Effective January 1, 2020, Assembly Bill (AB) 5 will dramatically extend the ultra-strict Dynamex “ABC” test for independent contractor classification. See, California’s Independent Contractors, Endangered Species? (October, 2019).

However, a portion of AB-5, to become Labor Code section 2750.3(b), exempts several specific industries/licensed professionals from the ABC test. The Borello multi-factor balancing test will continue to apply to these. See, Independent Contractor or Employee? (April, 2019).

• Accountants
• Architects
• Commercial fishermen working on an American vessel (as further defined in AB-5)
• Dentists
• Direct sales salespersons (as described in Unemployment Insurance Code section 650)
• Engineers
• Insurance agents, investment advisors and other persons or organizations licensed by the California Department of Insurance
• Lawyers
• Physicians
• Podiatrists
• Private investigators
• Psychologists
• Securities broker-dealers or investment advisors or their agents and representatives
• Surgeons
• Veterinarians

This list is the pure product of the political process. Those professions and avocations not exempt from AB-5’s incoming “clamp down” on independent contractor classification include acupuncturists, chiropractors, “enrolled agents” (federally authorized tax advisors), hygienists, optometrists, paralegals, nutritionists, and physical therapists.

To validly classify someone from one of the excluded occupations (accountant, architect, etc.) as independent, the hirer must show, case-by-case, that the greater weight of Borello factors applies, including:

• no right to control the manner and means of the work
• can only discharge the worker for cause
• the worker’s engagement in a distinct occupation or business
• no supervision over work performance
• the worker must be skilled
• the worker supplies the instruments, tools, and the place of work and invests in the job’s equipment, materials or helpers
• limit on length of time for which the services are to be performed
• method of payment is by the job, not hourly
• the work is not connected with the hirer’s regular business
• parties both agree to independent contractor status; and
• the worker can experience profit or loss

Stay tuned for more articles covering AB-5’s further exceptions/carve-outs to the ABC test.

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

Cindy Bamforth
October 9, 2019

Until April 2018, the 11-factor balancing test in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (California Supreme Court) had long applied to classifying workers as employees or independent contractors.

That court then dramatically changed the rules in Dynamex Operations West, Inc. v. Superior Court. See, Independent Contractor Status in California Now Falls Under Radically Different Rules (June 2018). Now, a hiring company could only treat a worker as independent if the individual met three criteria:

A. the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;

B. the worker performs work that is outside the usual course of the hiring entity’s business; and

C. the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Confusion followed since Dynamex’s “ABC” definition only applied to the reach of state minimum wage, overtime, meal and rest break and other related rules, with the 11 Borello factors remaining for contractor/employee distinction on all other issues, for example workers’ compensation protections and unemployment benefits.

Assembly Bill (AB) 5 -- most of which is scheduled to go into effect January 1, 2020 -- is state government’s attempt to more uniformly apply the Dynamex “ABC” test, including to workers comp and unemployment. Yet, true to the legislative process, the new law is full of available exemptions for certain occupations and industries:

• certain medical professionals, licensed lawyers, accountants, enrolled agents, architects, engineers, and private investigators;
• insurance licensees, securities broker-dealers and investment advisers;
• direct salespeople, marketers, human resource administrators, travel agents, payment processing agents, and grant writers, real estate licensees, and repossession agencies;
• graphic designers, fine artists, certain photographers or photojournalists, and certain freelance writers, editors, or newspaper cartoonists;
• licensed cosmetologists, barbers, estheticians, and manicurists; and
• licensed construction contractors that have licensed subcontractors.

Another possible exemption is a business hiring another business to provide work directly to the hiring business and not to its customers. In suitable circumstances, this may apply to the software industry for example.

Those covered by these exemptions still must meet the Borello factors to claim legitimate independent contractor status.

While many commentators are pointing to the potentially devastating effect of AB 5 on the so-called “gig economy,” the law will also seriously affect many other industries, trucking prominent among them.

Already at work helping companies with implementation, we will be supplementing this overview with additional articles on specific industries or features of the new law.

