On our article “Caring for Caregivers,” a recent visitor to our website asked: “How much is housing and meal value [in my area] for a private household worker under California Wage Order 15?” As in every area of employment law, the answer of course depends on the circumstances.

California regulates the wages and hours of workers through a series of 17 “Wage Orders,” published by the Industrial Welfare Commission (IWC). An employer must know which of these Wage Orders applies to its particular business or its particular types of employees. For instance, Wage Order 1 covers most manufacturing companies, Wage Order 2 covers “personal service” companies (e.g., beauty salons, health clubs), and Wage Order 4 covers most “white collar” office workers. An IWC pamphlet, available on-line and current to 2013, provides detailed descriptions of all such orders.

Wage Order 15 covers employees engaged in so-called “household occupations,” services related to the care of people or premises in a private household. These include housekeepers, cooks, and home caregivers.

Employing such workers involves special rules not present in most other industries, in part complicated by whether the worker is “live-in” or “non-live-in.” See the “Caring for Caregivers” article for more of the requirements.

When Live-In Household Workers Must be Paid Overtime, Special Rules: Wage Order 15 specifies household workers who reside on the employer’s premises for at least 120 hours per week or spend five consecutive days or nights per week residing on the employer’s premises are normally exempt from overtime requirements (but not minimum wage).

However, Wage Order 15 also requires employers provide live-in employees at least 12 hours free of duty each day, with an additional three or more hours free during each 12-hour work span. Live-in employees that work during such free hours are entitled to overtime at 1.5x times their regular rate of pay. (For calculating “regular rate,” see our blog “Working Overtime in California.”

Wage Order 15 also specifies that when a live-in employee works more than five days in any one workweek without a day off of not less than 24 consecutive hours (except in specially defined emergencies), the employer must pay overtime at 1.5x regular rate up through nine hours worked in the sixth and seventh days and 2.0x regular rate for any hours worked over nine in the sixth and seventh days.

Wage Order 15 specifies different overtime rules for non-live-in household workers, akin to the daily and weekly overtime rules for workers in many other industries. Again, see, “Working Overtime in California.”

Room and Board for Household Workers: An employer and household worker may agree in writing to satisfy at least a portion of the minimum wage requirement by crediting the value of meals and lodging the employer provides to that employee.

However, the employer may not set a “market value” for such credits but must follow the specific chart provided in Wage Order 15. For lodging, the credits may not be more than:

• $31.75/week for a room occupied alone;
• $26.20/week for a shared room;
• $381.20/month or two-thirds of the “ordinary rental value”/month for an apartment, whichever is less; and
• where the employer employs a couple, $563.90/month or two-thirds of the “ordinary rental value”/month for an apartment, whichever is less.

If the employer utilizes the “two-thirds ordinary rental value” measurement for the value of lodging, this could of course vary depending on where the live-in arrangement is located. Such employer would thus have to take care to document the basis of its calculations, including current consumer price index rates for comparable housing. Of course, just paying the $381.20/month or $563.90/month would be the safer avenue, even if those levels happened to exceed the applicable “two-thirds ordinary rental value.”

Under Wage Order 15, the meal credits may not be more than:

• $2.45 for breakfast;
• $3.35 for lunch; and
• $4.50 for dinner.

The definitions and rules for household workers in California have many other aspects.Our firm’s attorneys Tim Bowles or Cindy Bamforth can assist employers with such questions or issues.

Law Offices of Timothy Bowles

We are extremely pleased to announce that Helena Kobrin is now “of counsel” to our firm. Helena was admitted to The Florida Bar in 1978, first specializing in transactional and commercial matters, as well as governmental regulation and real estate and probate work.

Helena was then in-house attorney for several years for a large non-profit organization in Florida. Moving to the Los Angeles area, joining the State Bar of California in 1991, and as partner in the Bowles & Moxon and then Moxon & Kobrin firms, Helena has since worked extensively on copyright, trademark and trade secret issues, contract review and drafting, bankruptcy, litigation, dispute resolutions, and much more.

