Seyfarth Synopsis: When we think of California employers encountering complex issues during the COVID-19 pandemic, images of retail, service, and other types of businesses come to mind. But one special type of employer needs to be mindful of California law: the family who employs workers to support the household as nannies, chefs, security personnel, personal assistants, and personal caregivers. We highlight below some of the key issues for California families to consider as they cross the threshold from family to employer.

It is critical that families who employ workers of any kind (beyond a casual babysitter) carefully structure the relationship. We see many claims made by domestic workers against the families and individuals who have retained them as employees or contractors. These claims are stressful, time consuming, and often very expensive for the family to resolve, particularly where the employment relationship did not end on good terms.

Can We Classify Family Workers as Independent Contractors?

Traditionally, many families employed domestic workers as independent contractors. Other than some very limited cases, such as an occasional babysitter, this approach is now fraught with huge legal risk in California (and was risky even in the past).

Last year, Governor Newsom signed Assembly Bill 5 (AB5), which codified a three-part test to determine whether a worker providing services in California is an employee for purposes of the California Labor Code, the state’s Wage Orders, and the Unemployment Insurance Code. With some very limited ad hoc statutory exceptions, this law was very expressly designed to eliminate independent contractors in California. We discuss AB5 here and here in prior posts.

AB5 establishes significant potential penalties for employers, including families, who misclassify employees as contractors. These penalties are in addition to the very substantial meal and rest period penalties, paystub penalties, unpaid wages, overtime, waiting time penalties, interest and attorneys’ fees that a disaffected domestic worker can seek if misclassified as an independent contractor.

Without delving into great detail, California domestic workers and attendants of every kind often will not qualify as contractors under the new AB5 test. The fact that an individual may want to be an independent contractor is also almost entirely irrelevant under California law.

This means that families who have erroneously classified their nannies, au pairs, frequent gardeners, housekeepers, cooks, personal attendants, and other staff as independent contractors face the risk of enormous potential liability, not including the costs of defense. The law also gives domestic workers huge leverage over the family, if for some reason the relationship does not work out. When hiring any of these types of domestic employees, therefore, families should seek legal help to structure an employment relationship to avoid these risks.

What are California’s Current Overtime Rules?

Assuming that a domestic worker is properly classified as an employee, one primary area of risk will involve whether, when, and how to pay overtime. When it comes to overtime requirements, California provides extraordinarily generous legal protections for hourly, non-exempt employees. While federal law only requires overtime for hours worked in excess of 40 in a workweek, California employers generally must pay hourly non-exempt employees daily overtime at time and a half, and possibly double time, depending on how many hours they work in a day or week. These overtime obligations also apply to employers of domestic workers—with some limited exceptions and variations.

Specifically, when determining what overtime rules may apply to a particular domestic employee, there are generally two questions to consider. First does the worker qualify as a “personal attendant” as opposed to other types of domestic workers? Second, does the employee live in the home? The answer to these two questions will determine when overtime is owed, if at all.

What are the Overtime Rules for Domestic Workers and Personal Attendants?

As noted above, California law has different overtimes rules for personal attendants, as compared to other types of domestic workers.

  • Personal attendants usually are employed by a private household or any third-party employer recognized in the health care industry to work in a private household. Duties of a personal attendant include supervising, feeding, and dressing a child or person who needs assistance because of advanced age, physical disability, or mental deficiency. Typically they are nannies, nurses, and caretakers.
  • Other domestic workers provide services related to the care of people in the home, or maintain private households or their premises. Typically they are butlers, chauffeurs, cooks, gardeners, tutors, housekeepers, guards, and assistants to healthy adults.

It is critical to note that if the employee spends more than 20 percent of the time performing work other than supervising, feeding, and dressing a child or person who needs supervision (such as making beds, housecleaning, cooking, laundry, or other duties related to the maintenance of a private household or the premises), then the employee cannot be considered a personal attendant and, thus, is an “other domestic worker” subject to the overtime requirements applicable to such workers.

Employees who qualify as personal attendants who work in the home are entitled to overtime pay (1.5 times the regular rate of pay) for any hours worked over nine hours per day or over 45 hours per week. (The federal Fair Labor Standards Act might mandate overtime pay after 40 hous in a workweek for a live-in personal attendant, but this depends on whether the employee is employed directly by the family or a professional employer organization.) Personal attendants who work in the home are not entitled to double time. But keep in mind the 20%-duties rule (described above), which, if triggered, will make the employee an “other domestic worker.”

If the employee does not qualify as a personal attendant and, thus, is an “other domestic worker,” the overtime rule that applies comes from IWC Wage Order 15. A domestic worker’s entitlement to overtime will depend on whether the domestic worker lives with the family or in the home.

