Seyfarth Synopsis: The great California patchwork of minimum wage ordinances might have employers feeling full of matatas, but no worries! Seyfarth is here to explain the circle of life of these laws so that even the slowest hyena could follow.

More Food For The Whole Flock

As of July 1, 2019, many California counties and municipalities have upped the ante with ordinances that increase local minimum wage rates. Some municipalities prescribe different rate increases depending on the number of employees in the herd, while others specify that hotel and government assisted workers receive special treatment. Even the most studious of lions may have trouble mastering the different local herds’ pay, but the chart below is a handy cheat sheet to help guide the way.


Pre-July 1, 2019 Minimum Wage

Post-July 1, 2019 Minimum Wage Hike

Alameda $11 for small employers and $12 for large employers $13.50 for all employers
Berkeley $15 $15.59
City of Los Angeles – for fewer than 26 employees $12 $13.25
City of Los Angeles – for more than 25 employees $13.25 $14.25
City of Los Angeles – hotel workers exclusively $16.10 $16.63
County of Los Angeles Unincorporated – fewer than 26 employees $12 $13.25
County of Los Angeles Unincorporated – for more than 25 employees $13.25 $14.25
Emeryville – fewer than 56 employees $15 $16.30
Emeryville – more than 55 employees $15.69 $16.30
Fremont $12 $13.50
Long Beach $14.64 $14.97
Malibu – fewer than 26 employees $12 $13.25
Malibu – more than 25 employees $13.25 $14.25
Milpitas $13.50 $15
Oakland – hotel workers without benefits exclusively $13.80 $20
Oakland – hotel workers with benefits $13.80 $15
Pasadena – fewer than 26 employees $12 $13.25
Pasadena – more than 25 employees $13.25 $14.25
San Diego* $12 $12 (no change)
San Francisco $15 $15.59
San Francisco – government supported employees exclusively $13.27 $13.79
San Francisco – non-Profit Employers** $15 16.50
San Francisco – for-Profit Employers** $15 $17.66
San Francisco – Public Entities** (If the city appropriates funds for the increase in the budget) $16 $16.50
San Leandro $13 $14
Santa Monica – fewer than 26 employees $12 $13.25
Santa Monica – more than 25 employees $13 $14.25
Santa Monica – hotel workers exclusively $16.10 $16.63

*San Diego did not have a minimum wage increase scheduled for July 1, 2019

**SFO airport tenants, subtenants and their subcontractors, contractors and subcontractors providing services to city and county of San Francisco, and public entities within the city and county who have city contracts must follow San Francisco’s Minimum Compensation Ordinance. The MCO includes 12 paid days off per year (or cash equivalent) and 10 days off per year without pay.

What’s more, as of July 18, 2019, the U.S. House passed a $15 per hour minimum wage, which would raise the federal hourly rate from the current $7.25. However, the bill is unlikely to pass in the current Senate. Either way, keep your ears perked for future news on this development, since it’s important to always look where you’re headed rather than where you were!

Workplace Solutions: For help troubleshooting specific ordinance questions (including navigating the various posting and notification requirements of the specific local ordinances) or help reaching Hakuna Matata, contact your favorite Seyfarth attorney. Or Timon and Pumbaa. Until then, Long Live the King!

Edited by Coby Turner and Elizabeth Levy

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This New Year, Raise Your Glasses And the Minimum Wage

San Diego Voters Enact Paid Sick Leave, Higher Minimum Wage

Seyfarth Synopsis: As the mercury rises, California employers must comply with regulatory requirements to keep their employees cool.  Employers should be aware of Cal/OSHA’s existing requirements for outdoor workplaces and proposed rules which could turn up the heat on indoor employers.

California Keeps It Cool

For many years, Cal/OSHA has distinguished itself from Federal OSHA by, among other things, requiring all California employers with outdoor work areas to take steps to prevent heat illness.  For example, employers with outdoor work areas must train all employees about heat illness protection and keep their employees well hydrated.  Employers must also provide shady areas for five minute cool-down breaks when employees feel the heat.  (These breaks are on the clock and separate from rest breaks employers need to provide under the Labor Code).  Finally, employers must develop and implement written procedures for complying with the heat illness regulatory requirements. The regulation is contained in 8 CCR 3395.

Proposed Rules May Put Indoor Employers in the Hot Seat

Now, Cal/OSHA has a proposed an indoor heat illness standard that’s making its way through the rule-making process. The final draft of these proposed rules would impose a number of requirements when it’s a good day to head to the beach—and indoor temperatures equal or exceed 82 degrees Fahrenheit.

