No Free Ride for Employers Who Ignore the Rules

With an economy continuing to sputter, a company may be more keen to take on unpaid summer interns to share the workload. Yet, if a business fails to fulfill detailed laws and regulations for such training programs, this supposed “cost-cutting” measure could become an expensive litigation nightmare. Boiled down, internship programs must predominately be for the benefit of the participants rather than a profit-yielding venture for the sponsoring company.

Our January 7, 2011 article “Employer’s Guide to New 2011 Laws, Part III” addressed new Division of Labor Standards Enforcement (DLSE) guidelines for unpaid internship programs. Among the key provisions, interns may be exempt from minimum wage laws only if:

1) The intern’s training actions are similar to those of a vocational school student;

2) The training is for the benefit of the trainee;

3) The trainee does not displace regular employees, but works under close observation;

4) The company derives no immediate advantage from the activities of the trainee and on occasion its operations may actually be impeded;

5) The trainee is not necessarily entitled to a job at the completion of the training period; and

6) The employer and the trainee understand that the trainee is not entitled to wages for the time spent in training.

The DLSE directs that if a company’s intern program does not meet all of these conditions for any individual, that person is an employee subject to state and federal wage and hour laws.

For assistance in setting up a lawful, written summer internship program for your business and accompanying forms for participants, contact a knowledgeable labor law attorney.

IRS Increases Acceptable Mileage Rate Deduction

Effective January 1, 2011, the IRS increased the accepted mileage deduction for business use of a motor vehicle from 50 cents to 51 cents per mile. Employers may deduct as a business expense the full amount of any reimbursement equal to or less than this IRS rate. However, the IRS considers reimbursement amounts in excess of the 51-cent limit “wages” that are subject to taxation.

Those who are self-employed can deduct their business miles using the standard mileage rate or by calculating actual costs. To use the standard mileage rate, it must be applied in the first year the vehicle is used for business.

There are other, lower rates for medical, moving and charitable transportation.

For example, injured California workers receiving workers’ compensation benefits can also use the IRS-prescribed 19 cent/mile rate when requesting reimbursement for miles driven to and from medical appointments, pharmacies and any other locations related to diagnosis and treatment of the job-related injury.

For further details on the rules, an employer should consult a tax lawyer or accountant. Of course, business owners planning to change their companies’ reimbursement rate should be sure to notify their employees.

The Effect of California Anti-Trafficking Law on Business

An estimated 12 million people are enslaved worldwide, 50,000 in the United States every year. By far, more individuals are trafficked and made slaves today than at any time when the practice was “legal.”

The State of California has responded with the recent passage of Senate Bill 657, the “California Transparency in Supply Chains Act of 2010.” The law takes effect January 1, 2011. It will require California retailers and manufacturers to disclose their efforts to eradicate slavery from their supply chain. The law targets agriculture, mining, garment and other industries in which slave labor is most common.

In announcing the new law, Governor Schwarzenegger stated: “Human trafficking is a terrible crime that goes against basic human rights and everything our country stands for. I am proud that in California, we have enacted some of the toughest laws to punish human traffickers and protect their victims. This legislation will increase transparency, allow consumers to make better, more informed choices and motivate businesses to ensure humane practices through the supply chain.”

For more information about the law and the facts on human trafficking in California, visit Coalition to Abolish Slavery & Trafficking (CAST). CAST was a co-sponsor of the bill.

(Photo by One Eleven Photography)

Youth for Human Rights International

& United for Human Rights present

Education and Human Rights Awareness, In Combat of 21^st Century Slave Trade

Special Guests:

Rohida Khan, Victim Assistance Coordinator, Department of Homeland Security

Brad Dacus, Esq. President of Pacific Justice Institute

Church of Scientology of Pasadena Chapel

35 South Raymond Ave., Pasadena, California

Brunch with presentations and panels to follow

Saturday, December 11, 2010

9:30 to Noon

Please RSVP by email or by calling 626.583.6600 (Law Offices of Timothy Bowles)

Copyright © 2010 by United for Human Rights. All rights reserved.

