California has long regarded intentional employer failure to pay wages and tips as a misdemeanor, with civil penalties and remedies for their recovery. Labor Code sections 215 and 216. Effective January 1, 2022, prosecutors will have the discretion to bring felony charges for such violations under certain conditions. Penal Code section 487m.

“Theft of wages” is the intentional deprivation of wages, benefits, tips or other workplace compensation the employer knows is due the employee under the law. Section 487m expands “employee” to include an independent contractor and “employer” to include the contractor’s hiring entity.

Such deprivation becomes grand theft for amounts greater than $950 from any one employee or independent contractor or $2,350 from two or more employees/contractors in any consecutive 12-month period. Grand theft can be a misdemeanor with county jail imprisonment for up to one year or a felony with 16 months in the county jail or state incarceration for two or three years.

Section 487m permits additional penalties of up to $10,000 and worker wage recovery through the “restitution” provisions of the Penal Code (sections 1202.4 and 1203.1).

The greater labor law’s potential bite, the greater business’s required vigilance to ensure full understanding and compliance with applicable workplace provisions.

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

See also:

• California Summer Minimum Wage Rate Increases (June 10, 2021)
• Minimus Maximus – A Brief History of Minimum Wage (April 2, 2021)
• California Wage Theft Protection Act (2012)

Tim Bowles
October 15, 2021

A.B. 1701, effective January 1, 2018, made “direct contractors” liable for all wages and benefits that any subcontractor at any level on a job fails to pay its workers, plus accrued interest. The resulting law, Labor Code 218.7, applies to any California contractor having a direct contract with an owner “for the erection, construction, alteration, or repair of a building, structure, or other private work.”

SB 727, effective January 1, 2022 as Labor Code 218.8, will make direct contractors also liable for penalties and liquidated damages for subcontractor non-payment of workers if the contractor:

• “Had direct knowledge of the subcontractor’s failure to pay the specified wage, fringe or other benefit payment or contribution”;

• Did not monitor required wage and benefit payments by periodically reviewing subcontractor payroll records containing the information on payroll documents compliant with Labor Code 226(a);

• Did not take steps to rectify such a situation upon learning of it, including withholding sufficient payment from the subcontractor; or

• Prior to making final payment to the subcontractor for work performed, did not obtain a sworn written statement confirming the subcontractor has paid all wages and benefits due its employees for the project.

The expanded law will still permit the Labor Commissioner and other third parties including labor unions to enforce these provisions against direct contractors via administrative or civil actions. However, subcontractor employees may not bring an action themselves.

Take-Aways:

Direct contractors should include in their written subcontractor agreements:

1. Confirmation of subcontractor obligations to pay workers for all wages and benefits;

1. As a condition of payments for services, requirement to provide the direct contractor full payroll and benefits information for each preceding pay period; and

1. Set-aside, indemnification, withholding and/or bonding provisions to promptly compensate a direct contractor for payments to subcontractor workers under the Act.

Best practices also include qualified legal guidance to formulate the contract terms establishing these safeguards.

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

See also:

• Bullet Dodging Part 4 - Building Subcontractors’ Exemption From the Strict New Limits on Who is “Independent” (October 31, 2019)
• What’s in a Name? - Employers Must Heed Pay Stub Technicalities (May 17, 2019)
• Correct Pay Stubs Save Bucks – Learn California’s Specific Pay Stub Requirements to Avoid Penalties (May 3, 2018)
• What’s New for 2018 Contractors Liable For Wages And Benefits If Subcontractors Don’t Pay Their Employees (January 11, 2018)

Helena Kobrin
October 14, 2021

California regulates the wages and hours of workers through a series of “Wage Orders.” Wage Order 15 (WO 15) covers employees engaged in so-called “household occupations,” including “personal attendants.”

Personal attendants are nannies, babysitters and certain caregivers who work in a private household to supervise, feed or dress a child or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. WO 15 directs that an attendant must not perform a “significant amount” of other duties, e.g., cleaning or doing laundry, without defining “significant.”

The Domestic Worker Bill of Rights (DWBR), effective January 1, 2014, remedied that omission, setting the “significant” other-work prohibition at more than 20 percent of the attendant’s total weekly hours.

The DWBA also added overtime pay for some, but not all, WO 15 personal attendants, including live-in workers, after 45 hours/week or nine hours/day. Attendants who are close family members, babysitters under 18 and “casual” babysitters (those sitting for a minor child on an irregular or intermittent basis and not in the business of babysitting) are not entitled to overtime.

Federal law complicates the picture, requiring third-party employers such as staffing agencies to pay overtime to “companions” after 40 hours/week. A companion is someone who provides: (a) fellowship, and (b) protection to an elderly, ill, injured, or disabled person for at least 80 percent of the workweek and provides “care,” i.e., assistance with daily living activities, no more than 20 percent of the time.