For indoor work areas that can’t beat the heat, employers would need to provide:

  • Cool-down areas that are blocked from direct sunlight and radiant heat sources (e.g. the sun, a fire pit, or an overzealous espresso machine) and that are either open-air or ventilated. Employees would need to have access to cool-down areas at all times and employers would be required to encourage employees to take breaks to chill out.
  • Drinking water.
  • Emergency response procedures.
  • Close observation of employees under certain circumstances.
  • Training on heat illness related topics.
  • A written heat illness prevention plan.

Additional requirements would apply to employers that have employees working under hotter conditions, namely: if employees wear clothes that restrict heat removal (like waterproof or biohazard gear), employees work in or near radiant heat, or the thermostat hits 87 degrees.  In these cases, employers would need to:

  • Keep records of temperatures and evaluate environmental risk factors for heat.
  • Use engineering control measures (e.g. air conditioning) to minimize the risk of heat illness. If the temperature cannot be reduced to 87 degrees F (or 82 degrees F in some cases), employers would need to implement administrative controls and provide personal heat protective equipment.

Workplace Solutions: As summer heats up, employers must comply with existing California heat regulations.  Seyfarth’s Workplace Safety and Health Group can help you check the forecast for future regulations.


Edited by: Elizabeth Levy

Seyfarth Synopsis: While employees often will toot their own horn, employers sometimes may have concerns about their ability to safely perform their job. If this situation rings a bell, it will be music to your ears to hear that it may be possible to request employees to undergo a medical examination to certify their fitness for duty.

Fitness for duty examinations are permitted under both the federal Americans with Disabilities  Act (ADA) and the California Fair Employment and Housing Act (FEHA). However, because employers are generally prohibited from inquiring about employees’ physical and mental conditions, employers must exercise caution and should not march to the beat of a different drum.

What if I don’t think an employee is ready to return from leave?

Under the Family and Medical Leave Act (FMLA), when an employee’s physician certifies that  the employee can return to work from leave, the employer must return the employee to work. However, if the certification is incomplete or insufficient, the employer can give the employee a written notice stating what additional information is necessary.

Alternatively, as discussed by the California Court of Appeal in White v. County of Los Angeles, once the employee has returned to work from FMLA-protected leave, an employer can request an examination consistent with the ADA.

Under California’s FEHA, an employer may require an employee to undergo a medical examination to certify an employee’s fitness for duty upon the employee’s return from a non-FMLA medical leave of absence if there are reasonable safety concerns regarding the employee’s ability to perform the essential job functions. The examination must be job-related and a business necessity under the specific circumstances.

Can I require a fitness for duty examination when there are safety concerns?

An employer may require an employee to submit to a medical examination and obtain a fitness for duty certification if the employer has a reasonable belief based on objective evidence that the employee’s ability to perform essential job functions will be impaired by a medical condition, or that the employee will pose a direct threat due to a medical condition. If a medical examination and fitness for duty certification is sought under those circumstances, the examination must be job-related and consistent with business necessity.

Employers must have a “genuine reason to doubt” an employee’s ability to perform job-related functions. So, when considering a fitness for duty examination, it is instrumental to have evidence to drum up support for your reason to doubt the employee’s fitness. Excessive absenteeism, difficulty performing essential functions of the job, or poor productivity (particularly where outside of the employee’s usual patterns or character) may all be “cymbal-ic” of an employee being “unfit for duty.” These situations are highly fact specific and employers will have to play it by ear to see if a fitness for duty examination is appropriate in a particular circumstance.

What can a fitness for duty examination tell me?

Under California’s Confidentiality of Medical Information Act (CMIA), unless the employee provides written authorization, an employer can only know whether the employee is able to perform the essential functions of the job. In other words, the employer cannot be told the diagnosis or cause of an employee’s inability to perform—it is simply a pass/fail examination. However, if an employee would be able to perform the essential functions of the job with a reasonable accommodation, the employer is entitled to know the medical restrictions of the employee’s fitness for duty, such as lifting or standing restrictions, or needing an alternative schedule. Of course, if there is any doubt as to the accommodations needed, an employer can request that the employee provide additional clarification.

Workplace Solutions: Fitness for duty examinations are a useful instrument for employers, but be wary of playing solo. Your favorite Seyfarth attorney can chime in to make sure you land on the right note.

Edited by Coby Turner and Elizabeth Levy

Seyfarth Summary: Like the singers in “California Dreamin,” many out-of-state employers—on a winter’s day and otherwise—might dream of operating in California. California is an attractive market for out-of-state companies. But employers who hire employees in California or send employees to work there face a unique set of challenges. Below are some key areas of employment law these companies should consider if they want to be “safe and warm in L.A.”


