Seyfarth Synopsis: Some California employers offer floating holidays for employees to use for events like the upcoming St. Patrick’s Day holiday. Floating holidays, while offering additional unrestricted days off that promote employee satisfaction and work-life balance, can also bring a sinking feeling to employers who learn, too late, of their possible ballast.

Many California businesses provide 11 paid holidays to employees. In addition, some employers provide floating holidays, which bob along on the sea of workdays until an employee grabs one to serve as a personal life preserver. All good, right? Not necessarily. Granting floating holidays can raise questions that, if not answered correctly, can lead to unexpected liability despite the good intent.

What is a floating holiday anyway?

“Floating holidays” allow employees, with advance notice, to take off any work day, for any reason they choose. These extra days off may enable employees to attend to personal business such as a parent-teacher conference, to observe religious holidays such as Yom Kippur, Rosh Hashanah, or Christmas Eve, to take a “mental health” day, or to celebrate other significant days such as a birthday, a spouse’s birthday, or an anniversary.

Are floating holidays mandatory?

Although no law requires employers to provide floating paid holidays, some employers use them to promote employee satisfaction and work-life balance.

Do floating holidays affect final pay? 

That’s where things can get tricky. In California, employers can let floating holidays truly float with the wind or tether them to other events. Depending on the employer’s approach, unused floating holidays may need to be included in an employee’s final pay.

One approach is for the employer to treat floating holidays as unrestricted. This allows employees to take a day off any time they chose, regardless of the occurrence of any other event. With this approach, courts are likely to treat floating holidays as simply vacation by another name. As such, any unused floating holiday must be paid out at the time of the employee’s termination, along with any other wages owed.

The other approach is for the employer to tie floating holidays to the occurrence of a specific event. This approach requires that floating holidays be used on or near specific days (such as on or near the employee’s birthday). The right to take the day off does not arise until the occurrence of the event to which it is tethered; that is, if the employee is no longer employed upon reaching a birthday (in this example), the right to take the associated floating holiday never springs into being. In that case, the floating holiday would be treated like a regular paid holiday, which is not owed until the event (e.g., Thanksgiving, July 4th) occurs. Consequently, pay for the unused holiday pay would not due upon termination.

Can we cap the number of floating holidays?

Yes. An employer may cap the number of floating holidays that an employee can take. But employers must remember that California law on vacation does not allow a “use it or lose it” policy. As we’ve just learned, if use of a buoyant holiday is unrestricted, it will be considered a vacation equivalent. Because California equates earned vacation pay with wages, it vests as it is earned. As we detailed in an earlier piece, an employer may not have a policy that makes employees forego “vacation” pay that is not used by a specific date. Likewise with those unrestricted floating holidays.

What must our written policy include?

Because employers can treat floating holidays in different ways, it’s important to have your policy clearly reflect when floating holidays may be taken and what happens if the floating holidays are not taken. If floating holidays can be taken at any time, then it is important to track the employee’s accrued and unused floating holidays. Those must be paid out at the time of termination.

Workplace Solution:  By making sure that the written policy is clearly drafted, California employers can avoid many of the pinpricks and burst bubbles of good intent that can come along with providing floating paid holidays. If you would like assistance with ensuring compliance with California rules regarding floating holidays, please contact the authors or another attorney from Seyfarth’s Labor and Employment Group.

Edited by Michael Cross.

Seyfarth Synopsis: On March 13, 2017, San Jose’s new “Opportunity to Work Ordinance” takes effect, requiring covered employers to offer additional hours to part-time employees before hiring new or temporary employees. As the law’s effective date looms, the City has issued guidance clarifying portions of the ordinance and has released the notice form that employers must post.

An earlier post detailed the obligations that San Jose’s new voter-approved ordinance creates for San Jose private employers. The ordinance requires certain employers to:

  • offer additional work hours to existing, qualified part-time employees before hiring new employees, through a “transparent and non-discriminatory process,”
  • post a notice of the rights created by the ordinance, and
  • retain, for four years, relevant records such as work schedules, payroll records, and offers to current and former part-time employees.

