California employers are not legally required to provide their employees with paid or unpaid vacation time. However, if the employer does provide such benefits, it must comply with certain restrictions under California law:

• Vacation time is considered wages and is earned (or vests) as labor is performed;
• Accrued vacation cannot be forfeited, even upon termination of employment;
• Employers can decline to provide vacation benefits during a new hire's introductory period or even the entire first year of employment so long as the accrual rate does not decelerate at any point thereafter. For example, an invalid plan would provide no vacation in year one, four weeks' vacation in year two; and two weeks' vacation in year three;
• Employers can place a reasonable cap on vacation benefits that prevents an employee from earning vacation over a certain number of hours or days, but employees must be given a reasonable amount of time to use accrued vacation before they reach that cap;
• Alternately, employers can cash out accrued, unused vacation benefits on a yearly basis at the employee's current pay rate;
• Employers can mandate and/or prohibit vacation scheduling at specific times of the year with reasonable advance notice, typically 90 days; and
• Upon termination of employment, accrued, unused vacation must be paid at the final rate of pay and must be documented in a separate line item on the pay stub.

Policy Drafting Tips:

• Specify which employees are eligible for vacation pay (i.e., regular full-time employees only);
• Describe any waiting period before new hires can begin to accrue the benefit;
• Provide the accrual rate for each year of employment;
• Specify any reasonable ceiling accrual amount/cap (for example, one and one-half year's vacation pay);
• Determine whether employees can request and receive vacation benefits before they accrue;
• Explain when and how employees can request a scheduled vacation; and
• Define any specified slow or busy times of the year when the employer may either require and/or refuse vacation scheduling.

Take-Away:

Implement and regularly review your handbook to include a vacation benefits policy if applicable.

We publish this series to educate employers on best practices for a well-written handbook that assists applicants, employees, and management alike. To purchase our 2023 template handbook - which contains the above policy and much more - and accompanying forms or for more information, please contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

See also:

• Is Dotted, Ts Crossed - Workplace Policy Handbook & Forms for 2023 (March 19, 2023)
• California Paid Vacation Can Be No Holiday - State Rules Ban "Use It or Lose It" (May 21, 2021)
• Prepare for Summer - Effectively Manage Paid Vacations (May 10, 2018)

Cindy Bamforth
June 2, 2023

In honor of Older Americans Month in May, Equal Employment Opportunity Commission (EEOC) Chair Charlotte Burrows recognized the large numbers of older workers remaining in the workforce and their strong value to employers, including:

• "Strong work ethic and professionalism"
• "Strong 'soft skills,' including leadership, problem-solving, and communication"
• "Context and perspective, based on their experience, which bolsters collaboration and creativity"
• Increased "'wisdom, resilience, compassion, and tolerance of stress'"
• Longer commitment to employers
• "Stability and continuity"

She also cited the discrimination issues that older workers may face and committed to vigorous EEOC enforcement of the Age Discrimination in Employment Act (ADEA). The ADEA protects anyone 40 and over from discrimination in hiring, firing, promotion, compensation, and employment conditions and privileges.

In one example of recent EEOC enforcement, it sued an employer that constantly asked an over-60 employee to retire, and when she would not, eliminated her job, reinstating it a month later with a 30-year-old worker. In another case, the EEOC settled a suit against a manufacturer for $460,000, an injunction, and monitoring of future practices. The employer had been hiring unqualified younger applicants and refusing to hire qualified older workers, and eliminating older workers from their positions.

Ms. Burrows also advised caution in employment application questions so they do not disclose facts that could lead to biased hiring decisions, such as those which indirectly (or directly) disclose age.

Take-Aways:

Employers should avoid all forms of discrimination against protected classes, including age, in hiring, firing, promotion, compensation, benefits, and every aspect of employment. They should have a good job application created or approved by an employment attorney to avoid asking for information that directly or indirectly discloses a person's age (or gender or other protected categories).

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

See also:

• Workplace Artificial Intelligence, EEOC Goes Old School - Data In, Equal Opportunity Out (May 26, 2023)
• Age Discrimination, Employee's Suspicion Not Enough -- Older Worker Needs More Than Her Belief of Unequal Treatment (March 10, 2023)
• Cautionary Tale Episode 54, Speed Bump - California Sues Tesla for Race Discrimination and Harassment (April 15, 2022)

Helena Kobrin
June 2, 2023

Washington and Oregon employer R&SL, operating as "TEAM," has agreed with the Equal Employment Opportunity Commission (EEOC) to pay $276,000 to certain employees in settlement of a national origin discrimination and retaliation charge.