Access to the California market—the sixth largest economy in the world—is irresistible for many companies. But doing business there entails a unique set of risks. California confronts employers with an often hostile combination of regulatory oversight, complex employment laws (creating draconian penalties for failure to comply), and employee-friendly courts and administrative agencies. Before dipping a toe onto California’s shores, out-of-state businesses should understand whether and when California’s peculiar (and often unique) employment laws apply to their employees.

California judicial decisions have made clear that even employers who are primarily based out-of-state and have only a few employees in California must comply with California employment law. In a 2011 decision, Sullivan v. Oracle, the California Supreme Court held that non-California residents working in California for a California-based employer were subject to California’s daily overtime laws when they worked in California for a whole work day. Oracle left employers up in the air as to whether California law would apply in other contexts, such as when non-California residents work partial days in California and such as when other issues other than overtime pay are involved.

In 2018, the Ninth Circuit requested the California Supreme Court to address some of these outstanding questions in cases against United Airlines and Delta Airlines. The Supreme Court has not yet ruled.

Meanwhile, out-of-state employers are well-served by seeking counsel before hiring employees in California or even sending employees to the Golden State to conduct business on a temporary basis. Some of the California peculiarities facing out-of-state employers are:

  • Minimum Wage—As of January 2019, the minimum wage for larger employers (having more than 26 employees) rose to $12. (And California’s minimum wage for all employers will incrementally increase to $15 an hour over the next few years.) Meanwhile, California has no shortage of progressive jurisdictions (safe and warm LA among them) that have their own special minimum-wage laws.
  • Daily Overtime—California non-exempt employees must be paid at one and one-half times the regular rate for all hours worked over eight in a day (and any hours worked on a seventh consecutive workday during a workweek) and must be paid doubletime for all hours worked over twelve in a day (and any hours worked over eight on a seventh consecutive day during a workweek). These rules contrast sharply with federal law, which requires overtime pay only when employees work more than forty hours during a workweek.
  • Itemized Wage Statements—California employers must provide hyper-specific items of information on wage statements. Failure to do so can result in the imposition of hefty penalties. These requirements include, among other things, gross wages earned, total number of hours worked, net wages earned, the period during which the wages were earned, all deductions, and all hourly rates applicable during the pay period.
  • Meal and Rest Periods—Non-exempt employees working in California must be provided certain meal and rest periods (and recovery periods). Moreover, employers must keep accurate records of employee meal periods and pay a penalty when either meal or rest or recovery periods are not provided.
  • Independent Contractors—California is peculiarly if not uniquely hostile to businesses that classify workers as independent contractors instead of employees. Misclassifications can trigger substantial liability for missed meal and rest periods, unpaid overtime and unpaid expenses, and even massive civil penalties, among other consequences.
  • Discrimination and Harassment—California recognizes many “protected characteristics” that do not appear in federal law anti-discrimination laws, characteristics such as sexual orientation and gender identity or expression.
  • Local Ordinances—As noted already (but worth repeating), many California local governments, including the Cities of San Francisco and Los Angeles, boast of their own special laws on subjects such as minimum wage and paid sick leave.

Workplace Solution

While the Oracle case left many unanswered questions, employers are well-served by understanding when they need to apply California law, and how to correctly implement it. Feel free to contact your favorite Seyfarth attorney if you would like to discuss.


Edited By: Elizabeth Levy

Seyfarth Synopsis: The California state assembly is set to vote on Senate Bill 171, a state analogue to the federal EEO-1 report, which would require employers with 100 or more employees to submit annual pay data reports to the Department of Fair Employment and Housing, broken down by gender, race, ethnicity, and job category.

Pay Data Reporting at the State and Federal Level

The California Legislature may be poised to pass a law that would require California employers to submit pay and hours data to the Department of Fair Employment and Housing (“DFEH”).

This information is duplicative of “Component 2” of the federal EEO-1 report. The revised EEO-1 form was an Obama-era change to require employers with 100 or more employees to report W-2 wage information and total hours worked for all employees by race, ethnicity, and sex within 12 proposed pay bands.

When California Senate Bill 171 was first introduced in January 2019, the federal collection of pay and hours worked data was indefinitely stalled after the federal Office of Management and Budget (“OMB”) stayed the implementation of the federal pay data collection portions of the revised EEO-1 Report. That decision prompted the National Women’s Law Center and the Labor Counsel for Latin American Advancement to sue the OMB and the EEOC, and on March 4, 2019, a federal district court in Washington, D.C., issued an order reinstating the EEOC’s collection of pay data as part of the EEO-1 Report.