Starting in the 1990s, Helena was instrumental in establishing protections for copyrights and trademarks from Internet abuse. This included representation of plaintiffs in the first-ever copyright infringement suit over unauthorized online postings. That case led to the passage of federal law that requires service providers to help copyright owners remove infringements from websites . The law in turn protects service providers proactive in removing such unauthorized uses of copyrighted material online.

Helena’s 35 years of experience is now available to assist us and our clients in all of her various areas of practice. We are of course very happy with this significant expansion of services now available to our clients.

Law Offices of Timothy Bowles

The IRS issues annually its optional standard mileage reimbursement rates for an employee’s business use of his or her vehicle. The IRS has decreased the rate from 56.5 in 2013 to 56 cents per mile in 2014.

The government calculates the mileage rate by an annual study of the fixed and variable costs of operating an automobile.

Under California Labor Code Section 2802, employers must fully reimburse employees for all work-related expenses actually and necessarily incurred. Many employers choose to use the IRS mileage reimbursement rate to satisfy their reimbursement obligation.

However, if the employee can show the IRS reimbursement rate does not cover all of his/her actual and reasonable business-related vehicle expenses, the employer must pay the difference.

For more details on required reimbursements to employees for business purposes, visit www.IRS.gov.

Law Offices of Timothy Bowles

There are economic risks for an employer who misclassifies a worker who should be employed as an independent contractor. A wide range of California and federal agencies have the power to impose back taxes, interest and penalties upon companies who unsuccessfully attempt the tactic.

California placed greater deterrents on the practice in 2012. Labor Code sections 226.8 and 2753 permit certain officials or a court to impose civil penalties between $5,000 and $25,000 for each instance of willful misclassification against both employers and any individual adviser (other than a lawyer) who “knowingly advises an employer to treat an individual as an independent contractor to avoid employee status”.

The agency or court directing such payment must also direct the business or person to post a notice on its website for one year, specifying that the company has violated the law, has had to change its business practices in order to cease doing so, and that employees who believe they were also misclassified may contact the Labor and Workforce Development Agency. See also, “Personal Liability and Mandatory On-Line Flogging for Misclassifying Employees as Independent Contractors.”

Boiled down, employers can impose their oversight and control over an employee’s daily production while independent contractors are, well, independent, free to provide services to the hiring party by any means the contractor chooses. However, there are never any absolutes. Determination of “employed” or “contracted” status is an exercise in comparing and balancing many factors, sometimes conflicting, on the degree and manner of control. Two recent California appeals court decisions illustrate how this is always a case-by-case proposition.

In Bain v. Tax Reducers, Inc. (2013) 219 Cal.App.4th 110, the California Court of Appeal found that an accountant working for a tax preparation and bookkeeping firm was an employee and not an independent contractor as the company had classed him. The court noted the firm required the accountant to:

• attend staff meetings;
  
• have his work reviewed before it went to clients;
  
• do administrative functions and fill out time sheets like employees did;
  
• do work the firm assigned to him; and
  
• work the hours the company established

The court also pointed out that:

• the accountant had no other clients,
  
• he primarily used supplies and equipment provided by the company,
  
• the company marketed him as its worker and he did not market himself,
  
• he was at-will,
  
• he performed a function central to the firm’s services to the public,
  
• the firm reimbursed his expenses,
  
• he did not invoice the company,
  
• he did not use subcontractors or his own employees to do any of the work

In contrast, in Beaumont-Jacques v. Farmers Group, Inc. (2013) 217 Cal.App.4th 1138, another California Court of Appeal panel found that a district manager for a group of related insurance companies was an independent contractor. The manager hired agents, who had to be approved by the company, and she trained and motivated the agents to sell the company’s products. Most importantly, the court found that even though she had to follow the company’s “‘normal business practice’ and ‘goals and objectives,’” the company did not control “to any meaningful degree the means by which [she] performed and accomplished her duties as a district manager.”

The court also observed that the manager:

• determined her own schedule, including hours, breaks, and vacations;
  
• hired and supervised her own staff and withheld taxes for them;
  
• she did administrative functions in her own office; and
  
• paid her own costs, such as a lease, telephone and office supplies, and deducted them on her tax return, which she filed as an independent contractor

The court found her properly classified as an independent contractor even though she was required to and did prepare reports and attend meetings of district managers.

