason.”

To comply with the new law (codified at Health & Safety Code § 118600, et seq.), the signage on single-occupancy restrooms must be updated to gender-neutral signs by March 1, 2017. And although the Act does not create any penalties or a private right of action for non-compliance, inspectors, building officials, and local officials can inspect, and it is likely that municipalities will pass or revise ordinances in response. So this is a good time to take a fresh look at existing signage to see that it complies.

The California Building Standards Code provides the requirements for the three types of restroom signs to be aware of for your business:

  • Geometric signs: a circle (women), a triangle (men), and a triangle on top of a circle (gender neutral)
  • Designation signs: signs that identify permanent rooms and spaces (i.e., restrooms, closets, and vending areas)
    • Tactile signs: Signs that are read by touch (i.e. raised lettering and Braille)
    • Pictograms: Pictures accompanied by tactile characters and Braille
  • Directional and Information signs: signs that are read visually

California requires at least two signs to identify each restroom open to the public: a geometric sign and a designation tactile sign. Just how California businesses must designate these signs is very peculiar indeed, so you’ll want to read this closely!

Geometric Signs

The required geometric symbols are different for men’s, women’s, and unisex or all-gender restrooms. Women’s restrooms are identified by a circle measuring 12 inches in diameter. Men’s restrooms are identified by an equilateral triangle with all sides being of equal 12 inches length. Finally, relevant to AB 1732, all single-occupancy restrooms must now be identified by an equilateral triangle measuring 12 inches on each length within a circle with a 12 inch diameter. The color of the triangle must contrast with the color of the circle within which it is superimposed.

Regardless of which geometric restroom sign is used, the sign must contrast in color with the surface on which it is mounted. So a light sign should be on a dark door and, conversely, a dark sign should be on a light colored door. Further, each geometric sign must be ¼ of an inch thick and be mounted at a minimum of 58 inches and a maximum of 60 inches above the ground.

Designation Signs

Designation signs that must be tactile include signs for “Restroom,” “Women’s,” Men’s,” “All-Gender Restroom,” and “Unisex Toilets.” Descriptive signs, such as “All restrooms are open to persons of all genders,” are not considered designation signs and are not required by law to be tactile.

For required tactile signs, the lettering must be 1/32 inches thick, in all uppercase, 5/8 inches to 2 inches in height, and may not be italic, oblique, script, highly decorative, or any other unusual style. Left-flush or centered 3/8 inches to 1/2 inches below the lettering must be a Braille duplication of the lettering. Tactile signs are also subject to certain mounting requirements, including the requirements that the sign be mounted on the latch side or on the right hand side of doorway without a door, and placed outside the swing of any door.

Although pictograms are not required by the new law, they are commonly used to identify restrooms. Familiar pictograms used for restrooms include the toilet symbol, as well as the corresponding symbols for male and female. If pictograms are used, California law requires that they have contrasting colors and no glare, and the field must be six inches minimum in height with no text, Braille, or anything else in it. A text description must also be placed below the field in tactile lettering and Braille. Pictograms are subject to the same mounting requirements as tactile signs and should be placed adjacent to the door.

Important For Our Readers:

  • The minimum size of the pictogram field will not fit into a 12 inch triangle. As a result, all “unisex” geometric signs with pictograms in them are not compliant and should be not used.
  • You must use approved symbols and verbiage when using pictograms. Although many websites offer pictograms for use, they may not comply with the size requirements, or they may potentially be offensive. So look at these very carefully for compliance!

Directional and Information Signs

Directional and information signs provide messages about interior or exterior places and facilities, such as: “Smoking is not allowed in the restrooms” or “For customer use only.”

These signs have various requirements regarding matters such as the finish, size, style, thickness, and spacing, depending upon the viewing distance and mounting height. Unlike designation signs, directional and information signs are not required to have raised lettering or Braille.

Note that when using directional and information signs, it is important to remain generic so that the sign does not become an identifier requiring tactile signage. For instance, “the company’s restroom is open to all persons” is generic and only gives information about the restroom. Contrast that with a sign saying “Unisex Restroom” which specifically identifies the restroom and is therefore a designation sign that must comply with tactile sign requirements.

Workplace Solution: As you can see, California’s bathroom signage requirements are very technical and specific. Please contact your favorite Seyfarth attorney if you need any assistance with remaining or becoming compliant with these specifications.

