California Penal Code section 487m criminalizes intentional Labor Code violations – such as failing to timely pay all required wages (e.g., minimum wage, overtime, premium pay for missed breaks), requiring off-the-clock work, or taking workers’ tips -- as felony grand theft if the underpaid wages exceed $950. For this section, “employee” includes an independent contractor and “employer” includes the hiring entity of an independent contractor. Conviction can result in a jail sentence of up to three years.

On February 16, 2024, the California Department of Industrial Relations (DIR) launched an $18 million Workers’ Rights Enforcement Grant Program (the Grant Program) for local prosecutors to aggressively pursue employers who violate labor laws.

Labor Commissioner Lilia Garcia-Brower stated: “We appreciate the legislature’s support in creating this funding source to incentivize the prosecution of wage theft. This is a serious and persistent problem, which demands increased collaboration with government agencies and community leaders. This grant program will help further our efforts to combat wage theft and unfair competition in the workplace. We look forward to working with local prosecutors in addressing these important issues.”

Take-Aways:

The Grant Program underscores the importance for all California employers to know and apply proper pay practices. Our firm can help with friendly, confidential wage audits, ranging from a small targeted sampling of pay records to extensive review of workplace wage-and-hour practices.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• We Offer an Ounce of Prevention; Make Wage Audit a Priority (February 15, 2024)
• $5.5M To Settle Wage Theft Claim — Elderly Care Provider Fought Underpayment Citation for Five Years (January 5, 2024)
• PAGA Monster Grows More Legs – Best Protection Against Potentially Devastating Group Labor Claim is …Prevention (February 2, 2024)

Cindy Bamforth
March 8, 2024

We have completed this year’s “what’s new” employment law seminars, receiving the best possible reward: participating managers’ confirmed greater command of this mine-laden, but critical, field.

“Your all-day session gave me much more certainty as an office manager. Navigating California’s many employment laws, seemingly in a constant state of change, can seem overwhelming. No longer. Thank you, Tim, Cindy and team for making the subject much understandable, arming managers with the knowledge critical to secure and stable company expansion. This is a win-win for all!” ~BC

“I discovered much more than I thought possible. I always enjoy these seminars, each year coming out more educated on HR. Thank you. I will be implementing some changes right away.” ~ PM

“Great webinar. There is a lot of information for a new employer in California. The process is definitely more manageable. My only regret is not contacting you sooner. Thanks Aimee, Cindy and Tim for your help.” ~ AS

For questions and assistance on the 2024’s new laws or any other employment-related issue, contact Aimee Rosales, officemanager@tbowleslaw.com, 626.583.6600.

Tim, Cindy and team
March 1, 2024

As of February 3, 2025, California employers no longer have to maintain a COVID-19 model written program or provide written notice to close contacts and COVID cases.

COVID-related reporting and recordkeeping requirements, however, remain in effect until February 3, 2026, requiring California employers to:

• Keep records and log all COVID cases (i.e., employee name, contact information, occupation, worksite, last date at workplace, and date of positive test and/or diagnosis);
• Retain such records for at least two years; and
• Provide COVID case information to the appropriate authorities immediately upon request and when required by law.

As a reminder, California employers must always:

• Maintain a safe and healthy workplace;
• Implement and maintain an effective Injury and Illness Prevention Program (IIPP); and
• Identify, evaluate, and correct any unsafe or unhealthy COVID-related workplace situations if COVID is deemed a workplace hazard.

Take-Aways:

Employers should comply with the above; properly implement all appropriate safety and health precautions; and monitor Cal/OSHA’s website for any new updates.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Not So Safeway? Cal/OSHA Cites Supermart for Serious Hazardous Conditions in Warehouse (February 14, 2025)

Cindy Bamforth
February 27, 2024

To address the shortage of health care workers, Senate Bill 525 (SB 525) created Labor Code sections 1182.14 and 1182.15. Effective June 1, 2024, the new laws provide substantial minimum wage increases for health care workers in facilities ranging from tiny residential care facilities for the elderly (RCFEs) to hospital systems with more than 10,000 workers. Eventually raising all non-exempt health care workers to $25/hour, the rate of increase varies depending on type and size of health care provider. The new laws supersede local minimum wage laws.

“Covered health care facility” includes not only employees of large acute care hospitals and facilities in integrated health care systems, licensed skilled nursing facilities, various kinds of clinics, including dialysis, specialty clinics affiliated with schools for teaching purposes, medical research and education facilities, and urgent care clinics, but also physician groups with 25 or more physicians, licensed RCFEs, licensed home health agencies, and even county correctional institutions and patients’ homes where health care services are delivered by entities owned by acute care or psychiatric hospitals.

