California Governor Jerry Brown recently signed Senate Bill 299 into law extending health insurance coverage benefits for employees out on pregnancy disability leave, effective January 1, 2012. As covered in “Pregnancy Disability Leave,” California employers with five or more persons on payroll (whether full- or part-time) must provide any female employee up to four months of unpaid leave for her pregnancy, delivery and newborn care. (California employers with 50 or more on payroll must also provide any qualified female employee with up to 12 additional weeks of medically required maternity leave under the California Family Rights Act (CFRA) or the federal Family and Medical Leave Act (FMLA).)

Currently, employers may opt to make group health insurance coverage available to their workers. The new law requires that if a California employer provides such benefits, it must continue to make them available to a pregnant or new mom out on pregnancy disability leave. The employer must continue that coverage on the same terms and conditions applied to active employees. For example, if the employer normally pays an employee’s premium in full when she’s actively on the job, that company must now continue to pay full premium while she’s out on the four month pregnancy leave.

A business may recover from the employee the premiums it paid to maintain such coverage during the leave if the worker fails to return at the end of the four month maximum period and if that failure was not due to exercise of additional leave rights under FMLA/CFRA or not due to a circumstance beyond the employee’s control. .

Employers should review the new law and contact a California labor law attorney if they have any questions on the new requirements.

Law Offices of Timothy Bowles
January 1, 2012

Effective January 1, 2012, California Assembly Bill AB 469 will require private employers to distribute a document “in the language the employer normally uses to communicate employment-related information” to all hourly employees at the time of their hire.

The written notice must include:

• The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable;
• The regular payday designated by the employer;
• Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;
• The employer’s name, including any “doing business as” names used by the employer;
• The physical address of the employer’s main office or principal place of business, and a mailing address, if different;
• The employer’s telephone number;
• The name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and
• Any other information the California Labor Commissioner deems material and necessary.

The Labor Commissioner is to make available a template for employers to follow for such a document. This new requirement does not eliminate existing employer notice rules.

Contact a California labor law attorney with any questions about compliance with and implementation of this new law.

Law Offices of Timothy Bowles
January 1, 2012

California Governor Jerry Brown recently signed Senate Bill 299 into law extending health insurance coverage benefits for employees out on pregnancy disability leave, effective January 1, 2012. As covered in “Pregnancy Disability Leave,” California employers with five or more persons on payroll (whether full- or part-time) must provide any female employee up to four months of unpaid leave for her pregnancy, delivery and newborn care. (California employers with 50 or more on payroll must also provide any qualified female employee with up to 12 additional weeks of medically required maternity leave under the California Family Rights Act (CFRA) or the federal Family and Medical Leave Act (FMLA).)

Currently, employers may opt to make group health insurance coverage available to their workers. The new law requires that if a California employer provides such benefits, it must continue to make them available to a pregnant or new mom out on pregnancy disability leave. The employer must continue that coverage on the same terms and conditions applied to active employees. For example, if the employer normally pays an employee’s premium in full when she’s actively on the job, that company must now continue to pay full premium while she’s out on the four month pregnancy leave.

A business may recover from the employee the premiums it paid to maintain such coverage during the leave if the worker fails to return at the end of the four month maximum period and if that failure was not due to exercise of additional leave rights under FMLA/CFRA or not due to a circumstance beyond the employee’s control. .

Employers should review the new law and contact a California labor law attorney if they have any questions on the new requirements.

Law Offices of Timothy Bowles
January 1, 2012

Effective January 1, 2012, California Assembly Bill AB 469 will require private employers to distribute a document “in the language the employer normally uses to communicate employment-related information” to all hourly employees at the time of their hire.

The written notice must include:

• The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable;
• The regular payday designated by the employer;
• Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;
• The employer’s name, including any “doing business as” names used by the employer;
• The physical address of the employer’s main office or principal place of business, and a mailing address, if different;
• The employer’s telephone number;
• The name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and
• Any other information the California Labor Commissioner deems material and necessary.

The Labor Commissioner is to make available a template for employers to follow for such a document. This new requirement does not eliminate existing employer notice rules.

Contact a California labor law attorney with any questions about compliance with and implementation of this new law.

Law Offices of Timothy Bowles
January 1, 2012

The Internal Revenue Service (IRS) recently announced an increase in the optional standard mileage rate from 51 cents to 55.5 cents per mile for all business miles driven from July 1, 2011 through December 31, 2011. This is highest IRS standard rate since the latter part of 2008. www.irs.gov.