With the ordinance’s March 13th effective date now knocking, the City has issued guidance on how to comply. We provide some highlights below.

For starters, employers can stop banging on the City’s door for the ordinance’s required notice. The City has issued the notice for employers to post with their other employment notices (click here for the notice in English, Spanish, Chinese, and Vietnamese).

The City has also published Frequently Asked Questions to shed some light on how the City interprets the ordinance. Perhaps most importantly, the FAQs define a “full-time” employee as an employee who works at least 35 hours a week, which means that “part-time” employees (who must be offered extra hours) are those who work fewer than 35 hours a week.

The FAQs also remind us that a “covered employer” is an employer that has at least 36 employees and that is subject to San Jose’s business tax (i.e., the ordinance doesn’t apply to government employers). The FAQs also explain that the employer’s total number of employees includes employees who work in locations outside of San Jose.

The FAQs go on to explain that only non-exempt employees count towards the 36-person threshold required to become a covered employer (this number includes part-time and full-time employees). Administrative and professional employees will not affect an employer’s coverage under the law; in fact, the FAQs explain that they are exempt from the law.

Further, the FAQs details how employers can comply. First, employers need to offer additional hours to part-time employees only at a particular location. Employers do not need to reach out to employees at other locations.

Second, employers can decide how to offer additional hours to part-time employees, provided that the employers adopt a process that is transparent and non-discriminatory. For example, an employer can give employees a limited window to accept additional hours of work before bringing on new labor. And employers need not rearrange their shift schedules to give more hours to part-time workers; the part-time worker must be able to work during the employer’s regularly scheduled shift.

Finally, for those covered employers who feel like the ordinance might knock them out, the City has provided a hardship application. On a case-by-case basis, the City will grant renewable twelve-month exemptions where a covered employer’s “work or need is unpredictable or requires a specialized skill and there is a need to essentially have Employees ‘on call.’ ”

This recent guidance, while not removing all uncertainty, certainly gives employers a better understanding of what lurks behind the Opportunity to Work Ordinance door, which will open on March 13.

Workplace Solutions. Compliance with new city ordinances can be tricky, especially since they are often relatively obscure. Knowledge is the first step. Compliance efforts are the next. If you would like assistance with ensuring compliance with this new ordinance, then please contact the authors or another attorney from Seyfarth’s Labor and Employment Group.

Edited by Michael Cross.

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.

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: Travel time pay is a nebulous area of the law that can leave many employers stalled on the starting blocks. Here are some guidelines to help ensure that employees get paid for all hours worked, including any compensable travel time.

Ready. Set. Not so fast.

It makes common sense to most people that commute time—the time an employee travels between home and work and back again—need not be paid. But at what point does an employee’s time on the road become compensable?

What travel time counts as hours worked?

The answer depends on whether travel time is “hours worked.” California Wage Orders define “hours worked” as the time during which an employee is (a) subject to the employer’s control or (b) the employee is suffered or permitted to work, whether or not required to do so. If travel time falls under either category, the employer must pay for the time spent traveling.

A few points of note:

  • A potential exception to the no-pay-for-commuting rule exists when employees carry business-related tools or materials in their car to a worksite or work meeting. A recent California court held that where employees can use a vehicle for personal purposes during the commute, and are not required to drive a particular route, they are not subject to control of the employer even if they are transporting tools. But the DLSE opines that if an employee must deliver equipment or goods to the worksite for the employer, the travel time is compensable.
  • Labor Code section 2802 requires employers to reimburse employees for automobile costs (mileage, wear and tear, etc.) the employee incurs when being required to use a car for work. So while normal commute expenses are not reimbursable, expenses required beyond the reasonable commute require reimbursement. The DLSE has stated that paying the IRS mileage rate (currently $0.54 per mile) is a “presumptively reasonable” reimbursement rate.
  • Check out our prior blog post on travel time issues here, for more detail regarding compensation for travel time during the workday versus overnight travel out of town.

