California Employers Must Pay Wages and Mileage for “Off-Hours” Work-Related Tasks

In response to our article “Travel Pay in California,” a California employer has asked how he should pay his employees for time spent and for their personal vehicle mileage incurred while shopping for company supplies.

Compensation for All Hours Worked: Of course, an employer must compensate an employee for time worked, even hours after that worker has clocked out for the day. For instance, an employee who stops off on the way home to shop for and buy office items for the employer performing compensable work during that time. However, as commuting time is not compensable, only the time required to stop, shop and get back on the road for home would count as time worked. See also, our article “Travel Pay Revisited.”

Calculating Mileage for a Work-Related Task: California employers must also reimburse workers for mileage incurred in personal vehicles on employment-related tasks. A company should issue and supply appropriate forms or logs to enable such payments. The IRS’s published mileage rates for 2013 are:

• 56.5 cents per mile for business miles driven
• 24 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organization

Employers should issue and maintain clear and consistent written policies on such matters. See “Promoting Workplace Productivity with a Sound Policy Handbook and Forms.”

For workplace policy matters, including employee manuals and forms, please contact our firm’s attorneys Tim Bowles or Cindy Bamforth.

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For possible cost savings and ease in administration, businesses are sometimes tempted to classify people working regularly as “independent contractors” instead of “employee.” In California, as in other states, independent contractors are usually not entitled to most of the benefits that employer must provide employees, including minimum wage, overtime pay, workers’ compensation coverage, social security credits, and unemployment insurance.However, whether inadvertent or otherwise, a company’s misclassification of one or more hired persons as independent contractors instead of employees can become a very expensive error. The California Employment Development Department (EDD), Franchise Tax Board (FTB), Division of Labor Standards Enforcement (DLSE), and Department of Industrial Relations (DIR), as well as the federal Internal Revenue Service are all agencies with the power to investigate, audit and impose expensive penalties on businesses for incorrect employee or independent contractor designations.Such errors also can also create liabilities for back wages, overtime compensation, and payments to the government for retroactive unemployment, workers’ compensation and social security coverage.Analysis must always be on a case-by-case basis. Agencies commonly judge classification decisions on the greater weight of factors favoring employment or independent contractor status. For example, the DLSE publishes a list of pertinent qualities for validly classified independent contractors:

• An independent contractor’s occupation is distinctly different from the product of the hiring company (e.g., a manufacturing company hires an outside lawyer to write represent the business in court);
• An independent contractor’s work is not part of the regular business of the hiring entity (an auto dealer retains a marketing consultant to analyze purchasing trends);
• An independent contractor commonly provides his or her own tools and workspace and covers his/her overhead expenses;
• An independent contractor usually provides a specialized service or skill (e.g,., a professional accountant delivering financial services under his/her distinct license);
• An independent contractor’s work is usually unsupervised and the hiring company lacks the right to control (i.e., micro-manage or supervise) the course of that contractor’s labors;
• The length of time for an independent contractor’s services are classically short-term, project by project; and
• The method of payment for an independent contractor’s services is usually by the job, not by the hour or other period of time.

There are always exceptions to these factors. Lawyers commonly charge by the hour. A business might provide the contractor a workspace on company’s premises to carry out the project. Again, proper classification depends on a thorough and accurate assessment of all independent vs. employment factors. An experienced labor lawyer can be a significant help in the process, including the appropriate contract documentation.

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A California worker recently asked us through the blog site whether his employer should pay for his “stand-by” or “on-call” time. He wrote, in part: “On some days, we are expected to be on-call for certain shifts … The sign posted at the store informs us that failure to show up as requested will result in negative consequences … However, [while] we are not on paid stand-by, the belief is that we must be within the area and must answer our phones if called. Can I be punished for failing to respond?”

We covered the issue of “on-call” time in “On-Call Employees in California”. Whether an employer must pay a worker for that time depends on the degree the company requires that worker to restrict his/her personal activities in order to respond to the call. Factors include:

• any company-imposed geographic restrictions on the employee’s location
• required response time to a call
• the nature of the employment relationship and industry practice; and
• any other limitation on the employee’s ability to use the time for personal benefit.

A policy that provides employees an option of responding to a call probably does not require the company to pay the employees for choosing to be available. For example, a business that puts out the word of a hot prospect to several salespeople, with the referral going to the first employee to call-in is likely an unpaid standby situation.

On the other hand, a policy that requires a designated worker to stay within specific geographic limits, to maintain open telephone or text message contact during specific hours and to arrive at the worksite (or otherwise begin working) within a limited amount of time after receiving employer’s request is almost certainly a paid on-call arrangement.