Edited by Coby M. Turner.

Readers interested in developments concerning California’s unique Private Attorneys General Act (PAGA) may want to delve into a short thought piece (actually advice to the California Legislature) on a recently-proposed bill that would amend PAGA. To read that post, also available on Seyfarth’s Wage & Hour Litigation Blog, please click here or at the end of the synopsis.

Seyfarth Synopsis: Sometimes, plaintiffs’ attorneys have circumvented a key aspect of the California Legislature’s intent in enacting PAGA: limiting standing to pursue penalties for Labor Code violations to those employees who were actually harmed. Though a new California bill could halt those attempts, PAGA plaintiffs’ wiliness warrants a cautionary comment to the Legislature to ensure that any amendment furthers—rather than further frustrates—the original legislative intentContinue Reading

Seyfarth Synopsis: Background screening companies that provide background checks to online child care job posting services in California may face increased civil liability as they seek to comply with new Assembly Bill No. 2036.

Parents want to employ only the most qualified individuals to watch over their children. Background checks on these individuals—often provided by consumer reporting agencies—therefore are at a high premium. The author of Assembly Bill 2036, Assembly member Patty Lopez, cited just this concern in support of her new bill, which imposes additional restrictions on businesses providing online childcare job posting services in California and on background screening companies providing background checks to those businesses: “This Bill is another good step to protecting our children and ensuring that child care consumers are making the most informed and safest decisions about the individual(s) they hire to care for their child[ren].”

In the old days, people who needed childcare would often engage a nanny referral service. Now, of course, there are websites (“online child care job posting services”) that list babysitters and nannies available for hire by parents (or other consumers). These websites usually state that the babysitters/nannies listed have undergone background checks. According to the California Child Care Resource and Referral Network, while parents trust online child care job posting services when they advertise that their providers have undergone background checks, these checks are often conducted by “third parties,” a process that makes it difficult to determine what information the background check may contain (for example, the check may not contain information from the FBI and the DOJ’s Child Abuse Central Index databases).

AB 2036 amends existing law by imposing new duties on businesses that offer child care services (for example, nannies and babysitters) via online job-posting. In particular, if a covered business provides access to a background check on child care providers listed on its website in California, the business must provide “by means of a one-click link on each California child care provider” a written description of the background check provided by the background screener. The background screener is responsible to provide this information to the business posting the child care services. Background screeners that fail to comply with the law may be liable to individuals using the job-posting websites.

For background screening, to whom exactly does this statute apply?

The statute applies to background screeners that “provide background checks for online child care posting websites in California.” These background screeners must “provide to the online child care posting services a written description of the background checks conducted,” as detailed below.

This language does not expressly address whether the statute applies to background screeners that are affiliated with the job-posting website but that provide the background checks directly to the users of the child care services rather than to the business offering the services.

What information must background screeners include in their descriptions?

At minimum, a background screener’s description of the information contained in the background checks must include:

  1. A detailed description of what is included in the background check.
  2. A chart that lists each county in California and the databases that are checked for each county, including the following information for each database, as applicable:
  • The source of the data, the name of the database used, and a brief description of the data included in the database.
  • The date range of the oldest data and the most recent data included.
  • How often the information is updated.
  • How the databases are checked (by name, social security number, fingerprints, etc.).
  • A list of the counties for which no data is available.

These requirements raise a host of issues, including:

  • Are these requirements general or specific? In other words, do they require a description of what background check services are generally offered, or do they require a description of what background check services were offered and provided on a particular individual?
  • Do the requirements include searches that are not tied to a county? For example, if a background screener includes social traces in background report, should the social trace be listed in the chart?
  • What do “database” and “source” mean, and how do the terms differ? The terms are undefined in AB 2036.  If records are obtained from a court, is the court considered a “database,” a “source,” or both?  What about records obtained from a vendor?
  • How frequently must a background screener update the descriptions? For example, if a database is updated regularly (and many are), the date range for the data in that database would vary regularly.

What are the liability risks and resulting penalties?

