California May Require More Home Aide Disclosures Starting July 1, 2019

The Home Care Organization Consumer Protection Act (HCOCPA), effective January 1, 2016, requires licensing of home care organizations (HCOs) and registration of their home care aides (HCAs). The Home Care Services Bureau (HCSB) of California’s Department of Social Services (CDSS) regulates this industry. See Caregiver Agencies Must Comply with Home Care Services Consumer Protection Act or Cease Operation (January 2016).

The HCOCPA (Health & Safety Code section 1796.29) establishes an online registry containing an HCA’s name, identification number, registration status, and expiration date. The purpose is “to expedite the ability of a consumer to search and locate a registered home care aide or home care aide applicant,” enabling the public to learn if a caregiver had been background checked and trained and was affiliated with any particular HCO. Notably absent from disclosure was an HCA’s personal information.

However, last September AB 2455 amended section 1769.29. Still prohibiting the Internet display of such information, after July 1, 2019 and upon an HCA’s new registration or renewal, the law requires electronic disclosure of his/her name, phone and cell phone numbers on request of a labor organization for the specific purpose of “organizing, representation, and assistance activities.”

If an HCA does not want that information disclosed to a union, the person has to opt-out by a “simple procedure” developed by the CDSS. The agency is expected to revise its forms and procedures by July 1, 2019.

HCO best practices would thus include informing its HCAs that if they wish to maintain privacy vis-à-vis labor organizers, they must affirmatively opt-out when applying for or renewing their registration on or after July 1, 2019. Watch for the CDSS’s amended renewal and registration forms and make sure HCAs are using the correct ones.

See also:

• Home Care Aides Must Register With New State Agency No Later Than March 1, 2016 (January 2016)
• Caregiver Agencies Must File License and Caregiver Registration Applications by March 1, 2016 or Cease Operation (February 2016)

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

Helena Kobrin
May 24, 2019

California May Require More Home Aide Disclosures Starting July 1, 2019

Helena Kobrin
July 1, 2019

Labor Code section 218.7, effective January 1, 2018, made general “direct” contractors (those delivering to property owners directly) responsible for wage payments to employees of subcontractors who fail to make those payments. However, direct contractors may be able to prevent such exposure through well-constructed written agreements with their subs. See, Contractors Liable for Wages and Benefits If Subcontractors Don’t Pay Their Employees.

A could-have-been-avoided case in point is the Labor Commissioner’s May 29, 2019 $68,657 assessment against general contractor J.H. McCormick, Inc. for wages the commissioner found subcontractor Universal Structural Building Corp failed to pay its workers. McCormick, apparently lacking the protective contractual measures that would have placed full burden back on Universal, appears in the unenviable position of having to pay that $68,657 presumably after having already covered that amount in the compensation paid the sub for its services.

The Labor Commissioner determined Universal’s violations – including additional substantial penalties section 218.7 did not extend to general/direct contractor McCormick – upon worker complaints that they had been paid nothing for five to six days labor a week, eight to 14 hours a day for the final weeks of the project. Universal reportedly told the workers it had no money and that McCormick, the general, was supposed to pay them.

California Labor Secretary Julie A. Su commented: “Up-the-chain general contractors are now responsible for wage theft committed by their subcontractors on all construction projects in the state. General contractors who choose subcontractors that do not pay wages owed will pay a hefty price. The Labor Commissioner’s Office will use all the tools at its disposal to return these stolen wages – including the placement of liens on these properties which will have a hold until the labor these workers poured into these projects is paid for in full.”

The commissioner’s powers can thus not only reach a general contractor’s accounts to pay an erring sub’s wage shortages, it can also sell off the property on which the project was performed. To prevent such a fiasco, best practices might include:

• General contractor agreements that confirm ultimate subcontractor responsibility for full wage and benefits payments to their workers;
• Contracts that require subcontractors to provide full wage payment documentation each pay period as a condition for the general’s payments to the sub for services rendered;
• Required indemnification, bonding and/or set-aside provisions to compensate the general/ direct contractor for its wage payments to a sub’s employees; and
• Consult with a knowledgeable legal counsel to help put such protections in place.

Helena Kobrin
June 28, 2019

The U.S. Equal Employment Opportunity Commission (EEOC) has announced the $690,000 resolution of its gender-based lawsuit against Alaska gold mining outfit Northern Star LLC, formerly Sumitomo Metal Mining Pogo (Pogo).

