Federal and state laws currently do not require California employers to provide employees with paid sick leave unless the employer is located in San Francisco County. However, as a practical matter, many employers grant sick leave, often in the form of an annual allotment of paid sick days. Where employers provide paid sick time, employers must permit an employee to use one-half of his or her annual sick leave allotment, once it has actually accrued, to care for a sick child, spouse, parent or domestic partner (so-called “kin-care”). See Labor Code Section 233(a).

Once an exempt employee has exhausted his or her paid sick leave, the employer may begin to deduct from the exempt employee’s salary for absences due to sickness or disability in increments of full working days. See the California Division of Labor Standards Enforcement (DLSE), Enforcement Policies and Interpretations Manual, available online at http://www.dir.ca.gov/dlse/Manual-Instructions.htm.

Unlike vacation pay, sick pay is not a so-called “accruing benefit.” Unused sick pay is not carried over into the next calendar year. Employers should state in their sick leave policies that employees are not paid for any sick time unused at the end of a calendar year or in the event of termination for any reason.

Sick leave policies should also state the employer reserves the right to require the employee to demonstrate the medical necessity for sick leave by his or her doctor’s written confirmation. Employers may also require a doctor’s written confirmation that an employee is able to return to work (a) without posing a safety or health risk to that employee or other workers; and (b) with the ability to perform the essential functions of his or her job with or without reasonable accommodation.

On May 18, 2009, Rep. Rosa DeLauro of Connecticut introduced a bill called the Healthy Families Act (H.R.2460) in the U.S. House of Representatives. The Act would require employers with 15 or more employees to provide at least one hour of paid sick time for every 30 hours worked. This bill is in the first step in the legislative process and has been referred to committee. For more information on H.R.2460 please see http://www.opencongress.org/bill/111-h2460/show.

Law Offices of Timothy Bowles
May 18, 2009

California law authorizes an alternative work week schedule (AWS) of workdays exceeding eight hours without overtime pay if certain criteria are met. Classically, an alternative work schedule will be four 10-hour days, with three days off. Health care offices are common candidates for an AWS. Such flexible alternative work schedules require full advance disclosure to affected employees and the affirmative vote of at least two-thirds of those employees in a secret ballot election before performance of the work.

Effective May 21, 2009, California Assembly Bill No. 5 amended this law (Labor Code section 511) to permit an employee to opt-out of an AWS passed by the majority of his/her co-workers. This allows such worker to retain a regular five 8-hour days per week schedule. The bill also authorizes employees, with the consent of their employer, to move on a weekly basis from one work schedule to another on the adopted menu of work schedule options.

In addition, the California Division of Labor Standards Enforcement (DLSE) issued a March 23, 2009 opinion letter (online at http://www.dir.ca.gov/dlse/opinions/2009-03-23.pdf ) stating that under some circumstances, an alternative workweek schedule may be in place for only part of the year, for example rotating between a schedule of four 9-hour days and one 4-hour day during the summer months and five 8-hour days during the rest of the year.

Employers must still follow the detailed provisions of the California Industrial Welfare Commission (IWC) Wage Orders (online at http://www.dir.ca.gov/iwc/wageorderindustries.htm) when implementing or revising alternative workweek schedules and should consult with legal counsel about this and applicable California overtime laws before doing so.

If you have any questions on these or any other employment laws, please contact me or any of our other employment law attorneys. Best wishes, Bob Edwards

Law Offices of Timothy Bowles
March 23, 2009

A recent California federal court ruling confirmed that company supervisors are not individually liable for retaliatory acts. Sarmas v. County of Stanislaus, et al. October 26, 2009 Westlaw 3489425 (Eastern District California).

According to Stanislaus County’s Sheriff’s Department (Department) employee Valine Sarmas, Sheriff Christianson’s sergeant Pedro Beltran sexually harassed her on two incidents in September and October 2008 during which he made unwelcome physical advances, insisted she drive him to a strip club, kissed, bit and groped her in her car, and showed her cell phone videos of him having sex with another coworker. Days after the September incident, Sarmas learned a Department lieutenant was aware of Beltran’s conduct and was investigating the matter further. Beltran himself then contacted Sarmas, voicing his concern that he would be fired and asking Sarmas what she intended to say in the investigation. She responded she would tell the truth.

