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The California Labor Commissioner hasfiled her “AB 5” first lawsuit— against Mobile Wash, Inc. of Bellflower, CA — for misclassifying more than 100 mobile car washers as independent contractors under ...
The California Labor Commissioner has filed her “AB 5” first lawsuit — against Mobile Wash, Inc. of Bellflower, CA — for misclassifying more than 100 mobile car washers as independent contractors under the state’s “ABC” test. See, The Mystery of it All – Employed or Independent? California Offers AB5 Answers (February 7, 2020)
The June, 2020 complaint alleges that Mobile Wash should classify its workers as employees and thus among other things pay minimum wage for travel time, reimburse their expenses, and cease to extract a transaction fee for tips made by credit card.
If successful, the suit would likely be catastrophic for this gig-based business, with Mobile Wash liable for minimum wage back pay, doubled “liquidated damages,” overtime for six-day, 10-hour day workweeks, rest period premiums, sick leave violation penalties, business expenses, and underpaid tips back to April 2017.
Commissioner Lilia García-Brower stated: “Willful misclassification of workers harms not only workers but law-abiding employers and the public. Under the ABC test, these workers are clearly employees and were entitled to basic labor protections. My office is committed to combatting this unlawful practice as a business model.”
Underscoring that determination, the suit also names president and CEO as a defendant under Labor Code 558.1 for allegedly causing Mobile Wash to violate the minimum wage and other requirements of the Labor Code.
Commissioner Garcia-Brower credits the Community Labor Environmental Action Network (CLEAN), a non-profit advocacy group, for bringing Mobile Wash’s alleged practices to the state’s attention.
With AB 5’s tight restrictions as well as its multiple exceptions, it is more important than ever to obtain expert advice from a management-side employment attorney before deciding to engage workers – or to continue to engage them — as independent contractors.
See also:
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
July 31, 2020
First AB 5 Suit Challenging Independent Contractor Classification
Asa Philip Randolph, 1963
Asa Philip Randolph, 1963
Over 200,000 demonstrators took part in the August 28, 1963 March on Washington for Jobs and Freedom. The event’s impact – famously known for Dr. Martin Luther King Jr.’s “I Have a Dream” speech – lead to the landmark Civil Rights Act of 1964.
The protest had a WW II precursor. In 1941, A. Philip Randolph, founder of the Brotherhood of Sleeping Car Porters, called for a march on D.C. to protest employment discrimination against African Americans in the defense industry. The specter of 100,000 marchers descending on the capital pressed President Roosevelt to issue Executive Order 8802, creating the Fair Employment Practices Commission to investigate such racial inequality. In response, Randolph called off the march.
Mr. Randolph was instrumental in conceiving the 1963 March. That spring, he sought Dr. King’s support for a planned June march “for Negro job rights.” In May, at the height of the Birmingham Campaign for equal racial access to that city’s commercial businesses, King joined Randolph and other Black leadership to call for such a move upon Washington later that year, eventually scheduled for August 28. Stated goals included passage of a comprehensive civil rights bill to ban segregation in restaurants, transportation and all other public accommodations; voting rights protections; public school desegregation; a federal works employment training program; and “a Federal Fair Employment Practices Act barring discrimination in all employment.”
Thanks to the courage of the many who stood up to confront non-violently the widespread hatred and intolerance of the time, the resulting 1964 Civil Rights Act remains America’s principal anti-discrimination law, prohibiting segregation in public places and banning employment discrimination on the basis of race, color, religion, sex or national origin.
February 6, 2020
Dr. Martin Luther King, Jr.
Civil Rights March on Washington, D.C.
August 28, 1963
March on Washington, August 28, 1963, Leads to the First National Anti-Discrimination Protection
In a blow to the gig economy, a Los Angeles federal court has ruled that Uber, Postmates and two individual plaintiffs are unlikely to succeed on their constitutional challenges toAB5.Olson v. State o...
In a blow to the gig economy, a Los Angeles federal court has ruled that Uber, Postmates and two individual plaintiffs are unlikely to succeed on their constitutional challenges to AB5. Olson v. State of California (Olson).
While noting the potential harm Uber and the other plaintiffs face from AB5’s rigid “ABC” standard for classifying independent contractors, the judge found more important the state’s legitimate “interest in protecting exploited workers to address the erosion of the middle class and income equality” and in “preventing misclassification of millions of workers.”
The court also rejected the Uber plaintiffs’ argument that gig economy workers should be exempted from AB5 as are other specifically named occupations and industries. The judge agreed with the state that AB5 legitimately distinguishes these other working relationships as requiring “business organization, skill, self-direction, self-pricing, shorter or less frequent work terms, a distinct location, specific type of work, and other hallmarks of independent status.” Even if these AB5 exemptions resulted from various industry lobbying efforts, the court found such exceptions do not mean the legislature unconstitutionally chose to harm others.