See also:

• Making Dynamex Retroactive (May, 2019)
• Independent Contractor or Employee? (April, 2019)
• Independent Contractor Status? It Depends (November, 2018)

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

Helena Kobrin
October 4, 2019

It is illegal for employers to discriminate against or harass employees because of age, national origin, and other protected classifications. An employer that terminates an employee for such reasons can anticipate a lawsuit for wrongful termination. Also, an employee resignation due to a discriminatory work environment created or condoned by the employer may amount to a wrongful “constructive” termination if those conditions are found intolerable.

In the recent Galvan v. Dameron Hospital Ass’n decision, a California appeals court agreed supervisor Doreen Alvarez may have harassed and discriminated against 54-year-old Filipino nurse Shirley Galvan and three other foreign-born nurses with insulting, degrading and humiliating statements. Her stated intention to others was to get rid of these nurses for reasons based on age and foreign birth.

After Ms. Alvarez terminated one nurse and caused so much stress the other two resigned or went on leave, Ms. Galvan also went out on stress-related disability leave and did not return. She then sued the employer.

While the trial judge had ruled in favor of the hospital, the three-judge appeals panel sent the case back for a trial, ruling that Ms. Galvan’s claims for wrongful discharge, discrimination, and harassment were supported by the bad behavior of her supervisor. Even though the hospital administration was unaware of Ms. Alvarez’s behavior, the Court found her actions as a supervisor constituted intentional behavior by the hospital.

To avoid such lawsuits and ensure their employees are treated well, senior managers should:

• Proactively seek to know what is going on with their workforce;
• Have clear policies;
• Remind employees regularly to report bad behavior, whether targeting themselves or others;
• Take action to prevent such behavior and correct it when it does arise;
• Consult their employment attorney for advice to avoid such situations and to deal with them when they occur.

See also:

• State Agency Settles Sex and National Origin Discrimination Case for $450,0000 (September, 2019)
• Google Settles Age Discrimination Case for $11 Million (September, 2019)
• National Origin Discrimination Clarified (June, 2018)
• Employee Terminations (April, 2018)

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

Helena Kobrin
September 23, 2019

North Star Gas Ltd. (NSG) has settled a California Civil Rights Department (CRD) age discrimination claim, with $37,000 paid to the fired truck driver.

The CRD alleged a NSG manager justified a cut in the actively driving worker’s assignments because he was “too old” and “retired.” NSG reportedly then fired the worker for his age (40 or over) in violation of the California Fair Housing and Employment Act.

NSG has also agreed to issue and distribute policy to detect and prevent unlawful harassment, discrimination, and retaliation; to designate an employee to investigate complaints; and to report compliance to CRD.

CRD Director Kevin Kish stated: “If you believe you’ve been discriminated against on the job because of your age, report it to our office. We’re committed to doing everything in our power to ensure older Californians are treated with dignity and respect. The settlement announced today makes it clear that no matter your industry or job, we all deserve a fair chance to make an honest living as we grow older.”

Take-Aways:

Those 40 and older have the same rights as other employees. Companies must base decisions on employee competence and ability, not on protected characteristics such as age.

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

See also:

• Take Heed: Responding to Harassment and Discrimination Complaints Correctly (July 28, 2023)
• Age Discrimination: Employee’s Suspicion Not Enough: Older Worker Needs More Than Her Belief of Unequal Treatment (March 10, 2023)
• Boss Sauced: Senior Managers Must Prevent Supervisor Harassment, Discrimination (September 23, 2019)

Helena Kobrin
Apri1 19, 2024

As covered in Immigration Nation (August, 2019), the federal government requires all U.S. employers to verify both 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).

To verify one’s identity, the employee may submit a state-issued driver’s license/ID card.

Beginning October 1, 2020, U.S. citizens and residents will have to utilize the new “REAL ID” driver’s license or ID card or a federally issued identification (e.g., U.S. passport) to board domestic flights or enter federal facilities (e.g., military bases, federal courthouses, Congress). Thus, California’s “AB 60” licenses (which only require proof of residence and not citizenship or valid green card status) will no longer enable passengers to fly commercially in the U.S.

A California applicant can obtain this new “REAL” license through the DMV with proof of identity, state residency, and valid social security number. California’s REAL ID driver’s license or ID card has an image of a bear with a star in the upper right corner. Non-REAL driver’s licenses or ID cards will instead have the phrase “Federal Limits Apply” in that location.