In the grand California tradition, AB 2036 provides a right to sue, and there are no restrictions on class actions. Any individual “damaged by a willful violation” can sue under the act. This class of individuals seems to encompass recipients and subjects of the reports (for example, parents requesting the reports and the providers who were the subject of the reports). Recoverable damages include general, special, and punitive damages. Because individuals must be “damaged” to sue, lawsuits under the statute are likely to be limited to claims involving financial loss or a plausible claim of emotional damage. In addition, the requirement of actual damage may make it difficult for individuals to bring class actions for violations of the statute.

The statute provides for civil penalties of $1,000 per offense. These penalties can be awarded in actions brought by government entities, but an action can proceed only if the defendant was notified of the violation and failed to correct it within 30 days of the notice.

So what next?

What AB 2036 means for background screeners is not fully clear, and we expect that there may be additional guidance from regulators and the courts as the statute is implemented. We will keep a close eye on this one, so please stay tuned for developments and updates!

If you have questions about the statute, including its application to your business, please contact Esther Slater McDonald, Marjorie Soto, or your favorite Seyfarth attorney.

Seyfarth Synopsis: With the availability of new vehicle GPS devices and smart phone tracking applications, employers need to be mindful of employee privacy rights when using location technologies in the workplace.

It Doesn’t Take A Magellan To Map Routes Anymore

Employers now have available the technology that concerned parents of wayward teenagers have often wished for. Thanks to technological advances, one can now monitor another’s movements in ways that could only be imagined a couple of decades ago.

The benefits of tracking employee activity through GPS (Global Positioning Systems) include: (i) verifying routes and locations for mobile employees, particularly in the transportation or delivery industry, (ii) ensuring that employees are not violating traffic laws, (iii) monitoring employee overtime, (iv) verifying that employee time records are accurate, (v) locating company-owned stolen vehicles, and (vi) verifying that employees are not misusing company vehicles by, for example, driving to inappropriate locations or at inappropriate times.

With the advent of GPS smart phone applications, companies have begun to install GPS tracking apps on company-issued smart phones, which monitor not only the employees’ transportation in vehicles, but may allow for out-of-vehicle monitoring as well.

So with all of this great new technology, where (if at all) must employers draw the line when it comes to tracking employee mobility?

Navigating The Nexus of Privacy and Employer Needs

At the center of the debate on the lawfulness of tracking employees via GPS is the employee’s right to privacy vs. the employer’s need for productivity and business-related information. California has a strong tradition of protecting individual privacy rights. Article I, Section 1 of the California Constitution provides that “all people” have an inalienable right of privacy. This provision applies to private as well as public employers. California employers thus must be wary of infringing on employee privacy by learning too much about private time and lawful off-duty activities.

Litigation Beginning To Moovit Related To GPS Tracking

Of major importance is whether the GPS tracking information is related to job performance: if it is not, then cataloging off-duty activities may violate constitutional rights to privacy. Consider this recent cautionary tale: In Arias v. Intermex Wire Transfer, an employee sued her former employer, claiming she was fired for uninstalling a GPS tracking app from a company-issued smart phone that was tracking her movements even when she was off the clock. The employee objected to being tracked on her own time and compared the GPS to the ankle bracelet placed on someone under house arrest. She sued for wrongful termination, invasion of privacy, unfair business practices, retaliation, and other claims, seeking over $500,000 in damages. This suit, privately settled, is likely not the last of its kind.

An additional source of legal restriction on remote employee monitoring is California Penal Code section 637.7, which prohibits the use of “an electronic tracking device to determine the location or movement of a person” via a “vehicle or other moveable thing” unless “the registered owner, lessor, or lessee of a vehicle has consented to the use of the electronic tracking device with respect to that vehicle.” So while an employer arguably can install GPS tracking on company-owned vehicles, and even on employee-owned vehicles used for work purposes (with advance consent as we’ve blogged previously), there is currently no such carve-out allowing employers to require GPS tracking through smart phones.

In What Waze Should Employers Be Mindful About Using GPS?

A California employer using GPS to monitor employees should have policies carefully considering employee privacy issues. As with other kinds of workplace monitoring (e.g., cameras in the workplace, use of email and Internet systems), we recommend (a) full disclosure to employees, and (b) obtaining employee consent, including implementing a separate GPS tracking policy. The policy should:

  • Outline the legitimate business reasons for using GPS tracking (e.g., increasing operational efficiencies, improving customer service, maintaining accurate timekeeping records, improving safety).
  • Provide clear notice of the company’s right to monitor employee locations while the employee is using company-owned property, describe when and how employees should expect to be monitored, and tell employees they should have no expectation of privacy while using the company property.
  • Explain how the employer will use and safeguard data collected.
  • Notify the employee of the consequences that could lead to discipline for disabling a GPS device without the employer’s permission.
  • Communicate the policy to all employees, and have them provide written acknowledgement of their receipt and understanding of the policy.