Getting the Green Light.

So we’ve reached the finish line, right? Hold your horses. Determining what constitutes travel time is a fact-sensitive inquiry that may not be all that simple to analyze in all circumstances. Here are some scenarios where drive time has been found to be compensable:

  • If an employee must attend an offsite conference or meeting, the time spent traveling to and from the meeting in excess of the employee’s normal commute is compensable.
  • Any time spent in reaching the airport or train station that is over and above the time spent in the employee’s normal commute is compensable.
  • Travel to a remote work site from an employee’s home may be compensable if the time spent goes beyond the employee’s normal commute.
  • Once an employee reports to work, any work-related travel during the day is compensable. The same goes for time traveling for a special assignment or emergency outside of regular hours.

Finally, remember that California requires employers to record all hours worked, including travel time. And because any time spent traveling is compensable, all compensable travel time in California counts toward the number of hours worked in calculating any required overtime premium pay.

Keep in mind that employers may establish a separate rate for travel, as long as it does not fall below the minimum wage, and as long as the employee is notified of the travel rate in advance.

Workplace Solution:  California employers must implement a clear travel policy to ensure compliance with this tricky area of the law. If you have any questions or need assistance drafting such a policy, please feel free to contact any of our attorneys.

Edited by Coby M. Turner.

(with apologies to the song artist)

Seyfarth Synopsis: The Ninth Circuit has suggested it might upset longstanding “on call” practices by making California employers liable for “reporting time” pay to employees who phone in ahead of their schedule, only to find that they are not needed for the day.

On October 5, 2016, a Ninth Circuit panel indicated that it might call on the California Supreme Court to answer whether “calling in” to work amounts to “reporting for work” under California’s Wage Order 7-2001. The panel, in Case No. 15-56162 (9th Cir.), considered an interlocutory appeal from a decision by federal district court judge George H. Wu in the case Casas v. Victoria’s Secret Stores, LLC, CV 14-6412 (C.D. Cal).

Casas involves an on-call scheduling practice common among retailers: “on-call” employees call in a few hours before the scheduled start time to see if they need to appear for work.  Plaintiffs argued that this required act of picking up the phone amounts to “reporting” for work under Wage Order 7’s Reporting Time Pay provision. To Plaintiffs, this means that employers who fail to use call-in employees must pay reporting-time pay (subject to some exceptions). The rules on reporting pay generally provide that an employee who reports for work, but who is not put to work or is furnished less than one-half the usual or scheduled day’s work, is entitled to at least two hours and up to four hours of reporting-time pay.

In December 2014, Judge Wu rejected this “call-in” claim. Judge Wu relied on both the common meaning of “report” and the legislative history of Wage Order 7 to hold that to “report for work” plainly means to physically appear at the work site. Thus, contrary to Plaintiffs, simply lifting a receiver or tapping a touchscreen does not require the employer to pay reporting time when the on-call employee never actually shows up for work.

The Plaintiffs took an interlocutory appeal to the Ninth Circuit.

Will the Ninth Circuit put the call on hold? At oral argument, a panel of Ninth Circuit judges indicated that the panel might, for all practical purposes, place Judge Wu’s decision on hold. Pregerson, Noonan, and Paez—the three circuit court judges who took the line from Judge Wu—expressed skepticism that federal court is the appropriate venue to decide the on-call issue. Both Judges Paez and Pregerson repeatedly suggested transferring the call to the California Supreme Court. Judge Paez went so far as to iterate the statutory certification standard—that federal courts should certify important questions of state law to the state supreme court—and concluded that “this in my view, it seems to me, like a very important question that affects a lot of people.” These statements suggest that it is possible, if not likely, that the panel will call on the California Supreme Court for its guidance as to what California law is on this topic.

