Employers May be Liable For Unpaid Wages to Subcontractor’s Workers

Section 218.7 of the Labor Code, effective January 1, 2018, made contractors responsible for wage and benefit payments to employees of subcontractors who fail to make those payments. It permitted a contractor to require proof of wage and benefit payments from subcontractors and to withhold portions of a subcontractor’s payment if the demanded proof was not supplied.

Our blog on section 218.7 recommended that contractors require subcontractors to document payroll and benefit information for each pay period. See, Contractors Liable for Wages and Benefits If Subcontractors Don’t Pay Their Employees (January, 2018).

In A.B. 1565, the legislature has now created section 218.7(i) to require that written contracts with subcontractors must provide for production of such documentation before a contractor may withhold funds for unpaid wages and benefits from subcontractor payments. Subcontractors may include the same written provision with their subs and may withhold money from payments if the documentation is not forthcoming.

While obtaining and reviewing this documentation is an additional burden for contractors, it is more important than ever to do so, as a contractor can then ensure the needed payments are made from withheld funds.

Without such documentation and review, and subsequent withholding of funds for direct payment to unpaid employees, contractors risk government actions to enforce contractor wage and benefit payments to subcontractor employees from the contractor’s own pocket, especially if the contractor is using small, inadequately funded subcontractors..

For further information, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin

November 23, 2018

California employers must make reasonable efforts to provide their lactating employees with the use of a room or location – other than a toilet stall – in close proximity to the employee’s work area for the employee to express breast milk in private.

Effective January 1, 2019, amended California Labor Code section 1031 will not permit the use of a toilet stall or bathroom – so as to further ensure working mothers can express breast milk in a cleaner and safer environment, benefiting both mother and child. Thus, under the amended law a single-stall bathroom with a chair next to the sink will no longer be acceptable.

Employers will be allowed to provide a temporary lactation location only if:

• a permanent location is not available due to operational, financial, or space limitations;
• the temporary location is safe and private while expressing milk;
• it is only used for lactation while expressing milk; and
• it meets the state law requirements concerning lactation accommodation (e.g., it’s not a bathroom).

Under the amended law, agricultural employers may provide a lactating employee with a private, enclosed and shaded space, such as an air-conditioned truck or tractor cab.

An employer may apply to the California Department of Industrial Relations for an exemption if it can establish that the lactation accommodation would constitute an undue hardship concerning the employer’s size, nature, or structure. However, employers will still be required to provide a location other than a bathroom, which can be difficult for small businesses already facing significant space constraints.

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth

November 21, 2018

New, Simpler Certification Form for Disability Leave, Transfer and Other Reasonable Accommodation

The California Fair Employment and Housing Act (FEHA) requires employers with five or more on payroll to provide pregnancy disability leave, transfer and/or other reasonable accommodation due to pregnancy, childbirth, or a related medical condition. A woman is “disabled by pregnancy” if her health care provider determines: (i) she is unable because of pregnancy to perform any one or more of her job’s essential functions without undue risk to herself, her baby, or others; or (ii) she is suffering from severe morning sickness or needs time off for prenatal or postnatal care, bed rest, gestational diabetes, or other pregnancy-related physical conditions.

Employers may require written medical certification as a condition of granting reasonable accommodation, job transfer or pregnancy disability leave. If so required, the pregnant employee must be given at least 15 calendar days to submit the medical certification.

If the employee fails to give her employer reasonable advance notice (other than in emergency situations) or does not provide written medical certification when required, then the employer may be justified in delaying the reasonable accommodation, transfer, or pregnancy disability leave.

The California Department of Fair Employment and Housing (DFEH) recently reformatted and simplified its Certification of Health Care Provider form, which employers may download and issue to pregnant employees in these circumstances.

Additional resources:

• Your Rights and Obligations as a Pregnancy Employee.
• PDL, CFRA and FMLA Requirements and Obligations.

See also:

• New California Pregnancy Disability Leave Poster Requirements (March, 2016)
• Pregnancy and Disability (April, 2014)
• Pregnancy Disability Leave (February, 2011)

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth

November 15, 2018

THAI RESTAURANTS BARBEQUED

Three Southern California Outlets and Owners Must Pay Workers Over $1,000,000 for Wage Theft

On October 3, 2018, the Labor Commissioner’s Office announced that it has cited Sanamluang Café in North Hollywood, Orchid Thai Cuisine in Arcadia, and Orchid Thai in Baldwin Park, a total of $1,065,646 for wage theft violations.

The Labor Commissioner’s Office launched an investigation into the restaurants after receiving complaints of underpayment from non-profit organizations representing the restaurant workers. Investigators found that the restaurants paid the workers a flat fee of $45-50 for 10-11.5 hour shifts with no meal and rest breaks. These average $5/hour payments were well below minimum wage. The owners also failed to pay overtime wages, split shift premiums, and meal and rest period premiums.