SB 171 was initially touted as a groundbreaking effort to “ensure that [pay data by gender, race and ethnicity] will continue to be compiled and aggregated in California” despite the OMB’s actions at the federal level. Now that Component 2 of the EEO-1 is moving full-steam ahead, with employers required to file pay and hours-worked data for 2017 and 2018 in September 2019, SB 171 appears to be redundant because it requires that the same data reported to the EEOC also be reported to the DFEH. SB 171 will be independently significant for California employers, however, if federal efforts to forestall Component 2 ever succeed.

What Pay Data Would be Required to be Reported to California?

SB 171 provides that by March 31, 2021 (and by each following March 31st), any private employer with 100 or more employees must file an EEO-1 report and  the pay and hours-worked data to the DFEH. In response to the judicial reinstatement of the expanded federal EEO-1 report, SB 171 was modified to allow employers to submit a copy of their EEO-1, containing the same or substantially similar pay data information required by SB 171.

What’s the Risk?

While the information submitted to the DFEH will duplicate data submitted on the federal EEO-1, there are still some significant things to watch for if SB 171 becomes law. First, while SB 171 would make the information submitted by any particular employer confidential and not subject to disclosure under the California Public Records Act, the DFEH can publish aggregate reports, so long as they are “reasonably calculated to prevent the association of any data with any individual business or person.”

Second, SB 171 would require that the DFEH “make the reports available to the Division of Labor Standards Enforcement upon request.” Given the DLSE’s mandate to enforce California wage-hour laws and regulations (including California’s Equal Pay Act), employers who fail to properly implement pay equity measures and report pay and hours data risk further scrutiny by the DLSE through field audits and investigations.

Third, the DFEH must maintain pay data reports for not less than 10 years—a period even longer than a California employers’ retention obligation.

What Does This Mean for Employers?

Whether it be to fulfill federal or potential state requirements, many California employers will need to collect, aggregate, and report on employee diversity, pay, and hours. The future is clear: pay equity and pay equity reporting are here to stay. To remain ahead of the curve, employers should continue to work to ensure that pay is aligned across employees. If ever there was a time to develop and implement a pay equity strategy, now is it.

Seyfarth Synopsis: In a simpler time, courts reviewing medical cannabis laws issued employer-friendly decisions, generally finding no duty to accommodate medical cannabis even when state laws allowed its use for medical purposes. Now, however, the tide is rapidly turning. Where does California employment law currently stand on cannabis? Below we address burning issues regarding accommodations and drug testing.

What is the Current State of Cannabis in California?

At the federal level, cannabis continues to be a Schedule I controlled substance, meaning that its possession and use are crimes. But California has enacted medical and recreational cannabis laws that eliminate any crimes at the state level. The Compassionate Use Act (“CUA”), enacted in 1996, protects people using medical cannabis from criminal prosecution by the state. In November 2016, California residents voted in favor of recreational use under Proposition 64, which allows adults 21 years and older to possess up to 28.5 grams of cannabis and 8 grams of concentrated cannabis, and to grow up to 6 cannabis plants at home in a locked area not visible from a public place.

Do California Employers Have a Duty to Accommodate Medical Cannabis Use?

Not yet, but continue to tune in. The California Supreme Court’s 2008 opinion in Ross v. RagingWire Telecommunications held that employers need not accommodate an employee’s medicinal cannabis use, irrespective of the CUA. Ross reasoned  that the CUA does not grant cannabis the same status as a legal prescription drug. Because cannabis remains illegal under federal law, it cannot be “completely legalize[d] for medical purposes.”

Though it stalled in committee, a 2018 bill in the California Legislature would have required employers to accommodate employees’ use of medical cannabis use. But since the California Fair Employment and Housing Act does not currently require employers to accommodate illegal drug use, an employer can still lawfully fire an employee for smoking up.

Also, employers must remember the obligation to engage in an interactive process and reasonably accommodate applicants and employees with qualifying disabilities. Thus, for example, if an employee discloses use of medical cannabis to treat depression and a sleep disorder, an employer must discuss potential accommodations for the underlying conditions with the employee. Also pertinent is the California law requiring employers with 25 or more employees to reasonably accommodate alcohol and drug rehabilitation. Thus, even if an employee claims to be a medical cannabis user or even a former recreational cannabis user, employers must tread carefully to avoid getting lost in the weeds.

If Cannabis is Legal for Recreational Use, Can Employers Still Test for It?

Yes. Proposition 64 explicitly does not require employers “to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of marijuana in the workplace,” and it does not limit an employer’s ability to “have policies prohibiting the use of marijuana by employees and prospective employees.” For the time being, employers remain within their rights to maintain drug-free-workplaces and can test for use of cannabis.

What Other Drug Tests are Permissible in California?

Pre-employment and reasonable suspicion drug tests are generally permitted in California. As we’ve previously noted, unless the employee works in a safety- or security-sensitive position, suspicionless drug tests (e.g., random, pre-placement or pre-assignment tests) are very risky.