TEAM had adopted a rule that employees could not speak Spanish and fired five employees who refused to comply. EEOC treats English-only policies that lack business necessity -- and apply even when customers are not around or during breaks -- as national origin discrimination under Title VII of the Civil Rights Act.

In addition to paying the employees, TEAM also agreed to revamp its policies in both English and Spanish, train employees, have an anonymous complaint procedure, conduct prompt investigations of discrimination and harassment complaints, and provide reports to the EEOC.

Elizbeth Cannon, director of EOC Seattle Field Office Director, stated. "Employers should think twice before imposing limitations on what languages are 'allowed' to be used at work. Unless there is a legitimate business necessity, such policies are likely to discriminate against workers based on their national origin. We commend TEAM for engaging in the conciliation process and agreeing to take meaningful, comprehensive steps to remedy the issue."

Take-Aways:

Under both federal and state laws, employers should not restrict employees speaking in a language other than English if there is no business necessity for doing so, and never when they are on breaks. Consulting an employment attorney about what constitutes business necessity is a good idea.

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

See also:

• Is Dotted, Ts Crossed - Workplace Policy Handbook & Forms for 2023 (March 19, 2023)
• Cautionary Tale Episode 63 - EEOC Obtains $2 Million Settlement with McDonald's Franchisees for Tolerating Sexual Harassment (February 10, 2023)
• Cautionary Tale Episode 54 Speed Bump - California Sues Tesla for Race Discrimination and Harassment (April 15, 2022)
• Cautionary Tale Episode 37 - Workplace Culture Clash - California Challenges Cisco Systems for Color ("Caste-Based") Discrimination (September 4, 2020)

Helena Kobrin
May 26, 2023

I ponder the term "AI," aka "artificial intelligence." From pocket calculators to big-data Google search engines, what is artificial about software that reliably provides shortcuts to ponderous Old School long division or weeks-long research among the library stacks? To call it "automated" is more like it, same acronym in any event.

AI is likely in every workplace save for an occasional sidewalk lemonade stand: timekeeping programs, payroll software, online recruitment and job application processes, etc. Systems improvements continue to accelerate, the marvels of our Digital Age.

Yet, the Equal Employment Opportunity Commission (EEOC) reminds employers that while AI "may be evolving, anti-discrimination laws still apply. The EEOC will address workplace bias that violates federal civil rights laws regardless of the form it takes." EEOC Chair Charlotte Burrows reiterates: "As employers increasingly turn to AI and other automated systems, they must ensure that the use of these technologies aligns with the civil rights laws and our national values of fairness, justice and equality,"

Thus was born in 2021 the agency's Artificial Intelligence and Algorithmic Fairness Initiative (Initiative) to examine workplace AI more closely and "guide employers, employees, job applicants, and vendors to ensure that these technologies are used fairly and consistently with federal equal employment opportunity laws."

The EEOC has since issued a May 12, 2022 guidance memo on the application of the Americans with Disabilities Act in assessing job applicants and employees and, this month, its technical assistant document "Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964" (May 18, 2023).

The Initiative's prime concern is whether AI systems "for employment decisions, including recruitment, hiring, retention, promotion, transfer, performance monitoring, demotion, dismissal, and referral" have "a disproportionately large negative effect" (so-called disparate impact or adverse impact) on any classification protected by Title VII, including race, religion, gender, national origin and many others.

Unlawful disparate or adverse impact discrimination is unintentional but nevertheless actionable under the law. For example, while an AI system to process job applicants is clearly a significant time and cost saver, the framing of its screening questions might over time inadvertently disfavor one ethnic or racial group over another.

Take Away:

The AI programs available to employers are multiple and expanding exponentially. See, e.g., Top 19 HR Management Software for HR Managers in 2023, May 2, 2023.

While the agency's Initiative and ensuing pronouncements are long on an employer's ultimate responsibility to ensure its automated human resources decision software is non-discriminatory (including the duty not to just take any vendor's word for it), the EEOC is very short on any sample system that would pass its muster.

Rather, referring to its 2007 memo on selection procedures and a 2006 issue on detecting race and color discrimination, the agency "encourages employers to conduct self-analyses on an ongoing basis to determine whether their employment practices have a disproportionately large negative effect on a basis prohibited under Title VII or treat protected groups differently. Generally, employers can proactively change the practice going forward."

In other words, employers are on their own, remaining responsible to monitor the fairness of their hiring practices, and should not presume their digital efficiency tools are intelligent enough to do the job for them.

