EMPLOYMENT AND LABOR LAW: LEGAL UPDATE FOR CALIFORNIA EMPLOYERS
July 15th, 2017/By Admin/In Blog, SBSBLOG
Topics for this Month include:
– ERISA exemption for church-affiliated hospitals
– Exemption salary requirement cannot include nonmonetary benefits
– FLSA Anti-Retaliation Extended to Attorneys
– Federal agencies flipping positions on wage regulations
– Update on California employment bills that still survive
U.S. Supreme Court Extends ERISA Religious Exemption to Church-Affiliated Hospitals
On June 5, 2017, the U.S. Supreme Court unanimously held that the “church-plan” exemption in ERISA includes not only churches themselves, but also church-affiliated organizations, such as hospitals.
Non-Monetary Benefits Cannot be Used to Meet Exemption Salary Threshold
In Kao v. Joy Holiday, a foreign national who came to California to work as an office manager for a tour company in exchange for a salary, housing and meals. In addition to finding that Kao was an employee, and not a “student” or “non-employee trainee,” the First Appellate District held that the value of Kao’s nonmonetary benefits (rent, vehicle use, cell phone and meals) could not be used to calculate the minimum salary threshold for an administrative exempt employee. Because Kao’s salary itself did not meet the minimum salary requirement, he could not be considered exempt.
Even Lawyers Can Be Liable for Retaliation Under the FLSA
In Arias v. Raimondo, Plaintiff Arias was an undocumented worker. After filing a wage and hour lawsuit against his employer, the employer’s attorney set in motion a plan for U.S. Immigration and Customs Enforcement to take Arias into custody during a planned deposition, have him deported, and prevent his attorney from representing him. Arias filed a retaliation lawsuit.
The FLSA’s anti-retaliation provision prohibits “any person” from discriminating against an employee complaining of an FLSA violation. The term “person” is defined in the law as including a “legal representative.” The Ninth Circuit held that the FLSA’s anti-retaliation provision is intended to extend beyond just the employer, to “any person” who tries to stand in the way of someone exercising their rights under the FLSA. Accordingly, Arias could pursue his retaliation claim against the employer’s attorney.
The Sticky Administrative Exemption
In McKeen-Chaplin v. Provident Savings Bank, FSB, the Ninth Circuit held that mortgage underwriters did not meet the duties test of the FLSA administrative exemption because their “primary duty” was not related to the bank’s management or general business operations. Other circuits have held otherwise, finding that the underwriters’ function is ancillary to the primary business of the bank, but the Ninth Circuit found otherwise: “[W]here a bank sells mortgage loans and resells the funded loans on the secondary market as a primary font of business, mortgage underwriters who implement guidelines designed by corporate management, and who must ask permission when deviating from protocol, are most accurately considered employees responsible for production, not administrators who manage, guide, and administer the business.”
LEGISLATIVE/REGULATORY UPDATE
Labor Commissioner Issues Victims of Domestic Violence Notice for New Hires
The Labor Commissioner has posted its sample notice of rights for victims of domestic violence, sexual assault, and stalking. Employers are required to provide this notice to all new hires, and anyone else who asks for a copy of the notice. A copy of the notice can be found here: http://www.dir.ca.gov/dlse/Victims_of_Domestic_Violence_Leave_Notice.pdf.
DOL Withdraws Joint Employer and Classification Guidance
The US Department of Labor has withdrawn two administrative interpretation letters. AI 2015-1 addressed the classification of individuals as independent contractors versus employees. AI No. 2016-01 had set forth new, more expansive, standards for determining “horizontal” and “vertical” joint employment under the FLSA and the Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”). Note, however, that the NLRB’s position on joint employment remains intact.
DOL Seeks Comments on Rescinding Its “Persuader Rule” and Overtime Rule
The US Department of Labor is seeking feedback from the public on whether to rescind the currently enjoined rule requiring employers to disclose labor-management consultants and attorneys they use during union organizing campaigns to “persuade” employees. Information on how to provide your input can be found here: https://www.dol.gov/newsroom/releases/olms/olms20170608.
During budget hearings, DOL Secretary Alexander Acosta also testified that the agency will be reinstating the tradition of issuing wage and hour opinion letters, and will be seeking public comment on the agency’s enjoined overtime rule. The government has dropped its defense of the injunction.
DOJ Has Reversed Position on Employment Class Action Waivers
In one of the three cases currently pending before the U.S. Supreme Court challenging class action waivers in employment arbitration agreements, the Department of Justice has filed an amicus brief supporting the enforceability of the waivers. The government previously supported the NLRB’s position that such waivers violate an employee’s right to engage in concerted activity under the National Labor Relations Act. While far from determinative, this is further evidence that SCOTUS may uphold the waivers.
Here is a status update on legislative bills to keep an eye on:
- SB 63: Expands the CFRA to employers with 20 or more employees within a 75- mile radius. This bill passed the Senate and is in committee in the Assembly.
- SB 524: Gives employers a “good faith defense” for relying on written advice received from or published by the Labor Commissioner. Died in committee.
- AB 5 (Opportunity to Work Act): Requires employers with 10 or more employees to offer additional hours of work to an existing non-exempt employee before hiring another employee, unless it would require the employer to pay overtime. Died in committee.
- AB 168: Prohibits employers from inquiring about salary history during the hiring process. This bill passed the Assembly, and is in committee in the Senate.
- AB 281, 1429, 1430: Amends PAGA to extend the time to cure certain Labor Code violations from 33 to 65 days; caps penalties at $10,000 per employee; requires the LWDA to investigate all alleged violations. All three bills died in committee.
- AB 353: Allows employers to voluntarily choose to preferentially hire veterans without running afoul of FEHA. This bill passed the Assembly unanimously, and is now in committee in the Senate.
- AB 442: Gives “small businesses” and “microbusinesses” 30 days to cure non-serious OSHA violations before commencement of an enforcement action. Died in committee.
- AB 450: This bill has been amended to prohibit 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 employees within 24 hours of a federal immigration agency inspection of I-9 forms or other employment records; notify the Labor Commissioner of a federal immigration enforcement action within 24 hours (or, if the employer is not given notice of the enforcement action, then employer must immediately inform the Labor Commissioner and employees’ representatives); requires employers to provide a copy of the immigration notices to affected employees and their representatives; requires employers to notify the Labor Commissioner prior to conducting an I-9 self-audit or check a current employee’s work authorization documents unless otherwise required by federal law; fines of $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation. This bill passed the Assembly, and is pending in committee in the Senate.
- AB 569: Prohibits discrimination against an employee due to the employee’s or employee’s dependent’s reproductive health decisions; narrows the “ministerial” exception. This bill passed the Assembly, and is pending in committee in the Senate.
- AB 978: Permits employees to request a copy of an employer’s injury prevention program. This bill passed the Assembly, and is pending in committee in the Senate.
- AB 1008: Extends “ban the box” statewide, prohibiting employers from asking about applicants’ criminal convictions until after a conditional offer of employment. This bill passed the Assembly, and is pending in committee in the Senate.
- AB 1173: Establishes an overtime exemption for employee-selected holiday season flexible work schedules, allowing employees to work up to 10 hours without overtime pay within a 40-hour workweek. Died in committee.
- AB 1209: Amended by Senate committee to require, effective July 1, 2019, employers with 500+ employees in California (instead of 250+ total) 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. The bill is still pending in committee, as amended.
- AB 1565: Raises the minimum salary to qualify as an exempt employee to $47,472 or twice the state’s minimum wage rate, whichever is higher. This bill passed the Assembly, and now is pending in committee in the Senate (hearing scheduled for July 10 was postponed).
[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.]