“These conditions – long hours with no breaks and subminimum wages – are classic examples of wage theft,” Labor Commissioner Julie A. Su said, “and employers who make their profit by breaking the law will be held accountable.”

The Commissioner’s Office cited Snamluang Thaifood, Inc. and its owners $708,457 for wage violations against nine workers, and $125,250 in civil penalties imposed because this company continued ignoring wage minimums even after meeting with the investigators.

Orchid Thai Cuisine in Arcadia and its owners were cited $307,133 for wages owed to 11 workers and $100,750 in civil penalties. Orchid Thai in Baldwin Park and those same owners must pay $50,056 to two workers and $35,800 in civil penalties.

Labor Code section 558.1 makes owners, directors, officers, and managing agents of California employers liable for violations of minimum wage and hours and days of work. Because the cited companies and their owners are all liable for all of the amounts cited, both their personal and company assets can be levied if they do not pay these citations. Those who own and run companies should make certain they are paying employees correctly to avoid such liability.

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

Helena Kobrin

November 9, 2018

Radically New Dynamex Test Only Applies to Certain Employee Classification Cases

This past spring, the California Supreme Court inexplicably tossed out its decades-old “multi-factor” independent contractor test in favor of a far more stringent three-part “ABC” test. (Dynamex Operations West, Inc. v. Superior Court). See, Independent Contractor Status in California Now Falls Under Radically Different Rules (June, 2018).

Under the new test, a worker is automatically presumed to be an employee unless the hiring company can prove each part of the ABC test:

1. The worker is free from the hirer’s control and direction in connection with the performance of the work, both under the contract and in fact;
2. The worker performs work outside the usual course of the hiring entity’s business; and
3. 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.

In Garcia v. Border Transportation Group, a California appellate court recently confirmed the ABC test only applies to alleged California Wage Order violations (e.g., minimum wage and overtime issues) and that the traditional “multi-factor” test will continue to apply to all other order claims such as expense reimbursement, wrongful termination, and waiting time penalties.*

The California Chamber of Commerce (Chamber) has spearheaded the “I’m Independent Coalition” to urge state lawmakers to enact more reasonable legislation against the Dynamex ruling. The Chamber also commissioned Beacon Economics, LLC to report on Dynamex’s financial impact in California.

Until the legislature decides to act, businesses who regularly utilize independent contractors should, together with knowledgeable legal counsel, carefully evaluate those working relationships. For example, affirmative answers to any of the following questions might require reclassifying a worker as an employee:

Part A:

• Have the parties neglected to put their agreement in writing?
• Does the hiring company control or have the right to control the work its contractor performs?
• Does the contractor work out of the hiring company’s business premises?
• Does the hiring company require the contractor to follow the same company procedures and manuals as its employees?

Part B:

• Is the work performed by the contractor similar, identical or fundamental to the hiring entity’s core business?
• Does the contractor provide services in a role comparable to that of an employee?
• Is the contractor ordinarily viewed by others as working for the hiring company?
• Does the hiring company have employees who perform substantially similar work as its contractors?
• Does the company require its contractors to wear company uniforms or logos?

Part C:

• Does the contractor work exclusively for the hiring company?
• Has the contractor failed to create separate and distinct business cards or obtain a business telephone number, website address, and/or marketing and promotional materials?
• Has the contractor omitted to advertise its services to the general public?
• Is the contractor not currently established in an independent business?

*Note: The Garcia court also held that part C requires an existing, not potential, showing of independent business operation.

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth

November 9, 2018

Partner Cindy Bamforth Advises Conference for Work Experience Educators

The California Association of Work Experience Educators (CAWEE) is a state-wide professional association that since 1965 has been providing training and education on child labor laws and employment laws compliance, helping their members in turn to prepare their students for life within the workforce.

On October 4, 2018, our partner Cindy Bamforth participated in CAWEE’s fall conference in Burbank. Cindy presented vital information to educators and career specialists on job interview do’s-and-don’ts. She also covered legal perspectives on topics such as:

• Protected Classes
• Job Applications
• California Salary History
• California Criminal History

The lively, interactive presentation was well received by the educators, with many questions back to Cindy. She equipped the attendees with further knowledge of state and federal employment laws and how they apply to real-life work experience.

CAWEE officials remarked that Cindy’s presentation added a valuable input to the conference with her plain-language approach to a “scary” subject.

See also:

• Job Interview Errors to Avoid (April, 2018)
• If it Isn’t Written, Workplace Policy is Anyone’s Guess (March, 2018)
• California Ready to Enforce Greatly Expanded Workplace Laws (December, 2017)

November 1, 2018

EEOC Signals Wide Discrimination Protection

for the Emotionally Disabled

Contending employers must walk an extra mile to accommodate emotionally troubled workers, the Equal Employment Opportunity Commission (EEOC) has announced settlement of its disability discrimination lawsuit against Triton Management Services, LLC (Triton). See also, San Diego Tribune, October 10, 2018.