To further complicate matters for California employers, San Francisco has a drug-testing ordinance that generally prohibits random or company-wide testing of current employees’ blood or urine. And if a San Francisco employer intends to require urine or blood testing on the basis of a reasonable suspicion of drug use, the employer must have reasonable grounds to believe that an employee’s faculties are impaired on the job and that the employee is in a position where the impairment presents a clear and present danger to the physical safety of the employee or others.

Are Employees Entitled to Notice Before a Drug Test?

An employer that plans to drug test should distribute a clear drug policy ahead of time. The policy should explicitly prohibit all illegal drug use rather than drug use that occurs while working or on the employer’s premises. This is especially important because drug testing programs often cannot tell the employer when the employee actually ingested the drug. The policy also should notify employees of the circumstances in which a drug test would occur, the consequences for a positive test result or a refusal to cooperate, and resources available for employees who would like to seek treatment for substance abuse issues. In addition, applicants and employees must sign a specific form that authorizes the laboratory to release the drug test results to the employer and its Medical Review Officer.

Can Employers Test for Other Drugs, But Exclude Cannabis?

Unless an employer is subject to a federal or state law or regulation that requires it to test for cannabis (e.g., Department of Transportation regulations), employers can choose to eliminate cannabis from their drug testing program. To minimize negligent hiring, retention, or supervision claims, however, employers should first consider the risks of not testing and the nature of the position at issue to ensure the protection of employees and the public.

Takeaways for Employers

While California employers currently need not permit employee cannabis use (because it is illegal under federal law), employers should review their handbooks and written policies to ensure that their drug policies are broad enough to prohibit it. Employers should also communicate their anti-drug and drug testing policies clearly to employees to weed out any confusion caused by the legalization of cannabis in California.

Seyfarth’s Workplace Solutions Group is ready and willing to help to make sure your company is in compliance.

Edited By: Elizabeth Levy

Seyfarth Synopsis: Sometimes even the best employees can have their woebegone days. How is an employer to distinguish between (1) a mental disability that may require accommodation and (2) a case of someone “having the Mondays”? In honor of Mental Health Awareness Month, we offer some therapeutic antidotes for your queries on tackling mental illnesses at work.

In the television show Unbreakable Kimmy Schmidt, Kimmy’s therapist, Andrea (played by Tina Fey) has two personalities: Day Andrea, who solves problems calmly and hands out helpful advice; and Night Andrea, who is sloppy, irresponsible, and has unexpected (often drunken) outbursts.

While you may not have encountered “Night Andrea” at work, you may have seen other manifestations of mental illnesses in the workplace. Unlike physical disabilities, mental disabilities are often invisible, and surrounded by a maze of complicated privacy laws, making them harder to detect and address. To help ameliorate your concerns, we prescribe the following considerations for your next mental health quagmire at work.

California Psych 101: What Is A Mental Disability?

The first step in getting help is knowing with what kind of beast you’re dealing. As Dr. Phil wisely says, “don’t wait until you’re in a crisis to come up with a crisis plan.” California requires employers of five or more employees to provide a reasonable accommodation for individuals with physical and mental disabilities unless doing so would cause an undue hardship. California defines mental disabilities—far more broadly than under federal law—as including mental and psychological disorders or conditions, emotional illnesses, and even intellectual learning disabilities. So if your employee has dyslexia, ADHD, depression, or schizophrenia, you may have a duty to reasonably accommodate them.

Can I Ask My Employee If He Has The Blues?

While it may be tempting to “play therapist” and ask whether your employee suffers from a type of mental or emotional condition, you need to proceed with caution. An Equal Employment and Opportunity Commission (“EEOC”) guide provides that employees are entitled to keep their mental conditions private. In fact, employers can ask questions about mental health in only four situations:

          i. When an employee asks for a reasonable accommodation;

          ii. When you have made a job offer and are asking all applicants for the same medical information;

         iii. When you are engaging in affirmative action for people with disabilities (like tracking the disability status of an applicant pool in order to assess recruitment and hiring efforts); or,

         iv. When there is objective evidence that an employee may be unable to do the employee’s job or that the employee may pose a safety risk because of a health condition.

Employers also need to know that California law protects employees from discrimination based on perceived disability. So even if your employee doesn’t tell you about a disability, but you think the employee had a depressive episode, and you then take an adverse action against the employee (like discipline or termination), the employee may claim discrimination on the basis of a perceived disability. Moreover, California law requires you to initiate the interactive process when you are aware of the possible need for an accommodation.

What If My Employee Threatens To Put Me On Her Hit List?