Although the IRS typically updates its new rates each fall for the next calendar year, the IRS chose a mid-year increase due to increased gasoline prices, which IRS Commissioner Doug Shulman stated “are having a major impact on individual Americans.”

While gasoline prices are a significant factor in its calculations, the IRS also looks at depreciation, insurance and other fixed and variable costs when setting mileage rates.

Employers using the IRS standard mileage rate to reimburse employees should of course note the increase.

Employers should also take the opportunity to verify each employee driving on company time possesses a current driver’s license and personal auto liability coverage in the amounts required by applicable state law.

Law Offices of Timothy Bowles
December 31, 2011

Employer Precautions

There is very little more precious to an individual than his or her employment. For management and personnel directors facing poor economic times, there is probably very little more difficult than ending a productive worker’s relationship when the company simply can no longer afford to carry that position.

Handling that final meeting with a departing employee can be a manager’s diplomatic challenge akin to negotiating the end of a marriage or other major international conflict.  Faced with the intense personal pride a person commonly derives from gainful employment, managers can fumble a layoff by either being too personal with —  or too coldly removed from — the outgoing employee  in the transition.

Where the manager fails to walk the fine line of credibly conveying the economic realities that have forced the layoff decision while appropriately acknowledging the departing individual’s worth, that manager may be deeply motivating that worker to find some ground, any ground,  for a large legal claim to “get even.”

Layoffs of a significant percentage of a company’s workforce raise the stakes and probability that one or more suits may follow suit.  For example, law firm Seyfarth Shaw’s 2009 Annual Workplace Class Action Litigation Report found that the 2008 financial meltdown caused a sharp jump in workplace class action litigation, especially age discrimination and Worker Adjustment and Retraining Notification (WARN) Act claims.  (WARN is a federal law applicable to companies with 100 or more employees, requiring minimum advance notice and other opportunities to workers slated for layoff.)

It is thus important for a company planning to lay off any number of employees to take effective precautions that should limit potential wrongful termination and discrimination claims.  These include:

Document a Methodology for Selection: Management should establish a sensible and consistent system for business-based selection of individuals to be let go.  Guidelines that seek to balance seniority with objective indicators of employee performance are a common approach.

Develop a Viable System for Performance Appraisals: Management should thus create and consistently conduct performance evaluations that are as objective and impartial as possible.  See also, “Grading Employee Performance ”  A company that has been able to compile such evaluations is almost certainly better equipped to deal with the difficult selection process of who must go in the event of a significant business downturn.

Maintain Accurate and Relevant Job Descriptions:  A system for performance evaluation will have limited value unless accompanied by thorough, updated, and clearly stated descriptions of the duties, prerogatives and required products/results for each position in the company.   Layoff decisions based on relative, objectively evaluated proficiency in each person’s well-defined post should be very difficult to challenge as unlawfully discriminatory against a particular gender, ethnicity, age, etc.  Such criteria are of course also useful in hiring, compensation and promotions.

Experienced labor counsel can provide further valuable guidance on the often delicate task of company layoffs.

30 Dec 2011

December 30, 2011

The Supreme Court of California ruled today there are no easy assumptions when an employer seeks to qualify company “administrators” as exempt from overtime. Francis Harris v. Superior Court of Los Angeles County, No. S156555, opinion filed December 29, 2011.

For well over a decade, California has been a battleground on just what managerial roles and duties an employee must play in order to meet the administrative exemption. The difficulty first stemmed from a lack of definition in the 1998 regulations of the term “administrative work.” Today’s Harris decision observed that the Industrial Welfare Commission (IWC) sought to remedy the potential ambiguity by issuing in October, 2000 a set of “seven fairly extensive and interrelated subdivisions” to specifically define “administrative work,” now found for example in the IWC’s Wage Order 4 (covering most white collar workers), sections 1(A)(2)(a)-(g). However, as the Harris decision also pointed out today, the legal battles have nevertheless continued in part because some lower courts have failed to closely apply that seven-part definition.

Perhaps the most important lesson from the Harris decision is that employers must limit the potential for challenges to their administrative worker classifications by carefully comparing the roles and duties each such employee carries against each element of the IWC’s expanded definition for such workers. As Harris makes it clear that the analysis is a case-by-case proposition, companies should also take care to create or update to well-crafted written job descriptions that contain all the necessary elements from the regulations and that match the actual roles and duties of their administrators. The task is best embraced with the assistance of skilled, experienced labor counsel.

