COVID-19 Inspection Leads to $1.3 Million Minimum Wage Assessment

The California Labor Commissioner has assessed Irvine’s Perfect Point Corp. dba South Coast Gymnastics and its owner, Xiaoping Li, $1.3 million for wage and hour violations affecting 28 coaches and administrative staff after a COVID-19 compliance inspection turned into a payroll audit of the preceding three years.

Labor Commissioner Lilia García-Brower stated: “California law requires that workers be paid for all hours worked. Anything less is wage theft. My office is committed to ending wage theft and recovering stolen wages.”

Finding some workers earned less than $5/hour, the commissioner issued citations of $590,689 for minimum wages, contract wages, meal and rest periods, and waiting time penalties, and $342,765 in interest for employees. The assessments also include $386,996 in civil penalties for minimum wage, pay period, paystub, and meal and rest break violations as well as so-called liquidated damages, a doubling of the minimum wage underpayment.

Notably, under California Labor Code 558.1 business owners, directors, officers, or managers can be held personally liable for such wage and hour violations. If the company cannot pay a full assessment, the Labor Commissioner can thus go after the personal assets of such individuals.

Take away: Employers should take regular care to confirm and ensure wage and hour compliance before the government comes knocking. That knock may well require a company to open many doors for inspection. South Coast Gymnastics’ wide-ranging and potentially “business-busting” audit arose out of a seemingly limited check on COVID precautions measures.

See also,

• Cautionary Tales Episode 36: Is Gig up for Car Wash Company? – First AB 5 Suit Challenging Independent Contractor Classification (July 31, 2020)
• Cautionary Tales Episode 31: Residential Care Facility Not Feeling the Love – 708,521 Reasons to Pay Workers Legally (July 12, 2019)
• Cautionary Tales Episode 27: Walmart Hit with Six Million Dollar Verdict for “Discouraging” Off-Site Meal Breaks (May 23, 2019)

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

Helena Kobrin
April 8, 2021

A Brief History of Minimum Wage

With two exceptions (New Zealand, 1894; Australia, 1896), no country had a minimum wage law until the 20^th Century. Instead, employers paid what they contended were “just (or fair) wages” on the purported mutual consent of their workers. If employees agreed to labor at the take-it-or-leave-it rates business offered, U.S. courts ruled they were powerlessto challenge the sanctity of that private contract.

With the Progressive Era (1896 to the 1920s), religious and political groups attacked such “just wages” arguing that the vast majority of employees lacked the bargaining power to negotiate a livable wage. In the United States and throughout the industrialized world, factory conditions were also notoriously harsh and workdays long. Not uncommonly at the time, American businesses hired woman and children for lower wages than men. By 1910, two million children worked up to 20 hours a day in this country. Exhausted, many were killed or injured on the job.

In the 1920s, American lawmakers sought to improve working conditions in their states. By 1925, fifteen states had passed minimum wage laws, including California at 16 cents an hour.

President Roosevelt’s New Deal fundamentally changed the nationwide employment landscape. The 1938 Fair Labor Standards Act (FLSA) – overcoming an earlier Supreme Court invalidation of federal labor conditions legislation — established the first federal minimum wage at 25 cents an hour. The law also imposed overtime pay (“time and a half”) after a mandated 40-hour regular workweek. The Act also introduced the classification of “exempt (from overtime)” and “non-exempt” employees as well as outlawed many forms of child labor.

By 1943, the Labor Department had raised the federal minimum wage to 40 cents an hour. It hit $1.00/hour in 1955. Federal minimum wage has been $7.25 an hour since 2009. Although each U.S. state has the power to set a higher minimum wage than the federal rate, none can set a lower one.

The FLSA, American wage regulations, and state enactments have evolved into a complex body of state and federal employment law requiring that employers take careful measures to ensure compliance.

At least ten nations still lack minimum wage standards for private business employment, including Ethiopia, Qatar, Singapore, Somalia, United Arab Emirates and Yemen.

See also:

• Workplace Rhythm & Cues – Our Employee Policy Handbook & Forms for 2021(January 21, 2021)
• What’s New In 2021: California Minimum Wage Rate Increases (December 23, 2020)

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

Tim Bowles
April 2, 2021

California Supreme Court Prohibits Meal Break Time Rounding

The California Supreme Court has ruled that employers may not round worker time entries for meal breaks, in contrast to rules permitting rounding for start and end of workday time entries. Kennedy Donohue v. AMN Services, Inc. (Donohue) (February, 2021).