Several courts have found that an employer may discharge, or refuse to hire, someone who poses an actual threat of harm to others due to a mental disability. The reasoning is that the employee cannot perform the employee’s essential duties without endangering the health or safety of others even with a reasonable accommodation. So if your employee yells, swears, or threatens to put her coworkers on her “Kill Bill” list (as this employee with bipolar disorder actually did), you may have an excellent basis to let the employee go.

What To Do If Your Employee Seems Unfit For The Gig

If an employee’s mental condition is one that appears to reasonably impair the employee’s ability to perform the job, you may consider requiring a fitness-for-duty examination for the employee, provided the exam is job-related and consistent with business necessity. A fitness for duty evaluation may prove a useful tool in the following cases:

  • When, after conferring with your employee, the employee does not admit to, or otherwise realize, the employee has a problem; or
  • When you believe that an employee’s psychological condition makes the employee a danger to himself or herself, other coworkers, or other members of the public with whom the employee interacts as part of the job.

Workplace Solutions

It is never too early to come up with a targeted plan to address employee mental health concerns at the workplace. Here are some suggestions.

  • If an employee discloses a mental health illness to you, or you learn about the mental condition, keep that knowledge, and any medical information you receive, confidential. [Note: if you are not a member of your human resource group, you should share the information with a member of that department.]
  • Consider setting up an Employee Assistance Program or a crisis intervention system. If you have one, refer an employee in distress to the program so that the employee can seek help.
  • Develop a written policy in your handbook that includes accommodations for mental disabilities.
  • Be mindful of possible accommodations for employees with mental illnesses, such as offering more flexible working arrangements and schedules, and leave for therapy and other treatment.

If you have any questions about how to handle a particularly challenging situation with employee mental health, don’t hesitate to reach out to a member of our California Counseling Group.

Edited By: Coby Turner

Seyfarth Synopsis: Although the concept of working remotely may seem simple, employers must consider several issues before allowing employees to work from home.


There’s No Place Like Home

Today’s technology allows many employees to work nearly as well in their pajamas at home or in their jeans at a local coffee shop as they can dressed up at the office. While this arrangement may not be viable for every employer, allowing employees to work from home or other locations of their choosing has enabled employers to reduce overhead expenses while boosting employee morale. But before employers allow their employees to be homebodies, there are several issues to consider.

Does A Trip To The Fridge And Back Count As A Break?

Tracking non-exempt employees’ time on the clock becomes increasingly more difficult if they work remotely, since their supervisors obviously cannot consistently see when work is being performed. Nonetheless, California law requires employers to maintain records of non-exempt employees’ work hours, and pay them overtime premium wages for any hours worked over eight in one day, over forty in one week, or any hours on a seventh consecutive day during a workweek. Under Labor Code section 226.7, employers must also pay an extra hour of pay each day in which they fail to provide a meal or rest period. This law applies regardless of where the employee works.

Thankfully, there are some software programs and apps available that ease the burden of keeping track of remote non-exempt employees and their time worked. Nonetheless, an employer must still encourage employees to take their meal and rest breaks in accordance with the company’s legally compliant meal and rest break policy that applies to all non-exempt workers.

Are My Bunny Slippers A Reimbursable Business Expense?

Labor Code section 2802 requires employers to reimburse employees for expenses “necessarily incurred” in their employment. An employer generally complies with section 2802 by either reimbursing a given expense or providing the employee with the equipment necessary to ensure that the employee does not incur the expense in the first place. For instance, employees who use a personal cell phone to make work-related calls should be reimbursed for at least a percentage of their cell phone bill, though it can be tricky to determine what percentage of calls were necessary for work and what percentage were personal calls unrelated to work.

When it comes to remote workers, the most important inquiry is whether the expense was necessary for the work. The best way to avoid any ambiguity is to either (1) provide employees with all equipment the employer deems necessary or (2) have a policy that outlines which expenses are reimbursable and to what extent, and makes clear that if the employee incurs necessary business expenses beyond those anticipated, those expenses should be submitted in accordance with the company’s business expense reimbursement policy. (You may choose to reimburse for bunny slippers if you wish.)

What Happens If I Step On a Lego?

Accidents happen while working, and they can just as easily occur at a home office or remote working location. According to the Occupational Safety and Health Administration (OSHA), small business owners are responsible for providing employees with safe work environments. And while OSHA generally doesn’t inspect home offices as it does with traditional workplaces, employers must still track work-related injuries that occur with remote workers. Additionally, any California business with one or more employees must carry worker’s compensation insurance. There is no exception to this requirement for employees who work remotely.