  • Domestic workers who do not live with the family or in the home are entitled to:
    • overtime (1.5 times the regular rate of pay) for hours worked over eight in a day or 40 regular hours in a workweek;
    • overtime for the first eight hours worked on the seventh consecutive day of the workweek (depending on the hours spread over the workweek);
    • double time (2 times the regular rate of pay) for hours worked over 12 in a day; and
    • double time for hours worked over eight on the seventh consecutive day of the workweek.
  • Live-in domestic workers are entitled to:
    • overtime for hours worked over nine in a day;
    • overtime for the first nine hours worked on the sixth and seventh consecutive day of the workweek; and
    • double time for hours worked over nine hours on the sixth and seventh consecutive day of workweek.

Are Domestic Workers and Personal Attendants Entitled to Meal Periods and Rest Breaks?

Resolution of the “personal attendant” question will also dictate whether the employee is entitled to meal and rest periods.

If the worker qualifies as a personal attendant, the family does not have to provide meal periods and rest breaks, although it certainly can do so. However, all other domestic workers, regardless of where they live, are entitled to the same meal periods and rest breaks as any other California employee.

Generally, this means an unpaid 30-minute off-duty meal period if the employee works five or more hours and a paid 10-minute rest break for every four hours worked or major fraction thereof. The meal period must begin before the employee has worked more than five hours, and the employee must be relieved of all duties (including not being on call and being free to leave). The law provides for extremely onerous penalties for failure to provide these breaks (and it is very easy for employees to simply claim they did not get them). It is critical, therefore, that even family employers have clear rules, policies and practices to ensure these breaks are being made available, in full, at the required times, and that the meal periods are being fully documented.

Can a Family Apply Meal and Lodging Credits Against the Employee’s Minimum Wage?

Yes, to a small extent. But there are strict limits specified in the law and this arrangement must be documented in a voluntary written agreement between the family and the employee before the work is performed. Families that would like to take a meal and lodging credit should work with experienced counsel before doing so.

Are Family Employees Entitled to Paid Sick Leave?

Yes. California’s Paid Sick Leave law applies to all employers regardless of size. In addition, depending on the city in which the family lives or where the work is performed, some California cities have paid sick leave ordinances that require employers to provide more paid sick time than state law requires. Those cities currently include Berkeley, Emeryville, City of Los Angeles, Oakland, San Diego, San Francisco, and Santa Monica.

How Do Families Protect Their Property, Privacy and Other Interests?

Families that employ domestic workers and personal attendants open their doors to people with whom they might not have any history. These families have a strong desire to protect their property, their children and their privacy. As a result, we recommend employers consider conducting post-offer criminal history background checks on applicants before allowing them access to the family home. Of course, families that conduct such checks must comply with federal and state background check laws.

Moreover, families should consider a very strong confidentiality agreement that is carefully tailored to the privacy interests they seek to protect, and an enforceable arbitration agreement, mandating private arbitration. Both of these need to be tailored specifically for domestic workers to be enforceable and to avoid running afoul of numerous legal limitations on, and impediments to, such agreements.

Families also will need to secure worker’s compensation insurance and set up an account with the state’s Employment Development Department, the agency responsible for overseeing and administering unemployment benefits for California workers. Moreover, if the domestic worker or personal attendant will drive the family’s car or use other equipment, the family should secure appropriate automobile insurance coverage and work with their insurance broker to obtain any other general liability insurance policies to protect their property and interests.

Next Steps for Families that are Employers

While we’ve highlighted some key issues to consider when a family dives into employer status, there are a number of other laws and best practices to consider before families employ domestic workers and personal attendants, such as:

  • implementing proper time keeping and final pay practices;
  • ensuring legally compliant wage statements (an employer must specifically set up the wage statements to be compliant; the payroll services do not do that for the employer typically as a matter of course);
  • managing issues as to the homeowner’s general liability policy and coverage for use of vehicles by domestic staff;
  • ensuring the security of video, network and financial systems and records (and potential bonding of the worker);
  • maintaining control over family photographs, videos, images, and information;
  • managing issues related to health screening and drug testing of caregivers;
  • overseeing the lease or rental of space for live in workers, and ensuring that they do not become subject to the protection of state and local tenant protection laws;
  • managing issues as to immigration compliance;
  • determining whether any county or city laws require more than state law (e.g., local minimum wage requirements, posting requirements, etc.);
  • ensuring proper workers compensation coverage;
  • handling travel by caregivers, and paying properly for it (and avoiding liability issues), and
  • implementing of other key policies including, anti-discrimination and harassment policies.

Families should work with counsel experienced with these unique issues before allowing workers access to their family homes, their children, and their private lives.

Edited by Coby Turner

Seyfarth Synopsis: Two weeks after issuing a statewide face covering mandate, and just days after ordering seven counties to shut down bars, Governor Newsom made the decision to re-close the indoor operations of several sectors in 19 counties in an attempt to flatten the spike in new California COVID-19 cases.

As summer began and businesses across California started to reopen, the state saw a sharp uptick in COVID-19 cases. In response, the California Department of Health quickly issued a mandatory face covering directive on June 18, which we previously blogged about here.