The Donohue Court observed that California and federal law permit employers to round an employee’s time entries at the beginning and end of a day if done by a fair and neutral method that will result in the employee being paid for all hours worked over a period of time. Such rounding is permissible because “for purposes of calculating wages, counting slightly fewer minutes one day can be made up by counting a few more minutes another day.”

In contrast, the Court found that such rounding practices cannot apply to the 30-minute meal break required by Labor Code 512 and the Industrial Wage Orders before the end of five hours and the second meal break required before the end of 10 hours in a workday.

The Donohue Court concluded “the health and safety concerns underlying ‘meal period’ provisions distinguish the meal period context from the wage calculation context, in which the practice of rounding time punches was developed.” Rounding meal time entries thwarts that health and safety purpose since “a shorter or delayed meal period one day cannot be offset by a longer or earlier meal period another day.”

In addition, rounding may deprive an employee from receiving the one-hour premium pay required under Labor Code 226.7 and the Wage Orders for missed, short or late meal periods.

Employers should eliminate rounding meal break times and consult with an employment attorney on any advisable remedial measures to address mistaken past practices.

See also,

• What are a California employer’s duties on meal and rest breaks? (January 21, 2021)
• Required Meal Periods and Rest Breaks Revisited – Off-Duty Time During a California Work Day (April 12, 2018)
• Brinker: California’s Meal Break Breakthrough – Employers are No Longer the Lunch Police (May 1, 2012)

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

Helena Kobrin
April 1, 2021

California’s Fair Employment and Housing Act, A History

Now with over 40 million residents and some 950,000 employers, California leads the nation in the size and diversity of its workforce. Every employee in the state holds protections against discrimination, harassment and retaliation, primarily through the Fair Employment and Housing Act (FEHA).

Such workplace rights were long in coming and hard fought. At statehood (1850), California was rife with racial inequities. The new state legislature stripped the native populations of land claims, prohibited African Americans from homesteading public land and barred Chinese children from public school.

Over the next 100 years, California’s minority population continued to boom despite repeated discriminatory backlash from the white holders of power.

From 1900 to 1930, roughly 10% of Mexico’s population migrated to California and other southwestern states. During World War II, 500,000 African Americans migrated to California to work in the state’s booming wartime economy. Through the war, Mexican and African American laborers replaced white workers who had gone off to fight. When the war ended, however, many of these laborers were dismissed. Those able to find employment were relegated to menial, low-paying positions. Job discrimination against minorities remained widespread.

In response, state lawmakers introduced the Fair Employment Practices Act (1946), proposing a ban on employment discrimination based on race, religion, color or national origin. However, it took 13 years, to 1959, to enact it. That same year, California’s Unruh Civil Rights Act also became law, entitling “all persons to full and equal accommodations, advantages, facilities, privileges or services in all business establishments, including both private and public entities.”

Regardless, local governments retained the power to restrict minorities from living in California communities. The state legislature responded with the Rumford Fair Housing Act (1963). The California Real Estate Association countered with Proposition 14 to nullify the Rumford Act and restore landlord power to deny housing to anyone. Although approved by 65% of the voters, the California Supreme Court ruled Prop 14 unconstitutional, restoring the Rumford Act.

In 1980, the Fair Employment Practices Act and Rumford Housing Act were combined and renamed the Fair Employment and Housing Act, banning employment and housing discrimination in California. The FEHA also established an enforcement agency, the Department of Fair Employment and Housing (DFEH), with the power to investigate, mediate and prosecute unlawful discrimination, harassment and retaliation complaints. The DFEH is now the largest civil rights agency in the country.

The DFEH also serves as an information and resource center for employers and employees alike. For instance, the agency has developed a library of required notices and circulars on many of FEHA’s critical aspects, for example:

● Workplace Discrimination poster
● California Family Rights Act (CFRA) and Pregnancy Leave poster
● Sexual Harassment poster
● Sexual Harassment factsheet
● Transgender Rights poster
● Your Rights and Obligations as a Pregnant Employee poster

The FEHA and its federal counterparts, including the Civil Rights Act of 1964 and the Americans with Disabilities Act (1990), stem from the premise that persons should be judged for their competence on the job and not by factors of race, religion and the many other characteristics deemed arbitrary and irrelevant to workplace qualification.

