November 2014

By Duwayne A. Carr and Laura J. Maechtlen

Last week, we blogged that the San Francisco Board of Supervisors tentatively and unanimously passed the Retail Workers’ Bill of Rights, which requires certain employers to (a) offer additional hours of work to current part-time employees before hiring new employees or subcontracting, (b) retain employees for 90 days upon transfer of the …
Continue Reading UPDATE: San Francisco Board of Supervisors Passes Retail Workers’ Bill of Rights At Confirmation Vote

During this special time of giving thanks, we want to thank YOU, our loyal readers. Yesterday, ABA editors chose our little enterprise as one of the ABA Journal’s 2014 “Blawg 100,” an accomplishment we could not have achieved without your support.  We take great pride in working hard to stay on top of the trends and issues that make California…
Continue Reading Thanks to YOU, Cal Pecs Blog Receives BLAWG-Worthy ABA Recognition

By Kristina Launey and Ann Marie Zaletel

Just over a month before the January 1, 2015 effective date of AB 1522, the Labor Commissioner has issued two advisories of immediate interest to California employers.  One is a template poster for employer compliance and the other is a revised Wage Theft Notice.  

Employers may choose to use the template …
Continue Reading CA Paid Sick Leave Law Update: Labor Commissioner Issues Poster and Wage Theft Notice Templates and Sets Leave Accrual Date

By Duwayne A. Carr and Laura J. Maechtlen

We previously blogged about pending legislation in San Francisco titled the “Retail Workers Bill of Rights,” a comprehensive set of policies introduced as two separate pieces of legislation (here and here) by San Francisco Supervisors Eric Mar and David Chiu. 

We learned that the Board of Supervisors tentatively—and unanimously—passed both  pieces of proposed legislation this week.  A confirmation vote is scheduled to occur on November 25, 2014, and, if the legislation passes at that time, the ordinances will become law in San Francisco 180 days after the effective date. 

While amendments might be considered prior to the final confirmation vote, we summarize the notable aspects of the two pieces of legislation here, in anticipation of that vote.  Of particular note to employers, the legislation provides a private right of action.  Any person aggrieved by a violation of the ordinance, any entity a member of which is aggrieved by a violation, or any other person or entity acting on behalf of the public, may bring a civil action in court against an employer for violating the ordinance.

Board of Supervisors File No. 140880:  Hours and Retention Protections for Formula Retail Employees

This proposed ordinance would apply to Formula Retail employers with 20 or more employees in the City.  “Formula Retail” establishments are defined for purposes of the new legislation as businesses with at least 20 retail sales establishments located worldwide. 

The proposed ordinance would require employers to:
Continue Reading San Francisco Board of Supervisors Tentatively Passes “Retail Workers Bill Of Rights” – Final Vote Expected On November 25

By John R. Giovannone and Aaron Lubeley

“Let me get this straight. To the delight of our workers, we’ve been providing free meals. But now someone is claiming that I owe unpaid overtime to account for the value of the free meals? Really??” 

We have been hearing this kind of exasperated response from clients with more frequency, as many employers have made the business choice to provide their employees with lunch at no cost. Many of these same employers are being accused of underpaying overtime by failing to incorporate the value of free food in calculating the regular, overtime, and double-time rates of pay. Talk about a funny way to give thanks!

Companies provide free food to employees for many legitimate business reasons: to help limit lunch breaks to 30 minutes, to encourage employees stay close to the job site during lunch breaks in case of emergencies, to avoid food waste and related disposal costs in industries where more food is prepared than the customers will consume (i.e., menu options), and to build workforce camaraderie by encouraging employees to take their lunch breaks together. This just a small sampling of reasons an employer might decide to feed its workforce. And not all free food needs to be considered in the computation of overtime.  But sometimes companies enact such free lunch policies without due consideration of the rules and possible legal ramifications.

As the plaintiffs’ bar clearly understands, California defines wages as “all amounts for labor performed by employees.” California overtime and double time are computed based on an employee’s regular rate of pay, which includes cash and other types of remuneration. Labor Code §§ 200, 510.

Increasingly, employers are seeing complaints that argue, essentially, if an employee earns $9 an hour and gets a free turkey sandwich for lunch, the sandwich is part of the “amounts for labor performed.” Therefore, plaintiffs argue, the value of the food should be factored into the employee’s regular rate, so that the corresponding rate of payment for any overtime worked should be increased by the per-hour value of a couple slices of turkey and bread! For example, if the value of the sandwich is $4.00, and is provided five days a week, the employee is getting an extra $20 per week in “other remuneration” that, plaintiffs argue, would make the regular rate for overtime computation not just $9/hour, but something more (depending on the number of hours worked in the week).

Unfortunately, this is no Thanksgiving prank. Free food regular rate miscalculation cases have actually been around in California since the Seventies (e.g., Marshall v. Valhalla Inn, 9th Cir. 1979: “The regular remuneration … consisted of the wages … plus the value of the meal provided … . The amount of such payments must therefore be included in determining the overtime rate.”). But this “gotcha” category of lawsuits, which defy common sense, have recently come into vogue. Worse still, theoretically similar claim types have evolved in response to similar food-related company policies.

Some lawsuits, for example, attack the practice of giving employees a discount on cafeteria food, claiming that the value of the discount should be included in calculating overtime rates (“If you charge me $1 for a $4 sandwich, that’s $3 more to my regular rate computation.”).

Other lawsuits claim that employers miscalculate overtime when they incorporate the employer’s cost of the food provided into the overtime calculation rather than incorporating the fair market value of the food provided to the employee into the overtime calculation.

These lawsuits actually work against the interests of employees, as they inspire an unsurprising employer response: cancellation of free and discounted meal policies. Are there effective alternatives to the drastic cancel-the-policy solution to this problem? Yes, but only careful consideration of each employer’s relevant facts and circumstances, coupled with careful drafting of free-lunch policies and procedures, will avoid liability for miscalculating overtime and double time rates:
Continue Reading Gobble, Gobble … When Providing Employees With Food, Is There Such A Thing As A Free Lunch?

By Nick Geannacopulos and Emily Barker

With the election upon us, political expression at work likely has intensified and at times may have led to disharmony. We all understand that political speech receives the highest protection in the civil arena—but how far does that protection extend in the California workplace? What if your at-will employee goes on the radio to assert a political stance directly adverse to your company’s interests? Can you stop the company-wide email that asks for contributions to the local independent candidate? Can you require your nostalgic baby boomer to take down his “Nixon’s The One” poster in his office?

A reasonable employer might think that it can regulate, or stop entirely, potentially disruptive workplace conduct that occurs on company premises. But let’s remember once again that California is peculiar: employers here must navigate around strong protections for political activities that apply both in and outside the workplace. Specifically, California Labor Code sections 1101 and 1102 prevent private employers from controlling or attempting to restrict employees from participating in political actions or activities.

Now let’s revisit the examples we mentioned above:
Continue Reading Managing the Two P’s: Profanity and Politics in the Workplace