While only REAL ID licenses will be valid for getting to an airport boarding gate or entering a government immigration office (to name two examples), from October, 2020 employers will be able to accept either “REAL” and “non-REAL” licenses as valid identification for the I-9. See, I-9 Form FAQs.

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

See also:

• E-Verify is Back (February, 2019)
• I-9 Form Revised Yet Again (July, 2017)

Cindy Bamforth
September 19, 2019

On July 26, 2019 the California Department of Fair Employment and Housing (DFEH) announced the $450,000 settlement of a sexual harassment, national origin and retaliation case against Pioneer Pines Mobile Home Park.

The complainant, a female employee of Mexican descent who lived and worked at the mobile home park, alleged her former supervisor engaged in “unwanted touching, verbal harassment and ridicule for complaining.” Despite being aware of the unwelcome conduct, management purportedly permitted it to continue.

The complainant also alleged that certain individuals made extremely derogatory comments about people of Mexican ancestry.

After complaining about the harassment, management purportedly retaliated by reducing complainant’s schedule and ultimately terminating her employment.

In addition to the $450,000 monetary settlement, the employer agreed to implement a bilingual (Spanish and English) anti-discrimination policy, participate in anti-harassment and cultural sensitivity trainings, and hire an independent organization for four years to oversee its full compliance with all settlement terms.

As DFEH Director Kevin Kish commented, “Unlawful harassment can be based on multiple intersectional grounds, including sex and national origin, and we encourage anyone experiencing harassment at work or in their home to file a complaint.”

This lawsuit reiterates why employers should correctly and effectively respond to an employee’s discrimination, harassment and/or retaliation complaints. In addition to implementing proper anti-harassment policy and training, employers should educate all workers and management on how to report, investigate and resolve various forms of inappropriate workplace conduct.

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

See also,

• United State of Procrastination. (September, 2019).
• EEOC Settles Tex-Mex Restaurant Server’s Sexual Harassment Case for $40,000 (August, 2019).
• State Settles Sexual Harassment Case with Cypress Police Department (July, 2019).
• National Origin Discrimination Clarified (June, 2018).

Cindy Bamforth
September 13, 2019

Federal age discrimination protections, including the Age Discrimination in Employment Act of 1967 (ADEA), apply to companies with 20 or more on payroll. California’s workplace anti-discrimination law, the Fair Employment and Housing Act (FEHA), applies to employers with five or more on payroll. Both types of age-related discrimination laws only apply to persons age 40 or over.

In a federal class action lawsuit against Google, named plaintiffs Robert Heath (age 60+) and Cheryl Fillekes (age 47) alleged that despite possessing highly pertinent qualifications and experience, Google engaged in an intentional, systematic pattern of discrimination against 227 applicants age 40-plus interviewing for technical engineering positions throughout the United States.

This case recently settled for $11 million, with Google agreeing to train managers and employees on age-based bias; create an internal recruiting subcommittee to focus on age diversity; and ensure the company’s marketing efforts reflect age diversity.

Best practices:

• Do not restrict or prefer job candidates on the basis of any “protected class.”
• Periodically refresh or re-train job interviewers on acceptable and unacceptable employment inquiries.
• Never request age information from job applicants except where a certain age range or age limit is a legitimate “bona fide occupational qualification.”
• Include the phrase “An Equal Opportunity Employer” with all job listings.
• When including images with job postings, ensure they represent a diverse population.
• Use reference guides such as the Department of Fair Employment and Housing’s Inquiries Sheet when conducting interviews.
• Consult with knowledgeable legal counsel for further assistance.

See also,

• Avoid Discriminatory Job Recruitment and Advertising (August, 2019)
• Interviews Gone Wild (October, 2018)
• Job Interview Errors to Avoid (April, 2018)
• Asking for Job Applicant Age is a No-No (August, 2017)

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

Cindy Bamforth
September 5, 2019

A recent settlement extends California’s Fair Employment and Housing Act (FEHA) disabilities protection to rental applicants seeking to move in with emotional support pets.

In a complaint filed with the Department of Fair Employment and Housing (DFEH) against Adams West Associates, Ltd. and Bedford Group of Companies, LLC, a prospective tenant alleged FEHA discrimination when denied an apartment over his “comfort animals,” three cats. The applicant supported his claim with a psychologist’s note that the cats were needed to accommodate his mental disability. He also asserted this building had no formal pet policy. Defendants settled for $20,000 to compensate for the man’s higher rent elsewhere as well as his purported emotional distress from the rejection.