On January 20, 2009, Sarmas called 911 for assistance when a man came to her front door, verbally harassed her and her friends, and made various threats. The police arrested that suspect. On February 2, 2009, the Department’s Internal Affairs informed Sarmas she was being investigated on rumors that the man arrested at her home in January was a gang member and her boyfriend. Then on March 2, 2009, the Department fired Sarmas despite having given her an excellent performance evaluation the week before. The reason for her termination was “administrative decision.”

Sarmas’s lawsuit for violations of the California Fair Employment and Housing Act (FEHA) alleged that her termination was “retaliation for bringing Beltran’s conduct towards her to the attention of Internal Affairs and Sheriff’s Department command staff.”

The individual defendants, Sheriff Christianson and Sergeant Beltran filed a motion to dismiss the retaliation cause of action, contending that as a matter of law Sarmas was unable to sue them as supervisors for retaliation/wrongful termination under California law. The district court agreed, ruling that Stanislaus County (Sarma’s employer) was the only proper retaliation defendant as settled by the California Supreme Court’s ruling in Jones v. Lodge at Torrey Pines Partnership (2008) 42 California Reports 4^th 1158.

Disagreeing with two appellate court cases and a federal Ninth Circuit case to the contrary, the Jones court had ruled that only an employer can be liable under FEHA for firing someone in retaliation and not individual supervisors.

In a footnote of its Jones ruling, however, the Court stated it was only addressing alleged retaliation by firing, demotion or other major deprivation of benefits. It left open whether a supervisor might be personally liable for retaliating against an employee by harassing that individual. One or more future decisions may deal with that issue.

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

Cindy Bamforth
March 2, 2009

Under California law and Wage Orders, a “computer professional” is exempt from overtime compensation if he or she is “highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, or software engineering.”

In addition, he or she must be primarily engaged (51%-plus of the time) in:

• work that is intellectual or creative, requiring exercise of discretion and independent judgment; and
• performing one or more of these duties:

1. Application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications;
2. The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; and/or
3. The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.

Exercise of “discretion and independent judgment” means entrusted with comparison and evaluation of possible courses of conduct relative to his duties and with the authority to make an independent choice among the alternatives, free of immediate supervision. Someone who mostly follows specified “paint by numbers” procedures does not qualify for the exemption.

The California computer professionals’ exemption has no requirement for any particular academic degree and there is no licensure or certification requirement. Furthermore, job titles are not determinative of the applicability of this exemption.

There are several types of computer workers who are not eligible for the exemption:

• trainees and workers at entry-level positions;
• employees not skilled enough to work independently and without close supervision;
• employees engaged to operate, manufacture, repair or maintain hardware;
• engineers, drafters and machinists using computer-aided design software, including CAD/CAM, but not in a systems analysis, programming or any other similarly skilled computer-related occupation;
• writers creating box labels, product descriptions, setup and installation instructions, or content material to be read by customers or subscribers or visitors to computer-related media (including the internet or CD-ROM); or
• employees creating imagery for effects in the movie, television or theatrical industry.

Effective on September 30, 2008, amended Labor Code Section 515.5 extended the exemption to salaried employees whose annual and monthly salaries are not less than statutorily specified rates, which the California Division of Labor Statistics and Research (DLSR) is responsible for adjusting every October 1^st of every year, effective January 1^st the following year (online at http://www.dir.ca.gov/DLSR/statistics_Research.html).

During 2009, the minimum monthly salary for the exemption for 2009 is $6,587.50 and the minimum annual salary is $79,050.00. DLSR states it should issue the 2010 minimum monthly and annual salaries for the computer professional exemption in the next one or two weeks.

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

Bob Edwards
September 30, 2008

California’s cell phone law (Vehicle Code section 23123), effective July 1, 2008, makes it unlawful to drive a motor vehicle while using a wireless telephone (cell phone) unless the driver uses a hands-free listening and talking device. A companion law, also effective July 1, 2008, forbids anyone under the age of 18 to drive while using a cell phone, period. In light of these new laws, should employers forbid all employees from talking on their cell phones while driving on the job? Must employers furnish their 18-plus employees with cell phone headsets?

