EMPLOYMENT AND LABOR LAW: LEGAL UPDATE FOR CALIFORNIA EMPLOYERS
August 02nd, 2018/By Admin/In Blog, SBSBLOG, Uncategorized
Topics for this Month include:
– CA Supreme Court Rejects De Minimis Doctrine
– Rounding Policies
– Unions Can No Longer Require Non-Members to Pay Fees
– Update on CA Employment Law Related Bills
– And more . . .
Federal De Minimis Doctrine Not Recognized in California
In another significant blow to California employers, the California Supreme Court has held that the state’s Labor Code and Wage Orders do not recognize the federal de minimis doctrine, under which employers do not have to pay employees for work-related activities amounting to an insignificant amount of time if it is too burdensome to keep track of that time. In Troester v. Starbucks Corp., the Court held that the IWC Wage Orders require employees to be paid for “all hours” worked, and thus must be paid for work-related activities that take an average of 4 to 10 minutes at the end of a shift, after an employee has clocked out. However, the Court limited its ruling to the facts of this particular case. It did not rule out the possibility of applying the de minimis doctrine when the time worked is so small or irregular that it is unreasonable to expect the time to be recorded.
Troester was a shift supervisor, who performed store closing tasks after clocking out, such as transmitting data to the corporate office, activating the alarm, closing and locking the door, and walking co-workers to their cars (required by policy). Over his 17 months of employment, this additional time added up to approximately 12 hours and 50 minutes, or $102.67 in pay. The California Supreme Court recognized that federal and state courts, and even the DLSE, have applied the federal de minimis doctrine; however, California’s wage laws are more protective for employees than federal law. Thus, Troester was entitled to compensation for this time.
The Court noted, however, that the de minimis doctrine has been applied to a variety of scenarios, including incidental time related to noncompensable commute time, irregular or rarely occurring activities, and activities involving less than one minute of time. The Court refused to provide guidance on whether California would recognize the de minimis rule under any of these circumstances. Rather, the Court concluded that “[a]n employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine.”
SCOTUS Reigns in Labor Unions
In Janus v. American Federation, the United States Supreme Court overturned long-standing precedent, and held that labor unions cannot require non-members to pay any union fees, even though the labor union represents an entire bargaining unit, regardless of whether the employees are paying members.
Neutral Rounding is Permissible Under California Law
In AHMC Healthcare, Inc. v. Superior Court, the employer’s timekeeping system automatically rounded employees’ hours up or down to the nearest quarter hour, and employees were paid based on the rounded amount rather than on the exact start and stop times. For example, if an employee clocks in between 6:53 and 7:07, he or she is paid as if he or she had clocked in at 7:00; if an employee clocks in from 7:23 to 7:37, he or she is paid as if he or she had clocked in at 7:30. In addition, meal breaks that last between 23 and 37 minutes are rounded to 30 minutes. Following federal regulations, which permit rounding, the Court found that the company’s rounding policy was neutral on its face and in practice (i.e., employees were both benefitted and harmed by the policy depending on when the employee clocked in or out), as only a minority of employees lost compensation and the majority gained compensation or broke even. There is no requirement that every employee gain or break even every pay period, as fluctuations under a neutral policy are expected. The Court held that a rounding system is fair and neutral and does not systematically undercompensate employees where it results in a net surplus of compensated hours and a net economic benefit to employees viewed as a whole.
Employer Not Liable for Employee’s Use of Personal Vehicle When Not Being Used for Work
Under the “going and coming” rule, employers generally cannot be held vicariously liable for an employee involved in a vehicle accident during the employee’s normal commute time, unless required by the employer or otherwise provides a benefit to the employer. In Newland v. County of Los Angeles, the plaintiff regularly used his personal vehicle for work. However, on the day the plaintiff was in a vehicle accident, the plaintiff was not carrying out business using his vehicle – it was part of his normal commute. The Second Appellate District held the County could not be held liable for injuries to a third party because even though the employee regularly uses his vehicle for work, at that particular time he was not engaged in any job duties.