The federal rule does not apply to companions whom a patient or the patient’s family or guardian engages directly.

The potential conflict between these two sets of rules makes paying overtime to any California domestic worker qualifying as a personal attendant or companion after nine hours in a day or 40 hours in a week the prudent course of action.

Take-Aways:

Uninformed private and agency employers can become ensnared in legal complaints. We have even represented a 97-year-old woman facing an unpaid overtime claim by a caregiver. Thus, personal attendant employers should take appropriate action including:

• Have a written employment agreement with the caregiver specifying expected or scheduled work hours, duties, compensation and the “at-will” nature of the relationship (i.e., the caregiver can resign or be released from employment at any time, with or without cause or advance notice). For live-in caregivers, the agreement should include the person’s obligation to vacate the premises promptly when employment ends for any reason.

• Have the caregiver enter all working hours and meal start and end times in a written log, confirm its accuracy each day, and promptly clear up any discrepancies.

• Pay the caregiver by the hour at least twice a month, at a rate agreed in advance.

• Pay the caregiver at least minimum wage for all “hours worked,” defined by law as any time an employee is “suffered or permitted to work,” i.e., all time the caregiver is on duty. This may include the hours the caregiver is sleeping.

• Pay all earned overtime.

• Seek and obtain qualified attorney guidance on sound documentation and full legal compliance.

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

See also:

• The Basics of Overtime – Five Rules for California (April 27, 2018)
• The Need for Written Employment Agreements –Well-Drafted Contracts Eliminate Uncertainty and Ambiguity (March 30, 2018)
• Cautionary Tales Episode 7 – Paying Live-In Caregivers “Daily Flat Rate” Can Be a Very Expensive Mistake (November 24, 2017)

Helena Kobrin
October 8, 2021

For the relative ease in proving wrongdoing, unlawful retaliation against an employee for having complained of improper workplace conduct or conditions continues as the “go-to” accusation of choice against employers.

A worker seeking recovery for alleged discrimination or harassment must establish the employer’s motivating hostility toward that person’s race, gender or other protected classification. Not so with retaliation; the worker need only show that the employer fired her or him for having sincerely complained about some mistreatment regardless of any actual or intentionally offensive action.

The federal Equal Employment Opportunity Commission (EEOC) has announced a case-in-point: Texas-based Woodlands Psychiatry must pay $22,500, adopt corrective policy and conduct company-wide training stemming from its owner’s termination, via text, of a chemical dependency counselor/employee for having filed a charge of discrimination.

The EEOC’s regional attorney stated, “Title VII [of the Civil Rights Act of 1964] protects workers who participate in the EEOC process, especially those who seek redress from discriminatory or retaliatory conduct in the workplace by filing a charge of discrimination.” The agency’s lead attorney on the case added, “Retaliation against employees who report discrimination is unlawful. The Commission aggressively investigates, and, if necessary, prosecutes employers who violate Title VII’s anti-retaliation provision.”

While EEOC extends federal anti-retaliation standards to employers with 15 or more on payroll, the Department of Fair Employment and Housing (DFEH) enforces California’s equally stringent prohibitions against businesses with as few as five employees.

Take-Aways:

Through a printable brochure and other materials, EEOC offers important guidance to business for preventing retaliation claims. The DFEH posts similar assistance.

• Understand management responsibilities. Retaliation is illegal against applicants, employees or former employees for:
  • filing a complaint of discrimination with your business;
  • filing a charge of discrimination with a federal, state or local agency;
  • participating in a discrimination investigation or lawsuit (for example, serving as a witness); or
  • opposing discrimination (for example, threatening to file a charge or complaint of discrimination).
• Don't take out frustrations on the complaining employee. Treat the employee as if he or she had never reported discrimination, assisted with a discrimination investigation or lawsuit or opposed discrimination.
• Treat employees consistently. Before making employment decisions that may negatively affect the complaining employee, act consistently with past practice or with valid justification for treating the employee differently.
• Explain rules and expectations to employees. Ensure that employees understand your business's discrimination policies. Inform employees that retaliation is illegal and will not be tolerated.
• Establish an open door policy. Encourage employees to share any concerns about discrimination with management. Respond promptly and effectively to discrimination questions, concerns and complaints.
• Uphold policy across-the-boards. Ensure that company policies are followed and enforced consistently.

Tim Bowles, Cindy Bamforth or Helena Kobrin can assist with additional information.

See also:

• Tracking Down Discrimination - EEOC 2020 Report Retaliation, Disability Claims Predominate (April 16, 2021)
• Workplace Discrimination Prevention-California’s Fair Employment and Housing Act, A History (March 26,2021)
• Employee Terminations - Firing Low-Performing Workers While Limiting Repercussions (April 20, 2018)
• Unlawful Retaliation Defined (September 21, 2016)

Tim Bowles
October 1, 2021

The U.S. Equal Employment Opportunity Commission (EEOC) enforces federal laws prohibiting sexual harassment and retaliation.