New California Workers’ Compensation Posting and Pamphlet Requirement

Deadline: October 8, 2010

All California employers must post a new workers’ compensation notice and must distribute a new workers’ compensation benefits pamphlet to new hires by October 8, 2010.

California’s Division of Workers’ Compensation (DWC) has recently enacted regulations that require employers within California to post a new poster entitled “Notice to Employees – Injuries Caused by Work.” This updated notice is available on the DWC website.

The new poster must be placed in a conspicuous location frequented by employees. Failure to post the notice by the October 8 deadline can result in up to $7,000 in civil penalties.

All California employers must also distribute a new pamphlet entitled “Your Rights to Workers’ Compensation Benefits” to all new employees who commence work on or after October 8, 2010. Such employees must receive this pamphlet either at time of hire or before the end of their first pay period. Please visit the California Chamber of Commerce Online Store to purchase a stack of these pamphlets.

All California employers within an existing Medical Provider Network (MPN) must create and post a special MPN Notice and distribute copies to any employee injured on the job on or after October 8, 2010. (A “Medical Provider Network” is comprised of doctors, hospitals or other medical providers who contract directly with the employer to treat its workers injured on the job).

DWC also updated the workers’ compensation claim form (DWC-1), effective as of October 8, 2010. Please use the updated form available at http://www.dir.ca.gov/dwc/forms/ClaimForm2010.pdf for all workers’ compensation claims on or after October 8, 2010.

If you have any questions, please call or email me or any of our other employment law attorneys. Best, Cindy Bamforth

New Workers’ Compensation Regulations in California

As we kick off the new year, employers confront a slew of new laws and regulations that may affect operations and require revisions in workplace policy manuals and/or new notice postings. This is the first in a series of articles intended to help navigate key California and federal changes in employment legal standards.

California’s workers’ compensation laws were amended on October 8, 2010. Violations of the new rules can incur a fine of up to $7,000 per occurrence. Every California employer must:

• Post the new “Notice to Employees—Injuries Caused by Work” poster (DWC 7);
• Distribute the updated “Your Rights to Workers’ Compensation Benefits” pamphlets to any new employees; and
• Use the revised “Workers’ Compensation Claim Form (DWC 1) and Notice of Potential Eligibility” form.

The new rules include a host of notice requirements for employers utilizing Medical Provider Networks (MPNs), healthcare providers providing treatment for work-related injuries. The changes include:

• Implementation Notices – Employers who offer a MPN plan must provide a written “implementation notice” to all employees covered;
• Written MPN Employee Notifications – Employers are required to provide a written “MPN Employee Notification” to a covered employee at the time of injury or at the outset of treatment for a work-related injury;
• Notices for MPN Coverage Change, Termination, or Cessation of Use – Employers are required to provide another written notice to any covered injured employee on the date of any change, termination or cessation of MPN coverage; and
• Independent Medical Review Notices – If at any time a physician is asked to provide a third opinion, employers must notify the injured employee about the independent medical review process.

If you have any questions about how to implement these workers’ compensation changes, please contact us.

Equal Work = Equal Pay

The 1963 federal Equal Pay Act (EPA) requires employers to pay men and women equally for performing the same, or essentially the same, work. While the law is worded neutrally (it is just as unlawful to underpay either gender), Congress enacted the EPA to remedy the long-standing pay discrimination against women.

The National Committee on Pay Equity demonstrates the entrenched disparities present in 1963 are far from rectified. For example, the NCPE reports: “Census statistics released September 16, 2010 show that the women still earn 77 percent of what men earn, based on the median earnings of full-time, year-round workers in 2009. Both men’s and women’s earnings showed slight increases from 2008 to 2009, with men’s at $47,127 and women’s at $36,278, a difference of $10,849.” Also according to the NCPE: “Women who graduate from college earn only 72% as much as men with the same education.”

In addition to equal wages, women are also entitled to the same benefits, including vacation time, health insurance, profit sharing, retirement plans, and bonuses.