Wanting To Start Again

Since then, Governor Newsom has implemented additional measures to help mitigate the spread of COVID-19 across the state. On June 28, Newsom tweeted that he was ordering bars to close in seven counties and recommending bars close or remain shuttered in an additional eight counties.

Now, as we head into July 4th weekend—a holiday typically (but not this ) celebrated in large public and private gatherings—California is taking a more aggressive approach in an attempt to halt the spike in new cases. On July 1, via Twitter and California’s COVID-19 resource page, the Governor broke the news of additional closures across the state.

And When It’s Time, You’ll Know

Effective immediately, the following indoor activities are shut down in 19 counties for a minimum of three weeks:

  • Restaurants
  • Wineries and Tasting Rooms
  • Movie Theaters
  • Family entertainment centers (e.g., bowling alleys, miniature golf, batting cages, and arcades)
  • Zoos and Museums
  • Cardrooms

The 19 counties affected by the Governor’s new directive are: Contra Costa, Fresno, Glenn, Imperial, Kern, Kings, Los Angeles, Merced, Orange, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Barbara, Santa Clara, Solano, Stanislaus, Tulare, and Ventura.  Notably absent from the list are Napa and Sonoma, enabling wineries there to continue welcoming the public to their tasting rooms.

There’s Still A Chance For You

With the exception of bars, which must cease all operations, businesses ordered to close may remain open if the operations can be transitioned to outdoor or pick-up service.

Workplace Solutions

As tensions rise over both new and existing business closures, and with some local agencies refusing to enforce statewide directives, it remains uncertain what the landscape will look like for California businesses. However, we continue to closely monitor California COVID-19 developments. If you have questions, please be sure to visit Seyfarth’s COVID-19 Resource Center, or contact your favorite Seyfarth attorney directly.

Edited by Coby Turner

Seyfarth Synopsis: As counties begin loosening local restrictions and summer approaches, and in an effort to preempt a rise in COVID-19 cases, the California Department of Public Health issued a directive mandating that residents statewide wear face coverings.

Before today, California only recommended that residents wear face coverings as a precautionary measure with COVID-19, and the State left it in local governments’ hands to decide whether a mandatory requirement was necessary. As summer heats up and tempts residents to spend more time outside and congregate, Governor Newsom and the California Department of Public Health have issued a mandatory face covering directive to mitigate the spread of COVID-19 throughout California.

Masks on Top!

Under this new directive, unless a resident is specifically exempted, face coverings must be worn statewide in the following “high-risk” circumstances:

  • Inside of, or in line to enter, any indoor public space;
  • Obtaining services from the healthcare sector in settings including, but not limited to, a hospital, pharmacy, medical clinic, laboratory, physician or dental office, veterinary clinic, or blood bank;
  • Waiting for or riding on public transportation or paratransit or while in a taxi, private car service, or ride-sharing vehicle;
  • Engaged in work, whether at the workplace or performing work off-site, when:
    • Interacting in-person with any member of the public;
    • Working in any space visited by members of the public, regardless of whether anyone from the public is present at the time;
    • Working in any space where food is prepared or packaged for sale or distribution to others;
    • Working in or walking through common areas, such as hallways, stairways, elevators, and parking facilities;
    • In any room or enclosed area where other people (except for members of the person’s own household or residence) are present when unable to physically distance.
  • Driving or operating any public transportation or paratransit vehicle, taxi, or private car service or ride-sharing vehicle when passengers are present. When no passengers are present, face coverings are strongly recommended.
  • While outdoors in public spaces when maintaining a physical distance of 6 feet from persons who are not members of the same household or residence is not feasible.

West Coast Represent: County, City, and Industry Guidance

While the statewide directive does not specifically address California employers’ obligations, employers should keep in mind that more restrictive local orders will control. Accordingly, if a county or citywide order mandates wearing face coverings under additional sets of circumstances, or orders employers to provide face coverings to employees, the business must still abide by those requirements. Likewise, FAQs issued this afternoon direct Californian employees to industry guidance for additional situations warranting mask wearing at work.

Workplace Solutions

We are continuing to monitor California COVID-19 developments. If you have questions, please be sure to visit Seyfarth’s COVID-19 Resource Center, or contact your favorite Seyfarth attorney directly.

Edited by Coby Turner

Seyfarth Synopsis: California employers seeking to mitigate the financial impact of the COVID-19 pandemic may consider adjusting certain pay plans as a way to control costs. Where these adjustments involve commission agreements and bonus plans, it makes cents to invest some time in recalling that phrase coined by Benjamin Franklin: “An investment in knowledge pays the best interest.” So here we review a few California peculiarities about commissions and bonuses.

Faithful readers of this blog know that California employers must use written agreements to define how they compute and pay commissions and bonuses based on a percentage of sales or profits. California treats that pay as wages, which cannot be forfeited once they have been earned. In other words, once compensation has been “earned” under the terms of an agreement, it is, in effect, “money in the bank” and must be paid even if the agreement is modified before the compensation is payable. That’s why changes to commission and bonus agreements must be prospective rather than retroactive, and cannot reduce “earned” compensation even after a new agreement has been signed.