Employees who provide patient care, health care services and health care supporting services, are covered. Supporting services include positions such as housekeeping, janitors, clerical and nonmanagerial administrative workers, guards, gift shop personnel, food service workers, groundskeepers, warehouse and laundry workers.

The new laws also cover contractor employees and subcontractors who perform or support health care services primarily on the premises of a health care facility.

Under section 1182.14, the pay categories and rates for covered facilities are quite detailed:

1. The default minimum wage for health care workers, unless otherwise specified in the statute is: $21/hour from June 1, 2024 to May 31, 2026; $23/hour from June 1, 2026 to May 31, 2028; and $25/hour as of June 1, 2028.

1. For large health care facility or integrated health care delivery systems, employers with 10,000 or more full-time equivalent employees, those in counties with 5 million or more population, and certain dialysis clinics and their owners and operators, wages increase to $23/hour on June 1, 2024; $24/hour on June 1, 2025, and $25/hour on June 1, 2026.

1. For hospitals and independent hospitals with a high or elevated governmental payor mix, e.g., Medicare and Medicaid, rural independent health care facilities, and health care facilities owned, operated or affiliated with counties with population under 250,000, the rate is $18/hour as of June 1, 2023, with annual 3.5% increases, and $25/hour as of June 1, 2033.

1. For health care workers at an integrated health care delivery system, certain licensed general acute care hospitals, or distinct sections of such hospitals, and special hospitals, as well as certain clinics, community clinics, rural health care clinics, and urgent care clinics, the rates are: $21/hour from June 1, 2024 to May 31, 2026; $22/hour from June 1, 2026 to May 31, 2027; and $25/hour as of June 1, 2027.

The law tasks the Department of Industrial Relations (DIR) with developing a waiver program by March 1, 2024. Under the program, a covered health care facility can apply for an alternate phase-in or temporary pause of the new wage requirements if it can show through documentary evidence that complying with the new wages “would raise doubts about [the facility’s] ability to continue as a going concern under generally accepted accounting principles.”

Section 1182.15 requires licensed skilled nursing facilities to increase health care worker wages to $21/hour n June 1, 2024, $23/hour on June 1, 2026, and $25/hour on June 1, 2028. However, section 1182.15 only goes into effect when a patient care minimum spending requirement applicable to skilled nursing facilities is required.

For salaried health care workers to be exempt from overtime, health care facilities must pay them a monthly salary equivalent to at least 200 percent of the state minimum wage or 150 percent of the health care worker minimum wage.

Take-Aways:

Employers in the health care industries need to ascertain whether they are covered by the new laws and plan how to comply starting June 1, 2024. Facilities seeking a waiver should watch for the DIR’s imminent issuance of FAQs and forms.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• 5.5M To Settle Wage Theft Claim, Elderly Care Provider Fought Underpayment Citations for Five Years (January 5, 2024)
• California Minimum Wage Rates Increases (December 20, 2023)
• Physicians and Surgeons Overtime Exemption Rates (November 21, 2023)

Helena Kobrin
February 23, 2024

Activision Blizzard, Inc. and related companies were targeted in 2018 with joint investigations by the California Civil Rights Department and the Equal Employment Opportunity Commission.

The CRD’s resulting 2021 lawsuit claimed Activision’s systemic discrimination against women through unequal pay, constructive discharge, retaliation, promotions, instances of inappropriate or offensive conduct, and failing to prevent such sex-based inequality. The company has now entered a consent decree, subject to court approval, to settle the case for $54 million and other commitments including recruitment practices to include underrepresented groups and changes to hiring, compensation, promotion and other practices. See FAQ.

All Activision women employees from October 12, 2015 to December 3, 2020 will receive a standard minimum payment, and some, depending on longevity, will receive more.

Also in 2021, Activision entered a consent decree with the EEOC to settle federal court claims for sexual harassment, pregnancy discrimination, and related retaliation. The terms included $18 million compensation for women targeted, Activision’s correction of personnel records containing negative references and provision of future career opportunities and fair references.