But will the Supreme Court accept a transfer? As Judge Paez recognized, even though the Ninth Circuit might put in a call for help, nothing requires the California Supreme Court to answer. Nonetheless, Judge Paez seems confident the Supreme Court will take the call since it has accepted other related employment cases from the Ninth Circuit in the past (including, for example, Oracle and Kilby).

Legislatures, could you help them place the call? Regardless of the Ninth Circuit’s actions, the switchboards of legislative bodies could light up in the coming year with calls to regulate on-call scheduling. As reported in this blog, just last year San Francisco became the first jurisdiction to penalize employers for not using employees scheduled for “on-call” shifts. Under the so-called Workers Bill of Rights, when employers require employees to be available for work but do not actually engage the employee, employers must pay the employee between two and four hours of pay, depending on the duration of the on-call shift.

The California Legislature considered similar legislation in its most recent session. Like the San Francisco ordinance, subject to certain exceptions, it would have required employers to pay on-call employees who were not ultimately called in to work their shifts.  The legislation did not pass,  but it seems likely that the legislative initiatives—at both the municipal and state level—will not end the matter.

Call me (call me) on the line, Call me (call me) any, anytime. The bottom line is that at least for now, Judge Wu’s well-reasoned decision is good law. But be sure to dial up this blog in the coming months to see if that number remains in good working order. We’ll be holding on the line to monitor the messages that courts and legislative bodies leave for employers wishing to continue the time-honored tradition of on-call scheduling.

Seyfarth Synopsis: Does carrying a pager nullify a rest break? What about the possibility of being tapped on the shoulder by your boss? Or being called on your cell phone? The California Supreme Court considered these and other scenarios during an hour-long oral argument on September 29, as it asked, What does it mean to not “work” during a rest break? Although the question seems straightforward, the answer does not yet seem clear to the justices.

The case is called Augustus v. ABM Security Services Inc., S224853. We previously blogged about this important case here.

Though rest breaks are paid, Labor Code Section 226.7 prohibits employers from requiring “work” during those breaks. The trial court found that ABM owed damages—almost $90 million—to a class of 14,000 security guards, some of whom had to carry radios during rest breaks. The trial court’s broad rule—“if you are on call, you are not on break”—was reversed by the Court of Appeal, which said that “remaining available to work is not the same as performing work.” The consequence of not providing a rest break is an extra hour of pay for each day in which a break was not provided.

From the oral argument, it appears that the justices are struggling with how to craft a rule for what counts as “work” that would not, in Justice Goodwin H. Liu’s words, be a “recipe for litigation.” The justices actively questioned counsel for both sides, leaving it unclear whether a majority agreed with ABM’s position that simply being on call is not work, or with the plaintiffs’ position that any requirement (e.g., listen for your pager) would prevent an employee from putting on a “sleep mask” and headphones, and would nullify the entire rest break.

The justices explored whether there should be a distinction between (1) the mere potential of being called back to work during a break and (2) a requirement that employees be easily reachable during a break. And Justice Liu, who seemed most skeptical of ABM’s position, repeatedly asked whether employees could be disciplined for refusing to answer a summons to return from a break.

While it remains to be seen what rule the high court ultimately crafts, here are the main options raised in briefing and at oral argument:

  • Any possibility of “fetching” or “hailing” nullifies a break: this least employer-friendly position, adopted by the trial court, was met with skepticism by Justice Leondra L. Krueger and others. Justice Liu, however, asked both sides why there should not be a blanket prohibition of employers contacting employees during rest breaks. This rule would have the virtue of “simplicity.” ABM responded that this would be a “really bad rule,” and plaintiffs did not vigorously defend Justice Liu’s proposal either, acknowledging that employers may have emergency reasons for calling an employee back.
  • The Brinker rule: Plaintiffs proposed the standard set in Brinker for meal breaks: an employer provides a compliant break “if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted [10]-minute break, and does not impede or discourage them from doing so.” On-call time would not satisfy Brinker, Plaintiffs argued, because being “on call” is a “duty.”