Consider the following example. Employee Wally Warbucks has a commission agreement with his employer, Cheddar, Inc., providing that Warbucks will earn a 20% commission on sales of Cheddar’s widgets. The agreement states that a commission is “earned” when the customer pays the invoice on the sale, and is payable in the pay period after it is earned. On May 1, 2020, Warbucks sells 100 widgets to customer A, who pays for the widgets on June 1, 2020. On June 2, 2020, Warbucks and Cheddar enter into a new commission agreement, providing that the commission on widget sales will now be just 15%. Under this scenario, Warbucks is entitled to a 20% commission on his May 1, 2020 sale to customer A, even though the new agreement went into effect before the commission was payable.

Workplace Solutions. Employers who wish to reduce compensation for employees paid by commissions or bonuses that are based on a fixed percentage of sales or profits should do the following to avoid pitfalls that employers may later find taxing: (1) carefully review the terms of the agreements to be changed; (2) provide employees with reasonable advance notice of their intent to make changes to the agreements; (3) ensure that new agreements clearly spell out all requirements for computation and payment of the commissions and bonuses; (4) require that employees sign off on the new agreements; and (5) ensure that compensation earned under the terms of superseded agreements is paid in accordance with those agreements.

Employers need not buck at the complexities involved with making these changes, but should instead spend time with a Seyfarth attorney to guide them so that their interests will be protected.

Seyfarth Synopsis: In the popular PBS show Downton Abbey, a large staff attends to the every domestic need of the British Earl and his family. Those of us somewhat less fortunate have likely felt the additional household burdens associated with the SIP orders. And as California businesses re-open, companies and workers have yet another chore to attend: cleaning uniforms more often. We have tailored this post to examine some implications for employers.

Etiquette From A Bygone Era

Although we previously blogged on employer reimbursements for uniforms, tools, and equipment, the new realities of operating a business amidst heightened sanitation requirements make it time to suit up for a reexamination of the issues.

In general, the underlying rules regarding employer reimbursements for uniforms, tools, and equipment have not changed. Under California law, employers still must pay for or reimburse a non-exempt employee for all costs associated with uniforms, regardless of how much the employee earns. This law differs from federal law, which generally allows employers to pass those expenses off to employees so long as their pay does not drop below the minimum wage. Even in California, though, employers typically need not reimburse employees for time spent personally cleaning clothing if the cleaning requires minimal time or care and can fit within the employee’s typical laundry schedule.

The Nature Of Life Is Not Permanence, But Flux

COVID has brought a dramatic shift to our work hours and environments. Once upon a time, people shared clothing items—like aprons (or waistcoats!)—with the colleagues working before and after them. But person-to-person transmission of COVID has brought some sharing practices into question. Similarly, uniform clothing items such as vests or ties once were cleaned infrequently and yet now may require aggressive, regular cleaning to guard against COVID transmission.

For employees whose uniforms need special cleaning, California employers must provide and maintain the uniform without cost to the employee. Likewise, any uniforms that require ironing, dry cleaning, special laundering, or sewing and repairs because of the nature of employment must be maintained by the employer or covered by a uniform maintenance credit that pays for the time and costs incurred in maintaining it.

The World Is A Different Place From The Way It Was—Uniforms in the Time of COVID

Bringing this back to the present, what about uniform or work clothing items that, pre-COVID, would have required little to no maintenance or cleaning? If items like vests and aprons must now be cleaned after every shift—in excess of employees’ normal laundry habits—the new cleaning regimen may lead to claims that the employee should be reimbursed for the extra time or expenses involved.

But employers are not without options! One potential solution is to provide employees with multiples of required clothing items. Even if an employee must wear and clean a vest every day, having several on hand to rotate through family laundry cycles would reduce the burden of keeping them clean and sanitary. Another possible solution is for the employer itself to take responsibility for cleaning work garments, such as by enlisting a qualified laundering service.

Employers could also have employees wash uniform items at the worksite. But care must be taken with respect to washing soiled garments. For example, the CDC cautions against handling laundry from people who are infected, recommends wearing gloves, and warns that shaking laundry can release virus fomites into the air. Our Workplace Safety team is well-versed on the CDC’s guidance on ways to minimize the risk of virus transmission when handling clothing and other frequently handled workplace items.

It’s Not A Masquerade—What About Masks?

Currently, the CDC and others are advising employees to wear masks when performing work that puts them in contact with others. Indeed, some jurisdictions, such as Los Angeles, have required individuals to wear face masks at certain public places.

Assuming that the face masks worn by employees are generic—i.e., no company branding, logos, or special color—they likely are not a “uniform” under California law. Employers thus should not need to reimburse employees for time spent washing masks, especially if the amount of time spent cleaning masks does not significantly add to the employee’s laundry burden.

But this is California, so take care to minimize the time employees may feel required to devote to cleaning their masks. Again, providing multiple masks for employees to rotate through the workweek may help obviate any potential issue of required special cleaning.