According to the Assembly Committee on Transportation’s report, the main reason for this legislation is to encourage driving with two hands on the steering wheel. Although studies show drivers remain distracted to a certain degree while talking on cell phones, even with two hands on the wheel, the legislature acknowledges the safety benefits associated with using cell phones, such as reporting road hazards, stranded motorists, and car accidents. Accordingly, the new law attempts to strike a balance for certain cell phone use while driving (unless under the age of 18 as discussed below). Section 23123 prohibits drivers from using cell phones unless they are using a hands-free listening and talking device, such as an earpiece, headset, speaker phone or even Bluetooth technology. Any such hands-free listening device will suffice.

Section 23123 does not apply to persons using a cell phone for emergency purposes, to emergency services professionals, nor to persons using digital two-way radios that operate by depressing a push-to-talk feature while driving a truck (requiring commercial class A or B driver’s license to operate), farm vehicle, or tow truck. Nor does the law apply to anyone driving a motor vehicle on private property.

A violation of this new cell phone law in California is an infraction punishable by a base fine of twenty dollars ($20.00) for a first offense and fifty dollars ($50.00) for each subsequent offense.

Teens Talk at their own Peril: Minors are forbidden from driving while using any one of a multitude of electronic items including cell phone, even if equipped with a hands-free cell phone device. The prohibited list includes cell phone, pager, two-way messaging device, laptop computer with mobile data access, specialized mobile radio device, or broadband personal communication device, unless for emergency purposes, such as an emergency call to a law enforcement agency, health care provider, fire department, or other such emergency services agency. Violation of this law is an infraction punishable by a base fine of twenty dollars ($20.00) for a first offense and fifty dollars ($50.00) for each subsequent offense. Unlike the ban on handheld cell phones, however, a law enforcement officer may cite a teen for a suspected violation of this law only in connection with another suspected driving offense – meaning law enforcement officers cannot stop a vehicle for the sole purpose of determining whether the driver is violating this law.

Sensible Employer Actions: Employers should update their company handbooks and other policy pertaining to employee driving and cell phone use. Obviously, the safest policy would be to prohibit all cell phone use – hands free or otherwise – unless in an emergency. Employers probably do not want to find themselves in the unenviable position of having to justify the lack of such a policy if an employee causes a traffic collision while talking on a cell phone about work-related matters or while driving on the job, even if using a hands’ free system.

With this increased focus on the manner of work-related driving, employers should also ensure they have updated copies of employee drivers’ licenses and insurance policies for those employees whose jobs require them to drive on company time.

Law Offices of Timothy Bowles
July 1, 2008

Along with each paycheck, California law requires employers provide a written itemized statement containing nine pieces of information about that payment:

(1) Gross wages earned;
(2) Total hours worked (except salaried exempt employees);
(3) Piece rate units and rate, if applicable;
(4) All deductions, including taxes, disability insurance, and health and welfare payments (deductions ordered by the employee may be aggregated and shown as one item);
(5) Net wages earned;
(6) The inclusive dates of the pay period;
(7) The name of the employee along with his or her social security number (last four digits only) or an employee identification number;
(8) The name and address of the legal employing entity; and
(9) All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

These payroll laws are intended to prevent workers from being cheated on their pay. Intentional failure to provide this payroll stub data entitles the employee to recover all actual damages or up to $50 for the initial pay period in which a violation occurs and $100 per employee for each violation in a subsequent pay period, up to a total of $4,000, plus costs and reasonable attorney’s fees.

The Division of Labor Standards Enforcement (DLSE) provides an example of an itemized wage statement (pay stub) as required by California law for an employee paid an hourly wage (http://www.dir.ca.gov/dlse/PayStub.pdf) to reflect the January 1, 2008 requirement that the itemized statement may only show the last four digits of the social security number.

Law Offices of Timothy Bowles
January 1, 2008

Under California labor laws, certain provisions of the Industrial Welfare Commission (IWC) Wage Orders – including California overtime law and meal and rest period premiums – do not apply to persons employed in an exempt administrative capacity. An exempt administrator is primarily engaged (51%-plus) in high level “desk-bound” planning, organizing, and enabling of production as opposed to the actual production of the company itself. An administrator makes sure the “production line” is created, established, coordinated, serviced and maintained as opposed to participating directly in that production line. In other words, an administrator is concerned with how a business is programmed and organized to turn out its products or services, not with actually assembling that product or delivering that service. Since an exempt administrator may also perform such organizational duties for his employer’s clients or customers to enable them to produce in turn, it is possible in special cases for an employer’s service providers to be exempt administrators (for example, a consulting company that employs specialists to provide custom management or financial investment consulting and advice to its clients).