While the plaintiffs might still win their Olson case at a full trial several months from now (note: the State of California is asking the judge to dismiss the suit), Uber is reportedly moving to give their drivers even greater independence to forestall state challenges. See, e.g., AB 5 is already changing how Uber works for California drivers and riders, Los Angeles Times, February 3, 2020.
Independent contractor classification remains in the forefront of California employment law issues. With heavy penalties and even criminal prosecution at stake, a business’s prompt and thorough examination of its contractor relationships with the aid of knowledgeable legal counsel is a smart move.
See also:
For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
Tim Bowles
February 21, 2020
Federal Court Denies Uber Request to Stop AB5
With two exceptions (New Zealand, 1894; Australia, 1896), no country had a minimum wage law until the 20th Century. Instead, employers paid supposed “just (or fair) wages” on the purported mutual cons...
With two exceptions (New Zealand, 1894; Australia, 1896), no country had a minimum wage law until the 20th Century. Instead, employers paid supposed “just (or fair) wages” on the purported mutual consent of their workers.
Beginning in the late 1800s, religious and political groups attacked the “just wages” principle on the premise 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. The U.S. Supreme Court later ruled several of the laws unconstitutional. (By 1929, every state had passed laws limiting child labor.)
President Roosevelt’s New Deal radically changed the employment landscape. The 1938 Fair Labor Standards Act (FLSA) 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 Fair Labor Standards Act, 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 Egypt, Ethiopia, Qatar, Singapore, Somalia, United Arab Emirates and Yemen.
See also:
January 31, 2020
All U.S. employers must verify identity and work authorization for each employee hired within the U.S., including citizens and non-citizens, using “Form I-9, Employment Eligibility Verification” (the ...
All U.S. employers must verify identity and work authorization for each employee hired within the U.S., including citizens and non-citizens, using “Form I-9, Employment Eligibility Verification” (the I-9 Form or Form).
The I-9 form directs the employee to present specified documents evidencing identity and employment authorization and sign Section 1 upon hire. The employer must: (i) examine these documents to determine whether they reasonably appear genuine and relate to the employee; (ii) record the document information on the form; (iii) retain the fully-completed form for a designated period (either three years after the date of hire, or one year after the date employment is terminated, whichever is later); and (iv) make the form available for inspection by authorized government officers.
On January 31, 2020 the U.S. Citizenship and Immigration Services (USCIS) issued the revised I-9 Form (Rev. 10/21/2019). Employers may continue using the 2017 version until April 30, 2020. The minor changes include:
Form. Added new countries when selecting a foreign passport (sections 1 and 2); and
Instructions. Updated USCIS’s website addresses and DHS Privacy Notices, and clarified the list of acceptable documents and who can be an authorized employer representative.
The USCIS also published a supplemental document for use if more than one preparer and/ or translator assisted the employee in completing Section 1.
For general guidance, employers can download the USCIS’s comprehensive “M-274: Handbook for Employers: Guidance for Completing Form I-9” (Handbook), which includes information on completing and correcting the form, reverifying or updating employment authorization, and frequently-asked questions.
For further assistance in complying with the new laws, please contact Tim Bowles, Cindy Bamforth or Helen a Kobrin.
Cindy Bamforth
February 14, 2020
Revised Employment Eligibility Verification Form I-9 Released January 31, 2020
The Internal Revenue Service hasannouncedits 2020 optional standard mileage reimbursement rate for employee business use of a personal vehicle, effective January 1, 2020, decreasing from 58 to 57.5 cents.
The Internal Revenue Service has announced its 2020 optional standard mileage reimbursement rate for employee business use of a personal vehicle, effective January 1, 2020, decreasing from 58 to 57.5 cents.
These rates stem from annual government studies of fixed and variable automotive operating costs, including insurance, repairs, maintenance, gasoline and oil.
Under California Labor Code section 2802, employers must reimburse employees for all actual work-related expenses necessarily incurred.
According to California’s Division of Labor Standards Enforcement, using the IRS mileage reimbursement rate will satisfy an employer’s reimbursement obligation unless the employee provides evidence demonstrating otherwise. For example, if the employee can show the IRS reimbursement rate does not cover all actual and necessary business-related vehicle expenses, the employer must pay the difference.
For further assistance in complying with the new laws, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Cindy Bamforth
January 30, 2020
Many employers mistakenly presume they can depend on their payroll companies for legally compliant services. The fine print will almost certainly establish otherwise.
Many employers mistakenly presume they can depend on their payroll companies for legally compliant services. The fine print will almost certainly establish otherwise.
Unfortunately, more than a few businesses have learned this lesson the hard way. It is common for payroll service providers to handle compensation calculations and paystub disclosures as their employer-clients instruct, even if it is wrong.
For example, a Los Angeles company may find its payroll vendor – even one of the larger ones – has been listing the state-mandated 24 hours of paid sick leave on worker pay statements, notwithstanding the higher 48-hour standard the city requires. Even if previously unaware of the difference, that employer could well find its payroll company adjusts such benefit calculations on paystubs to match any higher local municipal minimums only if the client-employer specifically directs it.