Both consent decrees require the Activision companies to comply with applicable laws in their policies and practices, provide appropriate training, and handle complaints timely and effectively.
Take-Aways: Discrimination is a real issue. Employers must understand what constitutes illegal conduct and steer clear in all employment practices, including hiring, termination, promotion, pay, and overall treatment of employees. We offer Sexual Harassment Prevention Training seminars, virtual and in-person. Contact Aimee Rosales at officemanager@tbowles.com for more information.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Take Heed: Responding to Harassment and Discrimination Complaints Correctly (July 28, 2023)
• Tracking Down Discrimination: EEOC 2020 Report Retaliation, Disability Claims Predominate (April 16, 2021)

Helena Kobrin
February 16, 2024

California employers can be in for a rude awakening on discovery they are not fully compliant with the Labor Code. Devastating results can occur when not-so-friendly state or federal investigators come knocking.

Worse are the employee-driven wage and hour lawsuits that can force a business to shut its doors. See, PAGA Monster Grow More Legs – Best Protection Against Potentially Devastating Group Labor Claims is … Prevention (February 2, 2024). For even a handful of irregular meal break timekeeping records for 30 workers, averaging 1.5 violations per week for one year, one company recently faced $468,000 in penalties under California’s 2004 Private Attorneys General Act (PAGA).

Given the high stakes, best practices demand an internal proactive wage audit to locate and fix improper pay practices before any government agency or workers’ attorney points a finger in hostility.

Common topics:

• Independent contractor classification;
• Salaried worker classification;
• Pay periods and timing of payroll;
• Itemized wage statements;
• Timekeeping records, including rounding and accuracy of tracked time;
• Alternative workweek schedules;
• Compensation for minimum wage, overtime, reimbursed expenses, bonuses, commissions, piece rate, mileage, travel time, training time, mandatory meetings, sick pay, vacation or PTO pay;
• Meal and rest break practices;
• Fair Pay Act compensation for similar job duties;
• Interns and volunteers; and
• Remote worker compensation.

Utilizing qualified outside counsel:

• provides an objective perspective;
  
• brings a seasoned eye from having seen too many worst-case scenarios; and
  
• findings are confidential by the attorney-client relationship

Take-Aways:

Our firm is equipped to conduct friendly wage audits, ranging from a small targeted sampling of pay records to a thorough inspection of multiple wage-and-hour matters. E-letter subscribers will soon receive a link to register for a free 30-minute webinar next month to further explore the risks and options.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• $5.5M To Settle Wage Theft Claim -- Elderly Care Provider Fought Underpayment Citation for Five Years (January 5, 2024)
• PAGA Monster Quelled … For Now – Appeals Court Overturns Wal- Mart’s $102 Million Penalty and Damages Judgment (July 2, 2021)

Cindy Bamforth
February 15, 2024

As previously covered, California has tightened the noose on noncompete clauses that could restrain employees from engaging in lawful professions, trades, or businesses.

A new law, AB 1076, adds Business and Professions Code section 16600.1, requiring employers with in-state or California-based employees by February 14, 2024:

• To determine if any signed employment agreements, offer letters, confidentiality agreements or severance agreements contain an impermissible noncompete clause, even if the agreement was originally signed outside of California;
• If so, to individually notify all California-based current and former employees who were on payroll at any time after January 1, 2022, that the non-compete is void; and
• To deliver the written notice to each affected employee’s last known mailing address and email address.

Failure to comply with the February 14 deadline constitutes a violation of California’s Unfair Competition Law, which may carry civil penalties.

Take-Aways:

Affected employers must comply with AB 1076’s February 14, 2024 deadline; ensure current and future employment contracts do not contain unenforceable noncompete provisions; and refrain from enforcing an unlawful noncompete provision.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Competition Free-For-All: Most Non-Competes Are Unenforceable in California (July 23, 2021)

Cindy Bamforth
February 8, 2024

While there have been a few employer-favored developments, claims under California’s 2004 Private Attorneys General Act (PAGA) continue to rise, permitting a single worker to seek Labor Code penalties on behalf of a company’s entire payroll. Facing potentially crushing liabilities or without the resources to fight bogus accusations, many employers seek to promptly settle such claims, further encouraging PAGA lawyers to find other targets.

A recently encountered example: a building contractor, to its credit, had for years ensured its field workers accurately clocked out and back in for their mandated meal periods. Yet, facing a seemingly innocuous PAGA accusation that the company deprived its crews of their “lunch rights,” those records yielded an irregular pattern of meals potentially in Labor Code violation. The prospective impact of this single accusation? 30 workers, average 1.5 violations per week, $100/first violation and $200/further violation per worker per one-week pay period over minimum 12 months = $468,000.

The Supreme Court continues to confirm the unforgiving nature of this law. In Estrada v Royalty Carpet Mills (January 18, 2024), the Court invalidated a 2021 lower appeals court ruling that employers could nuke PAGA claims for their unmanageability. See, All Is Not Lost – Employers Protected from Out- of- Control PAGA Claims (September 17, 2021).