It’s unclear whether this rule could garner a majority. Justice Werdegar (Brinker’s author) pointed out that the “relieved of all duty” requirement governing meal breaks is absent from the rest break statute, and that rest breaks are paid. At the same time, though, she and other justices asked ABM why the Brinker rule could not also apply to rest breaks.

  • Being on-call does not nullify a break: this employer-friendly position, adopted by the Court of Appeal, was advocated by ABM. The justices did not explicitly mention the appellate court’s opinion during oral argument. At one point, however, the Chief Justice did remark that being on call seems like “work,” to which ABM responded by explaining that “work” is the actual performance of duties, not being available to perform them.

When asked specifically what overarching rule the Court should craft, ABM advocated a hybrid of Brinker and Mendiola (which held that on-call time must be paid). Under ABM’s proposed rule, an on-call rest break would be valid if the employee was given a “reasonable opportunity for an uninterrupted break,” during which the employee could engage in personal activities. Carrying a pager could ease any restrictions on an employee’s mobility, ABM pointed out, and would thus satisfy its proposed rule.  This rule would have the merit of distinguishing true rest breaks from “sham breaks” that are frequently interrupted in practice.

  • The “Liu “presumption”: Justice Liu, after calling ABM’s rule something that “sounds reasonable” but that is hard to implement in practice, proposed a presumption that a break is compliant if there is no on-call policy, if employees are free to do what they want, and if there is a “policy and practice” of not interrupting breaks unless there is an emergency. The other justices did not pick up on Justice Liu’s proposal.

The Supreme Court’s decision is expected within the next 90 days (by December 27). We will share a full analysis of the decision as soon as it is issued.

Edited by Michael A. Wahlander.

Seyfarth Synopsis: California’s rules on rest breaks are still developing. Recent cases have addressed the timing of rest breaks, and whether employees (particularly those who remain “on call”) must be relieved of all duty during breaks.

Our fair state has long imposed peculiar—and specific—requirements for employee work breaks. Varying interpretations of the rules for meal and rest breaks have spawned prodigious class action litigation, both before and after the California Supreme Court’s crucial 2012 decision in Brinker Restaurant Corp. v. Superior Court. Accordingly, California employers have a keen interest in making their break policies and practices as compliant as possible.

But this can be hard to do while the rules remain in flux. In this post, we discuss two cases—one decided a few months ago and the other now pending before the California Supreme Court—that bring the requirements for rest breaks into finer focus. The cases raise these questions: (1) Exactly when must employers provide rest breaks? (2) Can employers require workers on break to remain “on call”?

So we invite you to “take 10” and read on.

The Basic Rule

Section 226.7 of the Labor Code says that employers can’t require employees to work during breaks mandated by an order of the Industrial Welfare Commission. The IWC, in turn, has mandated (in Section 12(A) of the Wage Orders) that:

Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof.

More about that pesky phrase “insofar as practicable,” below.

Timing of Rest Breaks

The rule on rest breaks is often short-handed as “10 minutes paid rest for every four hours (or major fraction thereof) worked.” But must each rest break occur during the middle of each four-hour work period? Or can it be permissible to allow—or require—employees to combine breaks, or to schedule them at some time other than midway through the work period? And what does “insofar as practicable” mean, anyhow?

The 2016 California Court of Appeal decision in Rodriguez v. E.M.E., Inc. took a stab at answering. E.M.E. gave one 20-minute rest break and one meal break per eight-hour shift, due to the nature of the work and the clean-up time required at each break. Rodriguez brought a class action claiming that this practice violated Section 12(A) of the applicable Wage Order.

The Court of Appeal held that the phrase “insofar as practicable” means that employers must implement the rest schedule specified in the Wage Orders unless there is “an adequate justification why such a schedule is not capable of being put into practice, or is not feasible as a practical schedule.” More specifically, employers may depart from the Wage Order schedule (i.e., a rest break in the middle of each four-hour period or major fraction thereof) only when it (1) will “not unduly affect employee welfare” and (2) “is tailored to alleviate a material burden” on the employer that would result from using the Wage Order schedule.