Thus, “buyer (employer) beware.” Managers should read payroll service contracts carefully. Agreements can commonly disclaim any payroll vendor responsibility for compliance with applicable federal, state or local workplace laws. Thus, when a worker, or even a possible class of them, might raise a legitimate complaint over underpayment or other payroll violation, it’s typically the employer who holds the bag.
Especially in California with its shifting legal landscape, employers must thus be vigilant in seeking, understanding and properly applying the pertinent wage and hour laws. While payroll companies can perform the mechanics of employee pay admirably, they are not an employer’s legal adviser or lookout.
See also:
For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
Tim Bowles
January 24, 2020
Read the Fine Print: Payroll Companies Not Responsible for Employer Compliance
My “night job” for some 15 years now is to help make a difference in one of the most challenging regions of the planet, including the nations of Liberia and Sierra Leone, West Africa.
My “night job” for some 15 years now is to help make a difference in one of the most challenging regions of the planet, including the nations of Liberia and Sierra Leone, West Africa.
Illiteracy fueled the hatred, fear, and bloodthirsty revenge that marked Liberia’s coup d’etat in 1979-80, its 14 years of genocidal civil war between 1989 – 2003 and the 11 years of similarly savage conflict in neighboring Sierra Leone (1991 – 2002). This is a region notorious for child soldiers, kids as young as 7 or 8 years old reduced to mindless killing machines as graphically portrayed in the motion picture Beasts of No Nation (2015).
As the region struggled to recover from these insane slaughters, Ebola hit and ran largely out of control, for most of 2014 and into 2015, with more than 22,400 cases and more than 8,900 deaths to the disease. Among other devastating effects, the disease forced the indefinite closure of Liberia’s schools, nationwide, for the better part of a year.
This wasn’t just an “African problem.” The Ebola disaster spilled out into the West in late 2014, with two persons dying of the disease in the U.S., accompanied by media hysteria and growing public panic.
Illiteracy is the most destructive human rights violation as it makes violations of the remainder of the 30 articles of the United Nations Universal Declaration of Human Rights (UDHR) possible.
These humanitarian disasters must be a wake-up call to all but those terminally deaf and blind to the world’s sufferings. Effective action is not a luxury here. It is required.
Along with many courageous and inspired West African youth leaders, I created the African Human Rights Leadership Campaign for Youth for Human Rights International (YHRI) in 2006, since that time activating thousands of youth of the region as human rights educators, teaching by example and deed.
Now focusing wholly on Article 26 of the UDHR, we have partnered since 2016 with Applied Scholastics International (APS), an organization uniquely qualified to offer the solution to illiteracy through the proven effective learning methods of American author and innovator L. Ron Hubbard, widely known as “Study Technology ” or “Study Tech.” We dub our initiative the African Literacy Project.
Our 2019 delivery included teacher and student training programs in Kakata and Tubmanburg, key Liberian cities, as well as our third year running with the ongoing third summers with African Methodist Episcopal (AME) University’s Vacation Bridge program in Monrovia. In August, we were also able to expand our reach to Freetown, Sierra Leone. Pictures below.
The best is yet to come. Our ultimate aim – in partnership with a coalition of our major government and private supporters – is to help make the human right to education a fact in West Africa. Starting with Liberia and Sierra Leone, we can and will make this significant long-range contribution through the establishment of national and regional literacy education teacher training centers.
To those of you who have contributed over the years, thank you. To those who will continue to provide the vital financial fuel, your help will also assure a future worth creating in one of the most challenged regions of our world.
Donations are currently through this GoFundMe link: African Literacy Project. Again, thanks. No amount too large, or too modest!
Tim Bowles
January 16, 2020
African Literacy Project Vacation Bridge graduation AME University, Monrovia Liberia, July, 2019
Classroom New Kru Town, Liberia, February, 2019
Students in Classroom Freetown, Sierra Leone, August, 2019
Jay Yarsiah and Vacation Bridge students AME University, Monrovia Liberia July, 2019
Girl Ganta, Liberia, 2018
The product of Sacramento politics, specific “professional services” occupations will be exempted from the rigid “DynamexABC” standard for classifying independent contractors,California Labor Code 2...
The product of Sacramento politics, specific “professional services” occupations will be exempted from the rigid “Dynamex ABC” standard for classifying independent contractors, California Labor Code 2750.3, effective January 1, 2020 (part of Assembly Bill (AB) 5). See, Dodging the Bullet (October 2019), listing other specific industries/licensed professionals that can be exempt.
Such independent “professional services” include:
Licensed cosmetologists, barbers, estheticians, manicurists, and electrologists can also fall within the independent “professional services” definition, providing the contracted person:
As with the other specific industries/licensed professionals that can be exempt from the stricter standard (see Dodging the Bullet), the Borello multi-factor balancing test for the contractor vs. employee classification will continue to apply to the above occupations.
See also:
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
October 18, 2019
California’s “Professional Services” Exemption To Strict Independent Contractor Definition Licensed Beauticians Among the Eligible