Other best practices to consider include:

  • Limit monitoring of activity to work hours, and monitor an employee’s location only for a specific business purpose in compliance with the GPS tracking policy. The collected data should not reveal details of the employee’s private life.
  • Limit access to the GPS tracking information to company personnel who have a clear business need to know that information.
  • Make sure that you store any GPS-related data securely.
  • Where employees are unionized, consider whether there is a duty to bargain before implementing the use of GPS tracking, depending on the language of the contract and the parties’ course of dealing. The NLRB has advised that a complaint would issue when an employer failed to bargain before unilaterally implementing a vehicle data recorder system to monitor employee compliance with driver safety rules.

Workplace Solution: Because this area of law is still developing as new technologies emerge, employers should continually revisit their GPS policies for compliance. We monitor developments in this area and will provide our readers with further information as it becomes available. In the meantime, if you have any questions, please contact the author or your favorite Seyfarth attorney.

Edited by Coby M. Turner.

Seyfarth Synopsis: Employers are usually mindful of the many laws governing employee medical leaves and how they interact. But what about accommodation for non-medically necessary leaves? This post discusses the basics of employee leaves for elective medical procedures.

California employers who administer employee leave laws navigate a complicated labyrinth. Employers must consider interactions among federal laws (ADA, FMLA, Title VII), state and local laws (CFRA, FEHA, PFL), and even their own internal employer policies. It gets even more complicated when employees would like to take medical leave for procedures that aren’t medically necessary, but rather are elective. So what is an employer to do when an employee says they want to take two weeks off for that nose job or tummy tuck?

“Tell Me What You Don’t Like About” California Laws—The Basics

The FMLA and the CFRA both entitle qualifying employees to up to 12 weeks of unpaid leave per 12-month period for an employee’s own “serious health condition” that prevents them from performing their essential job functions. A serious health condition is defined broadly as an illness or injury that involves inpatient care, a period of incapacity of more than three consecutive calendar days that also involves treatment by a health care provider, or a chronic condition requiring treatment. It follows then, that elective procedures in and of themselves do not qualify as a serious health condition that would require protected medical leave, absent some complication (discussed below).

Employers should also note that elective procedures aren’t just limited to lifts and augmentations. Elective procedures fall within a broad range that includes such varied items as treatment for acne and orthodontics.

Whatever the reason for medical leave may be, an employer may require medical certification of the employee’s serious health condition. If there is reason to doubt the validity of the certification, the employer can usually go so far as to get a second opinion. If an employee refuses or fails to provide the certification, the leave request could be delayed or even denied.

Importantly, under federal law, the medical provider can be asked to state the diagnosis or medical facts supporting the need for the leave; however, California law is different. Here, whether the leave is requested under CFRA or the FEHA, the employer is limited to obtaining a certification from a qualified provider that the leave is needed as an accommodation for a medical condition or disability, and the expected duration of the leave. This begs the question of how the employer is to know that the leave is for an elective procedure.  Since the employer cannot ask, the information is usually shared voluntarily by the employee or his/her medical provider.

You’ve Got A New Wrinkle?—Leave Complications

While the laws are clear that purely elective procedures aren’t covered by FMLA/CFRA statutory leave, there is a complication: where a serious health condition arises out of an elective procedure. That is to say, an elective procedure can result in inpatient care in a hospital, where complications develop. In this situation, provided that the employer receives proper notice, employees may qualify for statutory protected leave.

Another wrinkle that employers should know is that restorative dental or plastic surgeries after an injury or removal of cancerous growths are considered serious health conditions for which protected leave is required, provided the presence of the other conditions constituting a serious health condition.

“Appearance Is Everything”—Post-Op Disability Leave Checklist

Frequently, employers face situations where an employee cannot return to work after a 12 week FMLA/CFRA medical leave is up. What’s next?