See also,

• Age Discrimination: Employee's Suspicion Not Enough, Older Worker Needs More than Her Belief of Unequal Treatment (March 10, 2023)
• Why Job Descriptions Matter (April 4, 2018)
• Pre- Employment Testing - Inquiries are Limited to Job-Related Skills and Qualities (June 2, 2011)

Tim Bowles
May 26, 2023

California employers who offer medical, dental, and/or vision insurance should include a handbook policy listing such company-provided benefits.

Policy Drafting Tips:

• Describe all available benefits;
• Define which employees are eligible, such as regular full-time workers;
• Refer to the official health plan documents for all detailed information regarding insurance eligibility, benefits, and other features;
• Advise employees to confirm coverage for treatments before incurring expenses;
• Reserve the right to modify, revise or eliminate currently-provided benefits; and
• Consider mentioning the date of the open enrollment period.

Take-Away:

Implement and regularly review your handbook to include a health care benefits policy if applicable.

We publish this series to educate employers on best practices for a well-written handbook that assists applicants, employees, and management alike. To purchase our 2023 template handbook - which contains the above policy and much more - and accompanying forms or for more information, please contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

See also:

• Disorder Insurance - Workplace Policy Handbook & Forms for 2023 (March 2, 2023)
• Handbook Helper Episode 24 Personnel Records Policy - Preservation Salvation (April 27, 2023)
• Handbook Helper Episode 12 Prying Eyes - Employee Privacy Policy (September 30, 2022)

Cindy Bamforth
May 18, 2023

With limited exceptions, such as for continuing education required to maintain a government or industry-mandated professional license, employee time for company-required training programs - seminars, courses, conventions, and other educational opportunities - is compensable, particularly those aimed at improving existing job performance.

On the other hand, career advancement training programs may be non-compensatory if they are completely voluntary, involve no production work, are attended outside regular working hours, and enable the employee to advance from a current position to another, usually higher position and skill.

Employers should include a handbook policy that correctly addresses all such training programs.

Policy Drafting Tips:

• Define and provide examples of employee training programs;

• Explain which are compensable and how the employee will be paid for time spent in such training, including travel to the training site;
• Limit unauthorized overtime for hourly workers while engaged in compensable training; and
• Explain which career advancement programs are not compensable and why.

Take-Away:

Implement and regularly review a comprehensive, clearly written handbook to include a proficiency and career training policy.

We publish this series to educate employers on best practices for a well-written handbook that assists applicants, employees, and management alike. To purchase our 2023 template handbook - which contains the above policy and much more - and accompanying forms or for more information, please contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

See also:

• Disorder Insurance - Workplace Policy Handbook & Forms for 2023 (March 2, 2023)
• Handbook Helper Episode 24 Personnel Records Policy - Preservation Salvation (April 27, 2023)
• Booze School - California Alcohol Servers Must Be Trained by August 31, 2022 (August 5, 2022)
• Employee Training Programs - When Employers Must Compensate for Worker Education (March 29, 2011)

Cindy Bamforth
May 12, 2023

A prudent company must consider state and federal law before deciding to classify a worker as an independent contractor rather than an employee. Unfortunately, many businesses make such decisions for illegitimate reasons including avoidance of payroll record-keeping and employer-side taxes or the hiree does not want taxes withheld. These arbitrary preferences can lead to hiring an employee as an independent contractor, often without even entering into a written agreement as required under most pertinent laws.

State and federal government agencies have been pursuing companies aggressively for misclassification, with many resulting judgments into the hundreds of thousands or millions. See, for example, Cautionary Tale Episode 62, Department of Labor $5.6 Million Judgment for Drivers Miscast as Independent Contractors: Feds Fed Up With Trucker Misclassification (February 2023); Cautionary Tale Episode 61, Take Care With Caregivers: $1.8 Million Citation for Independent Contractor Misclassification (January 2023).

Each state has its own laws on independent contractor classification, and employers need to consult those laws for correct classification of out-of-state workers. We have addressed California law, currently adopted under AB 2257, covering the California independent contractor ABC test and the many lobbied exceptions adopted by the state legislature. See links below.

There are also various sources of federal law concerning correct designation of independent contractors. See, Fair Labor Standards Act Fact Sheet, including discussion of U.S. Supreme Court independent contractor factors; IRS discussion and links re independent contractors.

The potentially astronomical cost of misclassifying workers as independent contractors should motivate employers to only treat someone as an independent contractor if that person's situation fully meets all legal requirements.