On September 24, 2021, the EEOC announced suit against general construction company Focus Companies Group of Nevada (Focus) for sexual harassment, retaliation, and “constructive discharge” (i.e., forced resignation).

The complaint alleges Focus violated federal law by subjecting female workers to forcible kissing, coercive touching of male genitalia, unwanted grabbing and groping of body parts, sexually offensive and vulgar language, and lewd facial expressions.

The EEOC also contends Focus management threatened the women with acts of violence if they did not acquiesce.

The lawsuit seeks monetary damages for the victims and injunctive relief to prevent and correct discriminatory practices.

EEOC regional director Michael Mendoza commented, “It is imperative that employers, especially those whose workforce has been historically male, understand their responsibility to implement strong anti-harassment and retaliation policies. The responsibility falls on the employer to create a harassment-free working environment for all its employees.”

Take-Aways:

Employers must effectively respond to employee sexual harassment complaints. In conjunction with skilled sexual harassment prevention training and properly-crafted anti-harassment policies, management should ensure workers correctly report and managers properly investigate, document and resolve various forms of unlawful harassment, discrimination and retaliation.

We provide live webinar prevention training for all California employees for a flat fee. We also provide anti-harassment policies within our employee handbook. Contact officemgr@tbowleslaw.com for more information and to schedule your webinar.

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

See also:

• Cautionary Tale 35 – Over the Borderline – State Agency Settles Sex and National Origin Case for $450,000 (September 13, 2019)
• Cautionary Tale 33 – Choke the Jokes – EEOC Settles Tex-Mex Restaurant Servers' Sexual Harassment Case for $40,000 (August 15, 2019)

Cindy Bamforth
September 30, 2021

California law requires employers with five or more on payroll to provide sexual harassment prevention and resolution training to all managers and employees every other year. We offer an interactive live webinar as a superior alternative to impersonal point-and-click online training.

We have developed our presentation from over 15 years of delivery, with experienced, practical instruction on identification, prevention and internal resolution of workplace harassment, discrimination, and retaliation.

The compelling reasons to offer a live, interactive webinar to your workforce include:

• Interaction with trainer, with ability to apply principles to specific work conditions;

• Immediate answers to questions, benefitting all attendees;

• Employees typically pay closer attention;

• Proper emphasis on relative importance;

• Preventative measures emphasized;

• Interactive training confirms company commitment to effectively addressing and preventing unlawful or inappropriate workplace conduct; and

• By the bulk of feedback we’ve received, our sessions are engaging, even fun!

See also:

• Cautionary Tale Episode 45, Old Boy Kill-Joy, EEOC Sues Employer Sexual Harassment and Retaliation (September 30, 2021)
• The #metoo Movement’s Impact (April 2019)

Contact us TODAY for more information, pricing or to schedule your workforce’s webinars at (626) 583-6600 or officemgr@tbowleslaw.com

Law Offices of Timothy Bowles
September 30, 2021

Employment arbitration, preserved and promoted by the Federal Arbitration Act (FAA), is often used as a contractual alternative to court actions.

California has a long history of unsuccessful attempts to limit mandatory employment arbitration agreements despite the Supreme Court’s strong confirmations that the FAA permits such “take it or leave it” conditions on hiring.

AB 51, enacting Labor Code 432.6 (effective January 1, 2020), was the latest effort, prohibiting mandatory employment arbitration agreements for discrimination, harassment or retaliation claims under the California Fair Employment and Housing Act (FEHA) or claims under the California Labor Code.

Business organizations responded quickly, on January 31, 2020, winning a federal court injunction against AB 51 enforcement.

A 9^th Circuit three-judge appellate panel has now invalidated that injunction, restoring AB 51’s requirement that employees must consent to workplace arbitration agreements.

That appeals court ruling contains a twist, concluding that while the FAA protects an employer from criminal and civil penalties for entering a mandatory agreement with employees, that law does not shield that employer from such penalties for requesting a worker to enter that agreement.

This decision may not be the final word. In dissent, Judge Sandra Ikuta, foreseeing further review as high as the Supreme Court, observed: “Like a classic clown bop bag, no matter how many times California is smacked down for violating the . . . FAA, the state bounces back with even more creative methods to sidestep the FAA.”

Take-Aways:

Employers should:

1. Consider if requiring post-January 1, 2020 arbitration agreements is worth the risk while this law remains in effect. If a current or prospective employee refuses to sign such an agreement, the state has grounds for seeking civil or criminal penalties.