This situation can trigger an interactive process under the ADA/FEHA, in which the employer and employee must work together to see what reasonable accommodations, if any, can enable the employee to perform the essential job functions. Strong interactive process procedures, including ongoing communication with the affected employee (where possible), are staunch tools in an employer’s possible defense to some ensuing discrimination claim.

One possible reasonable accommodation may be a further leave of absence. But both the FEHA and the ADA allow an employer to avoid providing further leave of absence if it would be not be reasonable to do so. California courts have concluded that employers need not provide an indefinite leave of absence as a reasonable accommodation. Each case must be addressed on a case-by-case basis, and there is no one-size-fits-all solution when it comes to reasonable accommodations.  Moreover, a reasonable accommodation need not be provided if it would create an “undue hardship” for the employer.

Workplace Solution: Leave laws are complicated, as each leave law has its own intricacies, compounded when one considers the law’s interactions with other law. So whether you’re looking to makeover your current leave policies or augment your knowledge base, you can always contact your Seyfarth attorney to address any areas that need touching up.

Seyfarth Synopsis: With increased attention placed on transgender rights in recent years, employers should pay close attention to transgender discrimination and related issues in the workplace. This post offers some tips for some best practices to minimize risk in managing your workforce.

The Basics. Everyone in the workplace must be mindful of using accurate terminology when talking about gender and gender identity. Here are some common terms that are a good starting point for having respectful conversations.

  • Gender Identity: A person’s internal, deeply-felt sense of being male, female, something other or in-between.
  • Gender Expression: An individual’s external characteristics and behaviors such as appearance, dress, mannerisms, speech patterns, and social interactions that are perceived as masculine or feminine.
  • Transgender: An umbrella term that can describe people whose gender identity or gender expression differ from the sex they were assigned at birth.
  • Transsexual: A term most commonly used to refer to someone who transitions from one gender to another, often using medical intervention. The person may also identify as transgender.
  • Gender non-conforming: A person who has, or is perceived to have, gender characteristics or behaviors that do not conform to traditional or societal expectations.

What’s the Law?

Although in recent the EEOC has aggressively interpreted the sex-discrimination provision of Title VII to forbid discrimination against transgender employees, no federal statute expressly addresses employment discrimination based on gender identity.

California, on the other hand, has consistently been in the forefront of legislation bolstering transgender rights. In 2003, AB 196 clarified that FEHA discrimination claims based on “sex” include a person’s gender identity or gender-related appearance or behavior, effectively prohibiting employers from discriminating against applicants and employees because of their gender identity or expression. In 2011, the Gender Nondiscrimination Act directly added “gender identity” and “gender expression” as protected characteristics under FEHA, making it explicit that discrimination based on those characteristics is unlawful.

And the DFEH, earlier this year, provided guidance on transgender employee rights in the workplace (which we wrote about here). The new FEHA regulations that went into effect on April 1, 2016, added protections for transgender employees and applicants.

Most recently, Governor Jerry Brown signed into law AB 1732, which will require, beginning in March 2017, all businesses and public buildings to label their single-use restrooms as “all gender” and update signage (rather than having designated “men’s” and “women’s” restrooms). This law may affect your workplace and require updating your bathrooms in the next few months.

Best Practices. Here are some practices to build awareness about transgender issues and ensure a workplace that is inclusive of transgender employees.

  • Open Door Policy. Having an open door policy can promote dialogue about the successes and challenges of transgender employees in the workplace, convey to all employees that their voices are valued, and help employers develop best practices to retain and support a diverse workforce.
  • Respect privacy rights. Always remember that it is a personal choice whether to discuss openly or keep private one’s gender identity. Employers should not discuss or share an employee’s gender identity without the employee’s permission.
  • Provide employee training. Employers should provide diversity training including issues related to gender identity and expression. The training should emphasize that discrimination based on gender identity or gender expression is unlawful.
  • Celebrate diversity. A workplace culture should be inclusive of employees no matter their gender identity or expression. Consider establishing an affinity group that transgender and gender non-conforming employees and their allies are welcome (but not obligated) to join.
  • Review dress codes. Dress codes should be free of gender stereotypes. Policies that describe what men should wear versus what women should wear may be problematic, as they do not account for employees who are gender non-conforming. These policies should also be enforced in a non-discriminatory manner and allow each transgender individual to dress in accordance with that individual’s gender identity .