Law Offices of Timothy Bowles
December 29, 2011

Knowing When to Call for Reinforcements

There’s a saying that no-one likes lawyers … until you need one. While experienced and knowledgeable managers are usually capable of handling basic employment issues, there are pitfalls in the more complex or high stakes situations for which consultation with an employment and labor lawyer is probably a good move. The laws governing the workplace tend to change frequently. Companies can face formal complaints, liabilities and large attorney bills if potentially significant employee disputes or decisions are not recognized and resolved early. For instance:

Disciplinary Investigations and Decisions: Employers must act fairly and effectively in response to an accusation of wrongdoing. A company can face liability for failing to deal with a dishonest or destructive employee as it can for mistakenly concluding without an adequate inquiry that an innocent worker is guilty of such actions. An employment law attorney can help strike the proper balance and reach a fair decision, while management continues to maintain workplace productivity.

Threatened or Actual Court or Administrative Proceedings: If a current or former employee files or threatens to file any sort of lawsuit or complaint with a government agency, such as the U.S. Equal Employment Opportunity Commission (EEOC) or the California’s Department of Labor Standards Enforcement (DLSE), it’s almost certainly time to contact an labor and employment attorney immediately. Charges of discrimination, harassment or wage and hour violations should be taken very seriously. Mishanding any such allegations from an employee could create a further assertion of workplace retaliation.

Employee Contracts, Including Severance Agreements: An experienced lawyer can create or review and strengthen employment-related agreements, including contracts at hiring or severance releases offered at termination. Poorly worded documents can create difficult and expensive disputes over interpretation later.

Workplace Policies and Handbooks: Comprehensive and up-to-date written employee policies, commonly maintained in a manual or handbook, are the foundation for legally-sound business and frequently a critical “ounce of prevention” against claims over compensation, paid vacation and other benefits, workplace safety, acceptable employee conduct, the company’s ability to investigate into potentially private subject matters, and many other issues

Law Offices of Timothy Bowles
November 18, 2011

California companies must provide non-union workers with at least a 30 minute unpaid meal break between shifts and at least a ten minute paid break during each shift. See, “Employee Meal Periods and Rest Breaks, California’s Basic Requirements for R&R,” April 8, 2011.

However, even though the applicable statutes were enacted more than ten years ago (California Labor Code sections 226.7 [2000] and 512 [1999]), the courts have still not resolved just what “providing” a break or meal period means. Labor Code 226.7(a) very clearly prohibits employers from requiring employees to work “during any [required] meal or rest period.” However, must businesses go further? Does the state require a business to ensure employees take their breaks and meals by policing the workplace? Or is it enough for an employer to provide the schedule that permits a worker to take advantage of rest breaks and meal periods, leaving it up to the worker?

The issue has significant economic consequences in some industries, for example restaurants where a server may well want to skip a break in order to maximize tips.

The California Supreme Court is expected to place most or all of the controversy at rest in Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum). The Court heard oral argument this week in the case (November 8, 2011) and must issue its opinion within 90 days, by early Feburary, 2011.

The Brinker company operates some 137 restaurants in the state, including Chili’s Grill & Bar, Romano’s Macaroni Grill and Maggiano’s Little Italy. Its written policy for unpaid meal periods and paid rest breaks provides that employees are “entitled to a 30-minute meal period” when they “work a shift that is over five hours.” It also provides that employees who clock out for a meal period “must clock out for a minimum of 30 minutes.” It also states that employees who work “over 3.5 hours” during a shift are “eligible for one [10-]minute rest break for each 4 hours that [they] work.”

While this is a straightforward, standard statement of the California standards, the five named employees challenge Brinker’s alleged actual practices – including purportedly requiring servers to give up tables and tips if they want to take a break and allegedly scheduling employee meal periods too early in the first shift, thus missing a first break. Those employees also seek to certify their suit as a class action that would potentially hold Brinker’s liable to most or all servers in each of its restaurants statewide. This of course significantly raises the stakes of the decision. We will keep you posted on the results in the Supreme Court. Whatever that outcome, contact an employment law attorney who can provide knowledgeable guidance on meal and rest policies and practices.

Law Offices of Timothy Bowles
November 8, 2011