Workplace Solutions

In our current new reality, frequent washing of often-used garments like vests and aprons may be advisable. But employees who lack a large staff of butlers, valets, and maids may feel additional burdens associated with this new requirement. Here, as with everything we do in the COVID-infused employment workplace, we must take care when implementing policies and procedures that keep both employees and the public safe while also complying with California’s often peculiar employment laws. As always, please reach out to Seyfarth with questions.

Edited by Coby Turner

We are pleased to announce the release of the 2020 edition of our in-demand book, Cal-Peculiarities: How California Employment Law is Different. The book is available in a convenient, searchable eBook format. Click HERE to order your copy to be delivered via e-mail today!

We also invite you to join us for a free webinar going over some of the biggest changes in the last year! The webinar will be on Thursday, May 28, 2020 with Seyfarth attorneys Chantelle Egan, Coby Turner, and Ann Marie Zaletel. They will discuss the latest legal developments of interest to executives, managers, in-house counsel, and human resources professionals with employees or workers in California, including:

  • New! Overview of COVID-19 provisions in the state of California
  • New! Expansion of ABC test for independent contracting
  • New! Ban on no-rehire provisions in settlement agreements
  • New! Ban on mandatory arbitration agreements
  • New! Expanded lactation accommodation: impacts on return to work
  • New! Expansion of Paid Family Leave benefits
  • New! Ban on hairstyle discrimination (the CROWN Act)
  • New! Organ donation leave entitlement
  • New! Minimum wages and salary thresholds for exempt status
  • New! Sexual harassment training requirements
  • New! Extension of filing deadlines for discrimination suits
  • “Regular rate” issues for meal premium pay and sick pay
  • “Unlimited vacation” plans under new scrutiny
  • Emerging issues in the life of COVID-19

While there is no cost to attend this program, registration is required. Please click HERE to register! The webinar will be offered at the following times:

1:00 p.m. to 2:30 p.m. Pacific

4:00 p.m. to 5:30 p.m. Eastern

3:00 p.m. to 4:30 p.m. Central

2:00 p.m. to 3:30 p.m. Mountain

On behalf of your Cal-Pecs team, thank you for your continued interest in the blog.

 

Seyfarth Synopsis: “Per diem” (or per day) employment may seem like a simple way to maintain a flexible workforce enabling employers to respond to last-minute changes in staffing needs. But certain legal and practical issues can hamper this flexibility. Here we briefly overview per diem employment, and describe some best practices to avoid common mishaps.

What is Per Diem Employment?

Employers sometimes refer to employees who work variable and irregular hours as “per diem” employees. Some employees prefer this status, as it provides them with flexibility and the opportunity to pick up work (often at higher rates of pay), without committing to a regular schedule. This arrangement can benefit employers as well, as it enables them to utilize a pool of employees to supplement regular staffing when the workload increases or during staff shortages. While per diem employment is common in the health care, education, and construction industries, and in connection with seasonal retail and agricultural work, the flexible nature of per diem status has also led employers in various other industries to consider this work status alternative.

While per diem employment typically is part-time, it differs from most part-time arrangements. Part-time employees work a shorter schedule than their full-time colleagues, while per diem employees often work full shifts.

While part-time employees might earn benefits (typically at a reduced rate), per diem employees generally do not. But per diem employees typically earn a higher hourly rate, reflecting their ability to fill shifts on short notice.

Benefits of Per Diem Employment

Flexibility. Per diem staffing provides employers with flexibility. Employers that can draw on a pool of vetted, trained per diem workers don’t have to scramble to meet unexpected staffing needs. Hospitals thus often use per diem health care workers during flu seasons, when they experience a surge in patients. Employees enjoy a corresponding flexibility. Many individuals with competing family or employment responsibilities enjoy the chance to earn extra money without committing to a regular schedule for a particular employer. These employees can keep up their skills (particularly in clinical or technical professions like healthcare) without committing to regular employment.

Control of Labor Costs. Per diem staffing can also be cost effective. Employers generally need not worry about having to pay for employees who are not currently needed or about having to continue contributions to benefit plans when the work is not there.

Employer Best Practices

Notwithstanding its clear advantages, per diem employment raises special challenges that employers should keep in mind:

Clear Employee Understanding. Make sure the employee understands the employment relationship. To ensure that the nature of the employment relationship is clear, employers should maintain written policies or agreements outlining the characteristics of the relationship (for example, the limited hours, the absence of any guarantee of hours, the limitations on benefits, and the expected availability).

The ACA. Beware of full-time equivalency. Under the Employer Shared Responsibility provisions of the Affordable Care Act, if an employer with more than 50 full-time (or full-time equivalent) employees hires an employee who averages over 30 hours per week—or 130 hours a month for the initial measuring period used by the employer (could be 6 or 12 months)—then the employee could be considered a full-time equivalent employee who must be offered at least one health plan option that provides minimum value and is affordable. Employers, to avoid an unexpected triggering of healthcare eligibility, should track how many shifts per diem employees are selecting.