Workplace Solutions: Employers can take many steps to create inclusive workplaces and ensure compliance with the law. As always, Seyfarth attorneys are here to help employers evaluate their policies, practices, and procedures to minimize risk and avoid potential liability.

Seyfarth Synopsis: 2016 brought a wave of new protections for California employees and scant protection for employers. In this week’s post, we anticipate changes for 2017, in the ever-peculiar world of California employment law.

True to our tradition, we pause at the beginning of the New Year to reflect on last year’s California employment law changes, and consider possible trends. On the good ship Cal-Pecs, our contributors take turns keeping lookout in the crow’s nest. Where, we ask, is the wandering bark of employment law heading in California? What shoals loom ahead?

Despite the sea change that the election of Donald J. Trump represents, including expected changes favoring employers at the federal level, California remains (with apologies to Carey McWilliams) its own “island on the land.” An island of employees who know their rights. While lawmakers in Illinois, New York, New Jersey, and Massachusetts are doing whatever they can to catch up, all three branches of California’s government—legislative, executive, and judicial—continue to tack toward expanding employee rights.

To pick just a few examples: in 2016, California judges, legislators, and municipalities

  • extended the protections of pay equity laws beyond gender, to also prohibit unjustified disparities based on race and ethnicity,
  • shielded applicants from being haunted by juvenile conviction histories,
  • provided that all contracts with California employees will be governed by California law, unless the employee is represented by a lawyer,
  • increased the number of jurisdictions where minimum wage and paid sick time rights exceed state norms,
  • required employers, upon pain of penalty, to schedule work time for certain employees well in advance.

The above developments—which we’ve discussed in more detail here, here, and here—are part of a continuing trend in recent years that emphasizes equal pay, expansion of paid sick and small-necessity leave rights, prevention of ”wage theft,” and increasing work opportunities for historically underprivileged or disenfranchised groups such as immigrants and those with criminal histories.

Against this ever more employee-friendly backdrop, one can only wonder how California will grapple with the challenges of a modern economy, such as job eliminations (caused by more work automation), the increasingly “gig” nature of our state’s economy (resulting in more independent contractors and fewer employees), and the impact of legalization of recreational marijuana (employees can’t be impaired in the workplace, but attempts to limit non-work time use could implicate employee privacy, among other things). One particularly bold effort came in 2016: proposed bill AB 1727 would have given independent contractors the right to organize and negotiate with work providers through “group activities” such as withholding work, boycotting, or critiquing labor practices. That effort died in the Assembly Judiciary Committee. But hear this fearless prediction: we will hear of this again. And we can expect other bold efforts to empower the growing numbers of gig economy workers.

Meanwhile, we anticipate answers on the following workplace issues now pending before the California Supreme Court:

  • Which “employee” test determines whether a class should be certified to determine whether a group independent contractors was misclassified? The IWC definition of “employee” (as construed in Martinez v. Combs, 49 Cal. 4th 35 (2020), or the common law test set forth in S.G. Borello & Sons, Inc., 48 Cal. 3d 341 (1989)? [Dynamex Operations West, Inc., v. Superior Court, S222732]
  • What does it mean that a California employer is to provide “one’s day rest in seven”? [Mendoza v. Nordstrom, S224611]
  • Does the federal de minimis doctrine apply to claims for unpaid wages under California Labor Code Sections 510, 1194 and 1997 (minimum wage and overtime)? [Troester v. Starbucks Corp., S234969]
  • What is the correct way to calculate the rate of overtime pay when a non-exempt employee receives a flat sum bonus? [Alvarado v. Dart Container Corp of California, S232607].

If we can take any guidance from the Supreme Court’s latest wage-hour decision (Augustus v. ABM Security, rewriting the law on required rest breaks [see links to our OMM and prior post on the case here]), the results in the above cases will continue the tide of worker rights that will swamp more than a few employer boats, making management of California employees even more complicated, and increasing the risks of employers incurring inadvertent violations.

As in past years, we invite you to contact us with any comments, suggestions, or disagreements you may have regarding any of our posts, or if you would like to be a guest author.

We look forward to keeping you apprised of continuing ebbs and flows in California employment law during the year to come.

Dashing through this holiday week of 2016, we wish you all peace, joy, and a renewed spirit with which to face the challenges sure to arise during the coming year.