Reversing summary judgment for the employer on the certified rest break claim, the Court of Appeal sent the case back to the trial court to resolve triable issues about these questions. The court highlighted two issues: (1) Was the nature of the work (i.e., sanding, painting and finishing metal parts for the aerospace industry) such that it took 10 minutes to prepare for each break and 10 minutes to ramp up again after the break? (2) Did the employees actually prefer to receive one combined 20-minute break? If E.M.E. could establish these points, then E.M.E. could use a schedule other than the one specified by the Wage Order.

Relief From All Work?

Poised for decision by the California Supreme Court in Augustus v. ABM Security Services, Inc., 233 Cal. App. 4th 1065 (2014) review granted, 186 Cal. Rptr. 3rd 359 (2015), is the question whether an employee on a rest break must be relieved of all duties, even the duty to be on call. The employees at issue in Augustus were security guards who remained “on call” even while taking their rest breaks. The guards claimed that their “on call” status deprived them of legally compliant rest breaks. The trial court agreed and granted them summary judgment.

But then, in a refreshing display of common sense, the Court of Appeal reversed, holding that on-call rest breaks are permissible. The Court of Appeal explained that although on-call hours constitute “hours worked,” an employee who is merely available to work is not actually working. Section 226.7 proscribes only work on a rest break; being on call is a compensable activity, but it is not work. This result is consistent with the point that employers may require employees on a rest break to stay on the employer’s premises because the breaks are, after all, paid. The issue of whether a rest period is compensable time (it is) is not the same as whether a rest period is a true break from work (on-call duty, when one is not called, is not work).

Yet employer hopes that the Court of Appeal had the final say on this matter were dashed when the California Supreme Court granted review of the decision. Check this space after the oral argument on this case, scheduled for September 29, 2016, to read our take on how the Supreme Court may be leaning when it comes to the issues presented in this case.

Workplace Solution

Even after Brinker, the waters continue to roil around rest break rules. We welcome your inquiries regarding any Cal-peculiar issues of employment law.

Seyfarth Synopsis:  Santa Monica has amended its Minimum Wage Ordinance to postpone implementation of its paid sick leave entitlements, now starting January 1, 2017 instead of July 1, 2016, and create a two phase implementation process for both small and large employers.

Like many a trip to the beach, the journey of the paid sick leave portion of Santa Monica’s Minimum Wage Ordinance[1] has hit some last-minute snags. On Tuesday, April 26, the City Council accepted a package of amendment proposals. Within those proposals, instead of rushing to a July 1, 2016 implementation date of the previously adopted San Francisco-like 72-hour sick leave cap, the Council has decided that everyone should just chill out. The amended Ordinance will allow implementation to roll in like the tide, with the first wave of changes delayed to January 1, 2017, and a second wave coming in on January 1, 2018.

Under the first wave, small businesses (employers with 25 or fewer employees) must allow a rolling cap of 32 hours of paid sick time for employees, with larger businesses capped at 40 hours. The second wave will increase these caps to 40 hours for small businesses and 72 hours for larger businesses. Until January 1, 2017, Santa Monica employers can relax and continue to follow California law.

The accrual rate remains the same as required under California law (one hour for every 30 hours worked), but these accrual caps act as “point in time” caps, similar to the San Francisco ordinance. That is, Santa Monica employers would no longer be able to limit employee annual use to 24 hours after Jan 1, 2017. Instead, they will have to allow the use of whatever an employee has in his or her bank at any given time. The Ordinance also does not eliminate an employer’s obligations to follow the California statute where the California statute is more generous. So, at least until January 1, 2018 (when the accrual cap will increase to 72 hours for large employers), Santa Monica employers who provide sick time by the accrual method should still follow the 48-hour minimum accrual caps under state law. The updated proposal does imply that some kind of frontloading would be acceptable, but it’s not apparent yet how that would work. We hope that once the Ordinance itself is published, this issue will be made clear.