As a relatively few pennies of prevention is clearly more sensible than the many thousands that it may cost to resolve a classification gone wrong, businesses should confirm any contractor relationship is soundly defined and justified as independent in practice. For assistance, please contact attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also, “Independent Contractors and Employees Avoiding Misclassification of Hired Workers in California.”

Law Offices of Timothy Bowles

Despite staffing cuts, hiring freezes and sequestration woes, the U.S. Equal Employment Opportunity Commission (EEOC) recovered a record $372.1 million for its private sector workplace discrimination charges — $6.7 million more than it recovered the year prior.

The EEOC enforces federal anti-discrimination in employment laws. According to the EEOC’s Fiscal Year 2013 Performance and Accountability Report (PAR), the EEOC received a 93,727 private sector discrimination charges. Although some 6,000 less than the prior three years, it still ranks among the agency’s top five.

The EEOC has continued to focus on systemic enforcement, targeting unlawful patterns, practices or policies which broadly impact an industry, profession, company or geographic area. Systemic practices include discriminatory barriers in recruitment and hiring; discriminatory restricted access to management training programs and to high level jobs; exclusion of qualified women from traditionally male dominated fields of work; unlawful pre-employment inquiries aimed at detecting disabilities; and age discrimination by reductions in a workforce.

The EEOC reports 300 systemic investigations in fiscal 2013 resulting in 63 settlements or conciliation agreements totaling some $40 million. Agency lawsuits filed for systemic enforcement represented over 20 percent of all active suits in that 2013, the largest proportion since tracking started in 2006. The EEOC also obtained more than $160.9 million in monetary benefits for complaining employees through mediation resolutions, the second highest level in the agency’s history.

If you as employer don’t wish to contribute to any further groundbreaking statistics, we can help. For more information concerning California or federal employment laws, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles

While employers are barred by federal law from knowingly employing unauthorized immigrants, companies are also barred from treating any immigrant unfairly, whether or not authorized to work in the U.S. New California laws for 2014 provide the strongest anti-retaliation protections for immigrant workers in the country. This legislation penalizes employers who threaten to report immigration status of an employee in retaliation for his/her exercising rights to complain over workplace conditions:

• Labor Code 98.6 confirms an employee’s right to make a written or oral complaint over unpaid wages without employer retaliation. That statute now directs that an employer can be liable for a civil penalty, up to $10,000 per violation.
• New Labor Code 1019 prohibits an employer from engaging in “unfair immigration-related practices” in retaliation for the exercising of any right protected under the Labor Code or local ordinances. These rights include filing good faith complaints over the employer’s labor practices, seeking information on whether the employer is in compliance with workplace laws, and informing another person of his/her employment rights. “Unfair practices” under this new law include: (a) requesting more or different documents than required by the federal I-9 form; (b) refusing to honor any I-9 listed documents that reasonably appear to be genuine; (c) misusing the federal E-Verify system to check employment status in a manner not required by law; (d) threatening to file or filing a false police report; and (d) threatening to contact or contacting immigration authorities except if and as required by federal authorities.
• Labor Code 1019 authorizes an employee subjected to such unfair immigration-related practice to file suit against the employer for damages, penalties, attorney fees and costs.
• This new law also establishes a three-tier license suspension scheme. An employer who commits “unfair immigration-related practices” can have its business or professional license(s) suspended for periods of up to 14 days for a first violation, 30 days for a repeat violation, or 90 days for any violation thereafter.
• Similarly, new Labor Code 244 prohibits an employer from reporting or threatening to report an employee’s (or former or prospective employee’s) suspected citizenship or immigration status (or the status of the person’s family member) because that person exercised his/her rights to complain about workplace conditions, including claimed illegal discrimination or harassment.

Employers should of course ensure their required I-9 procedures are in place. These new laws establish that businesses are prohibited from attempting to “leverage” any immigration or citizenship status to thwart a worker from complaining about wages or other workplace practices or conditions or to punish an employee for having done so. Worker complaints over such practices or conditions should be fielded and resolved thoroughly and professionally. Employers should ensure supervisors refrain from making any threats to use a worker’s immigration status against him or her.

For more information concerning an employer’s obligations under California or federal employment laws, contact one of our attorneys Tim Bowles or Cindy Bamforth.