The government alleged Pogo discriminated against female underground miner Hanna Hurst by refusing to promote her despite promoting male co-workers with less seniority or training. In response to Hurst’s protestations, Pogo allegedly retaliated by imposing additional training requirements to rise through the ranks that did not apply to her male counterparts.

In a “consent decree” the company must post for the next three years, Pogo agreed to pay Hurst $690,000 in lost wages and damages and to hire an independent expert to develop and implement policies, procedures and training to ensure equal employment. In addition, Pogo will provide anti-discrimination training to all personnel, report to the EEOC all complaints based on discrimination and retaliation, and post a notice to employees about the consent decree and employees’ rights.

EEOC Senior Trial Attorney May Che commented, “During Hanna’s employment, Pogo had a discretionary promotion policy applied by male supervisors, who repeatedly showed overt hostility and sexist attitudes toward women at the mine, which ensured that no woman made it to the top-level mining positions.”

This case is another example of why employers should take all appropriate measures to ensure equal promotion opportunity to all qualified employees, including implementation of procedures to promptly investigate and resolve employee discrimination complaints of any kind, in consultation with experienced legal counsel as needed.

See also:

• Dads are people too (September, 2018).
• Unlawful Retaliation Defined (September 2016)

Cindy Bamforth
June 27, 2019

Pregnancy remains one of the most clearly protected classifications for employees, safeguarded not only under general disability laws, but also under laws enacted specifically to protect expectant women. See, for example, Pregnancy Accommodation in California (Nov 2018); Employers with 20 or More on Payroll Must Provide Expanded Parental Leave (December 2017); Expanded Pregnancy Health Benefits for Most California Employees (October 2011). Refusing to hire someone or otherwise taking adverse action because of pregnancy is an excellent way to trigger repercussions from government agencies as well as the person targeted.

The Equal Employment Opportunity Commission (EEOC) has just announced an $80,000 consent decree entered into with Scribe-X Northwest (Scribe-X) of Portland, Oregon over its refusal to hire a pregnant woman, Brittany Frisby. After the company hired Ms. Frisby to start work as a medical transcriber in January 2016, she mentioned that she was pregnant. The CEO then called her personally to tell her the job offer was rescinded and the company would not have hired her if it had known.

Not only does Scribe-X have to pay Ms. Frisby $80,000 for lost wages and emotional distress because of its Dark Ages mentality, it also must implement policies that will protect such employee rights, train its executives and staff, and report to EEOC on compliance.

John Stanley, EEOC Supervisory Trial Attorney, stated: "Ms. Frisby sought to earn a steady paycheck at a stable job to support a new child. By bringing her story to the EEOC, she tried to right a wrong, and this positive outcome allows her move on and ensures positive changes for current and future employees at Scribe-X."

Company executives must have at least enough understanding of a decision’s potentials to know when it’s time to consult an experienced employment attorney beforehand. In this case, it likely would have taken only a vague notion of discrimination laws to sense that refusing to employ a woman because of pregnancy was a recipe for disaster.

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

Helena Kobrin
June 21, 2019

According to Wiktionary.org, a “Debbie Downer” is a “naysayer; one whose negative remarks depress or dissuade others.” Most seasoned managers will be all too familiar with how one negative individual can bring down the entire workforce’s morale.

Employers are often reluctant to terminate someone just for a negative attitude, particularly if the worker otherwise appears to be doing a good job, shows up on time and is not overtly flaunting workplace policies or rules.

Disciplining someone for having a “bad attitude” may also run afoul of legitimate employee protections. For example, employers must not violate the National Labor Relations Act, which shields certain activities including criticisms over working conditions. Employees also have rights prohibiting wrongful termination or discrimination based on his/her protected class, such as gender, age, race, religion, and physical or mental disability.

Yet continuing to employ a “Debbie Downer” or, say, a “Bob Bummer” can create a toxic environment in which other valuable employees may choose to leave. If to resolve legitimate workplace concerns, an employer is determined to part ways with Ms. Downer or Mr. Bummer, it should consider consulting with knowledgeable employment counsel to minimize the prospects of legal repercussions, including:

• Treating all employees fairly, consistently and appropriately in accordance with company policy.
• Documenting specific behavior that negatively impacts others, impedes productivity, etc.
• Verbal counseling and a written performance improvement plan in an attempt to correct the behavior.
• Placing the employee on probation or suspension, especially if the negative behavior violates company policy, such as insubordination.
• Offering additional severance pay upon termination in exchange for a signed release and waiver of all claims, real or imagined, known or unknown.