The Council has also reduced the period of time in which retaliation against an employee for exercising rights under the Ordinance will be presumed. The time, once 180 days, will now be 90 days (that that’s still three times longer than under the California law). So employers should be very cautious in taking actions against employees who take sick days, no matter how totally bodacious the surf report was for that day.

Please see here and here for more information.  We expect the amended Ordinance to be available at any moment.  In the meantime, please see your most tubular Seyfarth attorney for more information.

[1] The Ordinance is entitled “An Ordinance of the City Council of the City of Santa Monica Adding Chapter 4.62 to the Santa Monica Municipal Code Requiring a Minimum Wage for Employees, and Adding Chapter 4.63 to the Santa Monica Municipal Code Requiring a Living Wage to Hotel Workers.”

Seyfarth SynopsisUnder California law, employers have a part to play in protecting employee voting rights and other political activity.  What follows is a short reminder of employer duties and obligations.

With the June 7, 2016, primary right around the corner, California employers need to be prepared for election season.  For your reference, here is a quick summary of some of the major issues California employers may face between now and Election Day.

Voting

Regardless of whether their employees are feeling the Bern or stumping for Trump, California employers must ensure that employees have an opportunity to visit the polls, which are open from 7:00 a.m. until 8:00 p.m.  California Elections Code Section 14000 requires employers to provide employees who do not have sufficient time to vote outside of their regular working hours with up to two hours of paid time off to vote at the beginning or end of their regular shift, depending upon whichever will permit the most time for voting and the least amount of time off the job.  Employers and employees also are permitted to work out a mutually agreeable schedule for Election Day that better suits their needs.

Employees cannot simply skip work to punch those ballots, however.  Instead, employees who believe by the time of the third working day before Election Day that they will need to time off to exercise their civic duty must provide their employer with notice no later than two working days before Election Day.  To ensure that employees are apprised of this right, California Elections Code Section 14001 very patriotically obligates employers to post a notice setting forth the provisions of Section 14000 in a conspicuous place ten days before Election Day.  The notice can be found here.

Political Activity

Beyond pulling the lever in the voting booth, California employers must also allow employees to exercise their fundamental right to engage in political activity without interference.  That means employers cannot restrict their employee’s political activities or affiliations, nor can they force employees to participate in any particular political activity. Cal. Lab. Code §§ 1101 and 1102.  Employers need to keep in mind that political activity means more than just casting a vote.  The meaning of “protected activity” is expansive and encompasses participation in organizations or movements advocating for political or social causes such as civil and equal rights. Gay Law Students Assn. v. Pac. Tel. & Tel. Co., 24 Cal. 3d 458, 488 (1979).  Employers who interfere with an employee’s political activities should be aware that an employee may pursue a cause of action to recover damages sustained as a result of the employer’s interference.  Lockheed Aircraft Corp. v. Superior Court, 28 Cal.2d 481 (1946).

Solicitation of Funds

Private employers also cannot force their employees to donate funds to campaigns.  They may, however, solicit campaign donations from managers, officers, or executives with policymaking authority if they have political action committees. 2 U.S.C § 441(b)(3).  However, even if they want to “make America great again,” employers cannot coerce employees to donate their personal funds for political purposes.  What this means is, under both Federal and California law, employers cannot use threats of discharge, demotion, or any other financial reprisal to pressure employees to donate. 11 CFR § 114.2 (f)(2)(iv); see also Cal. Lab. Code § 1102; Fort v. Civil Service Comm’n of the County of Alameda, 61 Cal. 2d 331, 338 (1964).  Accordingly, private employers soliciting funds must have a political action committee, seek funds only from policymakers, and ensure that contributions are entirely voluntary lest they Cruz (sic) into a potential lawsuit.

Questions

If you have any questions regarding any of your obligations or your employees’ rights to flex their political muscles, please feel free to contact your favorite Seyfarth attorney.

Edited by Chelsea Mesa.