Management-side law firms have responded with helpful insights on how employers can still tactically deal with such law suits. See, e.g., Estrada v. Royalty Carpet Mills Largely Curtails Manageability Defense in California PAGA Cases (January 19, 2024); and The California Supreme Court Pulls the Carpet Out from Underneath Employers (January 18, 2024).

We aim to similarly assist our clients ensnared in such litigation. However, very few California employers have the resources necessary to make such moves, particularly all the way to a trial.

The Estrada decision once again confirms PAGA is here to stay. It takes but one ex-worker – perhaps rightfully disgruntled, perhaps not – and a seasoned plaintiff’s lawyer to crank-up a suit. PAGA requires no permission from any co-worker and no co-worker can opt out. The defendant employer in Estrada case had left California in 2017 for the high cost of doing business here and, with the case now headed back to the trial judge, still faces liability under this law.

Take-Aways:

By far the best PAGA defense is to never present or perpetuate the grounds to invite one. With the aid of experienced employment lawyers, thoroughly and regularly audit all relevant workplace pay policy and practices. Promptly correct all irregularities found. Spotless – or, at least, near spotless -- records and protocols are a powerful deterrent and the most effective response if, heaven forbid, PAGA comes knocking from the depths.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• PAGA Monster Quelled … For Now – Appeals Court Overturns Wal- Mart’s $102 Million Penalty and Damages Judgment (July 2, 2021)
• Please: Document Workplace Meal Breaks – Require Employees to Clock Out and Back In on Their Meals (June 4, 2021)
• The PAGA Monster Is Hungry – Non-Compliant California Employers at High Risk under Special Law (May 14, 2021)

Tim Bowles
February 2, 2024

A vestige of the pandemic, California hospitality workers laid off due to COVID have continuing and dramatically expanded comeback rights under SB 723. See: What’s New in 2024: Extended Comeback Rights: Hospitality Workers to Receive Longer Rehire Protection (November 10, 2023). Such rights extend not only to workers formerly employed by hotels, clubs, event centers, and airport-related hospitality providers, but also to janitorial and security guard companies.

The law imposes new – and very stringent -- burdens on employers hiring after any layoff (thus, even a termination of a single person) since March 4, 2020 for “a lack of business, reduction in force, or other economic, nondisciplinary reason.” Unless management can provide adequate evidence otherwise, that separation will be presumed to be “due to a reason related to the COVID-19 pandemic.”

If that presumption holds, then for any job opening in 2024 and through 2025, “[w]ithin five business days of establishing [the] position, [the hospitality industries] employer shall offer its laid-off employees in writing, either by hand or to their last known physical address, and by email and text message to the extent the employer possesses such information, all job positions that become available … for which the laid-off employees are qualified. A laid-off employee is qualified for a position if the employee held the same or similar position at the enterprise at the time of the employee’s most recent layoff with the employer.”

[A “laid-off employee” is “any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020.”]

“The employer shall offer positions to laid-off employees in an order of preference … If more than one employee is entitled to preference for a position, the employer shall offer the position to the laid-off employee with the greatest length of service based on the employee’s date of hire for the enterprise.

“A laid-off employee who is offered a position pursuant to this section shall be given at least five business days, from the date of receipt, in which to accept or decline the offer. A “business day” is any day except Saturday, Sunday, or any official state holiday. An employer may make simultaneous, conditional offers of employment to laid-off employees, with a final offer of employment conditioned on application of the [required] preference system …” Emphasis supplied.

Violations can be costly. Employers are subject to a $100 penalty per employee and $500 in damages per employee per day the violation is not cured.

Take-Aways:

Employers in the above hospitality industries must be especially careful on their hiring procedures, minimally over the coming two years. Best practices include thorough documentation of the basis for any employee layoff since the law’s March 4, 2020 pandemic start date – whether in any part for COVID or, alternatively, purely for other reasons. For any COVID-based layoff or for lack of such documentation otherwise, management must take care to follow such employee’s “rehiring” notice and acceptance rights summarized above and as contained in the full details of the new law.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Former Workers Get First Shot: 3.3 Million Reasons to Hire Back Pre-Pandemic Hospitality Employees (March 11, 2022)
• Comeback Trail: Hotels, Security Services and Others Must Offer Openings to Pandemic-Affected Former Staff (December 10, 2021)

Helena Kobrin
Timothy Bowles
February 2, 2024