California law also protects employees with assistive animals, defined as “an animal that is necessary as a reasonable accommodation for a person with a disability.” These include service animals “individually trained to the requirements of a person with a disability,” (e.g. guide and signal dogs) as well as support animals that provide “emotional, cognitive, or other similar support to a person with a disability.” However, as California law does not specify the species of assistive animals, miniature horses, ostriches, and rats could all be in the running.

Of course, employers are not required to hire an applicant with an assistive animal. They are however required to engage in the interactive process to determine if the disability indicated can be reasonably accommodated.

Thus, best practices would include the employer’s request for a letter from the employee’s health care provider confirming the disability and explaining why the person needs the assistive animal in the workplace (e.g., how the animal can enable the employee to perform essential job functions). Employers can also require annual recertification of that need.

However, if proposed accommodation for the animal would work an undue hardship upon the employer’s operations or finances, it may reject the applicant along with his or her proposed animal.

Obviously, a business could decline to employ an applicant who required a poisonous snake as a workplace companion. Yet, even such extreme examples require the case-by-case interactive process, well documented.

California regulations recognize the accommodation process can extend to the first two weeks of allowing the assistive animal in the workplace. It may take such an interim period to determine if the assistive animal is free from offensive odors, is housebroken, or not otherwise a danger to anyone’s health or safety.

Thus, among California employer best practices:

• Recognize that any kind of animal might fit the definition on “assistive”;
• Engage in a good-faith interactive process addressing the appropriate accommodation for a disabled worker seeking to bring an assistive animal;
• Calendar the two-week period in which tentative accommodation may be rescinded on factors that demonstrate undue hardship for the hiring, including good behavior; and
• Ensure any written policy conforms to the legal requirements for assistive animals

An employment attorney can assist with drafting a policy or the interactive process when needed.

See also:

• How to Handle Assistive Animals in the Workplace (May 2018)
• How to Handle Customers’ Service Animals (May 2018)

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

Helena Kobrin
August 30, 2019

The goal of the Americans with Disabilities Act (ADA) “is to ensure that people with disabilities have the same rights and opportunities as everyone else.” Sometimes, however, companies need a not-so-friendly reminder from the Equal Employment Opportunity Commission (EEOC) of their reasonable accommodation obligations for ADA-protected employees.

So it was with a Wal-Mart in northwest Washington D.C. that refused to accommodate the needs of two deaf employees, choosing not to furnish close-captioned videos, sign language interpreters, or other accommodations to enable the workers to participate fully in store training, meetings, and the like. See Press Release.

After the EEOC unsuccessfully tried to settle the accommodation issues with Wal-Mart Stores East, LP, it sued this employer. The parties later consented to a court order requiring the Wal-Mart to pay $100,000 and prohibiting it from further violation of the ADA and retaliation against the employees. The company also must:

• Amend its management guidelines for reasonable accommodation;
• Train management on the ADA guidelines for accommodation;
• Train non-management employees on the ADA and how to seek accommodation;
• Handle issues that concern accommodation of deaf employees;
• Post a notice about the settlement; and
• Report to the EEOC on compliance.

In a statement applicable to any employee disability, Acting Washington Field Office District Director Mindy Weinstein noted “[t]his settlement should encourage all employers to provide reasonable accommodations that allow equal access for deaf and hard-of-hearing employees and applicants to engage fully in the workplace,”

The reasonable accommodation requirement is not absolute; it can be overcome if it causes a company undue hardship, a case by case analysis. However, having close-captioned training videos is unlikely to be accepted as an undue hardship for a company the size of any given Wal-Mart. By making such an accommodation, a company can likely gain a more engaged employee, with both parties benefiting.

See also:

• DFEH Charged San Diego Credit Union with Failing to Accommodate Disabled Employee (February 2019).
• EEOC Sues California Grocery Store for Disability Discrimination (October 2018).
• Hearing Disabled Applicants Deserve Equal Consideration (September, 2018).
• Don’t Flunk the Reasonable Accommodation Test (May 2018).
• Preventing Workplace Discrimination (August, 2017).

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

Helena Kobrin
August 23, 2019