See also:

• Oh No You Didn’t! (June, 2018).

• Employee Terminations (April, 2018).

Cindy Bamforth
June 14, 2019

California minimum wage currently is $12.00 per hour for employers with 26 or more employees and $11.00 for employers that employ 25 or fewer. Annual increases will continue each January 1 until they reach $15.00 per hour in 2022 for larger employers and in 2023 for employers with 25 or fewer employees.

The nine California cities and two counties listed below will increase their local minimum wage rates effective this July 1, 2019. See the UC Berkeley Center for Labor Research and Education listing for regular updates.

Some cities have enacted separate minimum wage laws for hotel workers that also change July 1, 2019. For example, the minimum wage for hotel workers will be $14.97 in Long Beach (all hotels), $16.63.in Santa Monica (all hotels), and $16.63 in City of Los Angeles (hotels with 150 or more rooms). In addition, on May 29, 2019, Emeryville passed an amendment to its minimum wage ordinance, section 5-37-.02 of the Emeryville Municipal Code, which makes the minimum wage for small independent restaurants – having fewer than 21 locations globally -- $15.00 as of July 1, 2019.  On July 1, 2020, that rate will increase to 93 percent of the minimum wage for employers that are not small businesses, with an additional one percent of that amount added each year on July 1 until those businesses are paying the same minimum wage rate as other businesses as of July 1, 2027.

Non-profit charitable organizations should check for possibly slower implementation requirements under applicable local ordinances.

A covered employer must also conspicuously post an updated wage notice for each applicable jurisdiction. Click the above city/county link(s) to download the most current notice.

See also:

• Cautionary Tales Episode #24 – Mango Gardens’ Actions Not Fruitful; Unpaid Wages and Attempt to Evade Consequences Result in Seizure of Owners’ Assets (January, 2019)
• What’s New For 2019 – Industry Wage Orders Updated for California Minimum Wage Increases (March, 2019)
• What’s New For 2019 – California Minimum Wages Rates for 2019  (December, 2018)

Helena Kobrin
June 13, 2019

In Dynamex Operations West, Inc. v. Superior Court (2018), the California Supreme Court adopted a strict “ABC test” redefining “independent contractor”:

1. The worker is free from the hirer’s control and direction in connection with the performance of the work, both under the contract 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.

However, Dynamex does not apply across the boards, covering only the California Wage Order employee protections (e.g., minimum wage and overtime issues, deprivation of meal and rest periods, and record-keeping and itemized wage statement requirements). The traditional “balancing test” definition of independent and control factors continues to determine the scope of other workplace laws, including workers’ compensation and unemployment benefits.

Undertaking to eliminate at least some of the resulting uncertainty, the California Labor Commissioner’s office May 3, 2019 opinion letter asserts the ABC test should apply to all California Labor Code provisions intended to enforce Wage Order protections, including Labor Code section 226 (itemized pay stub obligations); 226.7 (meal, rest and cooldown recovery periods); 512 (meal periods); 1182.12; 1194.2 and 1197 (minimum wage); and 510 and 1194 (overtime provisions).

The letter further contends the ABC test should apply to Labor Code section 2802 expense reimbursement claims for those expenses set forth in the Wage Orders (e.g., tools, uniforms and equipment).

The letter also declares the ABC test applies to Labor Code section 203 (which penalizes employers for any wages that are not paid at the time of termination) under certain circumstances: “[W]here section 203 serves to enforce the underlying minimum wage and overtime obligations of the wage orders, application of the ABC test to these claims would be appropriate.”

Although the courts need not follow such Labor Commissioner interpretations, the letter indicates the ABC test is gaining momentum, with the Labor Board determined to broaden Dynamex’s application.

Best practices to avoid or minimize independent contractor misclassification claims include:

• Carefully evaluate any ongoing independent contractor relationships together with knowledgeable legal counsel.

• Update independent contractor agreements to adequately address the ABC test.

• Consider implementing arbitration provisions with class action waivers.

• As needed, re-classify independent contractors to employees with all proper employee hiring paperwork. See The Best Offense is a Good Defense (June, 2019).

• Promptly work with knowledgeable legal counsel if the company receives any government agency misclassification-related notice, inquiry or audit. See, For Whom the Bell Tolls (April, 2019).