Personnel Records and Actions. Employers should maintain documentation for per diem employees to the same extent as full-time or part-time employees. Employers should follow the same disciplinary and corrective action processes for per diem employees that they follow for other employees, and see that per diem employees receive regular feedback about their performance.

Scheduling Ordinances. Some jurisdictions have predictive scheduling laws that may affect the ability to offer per diem employment. Be sure to check local ordinances!

Unemployment. In California, per diem employees can file unemployment claims. This is yet another reason why it is critical to record whether per diem employees are refusing work or restricting their availability. It is particularly important for employers to have a clear policy regarding any availability expectations for per diem employees. This practice will allow employees to understand the scope of the commitment that they make as a per diem employee and any limitations on their ability to decline shifts.

Processes. Employment laws apply! Employers should be mindful that employment laws—and often the employer’s own policies—extend to per diem employees as well as regular full-time and part-time employees. Employers must ensure that per diem employees understand their policies, including timekeeping and meal- and rest-period requirements. Employees who work infrequently, or for multiple employers, may need reminders of these policies. Managers also need to understand that EEO policies, including the duty to reasonably accommodate employees with disabilities, apply equally to per diem employees.

Paid Sick Leave and Protected Absences. Even though they may not work many hours, per diem employees are entitled to paid sick leave under California law and many local laws. As per diem employees often are not eligible to accrue PTO, employers that rely on PTO plans to meet paid sick leave requirements should ensure that per diem employees (and other excluded employees) are covered by a separate policy that provides the required accrual and use of sick leave. Although per diem employees are not steady employees and thus may not have enough hours to qualify for FMLA/CFRA leave, note that employees who have 12 months of service and who have worked 1,250 hours in the preceding 12 months are entitled to FMLA/CFRA leave. Employers should track hours worked to stay in compliance with FMLA.

Meeting Short-Term Needs. Consider using temporary workers in some instances instead of per diem employees. Employers might have short-term projects that arise, and need employees with a specialized skill set for a short time frame. Such projects might be better staffed by temporary workers than per diem workers. This approach will help employers avoid tricky issues that might arise when the short-term need ends, such as whether the conclusion of employment could be treated as a termination (triggering final pay obligations for the employer).

Final Pay. Be mindful of final pay issues. Final pay in California is due on the final day of employment (or within 72 hours, if the employee resigns without notice). The final-pay requirements apply to all employees, including per diem employees. Employers should communicate regularly with their per diem employees to ensure that the term of their employment is clear. Final pay may be due immediately upon the end of an assignment, so it is important to define clearly when an assignment ends.

Workplace Solutions

Per diem employment can be a flexible way for employers to address unforeseen staffing shortages or fluctuations in work. Nonetheless, employers should be mindful that they still have important obligations to per diem employees. Employers should make sure they are following all best practices to ensure compliance with California and federal employment laws for all employees, even those who work sporadically.

If you would like to learn more about using per diem employees in your workforce, please contact a Seyfarth Shaw attorney for assistance.

Edited by Elizabeth MacGregor

Seyfarth Synopsis:  On April 29, 2020, Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara Counties, as well as the City of Berkeley, issued updated shelter-in-place orders. These orders take effect May 4 and run through May 31, 2020. They nominally adjust the restrictions that have been in effect since March 17, mostly by allowing some additional outdoor businesses and outdoor activities to open. Sacramento County also issued an amended order, which will be in effect from May 1 through May 22, 2020. Like the Bay Area orders, it makes only nominal changes to which businesses may operate in Sacramento County.

Bay Area Counties

Since March 17, six San Francisco Bay Area counties have largely coordinated their efforts to combat the coronavirus, and ordered all but essential businesses closed. After renewed orders were set to expire on May 3, some businesses hoped that the force would be with them, and May the 4th would mark more than just Star Wars Day. Alas, this “new hope” has not manifested into reality.

On April 29, the Bay Area counties and City of Berkeley issued amended shelter-in-place orders that largely maintain the status quo. Non-essential businesses must remain closed, and the orders do little to broaden the definition of what is “essential.” Aside from Essential Businesses and Minimum Basic Operations, the orders allow the following to resume so long as physical distancing and industry-specific requirements are followed:

  • All construction projects that follow the Construction Project Safety Protocols appended to the orders;
  • All real estate transactions, with restrictions on open houses and limited tours;
  • Childcare, camps, and educational/recreational programs that provide care for small, unchanging groups of children, whose guardians are permitted to work under the orders;
  • Use of certain shared outdoor recreational facilities (these differ slightly across jurisdictions, but include facilities such as golf courses and athletic fields); and
  • “Outdoor Businesses” such as nurseries, landscaping, and agriculture that normally operated outdoors prior to the shelter-in-place orders.

The orders continue to require businesses to prepare, post, and distribute social distancing protocols. Appendix A to the new orders is a (very slightly) revised version of the template protocol attached to the prior orders. The most significant change is incorporating the mandate from prior health orders that employees and customers must wear face coverings. Per the orders, businesses must update their protocols to reflect this change.

