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August 10th, 2016/By Admin/In Blog, Employment and Labor Law

The following legal update for California employers is brought to you by Firm Partner Sherry B. Shavit.  If you have any questions or comments about the information presented, please contact Ms. Shavit direct at telephone number (818) 205-9955; or via email to sshavit@tharpe-howell.com.


Time to Update Your Posters (Again)

The Department of Labor recently announced required changes to the Federal Minimum Wage and Federal Employee Polygraph Protection Act posters effective August 1, 2016.  The revised Federal Minimum Wage poster provides new information on the consequences of misclassifying employees as independent contractors and nursing mother rights; updated information on DOL enforcement; and revised information on tip credits.  The FEPPA poster changes the DOL contact information and removes the penalty amount for violation of the law.

Deadline to Comment on EEOC’s Revised Proposed Regulations on Reporting Pay Data [8/15/2016]

On the first go around, the EEOC held a public hearing and received 322 comments on their proposed regulations to expand employer obligations to report pay data to the agency.  In response, the EEOC made some revisions to their proposed regulations.  The EEOC now proposes that employers with 100 or more employees will be required to submit pay data based on reported annual W-2 income within 12 pay bands.  Instead of having to separately calculate income from October 1 to September 30, employers now can use the calendar year income reported on the W-2.  The deadline to submit the survey also has been moved from September 30, 2017 to March 31, 2018 to coincide with the W-2 reporting obligations.  Employers also will be required to report the total number of hours worked for non-exempt employees; for exempt employees, either that actual number of hours can be reported, or a default of 40 hours per week for full-time and 20 hours per week for part-time exempt employees.

Although the revised proposed rules somewhat reduce the burden on employers, for some companies, the cost and burden of gathering the pay data and worked hours information will still be significant.  For further details, and to submit comments, go to https://www.federalregister.gov/articles/2016/07/14/2016-16692/agency-information-collection-activities-notice-of-submission-for-omb-review-final-comment-request.

Only Wage Statements for Non-Exempt Employees Must Track Hours

On July 22, 2016, Governor Brown approved AB 2535, which will amend Labor Code §226 to clarify that the itemized wage statement requirement of listing total hours worked only applies to non-exempt employees.


Clarify Those Arbitration Agreements!

Courts have been all over the map on whether a court or an arbitrator is responsible for determining if an arbitration agreement that is silent as to class actions either permits or prohibits classwide arbitrations.  On July 28, 2016, the California Supreme Court weighed in.  In Sandquist v. Lebo Automotive, Inc., the Court ruled that the answer to this question depends on the arbitration agreement itself, and whether the agreement gives the power to answer this question to the court or to the arbitrator.

In this case, the agreement had a general provision that any disputes between the employee and employer are to be resolved in arbitration.  Because the agreement did not specify that the court retains the power to answer the question, and because the agreement was drafted by the employer and therefore any ambiguities in the agreement are construed against the employer, the court found that the arbitrator has the power to determine whether classwide arbitration is permissible.

Why does it matter?  If a trial judge issues an unfavorable ruling, you can appeal.  But, if the arbitrator issues a ruling you don’t like, in most cases you have no recourse.

Lesson to be learned?  Ensure your employment arbitration agreements are clear – specify whether an employee waives the right to proceed on a class basis, whether class claims must be litigated in court or can be litigated in arbitration, and which issues are for an arbitrator to decide and which are reserved for the court to decide.

Going to the HR Convention in Long Beach on August 29-31?  Stop by our Tharpe & Howell booth (#335) to say hello, pick up a lunch bag, and enter a free drawing for a chance to win an Amazon Echo!

[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.]

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