Labor Code section 3600 states that an employer is liable “for any injury sustained by his or her employees arising out of and in the course of the employment.” Liability for an injury sustained by an employee while working at home is no different than if the employee had sustained the injury while working in the corporate office. And in one case, a court found that an employee was entitled to workers’ compensation benefits when he sustained injuries trimming his hedges while on call.

Employers should be cognizant of this potential risk and have policies in place that ensure, to the extent possible, that an employee’s workspace is free from potential hazards, including loose Legos and hedge trimmers.

What Is An Employer To Do?

When allowing employees to work from home, employers should have a comprehensive telecommuting policy. To head off frequently asked questions, the telecommuting policy should cover the following areas:

  • The policy should provide that employees are entitled and expected to take their uninterrupted, off-duty meal and rest breaks, and require employees to certify that (1) their time records are correct and (2) their breaks were provided in accordance with company policy. The policy should also require employees to seek and obtain management’s approval before working overtime, and make clear that failing to do so could result in disciplinary action.
  • Business Expenses. The policy should clearly delineate which expenses are reimbursable, but also provide an avenue for employees to submit reimbursement requests for additional necessary business expenses, even if those expenses are not delineated in the policy. If an employee is using a personal device for business activities, employers should consider how much the employee will be using that device for work purposes, and reimburse the employee accordingly.
  • Office Safety. To help prevent injuries, employers should require employees to keep their remote work areas free from obstructions and hazards. Employers may also consider asking their employees to submit pictures of their remote work spaces, offering ergonomic consultations (at the employer’s expense) for employees’ home offices, or sending out a company representative to ensure the employee is working in a safe environment.

Workplace Solutions. Because the laws affecting telecommuting are constantly evolving, employers should be deliberate when enacting a telecommuting policy and continually revisit it to ensure it is legally compliant. We will continue to monitor developments in this area and update our readers. In the meantime, if you have any questions, please contact your favorite Seyfarth attorney.

Edited by Coby Turner

Seyfarth Synopsis: Employers increasingly find themselves in the difficult position of deciding whether to continue garnishing an employee’s wages pursuant to a garnishment order when the employee files for bankruptcy. On one hand, the employer risks penalties for failing to withhold wages; on the other hand, the employer risks sanctions for violating the automatic stay generated by a bankruptcy filing. Below we discuss this dilemma and employers’ options.

In 1996, the iconic MC Hammer filed for bankruptcy, claiming over $15 million in debt even though he was reportedly worth more than twice that only a few years earlier. As American household debt continues to climb, many less talented individuals may be following the Hammer’s funky footsteps and seeking bankruptcy relief. If these people are also employees subject to garnishment orders, employers may face the dilemma of (a) withholding wages in violation of the automatic stay in bankruptcy or (b) risking penalties for failing to withhold wages.

Making ‘Em Sweat

In California, once an employer is served with an earnings withholding order (an “EWO”), an employer must withhold the amounts required by the EWO from all earnings of the employee during any pay period within the withholding period. California law also sets forth a priority scheme for withholding in the event an employer has been served with multiple EWOs. Wages withheld should be paid to the levying officer, for ultimate payment to the creditor, on a monthly basis not later than the 15th day of each month. The employer’s obligation to withhold continues until the employer is served with a notice of termination of the EWO.

Employers should know that service of an EWO creates a lien upon the earnings of the employee and also upon the employer’s assets up to the amount required to be withheld. If an employer fails to withhold or pay amounts subject to an EWO, the creditor is entitled to bring a civil action against the employer to recover those amounts: failing to withhold wages properly may make the employer liable for the entire amount the employee owes to the creditor. Additionally, the employer potentially can be hit with contempt sanctions and—for an EWO concerning child support—civil penalties.

Stop! Hammer Time

Notwithstanding California law, an employee’s bankruptcy filing triggers an automatic stay that stops creditors’ collection efforts and enforcement actions (subject to some exceptions). That means an employer faces the daunting task of determining whether to continue to comply with California law on garnishments or whether to halt withholding in compliance with the automatic bankruptcy stay.

In the Ninth Circuit (which includes California), a garnishing creditor has an affirmative duty to stop garnishment proceedings when notified of the automatic stay. But not all garnishment actions are subject to the automatic stay. Some garnishments—such as collecting on certain domestic support obligations of the employee or on certain taxes owed by the employee—are 2 Legit 2 Quit and are not stayed by the employee’s bankruptcy. In those circumstances, if the employer stops withholding, the employee’s creditor may seek to hold the employer liable for failing to comply with the garnishment order. Meanwhile, the employee’s bankruptcy counsel may threaten the employer with possible sanctions for allegedly violating the automatic stay.

