EMPLOYMENT AND LABOR LAW: LEGAL UPDATE FOR CALIFORNIA EMPLOYERS
Topics for this Month include:
– Administrative claim waivers
– Compensability of time spent in inspections
– Being married to the boss’s daughter does not protect you
– No safe harbor for PAGA penalties for inaccurate pay stubs
– Update on employment bills sent to Governor Brown’s desk
*** I will be speaking on October 13, 2017 at the Club PIHRA event at Magic Mountain on the topic “Avoiding the Pitfalls of FLSA Misclassification.” It should be a great event – you can sign up on PIHRA’s website! ***
SIGNIFICANT CASE LAW
Employers Can Require Arbitration of Administrative Wage Claims
In Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, the California Supreme Court struck down an arbitration agreement that required employees to waive their right to pursue wage claims with the DLSE (known as a “Berman hearing”) because the agreement did not provide an equally affordable and accessible manner to adjudicate those claims. Since then, employers have generally relegated to the fact that employee can still pursue DLSE claims outside an arbitration agreement.
However, in OTO, LLC v. Kho, the First Appellate District found that One Toyota of Oakland’s (“OTO”) arbitration agreement provided that the employer bore the entire cost of the arbitration, and the arbitration would follow the California Code of Civil Procedure and Evidence Code. With these terms, the arbitration agreement satisfied the California Supreme Court’s affordability and accessibility requirements, and thus the employee had lawfully waived his right to a Berman hearing.
Are Bag Checks Compensable?
In a certified class action, Apple, Inc. is alleged to have not paid retail store employees for time spent standing in line to have their personal items inspected. The Ninth Circuit has asked the California Supreme Court for an advisory opinion as to whether such time is considered to be compensable work time. Stay tuned for the Court’s answer.
You Can Be Fired by Your In-Law
In Nakai v. Friendship House Assoc. of American Indians, Inc., Plaintiff Orlando Nakai was employed by a drug and alcohol rehabilitation facility. Nakai’s wife, who worked for the same facility, reported to the company’s CEO – who happened to be his mother-in-law – that Nakai had a gun and was angry at some of the company’s employees and his wife obtained a restraining order against him. The CEO fired Nakai. He alleged discrimination based on marital status. The First Appellate District upheld the trial court’s granting of summary judgment for the employer. The appellate court explained that while an employer cannot discriminate against someone on the basis of their marital status (e.g., an unwed mother), there is no prohibition against taking an adverse action against someone because they are related to a particular individual. Nakai was not fired because he was married, but rather because he was married to the CEO’s daughter, which is a political issue, not a marital discrimination issue.
The “Knowing and Intentional” Requirement for a Paycheck Stub Violation is Not Required for a PAGA Claim
In Lopez v. Friant & Associates, LLC, the plaintiff filed an action against his employer seeking civil penalties under the Labor Code Private Attorneys General Act (“PAGA”) for failing to provide him and all other similarly situated employees all required information on their itemized wage statements. Lopez accused the company of failing to put the employees’ last four digits of their social security numbers or employee identification numbers on paycheck stubs, which is required under Labor Code §226(a)(7). The trial court granted the employer summary judgment because Lopez failed to show that the error was “knowing and intentional.” However, the First Appellate District reversed. The appellate court noted that the “knowing and intentional” requirements is found in Labor Code §226(e)(1), which is the provision for statutory penalties for failing to provide accurate itemized wage statements. However, PAGA provides for civil penalties for Labor Code violations irrespective of whether there are also statutory penalties available. Labor Code §2699(f). These penalties do not require that the offense was knowing and intentional. Accordingly, the appellate court reversed the summary judgment ruling and sent the case back to the trial court. The court noted, however, that the trial court could take the fact that the error was inadvertent into consideration in determining the amount of the civil penalty.
Are You Using the Correct I-9 Form?
The I-9 Form was revised twice this year. Employers were required to use the most recent version by September 18, 2017. Double check that you are using the correct version (revision date 7/17/17).
Department of Labor Delaying Fiduciary Rule to 2019
The US Department of Labor announced its intention to delay parts of the regulations requiring retirement account advisers to comply with fiduciary obligations to its investors. The DOL believes it will take until mid-2019 to review and make any needed changes by the end of this year, as required by President Trump.
EEO-1 Pay Data Collection on Hold
The Office of Management and Budget (“OMB”) has issued a stay on the EEOC’s new regulations on EEO-1 pay data collection, and intends to review the regulations. The earlier approved EEO-1 form which collects data on race, ethnicity and gender by occupational category remains in effect, and employers should plan to comply with this reporting requirement by March, 2018.
San Francisco Bans Salary History Inquiries
San Francisco’s Board of Supervisors has passed an ordinance to ban employers from inquiring about an applicant’s past salary history, and making hiring and salary decisions based on the applicant’s salary history. The ordinance goes into effect on July 1, 2018.
The deadline for the California Legislature to pass bills this year has come and gone. Governor Brown now has until October 15 to sign the bills into law; otherwise, they die. Here are some of the employment-related bills that have made it to his desk:
- SB 63: Expands the CFRA to employers with 20 or more employees within a 75- mile radius.
- SB 306: Expands Labor Commissioner’s powers to investigate, issue citations, seek injunctive relief, and allow employees to seek injunctive relief for retaliation for engaging in protected activity under the Labor Commissioner’s jurisdiction. The governor signed this bill on October 3.
- AB 168: Prohibits employers from inquiring about salary history during the hiring process.
- AB 450: Prohibit public and private employers from allowing federal immigration authorities onto their non-public worksite without a warrant, and from accessing employment records without a subpoena, unless required by federal law; requires employers to notify current employees within 72 hours of a federal immigration agency inspection of I-9 forms or other employment records (a sample form is to be created by the Labor Commissioner accessible on its website); requires employers to provide a copy of the immigration notices to affected employees and any applicable union representatives; fines of $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation.
- AB 569: Prohibits discrimination against an employee due to the employee’s or employee’s dependent’s reproductive health decisions; employers with employee handbooks must include in the handbook a summary of the employee’s rights and remedies under this law.
- AB 978: Permits employees to request a copy of an employer’s injury prevention program.
- AB 1008: Extends “ban the box” statewide, prohibiting employers with 5 or more employees from asking about applicants’ conviction history until after a conditional offer of employment. Applicants have 5 business days to notify a prospective employer of the intent to respond to a proposed decision to deny employment based on a conviction history, and another 5 business days to submit the evidence.
- AB 1209: Requires, effective July 1, 2019, employers with 500+ employees in California to collect information on gender pay differentials in exempt and board positions, and submit annually to the Secretary of State, who will publish the information on a publicly available website beginning July 1, 2010.
Ones that did not make it include:
- AB 353: Allowing employers to voluntarily choose to preferentially hire veterans without running afoul of FEHA.
- AB 1565: Raising the minimum salary to qualify as an exempt employee to $47,472 or twice the state’s minimum wage rate, whichever is higher.
[This article is for informational purposes only and does not constitute legal advice. Do not act or rely upon any of the resources and information contained herein without seeking appropriate professional assistance.]