The above worker asked whether his employer must pay when it was his “belief” that he had to be within a certain area and had to answer his phone if called.

From the employee’s perspective, he should promptly and responsibly request written clarification of the company’s policy, thus either confirming or dispelling his impression that he is subject to mandatory response.

Similarly, from the employer’s perspective, it is important to have clear written policy, one way or the other. An employer who doesn’t pay for stand-by but, as in the above worker’s case, vaguely announces “negative consequences” for failing to respond to a call, risks a later government or court finding that it has failed to pay for required stand-by time.

The above worker also asked if he could be “punished” for failing to respond. As he describes an unpaid on-call arrangement, then in theory the company could not – and should not – reprimand or otherwise discipline an employee who does not answer a call to come to work.

On the other hand, a business with a clear paid, mandatory on-call policy can legitimately take adverse action against the individual who fails to comply. Certainly, the policy should spell out the range of consequences possible. On the degree of discipline a company should exercise in the case of a violation, the answer ultimately lies in the experience and (hopefully good) judgment of management.

For help to employers on how to structure, administer or enforce an on-call policy, please contact our firm’s attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles

Current regulations tighten trainer qualifications and impose heightened interactivity requirements, including questions that assess learning, skill-building activities and numerous hypothetical scenarios about harassment with follow-up discussion questions.

We are offering an updated in-house, two-plus hour seminar, at your location, that will fulfill these legal requirements. With your supervisors better trained on harassment basics, this session will help you safeguard your company against lawsuits while assisting you to create better employee relations.

Conducted by one of our experienced attorneys, our seminar includes a live lecture, printed materials, PowerPoint presentation, video scenarios, quizzes and a new session-ending investigatory scenario in which all participants can apply and demonstrate their knowledge of the fundamentals in this critical field. We will also provide certificates of attendance as documentation for your records.

The seminar topics include:

• Types of harassment and what makes supervisors personally liable
• Steps owners and supervisors should take to prevent company liability
• What constitutes harassment under current state and federal laws
• Policies employers can impose to limit employee relationships
• Printed materials, a lecture and audio-visual presentation
• Role playing scenarios to demonstrate skills and knowledge

By scheduled appointment, we can provide the required interactive seminar at your place of business.

Or if you have just a few employees who need this training, our Public Seminar is also available.

Law Offices of Timothy Bowles

Lawyers are in sales, they are not in management. They don’t sell widgets to consumers of course. Rather, competing attorneys each “sell” his/her client’s construction of events and actions to juries and judges, with the most plausible version of such occurrences the winner.

This firm defends employers daily on lawsuits for, you name it, (alleged) discrimination, (purported) retaliation, (supposed) harassment, (asserted) unpaid wages or overtime, and just about every other workplace accusation imaginable. More common than not, management’s inappropriate or illegal behavior is not the source of such court battles. Rather, suits often generate and grow from company failures: i) to have and follow simple, written policy; and ii) to promptly and fairly document workplace misconduct and its resolution.

Pile on the clichés and maxims if you wish. “An ounce of prevention is worth a pound of cure” isn’t bad. “If it isn’t written, it isn’t true” is better.

An employer which does not structure workplace production, organization and procedure around sound, sensible, easy-to-understand written policies is prone to finding itself sooner or later in the midst of an expensive court controversy. If written policy does not exist or if it is not followed, if disruptive incidents and the fair addressing of them are not documented promptly and consistently, then that disgruntled, and perhaps disreputable, employee and his/her lawyer can easily invent practices and versions of events to fit their sales pitch.

Very few jurors are employers. Almost all of them have been former employees at one time or another. At the end of a trial over alleged employee mistreatment, it will be these sworn-to-be-neutral citizens who will gauge whether employer or worker is telling the more credible story. For a business, no written policy and no documentation in these circumstances are a recipe for very expensive disaster.

For the actions employers can take to avoid this nightmare scenario, including access to our workplace forms and model personnel handbooks, please visit us at our website.

Law Offices of Timothy Bowles

A California worker recently asked how his employer should pay him for job-related travel time expended before and then after a full eight hours of labor at a remote location. He wrote: “If I drove 5-1/2 hours, then worked 8, then drove 5 more hours, wouldn’t my time and a half start on my 8^th hour and then double time after my 12th hour? They can’t just pay me double time on my travel pay rate of 8.00 dollars an hour can they?”