Be Sure All Versions of Employee Handbooks and Policies are Updated
This case is a good reminder that when updating an employee handbook or policy, ensure that any translations are also updated. In Juarez v. Wash Depot Holdings, Inc., the company’s employee handbook contained an arbitration policy. The English version of the handbook had been updated to allow the PAGA waiver to be severed from the policy. However, the Spanish version was not updated, and required PAGA claims to be arbitrated, which is not permitted. The plaintiff had received both versions of the handbook. Because contracts are construed against the drafter (in this case, the employer), the Second Appellate District upheld the denial of the employer’s motion to compel arbitration because the Spanish version contained an unenforceable provision that could not be severed.
The California Legislature has been on summer recess this last month, but here is a recap of where we stand on various employment-related bills:
- AB 1867: Requires employers with 50+ employees to retain records of sexual harassment complaints for five years after the last day of employment of the accused or accuser, whichever is later. In committee.
- AB 1870: Expands time to file DFEH complaint from one to three years. In committee.
- AB 2282: Amends Labor Code §432.3 (salary inquiry prohibitions) and §197.5 to further define terms and permit employers to consider current employee’s salary in making compensation decision based on legitimate business reasons. Enacted July 18, 2018.
- AB 3080: Precludes employers from retaliating against employees for refusing to sign an arbitration agreement. In committee.
- AB 3081: Extends protections to employees who are victims of sexual harassment, or take time off to assist a family member who is a victim of domestic violence, sexual assault, sexual harassment or stalking; requires employers with 25+ employees to train all employees on harassment; increases time to file a complaint to three years. In committee.
- AB 3109: Voiding settlement agreements prohibiting employees from testifying about criminal conduct or sexual harassment. Pending before full Senate vote.
- SB 820: Prohibits confidentiality provision in settlement agreement for claims of sexual harassment filed in a civil or administrative action. In committee.
- SB 826: Requires public companies with their headquarters in California to have at least one female on their Board of Directors by December 31, 2019 and two females (or three if there are 6 or more authorized directors) by the end of 2021. In committee.
- SB 937: Increases requirements for lactation accommodation. In committee.
- SB 1038: Makes employees who engaged in harassment jointly and severally liable for subsequent retaliatory acts in violation of the FEHA. In committee.
- SB 1284: Requires California-incorporated employers with 100+ employees to report pay data to the DIR beginning September 2019. In committee.
- SB 1300: Makes several changes to the FEHA such as increasing training, making “failure to prevent” a standalone claim, prohibiting requiring an employee to release FEHA claims to receive a bonus or raise, prohibiting non-disparagement clauses. In committee.
- SB 1343: Expands mandatory sexual harassment training to all employees for employers with 5 or more employees. In committee.
- SB 1412: Clarifies the “ban the box” law. In committee.
NLRB Issues Guidance on Employee Handbook Policies
NLRB’s General Counsel issued guidance to its regional offices that most employment policies generally are lawful. Ones that will continue to be targets for the NLRB are policies that prohibit employees from talking about their wages, benefits or working conditions, and rules restricting employees from joining outside organizations or voting on issues that may affect their employer. The NLRB also may review on a case-by-case basis certain general policies that could restrict employees’ ability to discuss their wages, benefits or working conditions, such as regulating the use of the employer’s name, broad confidentiality restrictions, and policies against disparaging an employer.
FEHA’s National Origin Discrimination Regulations Took Effect July 1, 2018
There are new regulations promulgated by the Fair Employment and Housing Council regarding national origin discrimination that went into effect on July 1. The regulations address English-only requirements, height and/or weight requirements, recruitment and job placement based on national origin, and limitations on immigration inquiries. Employers should review these regulations to ensure their policies and practices comply with the new requirements.
[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.]