An exempt administrator needs no actual juniors to direct on the chain of command. It is possible for such administrator to occupy a “one person” subdivision of a company. However, he or she must regularly and customarily exercise independent judgment and discretion in the programming and coordination of personnel and/or resources that enables the production of the employer or the employer’s clients.

While every employee is expected to use judgment as an element of any job, a worker will qualify for the administrative exemption only where he or she has and exercises the authority to make independent choices on the highest or higher levels of business policy, planning and coordination of operations, so-called “matters of significance.” A truck driver who makes “discretionary” decisions on the route he or she takes to a destination is not exempt from overtime. A programs director for a trucking business – responsible for the planning, programming, financing, acquisition of resources, allocations of personnel, etc. to ensure the company’s viability – is probably exempt from overtime compensation.

Last, the required regular and customary exercise of discretion and independent judgment is not limited to powers to make final decisions on significant matters. An administrator is legitimately exempt from overtime even if he or she only makes recommendations on policy, planning and coordination subject to review and approval, as long as the company’s seniors give weight to those recommendations.

If an administrator must perform a rote or routine duty that is “directly and closely related” to his or her planning and coordination functions such as typing up a program or counting and reporting on the statistical production of an area, the law considers this incidental work as part of exempt duties.

California recognizes three main settings for exempt administrators:

• someone who regularly assists the company owner, a exempt executive or other administrator and is entrusted with the same discretionary authority as the senior when that senior is absent (classically, the “executive assistant”);
• an individual who performs his or her coordinating functions in highly specialized or technical areas that require special training, experience or knowledge (for example, the internal IT manager, entrusted with planning and enabling a state-of-the-art computing and communications system for the employer); and
• a person who executes special assignments or tasks under only general supervision (for example, a marketing specialist responsible for assigned projects to find and create new markets and to develop and define new products to service those pioneer markets).

Job titles are not determinative. As with exempt executives, an exempt administrator’s purposes, duties and products contained in his or her written job description should accurately emphasize all of the above concepts as requirements, including the expectation that he or she will devote the majority of work time to the job’s administrative functions.

As with exempt executives, the employer must pay an exempt administrator a salary in each pay period that is at least two times the state minimum wage. As of January 1, 2008, the minimum is $640 weekly and $2,773.33 monthly. These amounts are unchanged for 2009 and thus far for 2010.

The California Industrial Welfare Commission (IWC) Wage Orders are available online at http://www.dir.ca.gov/iwc/wageorderindustries.htm.

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

Bob Edwards
January 1, 2008

“Commission wages” are compensation based proportionately on the value or amount of the item or service sold. An “inside sales representative” sells merchandise in a store or sales lot or sells products or services via a company telephone. In contrast, “outside sales representative” means any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling or obtaining orders for a product or service. The provisions of the California Industrial Welfare Commission Wage Orders (see blog article, “DO YOU KNOW YOUR CALIFORNIA WAGE ORDER?”) do not apply to outside salespersons.

Under California law, a commissioned inside sales representative covered either by Wage Order 4 or Wage Order 7 is exempt from overtime compensation if:

• total compensation exceeds 1.5 times the minimum wage for each hour worked during the pay period (As of January 1, 2008, 1.5 x $8.00 = $12.00/hour); and
• at least 50% of total compensation comes from commissions.

Since the compensation must exceed the $12.00 amount for every hour worked in a week, this exemption has the unique requirement of employee’s accurately tracking work hours each week to ensure he or she qualifies for the exemption. Whether the sales commission structure is comprised of a base salary plus commissions, pure sales commissions, a draw provided against future commissions or some combination of these, the exemption also requires that each weekly paycheck exceeds $12.00 times the number of hours worked to qualify.

The exemption applies in the case of an employee paid a fixed salary plus an additional amount of earned commissions if the amount of sales commission payments exceeds the total amount of salary payments for a chosen representative period. If a worker is compensated by pure sales commission, this “51% – 49%” calculation is of course irrelevant.