Perhaps the most challenging aspect of the EPA is its protection against wage discrimination for equivalent jobs, not only identical ones. Courts focus not on job titles but on job duties, skill, effort, and responsibility and whether work is performed under similar conditions. For example, it could be argued that a company paying its receptionists (made up largely of females) less than its customer service representatives (made up largely of male employees) may be in violation of the EPA if the jobs could be shown equivalent in skill, workload, etc.

For a suggested employer procedure to confirm or strengthen EPA compliance, see the NCPE’s “Ten Step Guide.” An experienced employment law attorney can assist with policies and other preventative measures.

Equal Work = Equal Pay

The 1963 federal Equal Pay Act (EPA) requires employers to pay men and women equally for performing the same, or essentially the same, work. While the law is worded neutrally (it is just as unlawful to underpay either gender), Congress enacted the EPA to remedy the long-standing pay discrimination against women.

The National Committee on Pay Equity demonstrates the entrenched disparities present in 1963 are far from rectified. For example, the NCPE reports: “Census statistics released September 16, 2010 show that the women still earn 77 percent of what men earn, based on the median earnings of full-time, year-round workers in 2009. Both men’s and women’s earnings showed slight increases from 2008 to 2009, with men’s at $47,127 and women’s at $36,278, a difference of $10,849.” Also according to the NCPE: “Women who graduate from college earn only 72% as much as men with the same education.”

In addition to equal wages, women are also entitled to the same benefits, including vacation time, health insurance, profit sharing, retirement plans, and bonuses.

Perhaps the most challenging aspect of the EPA is its protection against wage discrimination for equivalent jobs, not only identical ones. Courts focus not on job titles but on job duties, skill, effort, and responsibility and whether work is performed under similar conditions. For example, it could be argued that a company paying its receptionists (made up largely of females) less than its customer service representatives (made up largely of male employees) may be in violation of the EPA if the jobs could be shown equivalent in skill, workload, etc.

For a suggested employer procedure to confirm or strengthen EPA compliance, see the NCPE’s “Ten Step Guide.” An experienced employment law attorney can assist with policies and other preventative measures.

How to Fire a Troublesome Worker Without Getting Burned

Susan is the supervisor for “Tony the Trouble-Maker.” Although Tony used to be the top producer in the division, lately he has been rude to Susan, fights with his coworkers, and refuses to take responsibility when something goes wrong under his watch. Susan is struggling to keep her unit in the black and this guy is weighing down the whole area. She is now ready to terminate Tony’s employment. However, Susan seems to recall Tony once boasted about how he successfully sued his former employer for “tons of dough.” Susan is concerned if she terminates Tony, he will file a lawsuit for wrongful termination, and Susan doesn’t exactly relish the unnecessary cost or distraction. How can Susan reduce the likelihood of post-employment litigation?

Susan should offer Tony an additional severance pay amount in exchange for a signed release and waiver. In theory, this is a simple transaction. Tony will receive additional money beyond his final wages so long as he signs a document in which he agrees not to sue the company for claims including wrongful termination, discrimination, harassment, retaliation, or breach of contract.

However, there are several pitfalls to this arrangement of which Susan must be aware in order to ensure the applicable state agency (such as the California Department of Fair Employment and Housing) or federal agency (Equal Employment Opportunity Commission) will honor such a waiver. For example, if Susan’s company has at least twenty employees and Tony is age 40 or over, Susan must notify Tony that (1) he has up to 21 days to consider and sign the waiver after which time the company will withdraw the severance pay offer; and (2) he has another seven days to change his mind and rescind the agreement.

Handled correctly, we have found the great majority of departing workers will agree to such a severance package. Indeed, most don’t bother waiting for any part of the 21 day offer period to expire, instead signing and taking the severance check upon receiving and promptly reviewing the papers.

Our severance pay forms package includes a five-page overview of exact steps to take, two separate types of severance agreements and two corresponding checklists for the departing employee to initial and sign. By ensuring all these forms are properly understood and implemented, a company can take effective steps to prevent frivolous wrongful termination suits where the company judges it best to promote a worker’s smooth transition to other employment.

If you have any questions, please contact me or any of our other employment law attorneys. Best, Cindy Bamforth

June 30, 2010