I Told You Homeboy

Whether to stop withholding wages is typically not a clear‑cut decision and requires careful analysis of federal bankruptcy and state garnishment laws. The employer cannot simply cease withholding funds upon learning of the employee’s bankruptcy filing. The proper course of action may also be informed by the amount of potential penalties and liabilities that may result from noncompliance with either the automatic stay or the relevant EWO.

Rather than just throw up its hands in despair and Pray, at an absolute minimum, the employer should:

  • Provide written notice to the garnishing creditor of the employee’s bankruptcy filing and notify the creditor of its affirmative duty to stop the garnishment.
  • Send a copy of the written notice to the employee and employee’s bankruptcy counsel to encourage their intervention.
  • Notify both the creditor and the employee of any funds that have been garnished but not yet turned over to the creditor. The creditor and employee likely will assert competing ownership interests in those withheld funds, and the employer should avoid favoring one or the other.

Remember, an employer’s clear communication with all parties, and also perhaps a request to the bankruptcy court for guidance, is paramount to safeguarding the employer from liability.

Workplace Solutions: Given the overlap of federal and California law and the risks facing employers, the next time an employee files for bankruptcy and then points to his paycheck and starts to sing You Can’t Touch This (oh-oh oh oh oh-oh-oh), follow MC Hammer’s sage advice: “Stop! [Lawyer] time!” Immediately contact your favorite Seyfarth attorney or the authors of this post for advice on how best to proceed.

Edited by Coby Turner

Seyfarth Synopsis: Everything was smooth sailing with your latest greatest arbitration agreement, but then an employee refused to get on board. What do you do now? Keep reading for a primer on navigating some murky waters.

Even in a post-Epic Systems world, where more and more employers are rolling out mandatory arbitration agreements with class-action waivers, California has discouraged such agreements. This tension raises the question: how close to the wind can an employer sail to impose arbitration on employees who refuse to sign arbitration agreements?

What Are My Options And What Are The Potential Risks?

Option #1—Man Overboard: Terminate the employee.

Dismissing an employee for refusing to sign an arbitration agreement has been challenged as a wrongful termination in violation of public policy, but years ago in Lagatree v. Luce, Forward, Hamilton & Scripps, the Court of Appeal decided that because public policy favors arbitration, an employer can lawfully dismiss an employee for refusing to sign an arbitration agreement presented as a condition of employment. The issue may acquire practical significance, however, if many employees refuse to sign the agreement. Some employers will not want to follow through on dismissing each such employee, and may generate discrimination claims if the employer selectively determines which non-signing employees to dismiss. (A potential way to finesse such a potential dilemma is to issue a written arbitration program that will become effective without any signature.) Additional issues may arise if the arbitration agreement implicates pending litigation, which arguably might enable a protesting employee to argue that the new employment practice is retaliatory.

Option #2—Sink or Swim: Explain to the employee that the choice is hers and educate the employee on the benefits of arbitration, and then live with the employee’s choice. The object is to obtain a truly voluntary arbitration agreement, but the task is difficult in that California courts are prone to view employer comments as inherently coercive. The voluntary nature of the agreement could be further demonstrated, however, by offering some extra payment or benefit to those employees who do sign the arbitration agreement.

With this option, the employee could still refuse to sign, leaving the employer with Option #1 (terminate the employee) and Option #3 (do nothing).

Option #3—Keep Eyes on the Horizon: Do nothing.

If the arbitration agreement requires an employee signature, then the employer cannot enforce the agreement against an employee who declines to sign, even though the employer can enforce the arbitration agreement against those who do sign.

As noted, some employers finesse this issue by presenting arbitration programs as a condition of employment, which contemplates no employee signature to obtain proof of consent. Rather, the employer proves consent by proving distribution of the arbitration program, with a notice that employees will accept the arbitration agreement through continued employment. These agreements are generally enforceable as to at-will employees, as long as they are not unreasonably one-sided. A further measure sometimes used to fortify proof of consent is an opt-out provision—permitting employees who don’t like arbitration to affirmatively remove themselves from the obligation to arbitrate by giving the employer written notice within a specified number of days following the day they receive notice of the arbitration program.

Workplace Solutions: Since California runs a tight ship when it comes to evaluating arbitration agreements, arbitration agreements must be in shipshape. While it is not a purely legal consideration, employers should consider how an arbitration program could make waves in the workplace by undermining employee morale.

Because of the lack of legal clarity, the best approach is to not terminate an employee who refuses to sign an arbitration agreement, and to instead consider taking the risk that if a class-action litigation ensues, there may be a few employees whose claims are not subject to arbitration (a risk that might be further reduced if the employer offers some extra payment or benefit). Seyfarth is here to help in the event you are considering rolling out an arbitration agreement, or if you already have and anticipate a storm on the horizon.