Take-Aways: Companies should always proceed with caution in deciding whether to hire someone as an independent contractor. A person who will be an integral part of a company for a long time to come and whose functions the company controls should be an employee in virtually every instance. This is an area where assistance from an experienced attorney could help a company avoid expensive mistakes.

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

See also:

• Employee or Independent Contractor? Employers Who Misclassify Workers Put Themselves at Risk (September 16, 2022)
• California's Newest Independent Contractor Law Part I: Revamped Business-to-Business Exceptions (September 17, 2020).
• California's Newest Independent Contractor Law Part 2: Revised Referral Agency Exception (September 24, 2020).
• California's Newest Independent Contractor Law Part 3: "Fine Artists" and Other Clarified and Expanded Professional Services Exemptions (October 1, 2020).
• California's Newest Independent Contractor Law Part 4: Amateur Umpires and Referees Among Expanded "Specified Occupations" Exceptions to Strict Test(October 22, 2020).
• California's Newest Independent Contractor Law Part 5: New "Music and Entertainer" Exemption from the Strict "ABC" Test (October 29, 2020)

Helena Kobrin
May 5, 2023

Preservation Salvation

California employers must maintain a personnel file and a separate confidential file or files -- comprising medical records, private financial records, any applicable equal employment opportunity race, ethnicity and sex identities, and investigative or litigation files -- for each employee for at least four years after the employment relationship ends.

Employers should include a handbook policy on maintaining, preserving, protecting, and accessing these documents.

Policy Drafting Tips:

• Identify the company representative or division that maintains these files;
• Inform employees when personnel records must be provided to outside third parties, such as in compliance with a subpoena or other court or administrative order; during a workers' compensation proceeding; or in the administration of a company-sponsored benefit plan;
• Instruct employees how to request access to their own personnel records; and
• Ensure employees update their personal information, such as change of legal name, home address, or emergency contact person.

Take-Away:

Implement and regularly review a comprehensive, clearly written handbook to include a personnel records policy.

We publish this series to educate employers on best practices for a well-written handbook that assists applicants, employees, and management alike. To purchase our 2023 template handbook - which contains the above policy and much more - and accompanying forms or for more information, please contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

See also:

• Disorder Insurance - Workplace Policy Handbook & Forms for 2023 - Rule One: Rules (March 2, 2023)
• Handbook Helper Episode 5: Golden Rules - Workplace Conduct Policy (July 8, 2022)
• For the Records - Sound Management Practices For Personnel Documentation (August 14, 2020)

Cindy Bamforth
April 27, 2023

California employers must schedule either weekly, biweekly, or semimonthly (minimum two/month) payrolls. All wages must be paid within seven calendar days following the close of the payroll period. Temporary employees must usually be paid weekly (or daily for daily assignments).

Only salaried exempt-from-overtime employees covered by the Fair Labor Standards Actcan be paid once a month - so long as they receive their entire monthly salary on or before the 26^th day of the month, including the unearned portion between payday and the last day of the month.

Exempt employees must also receive full pay for any workweek in which they perform any work unless they are:

• Unless covered by accrued vacation or paid time off benefit, absent for one or more full days for personal reasons, such as vacation or personal time off;
• Absent for one or more full days for sickness if the deduction is made according to a bona fide sick pay policy and the employee has exhausted paid sick leave;
• On jury duty or military duty for a full workweek and perform no work; or
• Work less than a full week during the first and/or last week of employment.

Policy Drafting Tips:

• Specify the company's pay schedule;
• Identify the mandatory tax withholdings from employee compensation;
• Instruct employees how to submit changes to their W-4 forms;
• Describe payroll deduction rules for exempt employees; and
• Direct all employees where to voice concerns about wage deductions so that any mistakes can be quickly remedied.

Take-Away:
Implement and regularly review a comprehensive, clearly written handbook to include a paydays and deductions policy.

We publish this series to educate employers on best practices for a well-written handbook that assists applicants, employees, and management alike. To purchase our 2023 template handbook - which contains the above policy and much more - and accompanying forms or for more information, please contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

See also:

• Disorder Insurance - Workplace Policy Handbook & Forms for 2023 (March 2, 2023)
• Handbook Helper Episode 20 Overtime Policy - Burning the Midnight Oil (March 9, 2023)
• Handbook Helper Episode 19 Timekeeping Policy - Fourth Dimension Attention It's in the Cards (February 24, 2023)

Cindy Bamforth
April 18, 2023