The orders have different social distancing protocols for construction businesses. These businesses must instead comply with the appended Construction Project Safety Protocols.

Sacramento County

Sacramento’s new order is similar, but not identical to the Bay Area orders. It continues to require individuals to stay home except to perform Essential Activities, and all but Essential Businesses must continue to cease physical operations, aside from Minimum Basic Operations. The order, does, however make some different changes to what it deems “essential.” The key differences are:

  • Health care facilities can reschedule appointments for care that was considered non-urgent and canceled when the stay-at-home order was first issued;
  • Non-contact recreational facilities that involve shared equipment may open provided social distancing is followed and shared items are disinfected. These facilities include golf courses, shooting and archery ranges, and tennis courts;
  • Food trucks are now included as Essential Businesses; and
  • Residential real estate brokers can conduct in-person showings, provided they are limited to no more than two visitors, in addition to the realtor.

Unlike the Bay Area counties, Sacramento does not have a face covering mandate. The County still requires, however, that businesses continue to prepare, post, and distribute a social distancing protocol in a form substantially similar to the one attached to the order.

Workplace Solutions

It’s not too early to prepare for the future. Although the amended shelter-in-place orders do not lift most restrictions on businesses, companies should still start preparing to reopen. Each county indicated that it could revise the orders earlier if certain metrics were met. Seyfarth has developed a number of resources to help with post-pandemic renewal and recovery, and our deep bench of talent is always available to help plan for the day the Jedi return and sheltering-in-place is no more.

Seyfarth Synopsis: On April 28, 2020, Mayor London Breed announced a plan to allow employees working in San Francisco to use funds from the Healthcare Security Ordinance (“HCSO”) contributions to buy “necessary expenditures,” including food, rent, and utilities during the COVID-19 pandemic. Previously, use of these funds were limited to eligible health care expenses. Now, Mayor Breed’s announcement unlocks over $138 million for disbursement to employees who may now use the funds to meet their essential needs.

San Francisco’s Healthcare Security Ordinance

Employers with employees working in San Francisco likely are already aware of San Francisco’s many peculiarities, including the HCSO, which requires most employers to make healthcare expenditures on behalf of certain employees based on the number of hours the employee works in the City. As an alternative to contributing to health insurance coverage, employers may instead contribute healthcare expenditures to Medical Reimbursement Accounts (MRAs), through the SF City Option Program. Employees then can withdrawal funds from their MRA to cover medical expenses and other healthcare needs. According to the Mayor’s announcement, the MRAs currently have $138 million in available, unused funds that employers have contributed over the years.

Mayor Breed’s Plan To Expand Use Of MRA Funds To Pay For Basic Expenses

Citing the need to “protect public health” and “making sure people have enough to eat, have a roof over their head, and have the peace of mind that they’ll be able to pay their bills,” Mayor Breed’s declaration permits employees to withdraw funds deposited in their name to use for basic expenses, including food, rent and mortgage payments, and utilities during the COVID-19 pandemic.

Workplace Solutions

While the announcement says the SF City Option Program will contact eligible employees about how to withdraw funds, employers may also inform their employees that they may be eligible to request a disbursement of funds that were previously made in their name.  This can be done by providing a copy of the announcement, or pointing employees to the SF City Option’s website.

Regardless of how the expenditures may be used, the announcement nonetheless confirms the HCSO, along with every other San Francisco labor law, remains in effect during San Francisco’s shelter-in-place. Employers still must contribute the appropriate amount of healthcare expenditures on behalf of their covered employees. Likewise, employers are not likely to receive any leniency from the City in failing to make these expenditures during the emergency.

The HCSO is a particularly tricky ordinance to satisfy and there are a number of pitfalls that can trip up even the most diligent employer, leading to a costly audit and potential assessment of penalties from the Office of Labor Standards Enforcement. If you would like assistance with a review of your compliance with the HCSO or representation in audit proceedings, please feel free to contact one of Seyfarth’s attorneys.

Edited by Coby Turner

Seyfarth Synopsis: Last week, the San Francisco Board of Supervisors and the San Jose City Council enacted emergency ordinances to expand paid sick leave beyond that provided under the federal Families First Coronavirus Response Act. While San Francisco’s Public Health Emergency Leave ordinance awaits Mayor London Breed’s signature, Mayor Sam Liccardo has signed the San Jose COVID-19 Paid Sick Leave Ordinance, which became effective on April 7, 2020.

The Families First Coronavirus Response Act (FFCRA) Focuses on Smaller Employers

As we’ve noted (here, here, and here), the FFCRA requires employers with fewer than 500 employees to provide up to 80 hours of emergency paid sick leave to certain employees who are unable to work due to COVID-19 related reasons. As part of a growing trend, San Francisco and San Jose’s emergency ordinances attempt to close FFCRA coverage gaps by providing additional paid sick leave to employees not covered by the FFCRA.