Law Offices of Timothy Bowles

United Parcel Service, Inc. (UPS) essentially “won” an age discrimination case when a California jury awarded an ex-employee only $27,280 in damages. That relative victory was short-lived, erased by the trial judge awarding the worker $700,000 for her attorney fees. The appeals court recently upheld this decision. Muniz v. United Parcel Service, Inc. (9th Cir. 2013) 738 F.3d 214.

Kim Muniz sued employer UPS alleging, in part, that supervisor Ron Meyer demoted her based on gender and age discrimination and retaliation in violation of California’s Fair Employment and Housing Act (FEHA), California Government Code 12900 and following sections. UPS argued it had promoted Muniz beyond her level of competence and Meyer was simply the first to recognize Muniz’s failings.

The jury found Muniz’s gender wrongfully motivated UPS to demote her and was a substantial factor in causing her harm. However, while Muniz requested damages totaling over $700,000, the jury only awarded her $27,280 — $9,990 for lost earnings, $7,300 for past medical expenses and $9,990 for past non-economic losses.

Both sides claimed victory and sought payment from the other for attorney fees under FEHA, Government Code section 12965(b). The court found Muniz the prevailing party, at which point she requested $2,000,000 in attorneys’ fees (some 73 times the damages award). The district court judge then awarded her some $700,000, or 26 times the jury’s damage award.

UPS appealed the $700,000 assessment, claiming Muniz didn’t deserve that much after her very limited success at trial. However, the appeals court was unsympathetic, ruling that “a trial court does not under California law abuse its discretion simply by awarding fees in an amount higher, even very much higher, than the damage awarded, where successful litigation causes conduct which the FEHA was enacted to deter [to be] exposed and corrected.’”

This case underscores that employers must consider the possibility of attorney fee awards to prevailing employees in FEHA discrimination cases even if the worker’s claims appear to be relatively weak. Of course, to reduce the potential for employee claims as much as possible, employers should take effective measures to prevent unlawful workplace conduct. Employers should also always promptly and thoroughly investigate all complaints of discrimination, harassment or retaliation and take effective remedial action as necessary. Company managers must always act as part of the solution to any such claim and, whether out of neglect or other ill-advised reaction, never place themselves in a position where they can be perceived as part of the problem.

For more information or assistance, please contact the Law Offices of Timothy Bowles, 626-583-6600 or visit our website at Law Offices of Timothy Bowles.

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 employers 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

If you have ever written a story, poem, novel, essay, research paper, or song, taken a photograph or video, performed music, or been in a play or a film, you were at some point a copyright owner. However, you may not still own those rights if you have sold, assigned or otherwise given those rights away. Loss of rights might be by a formal agreement, for example through an entertainment, publishing or music industry contract, or by some other means. If you were an employee in the U.S. when you made your creation, your employer owns the copyrights, based on U.S. law and the concept of “work-made-for-hire.”

A copyright is an owner’s exclusive right to do certain things with an original work and to prevent others from doing so without permission. For example, under U.S. law, the owner is entitled to protect an original work from being copied by others in whole or in part, whether by photocopy or by audio or video copy. Copyright also protects the right to publicly perform or display an original work, to make derivative works from it, and to sell, lease or license copies of it to others. Copyright protects your tangible, specific expressions of your creation, but not the idea or concept behind it.

If you – or one of your employees while on the job – create a written work, sound recording, musical composition, graphic design, architectural plan, photograph, or many other creative works, that creation is copyrighted even if you never take any action to protect it legally.

Nevertheless, there are good reasons why you should protect your copyrighted works by registering them with the U.S. Copyright Office. Registration carries the right to file suit if an infringement occurs, as well as the rights to collect so-called “statutory damages,” set amounts that do not require proof of actual money loss, as well as attorney fees. Especially if you publish or broadcast your copyrighted work in a manner that it could easily be infringed, it is better to file for a registration early on than to have to scramble to register after an infringement occurs, incurring higher expedite fees in the process and missing out on some of the remedies available to a registered copyright owner.

There is of course much more to the process. If you need help with your copyrights, please contact our Of Counsel attorney, Helena Kobrin.

Law Offices of Timothy Bowles