The answers, both favoring the worker in this instance, are “yes, daily overtime starts in California after the first eight compensable hours, including travel time” and “no, the employer cannot just calculate overtime from the lower travel-time rate of pay.”

Calculating Overtime When Work-Related Travel Paid at a Lower Rate: Our blog article “Travel Pay in California” observes: “Hourly employees must be paid for all ‘hours worked.’ Depending on the circumstances, an employee can be considered experiencing a ‘working hour’ even when in deep unconsciousness or obnoxious intoxication in seat 36C, Flight 363 Los Angeles to New York. Where an employee is required to travel for work, near or far, the employer must compensate the worker for that time. Exceptions are normal commute time or road trip downtime, e.g., meals or entertainment. Thus, an hourly worker who boards that New York flight for business is earning pay for his or her hours on the plane except the time spent taking a meal.”

That article also points out that businesses can establish a lower hourly rate of pay for unproductive but compensable travel time. Thus, the hourly worker’s employer on the above New York flight could pay him/her minimum wage (currently $8.00/hour in California) for the transit time and that worker’s higher, normal rate (say, $20.00/hour) for time spent working at the destination that day. If that worker flew for five hours ($8.00/hour x 5 hours = $40.00) and then attended a conference for another three ($20.00/hr x 3 hours = $60.00), his total pay that day would be $100.00.

California is one of the few states that require premium pay for either weekly (“time-and-a-half” after 40 in a week) or daily overtime hours (“time-and-a-half” after eight hours in a day and “double time” after 12 daily hours).

As the above writer pointed out, the plot thickens considerably when a California worker works either daily or weekly overtime while earning separate hourly rates during a pay period. It is not true that the employer need only pay 1.5x or 2x of a $8.00/hour travel rate for overtime hours ($12.00/hr and $16.00/hr, respectively) just because those were “extra” or “in addition” to the productive working hours that day.

Instead, California employers must calculate those 1.5x and 2x premium rates from the so-called “regular rate of pay.” “Regular [hourly] rate” is reached by adding up all compensation for a week and dividing it by the total number of hours worked.

Thus, if the above worker flying to New York also returned to California that same week, working a total of 50 hours, with ten of those hours at the $8.00/hour travel rate ($8.00/hr x 10 hrs. = $80.00) and the other 40 hours at the $20.00 rate ($20.00/hour x 40 hrs. = $800), his total earned compensation would of course be $880.00 for those 50 hours. Thus, the regular rate would be $17.60/hr ($880.00 ÷ 50 hrs = $17.60), making the 1.5x rate for each of the ten overtime hours $26.40.

The matter can be further complicated if, say, the worker had two very long work days that week, each exceeding 12 hours. As above, the employee would earn 1.5x the regular rate for the each of the 9^th – 12^th hours worked each day and then 2x the regular rate for each daily hour worked over 12.

For help to employers on how to structure, administer or enforce a travel policy, please contact our firm’s attorneys Tim Bowles or Cindy Bamforth:

Law Offices of Timothy Bowles

The California Assembly passed earlier this year the “Healthy Workplaces, Healthy Families Act of 2014” (Assembly Bill [AB] 1522), sending it over to the Senate for consideration. If passed into law, the measure would mandate all employers to provide at least three paid sick days per calendar year to all workers who qualify. There is currently no sick pay requirement under federal or California law. See our article, Don’t get Sick of Sick Pay – An Overview of California Paid Sick Leave.

This is the Legislature’s third attempt to enact such a law (previously in 2008 and 2011). In its current form, AB 1522 would direct that eligible workers earn (accrue) at least one hour of paid sick leave for every 30 hours worked and may start using such benefits after three months of employment.

The California Labor Federation, AFL-CIO supports AB 1522 contending it will guarantee “every California worker paid time off to recover from illness, care for a sick family member, or bond with a new baby. AB 1522 also protects workers claiming this benefit from employer retaliation.” While observing that many employer already voluntarily offer non-accruing sick leave to full-time workers, the California Chamber of Commerce’s objects to the bill for its creating a “huge burden” on employers through required expansion of benefits to temporary, seasonal, and part-time employees.

Connecticut is currently the only state that requires paid sick day benefits. Several cities, including New York, Washington, D.C., Portland, Seattle and San Francisco, mandate such benefits.

Law Offices of Timothy Bowles

As we have described in California’s Expanded Immigration-Related Protections and California Extends Protections for Whistleblowing Employees, several California laws protect employees, regardless of undocumented status, from actual or threatened retaliation for demanding workplace rights.