See also,

• Abolishing Workplace Bigotry: A Work in Progress (March 5, 2020)
• What’s New in 2020 – Time’s Up Extended – Longer Three-Year Deadline For Initiating Discrimination Claims (January 10, 2020)
• Preventing Workplace Discrimination: Accommodating Disabilities, Made Simple – New Guidelines Package Available for California Employers (August 24, 2017)

For more information on such matters, please contact Tim Bowles, Cindy Bamforth orHelena Kobrin.

Tim Bowles
March 26, 2021

Feds Promote Expanded Paid Leave with Tax Credits, Through September 30, 2021

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA), extending payroll tax credits provided under the federal Families First Coronavirus Response Act (FFCRA) into Fall, 2021.

The FFCRA, which expired December 31, 2020, required two types of COVID-related paid leave:

(1) up to 80 hours of emergency paid sick leave on any one of six criteria (subject to a quarantine or isolation order; advised by a health care provider to self-quarantine; experiencing symptoms, etc.) (Emergency PSL); and

(2) up to 10 weeks more of partially paid emergency family and medical leave to care for a child whose school or place of care is closed due to COVID-19 related reasons (E-FMLA Leave).

See, Federal Coronavirus Workplace Relief – New Paid Sick Leave, Family Leave and Tax Credits Effective April 2, 2020 (March 23, 2020)

To promote an employer’s continuing voluntary provision of such paid leave benefits, the ARPA permits participating businesses to take tax credits on expanded sets of criteria for these two types of COVID-related covered leaves between April 1, 2021 and September 30, 2021.

Employers who choose to provide such optional benefits must comply with all applicable ARPA rules to qualify for the tax credits, including:

• “Reset” additional allotments of emergency paid leave: Eligible employees shall now receive a fresh 80 hours of Emergency PSL and up to an additional 12 weeks of partially-paid E-FMLA Leave between April 1 and September 30, 2021 even if they previously exhausted such allotted leaves under the FFCRA.

• Expanded grounds for Emergency PSL: Employers who opt in for these ARPA credits must provide emergency paid sick leave on time missed ● on any of the six grounds in the FFCRA, plus ● to get a COVID vaccine, ● to recover from adverse effects of the vaccine, or ● while seeking or awaiting the results of a COVID test/diagnosis due to workplace exposure or at the employer’s discretion.

• Expanded grounds for E-FMLA: Employers who opt in for the credits must provide emergency partially paid family leave for an employee caring for a child whose school or place of care is closed due to COVID-19 related reasons (the prior qualification for such leave under the FFCRA) or who meets any of the now-expanded PSL leave grounds, including the original six grounds in the FFCRA or ● any of the three new criteria in the above Emergency PSL bullet point.

• Increased emergency paid family leave tax credit: The ARPA increases emergency family leave paid wages from $10,000 per employee to $12,000.

• Non-discrimination requirement: Employers must provide these paid leave benefits to all workers across the boards. Thus, employers may not grant these benefits based on high earnings, full-time status or seniority. (The FFCRA is silent on this point.)

Thus, participating employers should update their policies and forms and consult with legal and tax advisors for assistance complying with these provisions of the ARPA.

See also:

• Once Certain Constant: Change – New Retroactive Paid Pandemic Leave Requirements. Revisions Coming 2021 Handbook & Forms (March 19, 2021)
• Stay-Away Exclusion Pay Required Pandemic Wages for Positive Test or Workplace Exposure (March 18, 2021)
• What’s New 2021: Paid Pandemic Leave In The New Year – Some Benefits Optional, Some Mandatory (January 15, 2021)

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

Cindy Bamforth
March 25, 2021

Required Pandemic Wages for Positive Test or Workplace Exposure

With only limited exceptions, Cal/OSHA’s mandatory COVID-19 Emergency Temporary Standards (ETS) (effective November, 2020) apply to all California employers. See, What’s New in 2021: Infection Prevention Direction CAL/OSHA COVID-19 Emergency Temporary Standards (February 5, 2021)

Exclusion Pay: The ETS require covered employers to provide employee pay and to maintain seniority and all other rights and benefits during absences due to ● a positive COVID test; or ● potential workplace COVID exposure.