Next week in this space, we’ll take a look back at the most significant Cal-peculiar employment law developments of the past year, and assess the winter wonderland going into 2017.

Happy New Year!

Edited by Coby M. Turner.

Seyfarth Synopsis: In what many employers will see as a “break” from workplace reality, the Supreme Court, in Augustus v. ABM Security Services, Inc., announced that certain “on call” rest periods do not comply with the California Labor Code and Wage Orders. The decision presents significant practical challenges for employers in industries where employees must respond to exigent circumstances.

On December 23, 2016, the California Supreme Court issued its long-anticipated decision in Augustus v. ABM Security Services, Inc., affirming a $90 million judgment for the plaintiff class of security guards on their rest break claim. The Supreme Court found that the security guards’ rest breaks did not comply with the California Labor Code and Wage Orders, because the guards had to carry radios or pagers during their rest breaks and had to respond if required.

The Supreme Court took a very restrictive view of California’s rest break requirements, concluding that “one cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communications devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest breaks.” Thus, in the Supreme Court’s view, an employers may not require employees to remain on call—“at the ready and capable of being summoned to action”—during rest breaks.

See our One Minute Memo for more details on the decision and thoughts on the implications of this case for California employers. The Augustus decision presents significant practical challenges for employers, especially in industries in which employees must be able to respond to exigent circumstances.

Workplace Solution:

The holding that “on call” rest periods are not legally permissible should prompt employers to evaluate their rest-break practices. In industries where employees must remain on call during rest periods, employers should consider seeking an exemption from the Division of Labor Standards Enforcement. Lawyers in the Seyfarth California Workplace Solutions group can assist with other suggestions for responding to this decision.

Seyfarth Synopsis: New legislation effective 2017 will expand California workers’ compensation coverage by requiring coverage for certain high-level individuals unless they affirmatively opt out and waive coverage, thereby reversing the prior rule by which those individuals, to get coverage, had to opt in. 

As a general rule, California employers must provide employees with workers’ compensation insurance coverage for work-related and industrial injuries and illnesses. Until now, the definition of “employee” has included paid corporate officers and directors, but has excluded corporate officers and directors who are the sole shareholders and has excluded working members of a partnership or limited liability company (“LLC”). These folks were not considered employees unless they “opted in” to workers’ compensation coverage.

Comes now AB 2883, signed into law by Gov. Jerry Brown on August 26, 2016, which will amend Labor Code sections 3351 and 3352 to alter the coverage rules for workers’ compensation coverage. As of January 1, 2017, certain officers, directors, and owners of companies will be covered by workers’ compensation unless they affirmatively “opt out.” Specifically, all officers and members of boards of directors who work for a corporation for pay will be covered under workers’ compensation unless the individual (1) owns at least 15% of the issued and outstanding stock of the corporation and (2) executes a sworn waiver of rights under the Labor Code stating that he or she is qualified for the exemption. In addition, working members of a partnership or LLC receiving partnership or LLC wages will be covered employees unless they qualify as (1) a general partner of a partnership or a managing member of a LLC and (2) sign a waiver of the type just mentioned.

These amendments aim to keep employers from giving their employees sham titles or small ownership shares to avoid covering them under workers’ compensation.

AB 2883 also amends Labor Code Section 3352 to provide that if a signed waiver is effective upon the date of receipt and acceptance by the insurance carrier. Note, the provisions of AB 2883 apply to all in-force policies as of January 1, 2017, and unless a signed waiver is received and accepted by the insurance carrier, any individual who had been exempted from coverage under the workers’ compensation policy will need to be added to the coverage until a waiver is received and accepted by the insurer.

Sample Waiver Forms prepared by the State of California Department of Insurance appear at: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/NoticeAB2883.pdf

By “opting out,” any working owner waives rights to three particular benefits:

(a) Potential lifetime medical coverage for the industrial injury. This coverage can be significant if the person leaves the company by retirement or otherwise.

(b) Rights to permanent disability, which can be significant for a serious injury with residuals.

(c) Temporary disability to cover any wage loss. (Companies, in the alternative, may consider short and long-term disability benefits for injuries that may last longer than the time provided by state disability coverage.)

Workplace Solution: With new laws being enacted continuously in California, we understand the struggle to keep up with developments. We have a team of experts focusing exclusively on workers’ compensation issues and they are here to help.