See also:

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

Cindy Bamforth
June 7, 2019

Industries and employers throughout California have been grappling since April 2018 with the effect of Dynamex Operations West, Inc. v. Superior Court on their independent contractor relationships. Rejecting a multi-factor standard that had been in place since 1989, the California Supreme Court in Dynamex required employers to prove all three prongs of a newly-adopted ABC test to justify classifying workers as independent contractors. See Independent Contractor Status in California Now Falls Under Radically Different Rules (June 2018).

When asked to rule if the ABC test applied retroactively, the California Supreme Court declined. Since then, some lower California courts have ruled that it does, for example, Garcia v. Border Transp. Grp and Johnson v. VCG-IS, LLC.

Now, the Ninth Circuit federal appeals court has ruled that the ABC test is retroactive in Vazquez v. Jan-Pro Franchising International, a case that was originally filed in 2008, 10 years before the Dynamex decision.. The court made little of the financial chaos and unfairness that retroactive application of ABC would cause and Jan-Pro’s reliance on the previously existing rules. Instead, the court endorsed retroactivity for multiple reasons, finding: (1) retroactivity is standard for court decisions: (2) California courts would rule that way and some, albeit lower courts, have already done so; (3) workers and their families must be protected; and (4) employers with substandard practices should not gain a competitive advantage as a result.

Employers with independent contractors should have taken notice to review those relationships a year ago when the Supreme Court issued Dynamex. If they did and changed such classifications as warranted by ABC, their retroactive liability under pertinent statutes of limitations is decreasing over time. Any employers who have not conducted review so should not delay. Any liability can continue back for up to four years from the date of any misclassification claim.

Stay tuned. The California legislature is currently considering competing bills on the long-term application of the ABC standard. See, California Legislature Dealing with Competing Proposals to Kill or Expand New Dynamex Test (April 2019).

See also:

Radically New Dynamex Test Only Applies to Certain Employee Classification Cases (November 2018)

Helena Kobrin
May 31, 2019

California employers must provide non-overtime-exempt employees unpaid meal break(s) based on the number of hours worked in a given day. See, Required Meal Periods and Rest Breaks Revisited (April, 2018).

The California Supreme Court’s 2012 Brinker Restaurant Corp. decision clarified that “employer-provided” breaks does not mean companies have to police workplaces to ensure employees take their meals. Rather, California employers must relieve employees of all duty, relinquish control over their activities, and permit them a reasonable opportunity to take an uninterrupted 30-minute break on or off the worksite without “impeding or discouraging” them from doing so.

In Chelsea Hamilton et al. v. Wal-Mart Stores, Inc. et al, two plaintiff-employees brought a class action on behalf of 5,000 non-exempt co-workers at Walmart’s Chino, California fulfillment center. They alleged that each time employees left the building they had to go through anti-theft metal detectors, potentially cutting into their 30-minute breaks, thus dissuading them from leaving the building to eat lunch.

In defense, Walmart established one of the named plaintiffs took her meal breaks outside the workplace while citing plaintiffs’ own expert on over 30,000 instances of class members taking meal periods of at least 30 minutes outside the facility.

The court noted, however, that plaintiffs were not required to show the security check actually prevented them or others from taking off-site meal breaks; they only needed to present evidence from which a jury could conclude that the security check impeded or discouraged them from doing so.

The jury returned a unanimous verdict for the employees, awarding over $6 million in damages. Walmart is appealing.

Whatever this case’s ultimate outcome, employers should implement policies and procedures to unequivocally encourage employees to take off-site meal breaks. If workers must undergo security checks before leaving for such breaks, employers should also consider installing a remotely-located time-clock beyond the security checkpoint so that employees can clock out for lunch after completing the security check.

See also:

• Workers Don’t Lose The Snooze (June, 2017).
• Brinker Case Settles for $56 Million (August, 2014).
• Brinker Decision and Rest Periods. California Employers Get a Break (May, 2012).
• Brinker: California’s Meal Break Breakthrough. Employers are No Longer the Lunch Police (May, 2012).
• Brinker: Employees May Skip Breaks. Yet Greater Flexibility Requires Greater Documentation (May, 2012).
• Brinker: Clocking In on Employee Timekeeping. Dos and Don’ts for California Employers (May, 2012).
• Brinker’s New Rules for Meal and Rest Breaks. The Necessity of Management Training (May, 2012).

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

Cindy Bamforth
May 23, 2019