In March 2016, while out-of-state, Triton’s attorney legislative affairs director, sent “incoherent” texts to Triton, announcing she was quitting and was bipolar. Soon after, the employee’s husband contacted the company claiming she was ill and hospitalized and had not intended to resign. Nevertheless, an ensuing company letter accepted her resignation. Triton then declined to reconsider despite a follow-up doctor’s note confirming the illness.

Contending the employer had failed to consider reasonable accommodation, the EEOC filed suit alleging violation of the Americans with Disabilities Act of 1990 (ADA). Triton has now settled, agreeing to pay $110,000 for emotional distress and to train its employees and revise its written policies to be ADA-compliant.

Anna Park, regional attorney for the Los Angeles EEOC District Office, commented that “It is important for employers not to let stereotyping dictate how they respond to individuals with physical or mental disabilities in the workplace.” She commended “Triton for resolving this case.”

The EEOC’s press release noted that ADA compliance is a priority issue in its current Strategic Enforcement Plan. This is another reminder that employers need to take seriously their employees’ claimed or observable physical and mental disabilities and to work to accommodate them if possible. It is easier and less costly to get it right than to have a government agency come in and force a company to do so.

See also:

What’s That Again? (October, 2018)

Don’t Flunk the Reasonable Accommodation Test (May, 2018)

Employer Duties to Reasonably Accommodate Worker Disabilities (May, 2015)

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

Helena Kobrin

October 26, 2018

Hold the Line on Over-the-Top Halloween Costumes

All Hallows’ Eve. That spooky time of year when witches, vampires and zombies roam the land. From management’s perspective, however, the scariest Halloween costumes are those which are too revealing or are otherwise offensive to others in the workplace. For example, earlier this year a lingerie website began selling a sexed-up “Brave Red Maiden” costume — a much skimpier version of the clothing worn by oppressed female characters in “The Handmaid’s Tale.” (The website stopped selling it after receiving significant backlash online).

Yet, a little constructive fun does have its place. Properly managed, workplace holiday celebrations can build teamwork and morale. Best practices dictate that an employer should:

• Plan holidays celebrations in advance to minimize improper conduct.
• Distribute an email or a notice reminding that employees should dress and act professionally.
• Never require employees to dress up or participate in Halloween parties.
• Require appropriate dress at all times in the workplace, even during holidays, to ensure employees do not wear insulting or offensive costumes against other races, cultures, religions, etc.
• Expect managers and supervisors to set good examples in the workplace.
• Do not allow alcohol consumption at company celebrations in order to avoid liability for physical injuries incurred or sexual harassment committed by inebriated party-goers.
• Train managers how to properly enforce the company’s dress code policy without making an employee uncomfortable, such as when discussing whether a female employee’s low-cut top is too revealing.

Happy Halloween!

See also:

• Dress for Success (September, 2018)
• If It Isn’t Written, Workplace Policy Is Anyone’s Guess (March, 2018)
• Holiday Season Office Party That’s Nice, Not Naughty (November, 2016)
• Office Holiday Survival Guide (November, 2010)

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth

October 23, 2018

SILENCE IS NOT FOR SALE

Hush Money for Sexual Harassment, Assault and Retaliation Now Prohibited in California

Effective January 1, 2019

In response to the #MeToo and #WeSaidEnough movements and effective January 1, 2019, California Code of Civil Procedure (CCP) 1001 bans settlement agreements prohibiting public disclosure of “factual information” related to any civil lawsuit or agency complaint alleging sexual assault, sexual harassment, and workplace or housing-related harassment, discrimination or retaliation claims related to sex. Courts may not approve settlements that violate this prohibition.

New section 1001 also permits settlement agreements to shield, at the claimant’s request, his or her identity and “all facts that could lead to the discovery” of that identity, so long as a government agency or a public official is not a party to the agreement.

In apparent recognition of the chilling effect otherwise created, section 1001 specifically does not prohibit confidentiality of an amount paid in settlement.

California has also enacted CCP 1670.11, making void and unenforceable settlement provisions that prevent a party from testifying on alleged criminal conduct or sexual harassment when required or requested to attend by a “court order, subpoena, or written request from an administrative agency or the legislature.”

Thus, when settling litigation over any such claims, the parties must of course fashion their agreements for consistency with these new sections 1001 and 1670.11.

See also:

• Additional Protections from Serial Harassers (July, 2018).
• Speaking Out Against Sexual Harassment (December, 2017)
• Ten Top Reasons for Live Sex Harassment Prevention Training (September, 2017)
• The State of Workplace Harassment and Retaliation Claims (July, 2017)
• Expanding Policy and Notice Requirements to Protect Employees (June, 2017)

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin

October 19, 2018