The ETS and their frequently-asked questions advise:

• The exclusion pay only applies if the worker is otherwise available and physically able to work. Thus, it is not required if the absence is unrelated to actual or possible exposure such as a business closure, caring for a family member, disability, or vacation.

• Such pay only applies if the employer is unable to have the employee work remotely while excluded from the workplace.

• Exclusion pay is only required if the COVID exposure was work-related. It is the employer’s obligation to amply investigate and document that outside exposure was more likely than not.

• If an employee is unable to work because of his/her own COVID symptoms, then that individual may be eligible for workers’ compensation or State Disability Insurance benefits but not exclusion pay.

• An employer, at least in theory, may require the employee to exhaust paid sick leave benefits before providing exclusion pay “to the extent permitted by law.” However, it is not clear that California would allow any such required use policy since its paid sick leave law does not expressly address the issue.

• Exclusion pay is limited to a standard quarantine period based on a single exposure or positive test.

• Employers may not estimate what an employee might receive through public benefits and deduct that estimate from exclusion pay.

See also:

• What’s New in 2021: One-Stop COVID SHOP – New California Website and Employer Portal (March 5, 2021)
• Cautionary Tale Episode 40 Big Stick Compliance – Cal/OSHA Fines Numerous Businesses For COVID-19 Violations (March 4, 2021)
• What’s New 2021: Getting Under The Hood – New Toolkit For Workplace Leave Compliance (February 25, 2021)

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

Cindy Bamforth
March 18, 2021

California’s Expanded Guidelines
on Workplace Vaccination Practices

Closely paralleling national standards, California employers must balance COVID-19 health and safety guidelines with the required Fair Employment and Housing Act (FEHA) protections for those who seek accommodation for a physical or mental disability or religious conviction and practice.

To further help achieve this balance, the Department of Fair Employment and Housing (DFEH) has again updated its “DFEH Information on COVID-19” circular (March 4, 2021), offering new policy and protocols for vaccination-related health condition inquiries.

● Employers May Require Worker COVID-19 Vaccinations Subject to Anti-Discrimination and Anti-Harassment Protections: While the DFEH is careful not to provide guidance “on whether or to what extent an employer should mandate vaccination within its workforce,” the agency cautions that management must respect disability- and religion-based objections if inoculation is to be required.

Thus, if an employer mandates workforce-wide vaccination and an employee objects on the basis of disability or a sincerely held religious belief or practice, management must engage that worker in a good faith interactive process to find a reasonable accommodation short of an undue hardship to the company’s operations.

The DFEH observes that reasonable accommodation is a fact-specific determination. Possible alternatives include whether the employee is able to work from home or whether reasonable worksite procedures and safeguards are feasible to enable work on site without endangering that employee or others. For a workplace where other prevention safeguards are already in place – social distancing, masks, etc. – such accommodation should generally not be difficult to achieve.

● Employers, in Theory, Need Not Accommodate an Objection to Vaccine Safety: The DFEH advises that if an employee objects to receiving a vaccination because he or she does not trust the safety of the vaccine, FEHA does not legally require the employer to reasonably accommodate that person. However, the agency’s guidelines do not address the prospect that an employer who disciplines or terminates such an objecting worker might face a retaliation claim if that worker frames his or her complaint as his/her own valid health and safety concern.

The take-away is that employers should field any objection to vaccination with patience and respect and likely work with experienced legal counsel to resolve all good faith worker concerns.

● An Employer Should Plan Its COVID Vaccination Screening Questions: The agency acknowledges that employers may generally ask workers to answer COVID-related questions, including screening arriving workers for symptoms.

Thus the DFEH advises that an employer administering an in-house vaccination program may ask employees pre-vaccination screening questions that could elicit disability information so long as the inquiry is “job-related and consistent with business necessity.” (The guidelines remind employers to maintain any vaccination records as confidential medical information.)

Yet, as the DFEH offers no examples of a proper “job-related” question in this context, management should deliberately plan just how pre-vaccination screeners will proceed, including posing all questions as job- and business-related and transitioning to the required interactive process if a worker raises a disability or religious concern.

Take away: employers should consult with experienced legal counsel before implementing procedures in this sensitive area.