The San Francisco and San Jose Ordinances Apply To Employers with 500 or More Employees And Permit Offsets

Covered Employers. The ordinances by the two Cities (the San Jose ordinance now effective and the San Francisco ordinance expected to be effective soon) require private employers with 500 or more employees to provide up to 80 hours of supplemental paid sick leave to employees who are unable to work as a result of the COVID-19 public health emergency. This supplemental leave will be available to eligible employees for immediate use. San Jose’s ordinance, however, deviates from San Francisco’s ordinance by also covering private employers with fewer than 50 employees.

What Can The Paid Sick Leave Be Used For. Generally, an eligible employee may use the supplemental leave granted by either ordinance if the employee cannot work because of one of these reasons:

  • The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis.
  • The employee is subject to COVID-19 related quarantine or isolation by a government order, or is caring for someone subject to the same (including, in San Francisco, vulnerable populations who are recommended to self-isolate).
  • The employee has been advised by a health care provider to self-quarantine due to COVID-19, or is caring for someone subject to the same.
  • The employee is caring for a family member because school or day care is closed due to COVID-19.

Although both ordinances delineate similar situations for use of supplemental leave, San Francisco specifically limits an employee’s caring of other individuals to family members. However, San Francisco expands care to a family member (not necessarily a child) whose  caregiver becomes unavailable due to the public health emergency.

No Carryover. The ordinances disallow employees from carrying over any unused paid sick leave at the ordinances’ sunset dates, or from being paid for unused amounts of sick leave.

Offsets. Both ordinances allow offsets for paid time off that an employer already provided to its employees. Under the San Francisco ordinance, the amount of emergency paid sick leave an employer must pay will be reduced for every hour the employer allowed the employee to take paid leave or paid time off for COVID-19 related reasons, over and above the employee’s existing sick, vacation, and PTO banks, between February 25, 2020, and the ordinance’s enactment. Similarly, the San Jose ordinance provides an offset for some combination of paid personal leave available to employees as of the effective date of its ordinance on April 7, 2020.

The Cities Differ In Defining Eligible Employees, Calculating Payment, Setting Notice Requirements, and Providing Exemptions. 

Covered Employees. San Francisco construes “Employee” broadly as any employee—full-time, part-time, or temporary—who worked 56 or more hours in San Francisco, including telework, during the 365 days immediately preceding the effective date of the ordinance. On the other hand, San Jose broadly includes those who have worked at least two hours for their employers within the City.

San Jose Remote Workers Excluded. If employees can work from home, San Jose does not provide them these additional COVID sick leave benefits. San Jose further specifies that only employees who must leave their residences to perform Essential Work are covered.

Payment. San Francisco employers may calculate this additional COVID paid sick in the same manner they calculate sick time under the San Francisco paid sick leave laws. Meanwhile, San Jose models payment calculation after the FFCRA.

Notice Requirements. Employers doing business in San Francisco must closely observe the notice requirements set forth in the City’s ordinance. The San Francisco’s Office of Labor Standards Enforcement (“OLSE”) will post a notice on its website within seven days of the ordinance’s enactment. Thereafter, within three days, employers must provide the OLSE’s notice to its employees. To ensure the Notice can be reached by all employees, employers should

  • post the Notice in a conspicuous place at workplace, via electronic communications,
  • post the Notice on an employer’s web-based or app-based platform, and
  • provide the Notice in English, Spanish, Chinese, and any language spoken by at least 5% of the employees.

In addition, the Notice must include the amount of ordinance-provided paid sick leave that is available to the employee.

Meanwhile, San Jose, while not laying out specific notice requirements, asks employers to comply with any notice requirement established by the City’s Office of Equality Assurance.

Health Care and First Responder Exemptions. Under the San Francisco ordinance, employers of health care providers or emergency responders, as defined under the FFCRA, may elect to exclude eligible employees from receiving the ordinance-provided leave. Hospital employers may be exempted from the San Jose’s ordinance only if, between April 7, 2020 and April 21, 2020, the hospital operators provide their employees some form of paid personal leave at least equivalent to the paid sick time as required by the ordinance.

Other Considerations. Both Cities prohibit employers from conditioning leave upon employees finding replacement workers. San Francisco has a few more explicit limitations, including prohibiting employers from requiring employees to use other accrued time off before using the supplemental leave, and from asking employees for doctor’s notes or other documentation substantiating absences. San Francisco employers also cannot modify their PTO policies during the pendency of the emergency ordinance.

Sunset Dates. The San Francisco ordinance sunsets 61 days after enactment, unless the ordinance is extended. San Jose’s ordinance sunsets on December 31, 2020.

Penalties for Non-Compliance. The San Francisco ordinance specifically prohibits retaliation, discrimination, or any interference with the exercise of employees’ rights. A rebuttable presumption of retaliation arises if an employer takes an adverse action against an employee within 90 days of the employee engaging in a protected act or filing a complaint for violation of this ordinance. San Jose’s ordinance can be enforced in the same manner as its Minimum Wage Ordinance.