1. Consider avoiding such risk by proposing only voluntary arbitration agreements with ample time and space for applicants and workers to consider the decision free of pressure or coercion;

1. Review any arbitration agreements signed after December 31, 2019 to ensure they are not coercive, as regardless of AB 51, coercion is a ground to challenge any contract;

1. Consult a management-side employment attorney for the best advice on how to proceed.

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

See also:

• What’s New in 2020: California Prohibits Mandatory Employee Arbitration Agreements (December 18, 2019)
• The Need for Written Employment Agreements –Well-Drafted Contracts Eliminate Uncertainty and Ambiguity (March 30, 2018)

Helena Kobrin
September 24, 2021

Little can rank above an individual’s pride in her or his livelihood. No matter how much a failing, insubordinate worker might deserve it, it is thus imperative that management handle a termination free of any urge to finger-point or otherwise antagonize. A humiliating, yet justified firing can and often does fuel an ex-employee’s determination to “get even” through court action.

Severance agreements can play an important, even deciding role in achieving the desired smooth transition. In the course of a termination, the manager offers some amount of additional “severance” pay or other benefits (e.g., forgiveness of an employee’s debt) above all earned wages and accrued vacation pay. In exchange, the worker signs a thorough release and waiver of all claims, real or imagined, known or unknown. “All claims” can and should include any accusation for wrongful termination, discrimination, harassment, retaliation, breach of contract, and disputed wage payments.

There are special rules under the federal Age Discrimination in Employment Act (ADEA) and the Older Workers Protection Act (OWPA) for such an agreement between a company with 20 or more employees and a worker aged 40 or older. In order to protect the employer against ADEA/OWPA discrimination claims, (1) the employee must have up to 21 days to consider and sign the waiver, and if desired, to have it reviewed by an attorney; and (2) even after accepting, that employee must have another seven days to change his or her mind and rescind the agreement.

Even where those special terms are not required, best practice is to provide the employee a reasonable time to weigh the offer, for example three calendar or business days.

Where presented forthrightly and with respect, most departing workers will accept the offer, often without taking the allotted 21 days or other specified interval to think it over.

Employers can approach the seven-day rescission requirement under the ADEA and OWPA in different ways. An agreement can provide the severance amount immediately on the employee’s signing the agreement. Others specify payment on the passage of the seven days.

Take-Aways:

• Adequately document employee performance, including significant incidents of insubordination, production errors or disruption;
• Professionally respond to employee concerns over workplace conditions, promptly documenting investigations and resolution;
• Provide effective manager training on proper attitude and procedure for terminations;
• Adopt sound policy for conditions suitable for severance offers and legally compliant template severance agreements; and
• Consult with qualified employment counsel for guidance on potentially contentious terminations.

See also,

• Nailing Goodbye – Employee Terminations Dos and Don’ts (September 15, 2021)
• Tracking Down Discrimination – EEOC 2020 Report Retaliation, Disability Claims Predominate (April 16, 2021)
• Workplace Discrimination Prevention – California’s Fair Employment and Housing Act, A History (March 26,2021)
• Employee Terminations – Firing Low-Performing Workers While Limiting Repercussions (April 20, 2018)

Tim Bowles
September 24, 2021

California’s Private Attorney General Act (PAGA) continues as a weapon of choice against employers, 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.

There is however some good PAGA-related news for employers. In Wesson v. Staples the Office Superstore, LLC, the Court of Appeal has recognized a new defense that allowed Staples to defeat a store general manager’s (GM) attempt to impose PAGA penalties for allegedly misclassifying 346 GMs as exempt-from-overtime employees.

In Wesson, the trial court dismissed the PAGA claims as unmanageable after plaintiff acknowledged that establishing liability would require six days of evidence for each of the 346 instances – including examination of individual store “size, sales volume, staffing levels, labor budgets, store hours, customer-traffic levels, products and services offered for sale, and many other variables” – resulting in an eight-year trial. Plaintiff had also declined to provide a plan to show how the trial could otherwise be managed and simplified.

The Court of Appeal affirmed the dismissal, finding that such a lengthy trial would wreak havoc on the trial court, making it impossible to attend to its other assigned cases.

Take-Aways:

Not every PAGA case is complex. Some involve only a few employees or issues that may be common to all, for example an across-the-boards defect in paystubs or failure to pay overtime to hourly workers. However, a PAGA complaint that requires worker-to-worker analysis to determine liability may now be dismissed as unmanageable, leaving only the plaintiff’s individual claims to be decided.

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

See also:

• Update Cautionary Tale Episode 42 PAGA Monster Quelled for Now – Appeals Court Overturns Wal-Mart’s $102 Million Penalty and Damages Judgment (July 2, 2021)
• Cautionary Tale Episode 42 The PAGA Monster Is Hungry – Non-Compliant California Employers at High Risk under Special Law (May 14, 2021)

Helena Kobrin
Tim Bowles
September 17, 2021