See also:

• Worker COVID Vaccinations – E.E.O.C.’s Expanded Guidelines for Pandemic Management (December 17, 2020)
• COVID’s Constant? … Change – EEOC’s Expanded Guidelines on Screening, Testing, and Pandemic Management (September 18, 2020)
• Workplace Discrimination in a Pandemic – California’s Updated COVID-19 FAQs Call for Careful Decision Making (August 5, 2020)

For more information, including the adoption of workplace vaccination policy and protocols, contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Tim Bowles
March 11, 2021

The California Labor & Workforce Development Agency (LWDA) has launched a new website consolidating COVID resources previously only available through separate state and local online websites including:

• new laws;
• online prevention training;
• Cal/OSHA’s emergency temporary standards;
• testing information;
• identifying symptoms;
• information about employee benefits;
• paid sick leave; and
• immediate steps to take after a workplace exposure.

The site also includes an employer portal, a one-stop hub for California employers. After the employer anonymously answers questions on its location, industry business and current COVID-19 related practices, the portal generates a tailored “road map” containing a list of relevant links to current state and local COVID industry guidance to operate safely and lawfully.

Labor Secretary Julie A. Su commented, “We recognize that in a public health crisis, guidelines and best practices are evolving. That’s why we created a central navigation hub where employers can find the latest information.”

LWDA will update the portal on an ongoing basis. To encourage its use, the agency notes the site “is for educational purposes and will not be used for state enforcement activities.”

See also,

• Cautionary Tale Episode 40: Big Stick Compliance – Cal/OSHA Fines Numerous Businesses For COVID-19 Violations (March 4, 2021)
• What’s New in 2021 – Infection Prevention Direction Cal/OSHA COVID-19 Emergency Temporary Standards (February 5, 2021)
• Workplace Rhythm & Cues – Our Employee Policy Handbook & Forms for 2021(January 21, 2021)
• Cautionary Tale Episode 39: Fish Story Gets Real – Cal/OSHA Fines Frozen Food Firm for COVID-19 Violations (December 2, 2020)

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

Cindy Bamforth
March 5, 2021

New Retroactive Paid Pandemic Leave Requirement

Revisions Coming 2021 Handbook & Forms

Likely to be quickly signed by Governor Newsom, Senate Bill (SB) 95 significantly expands California employer obligations to provide COVID-related paid sick leave in addition to established sick leave benefits, retroactive to January 1, 2021.

While we will report on the bill’s specifics once it is officially part of the Labor Code, its passage underscores the vital importance of updated, compliant workplace policies.

Accordingly, we will be promptly offering revised model forms to track with this significant development.

Current for 2021, our model forms will now include:

• Workforce pandemic recovery and prevention measures;
• Vaccination promotion, requirements and procedures;
• Paid sick leave benefits under all related federal and California directives, including the upcoming Covid-19 supplemental requirements;
• Employment application and accompanying job description template(including key requirements for Americans with Disabilities Act compliance and California’s constitutional privacy protections);
• Pre-employment protocols (properly positioning the process to meet changing legal requirements);
• Employment agreement (including confidentiality/non-disclosure of company trade secrets);
• Alternative dispute resolution agreement (also properly setting terms to match changing standards for private mediation and arbitration in lieu of court action);
• Meal and rest period acknowledgments (confirming employer provision of required breaks); and
• Termination policy, checklist and standard release (to be applied as appropriate for full transition and greater protection against later, preventable suits).

Our comprehensive model employee handbook will now include:

• Conditions of company employment, including mutual “at will” termination rights;
• Discrimination and harassment, prevention and handling (including new standards stemming from government response to COVID-19 conditions);
• Employee compensation;
• Employee benefits;
• Employee job performance;
• Limits of employee privacy, including valid employer access to employee-maintained databases and social media guidelines;
• Paid and unpaid leaves, including the latest supplemental paid sick leave requirements;
• Workplace health and safety;
• Job-related injury or illness, including prevention plan priorities; and
• Drug and alcohol policy, including testing and violations procedures and standards.

See also,

• Stay – Away “Exclusion” Pay – Required Pandemic Wages for Positive Test or Workplace Exposure (March 18, 2021)
• Preventing Discrimination in a Pandemic – California’s Expanded Guidelines on Workplace Vaccination Practices (March 11, 2021)
• What’s New in 2021: One-Stop COVID Shop – New California Website and Employer Portal (March 5, 2021)

CONTACT US TO ORDER NOW

To order or for more information, contact Office Manager Aimee Rosales at 626.583.6600 or email her at officemgr@tbowleslaw.com.

March, 2021