The representative period a company chooses to establish the plus-50% commissions and minus-50% salary ratio must be at least one month and not longer than one year. The employer should pick reasonable duration at or between those extremes which yields a fair reflection of the sales person’s true weekly average of earned commissions. For example, in a company where sales to the public and commissions paid are relatively constant month-in and month-out, then picking a relatively short representative period is reasonable. In a company that has seasonally high or low periods of sales, then calculating the average weekly figure for commissions should reasonably require a period nearer or at a year’s-worth of activity. Whatever representative period(s) the employer chooses, the employer must document the average ratio for each employee for each such period.

The employer thus must maintain adequate records that clearly indicate: i) the amount paid to employees exempt under this category; ii) the breakdown of base salary and commission payment for each week; and iii) the number of hours worked each week. In order to implement the exemption, the employer must also maintain:

• A symbol, letter or other notation placed on the payroll records identifying each employee who is paid under this inside sales exemption; and
• A copy of the policy or the specific written agreements with particular employees that lay out the terms of the sales commission structure, including the chosen representative period, the date the agreement was entered and how long it remains in effect.

Note: The California and federal exemptions and wage and hour laws are not identical. The comparable federal exemption only applies to retail or service establishments. Therefore, California employers are cautioned not to rely on the commissioned insides sales employee exemption from overtime without first consulting with an attorney.

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

Bob Edwards
January 1, 2008

Under California law, provisions of the Industrial Welfare Commission (IWC) Wage Orders – including overtime compensation and meal and rest period premiums – do not apply to persons employed in an executive capacity. This exemption is for executives primarily engaged (51%-plus) in managing at least two personnel below them in the chain of command. Exempt executives do not have to oversee – or have the authority to oversee – every worker in the organization. They can be senior to a distinct division or, conceivably, a department or even a unit. However, as one moves further down the organizational chart, qualification for exemption becomes less-and-less likely as the chances diminish that the subject employee is going to be involved in actually managing employees more than half of his or her time.

The sort of “managing” that will qualify for executive exemption is not just supervising two or more subordinates, i.e. spending over half of one’s day telling them what to do or supervising them to complete their job assignments or other set lists of tasks.

“Managing personnel” means having and exercising the authority for full responsibility over the planning, recruiting, work priorities and allocation, coordination, documentation (e.g., statistics, evaluations of personnel performance) and production results of a company or a distinct area of a company. This must include the ability to hire, advance, demote, discipline or fire other employees (or, at least, to make recommendations that are “given particular weight” by senior managers on these matters). Production, sales or routine clerical or maintenance work, whether or not the same as the work of subordinates, is not management work. However, if a manager must perform a rote or routine duty that is “directly and closely related” to managing personnel – e.g., writing a daily or weekly report of the area’s production, photocopying materials to pass out to subordinates – the law considers these labors as part of exempt duties.

In order to qualify for the executive exemption, a manager must “customarily and regularly exercise discretion and independent judgment.” This means a manager must have and exercise throughout the workday the power of making independent decisions on important aspects of planning and operations in his or her area. In contrast, actions that merely follow specified procedures are “paint by numbers” tasks that do not qualify for the exemption. While every employee must use discretion to make decisions no matter the position, a manager is entrusted to make decisions on matters that have a relatively substantial impact on the success or failure of the business or some major portion of the enterprise. For example, a janitor may have discretion on which room he or she vacuums first but this does not make him a manager. On the other hand, a division head deciding to allocate all of the personnel of his or her area to work on an “all hands” promotional blitz for an entire work day is clearly exercising discretion on a sufficiently important matter to qualify for the exemption.

An exempt executive’s purposes, duties and products contained in his or her written job description should accurately emphasize all of the above concepts as requirements, including the expectation that he or she will devote the majority of work time to the task of managing his or her subordinates. California is a stickler for requiring an executive to manage 51% or more on post hours, week-in and week-out. Working foremen, for example, are not exempt. The only exceptions include a manager who must pitch-in on rote tasks occasionally or one who must overcome an emergency so demanding in a given week that he or she is unable to actually manage for the majority of work hours.

To qualify an executive for exemption, the employer must pay him or her a salary in each pay period that is at least two times the state minimum wage. As of January 1, 2008, the minimum is $640 weekly and $2,773.33 monthly. “Salary” means a predetermined amount that is some or all of the employee’s compensation. “Predetermined” means the employer cannot reduce it due to changes in that worker’s amount or quality of work. With some exceptions, if an exempt executive works even a single hour in a given workweek, the employer must pay that person his or her salary for the entire week.

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

Bob Edwards
January 1, 2008