These state protections of immigrant workers, some of the strongest nationwide, would seem at odds with the federal law (Title 8, section 1324a of the United States Code) making employment of undocumented persons illegal and requiring companies to confirm an applicant’s ability to work in the U.S. by a completed “I-9” form supported by sufficient evidence (e.g., birth certificate, green card).

However, in Salas v. Sierra Chemical (2014), the California Supreme Court confirmed that an undocumented individual’s initiative and ability to land a job –- whether by falsified proof of work authorization or by an employer’s willingness to look the other way – does not then strip that person from this state’s protections from workplace discrimination under the Fair Employment and Housing Act (FEHA).

In Salas, a seasonal worker sued his former employer for FEHA disability discrimination and retaliation, alleging the company did not have the right to refuse to rehire him for a new season and accommodate his disability. He had worked for Sierra Chemical for four seasons, presenting an I-9 and social security card each time. During the last season, he had injured his back twice and had filed for workers’ compensation. The next season, Sierra said it would rehire him when he received a doctor’s release for full duty. It only learned of his undocumented status late in the lawsuit and then asserted it was immune from any FEHA liability because the rehiring, in retrospect, would have violated the above federal law.

The Court rejected the employer’s position. Mr. Salas was able to raise disability discrimination as the basis for Sierra Chemical’s failure to rehire him because consideration of his documented or undocumented status was not a factor in that decision. On the other hand, if Sierra Chemical had been diligent enough to determine Mr. Salas’s status and to have declined his re-employment on that basis, then he would have had no chance of bringing the FEHA claim. The decision turned on Labor Code 3339, created by the 2002 passage of Senate Bill (S.B.) 1818, providing all California workers the “protections, rights, and remedies available under state law, except any reinstatement remedy prohibited by federal law . . . to all individuals regardless of immigration status who have applied for employment, or who are or who have been employed, in this state."

Mr. Salas’s FEHA rights were not entirely unaffected by his undocumented status. The Court also ruled that Mr. Salas had no right to collect lost wages resulting from any Sierra Chemical disability discrimination from the point that the employer learned he was barred by federal law from acquiring further employment in the U.S.

The employer lessons learned from this decision thus include:

(1) Do not hire workers who cannot satisfy the federal I-9 requirements;

(2) In California’s FEHA, any undocumented worker (whether that status is suspected or actual) is entitled to the protections against unlawful workplace discrimination, harassment and retaliation accorded to all employees; and

(3) On any later discovery that a worker is not (or no longer) eligible for employment under federal law (because of false documentation or any other reason), a California employer is prohibited from continuing that employment. However, because of the potential of a FEHA claim under the Salas guidelines, that employer should promptly obtain legal advice on how to promptly terminate that relationship.

For assistance with any questions on these subjects, you can contact our attorneys, Tim Bowles, Cindy Bamforth, or Helena Kobrin.

Law Offices of Timothy Bowles

The best handling for workplace theft is to prevent it in the first place. Suspected or alleged employee thievery – and an employer’s twin obligations to protect the group against an actual thief and to protect the accused from false charges — is a delicate challenge. A company’s much more straightforward task is to implement policies and security measures designed to deter the criminally tempted.

Yet, stealing can occur regardless. A clearly written and regularly updated employee handbook should thus include standards and rules for conduct, reporting, investigation, fair hearing and discipline that discourage as well as address such alleged bad behavior. Company executives as well as policy must promote the purpose of reporting and investigation: to maintain a safe, just and trusting work environment. It is leadership’s responsibility to ensure that staff are not altogether intimidated out of raising a theft or other crime problem to management. Leadership must also assure that employees are not reduced to apathy from unfair procedures that prevent the full airing of accusations and discourage justice.

California and many other states maintain “employment-at-will” as the presumed working relationship between employer and workers. “At will” means that either side may end the relationship at any time, with or without advance notice and with or without any reason for the termination.

However, “at will” employment is not any manager’s or worker’s license to treat fellow employees harshly or unfairly. While an employer may fire someone for no reason, that company may not terminate for an unlawful reason. Thus, if management lets someone go for an unsubstantiated accusation of theft, the incident could lead to an action for defamation by the accused against the company as well as the individual accuser. If management summarily fires an employee for having mistakenly reported an innocent co-worker’s embezzlement, that now-former employee might well have a claim for unlawful retaliation over the incident.

In the face of alleged workplace theft, it is thus a good idea for management to consult with a skilled employment lawyer for guidance on the conduct of an impartial investigation and on any ensuing steps for discipline or termination.

Law Offices of Timothy Bowles