Changes to California’s Mandatory Workplace Notice and Pamphlet on State Benefit Programs

California employers must conspicuously display required labor posters or notices where all employees may view them in each company location. The posters cover a broad array of topics including minimum wage requirements, safety and health requirements, workers’ compensation information, and whistleblowing protection.

California employers must also distribute certain government-issued pamphlets or information sheets to new hires, to employees on certain types of leaves of absence, and again upon termination of employment, covering topics including state disability insurance, workers’ compensation rights and benefits, and paid family leave.

California’s Employment Development Department (EDD), responsible for the administration of state unemployment insurance, disability insurance, payroll tax collection, and job training/workforce services, has recently updated its mandatory poster and pamphlet.

The “Notice to Employees” poster (DE 1857A), describing how to apply for unemployment insurance, disability insurance, and paid family leave benefits, now contains updated EDD contact information and filing instructions.

The “For Your Benefit – California’s Programs for the Unemployed” pamphlet (DE 2320) outlines eligibility criteria and provides detailed descriptions of a worker’s rights to unemployment insurance benefits as well as information on disability insurance, paid family leave, and workforce job-seeking services. Employers must provide a copy to each California employee when laid off, terminated, or taking a leave of absence. The EDD has recently transitioned into a more streamlined application system accessible through a single login site. Accordingly, the updated pamphlet provides new contact/application information.

Although the EDD encourages covered employers to use these new versions right away, employers may continue using the previous versions until January 1, 2019.

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

Cindy Bamforth

August 15, 2018

When Employees Earn On-Call Pay

Some employers require workers to remain “on-call” or on “standby” outside scheduled hours, either at the worksite or off the premises. Depending on the circumstances, a company may be required to pay an hourly employee for on-call time, including all resultant overtime at the correct overtime rate. See The Basics of Overtime; Calculating Overtime with Employee Bonuses in California.

California and federal law standards include:

• On-Premises Standby – The California Supreme Court has ruled that an employee required to remain on a business’s premises after-hours to protect against crime or potential emergencies must be paid for all such time under Wage Hour 4, even if some of those hours are idle or spent sleeping. Mendiola v. CPS Security Solutions, Inc. The rules related to payment of on-call workers vary in different Wage Orders, so it is important to check the applicable Wage Order for any special rules applicable to a particular industry or type of worker. For example, for employees who are required to reside on the premises under Wage Order 5, Public Housekeeping Industry, only “time spent carrying out assigned duties shall be counted as hours worked.”

• Uncontrolled Standby – An on-call employee required to respond to an employer’s request to return to work during an otherwise off-duty time, but not restricted in any manner or having only minor restrictions as to off-work activities, response time, or location does not need to be paid as he or she is not considered under the control of the employer for those wide-open standby hours.

• Controlled Standby – On the other hand, if an employee’s activities or location are sufficiently restricted during the off-hours, the employer is considered to have control of the employee and, therefore, must pay for the waiting time. Such “controlled standby” restrictions include: (1) geographical restrictions on employee’s movements; (2) required response time; (3) required readiness standards (such as no alcoholic consumption); (4) the extent the employer’s policy would otherwise impact on personal activities during the on-call time (for example, no travel to a zone where there is no cell phone coverage); (5) unlimited number of times employer may contact the employee; and (6) cannot easily trade his/her on-call responsibilities with another employee.

The line between uncontrolled and controlled standby is not always clear, moving in either direction on the relative degree of “uncontrol” and control factors present.

For instance, a policy that provides employees an option of responding to a call probably does not require the company to pay the employees for choosing to be available. Thus, a business that puts out the word of a hot prospect to several salespeople, with the referral going to the first employee to call in, is most likely an uncontrolled and thus uncompensated standby/on-call situation.

On the other hand, a policy that requires a designated worker to stay within specific geographic limits, to maintain open telephone or text message contact during specific hours and to arrive at the worksite (or otherwise begin working) within a limited amount of time after receiving employer’s instruction to appear is almost certainly a paid controlled standby or on-call arrangement.

Whatever the standby arrangement, once an employer engages a worker for labors during his or her off-hours, the time is compensable. Thus, a business must pay an hourly employee for all time spent responding to an off-hours question or emergency via phone, text, email, or other communication channel.

It is thus important to have clear written policy for on-call requirements, one way or the other.

An employer who doesn’t pay for standby, but vaguely announces “negative consequences” for failing to respond to a call, risks a later government or court finding that it has failed to pay for required standby time.

On the other hand, a business with a clear, paid, mandatory on-call policy can legitimately take adverse action against the individual who fails to comply. Certainly, the policy should spell out the range of consequences possible. On the degree of discipline to be consistently applied for a particular violation, there is no substitute for management experience and judgment and, as needed, appropriate legal advice.

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

Helena Kobrin

August 10, 2018

Call Center Accused of Ignoring Sexual Harassment Complaints Settles Suit for $3.5 Million

The U.S. Equal Employment Opportunity Commission (EEOC) has announced court approval of a $3.5 million payment to resolve a sexual harassment lawsuit against Irvine, California employer Alorica, Inc., a call center and technology services business. The government alleged the company had condoned repeated, long-term sexual harassment of both male and female customer service employees despite repeated worker complaints.

In settlement, Alorica also agreed to hire a third-party monitor, to create two internal positions (an equal employment opportunity consultant and an internal compliance officer), and to provide sexual harassment training incorporating civility and bystander intervention training for all its employees. The company also agreed to revise its anti-discrimination and retaliation policies and procedures as well as maintain records of any future sexual harassment and retaliation complaints, audits, and reporting.

The EEOC enforces federal laws prohibiting workplace discrimination in all types of work situations, including hiring, firing, promotions, harassment, training, wages, and benefits. Most employers with at least 15 employees are covered by such national laws (20 employees in age discrimination cases). Similar state legal protections apply to many employers with smaller numbers on payroll.

EEOC Acting Chair Victoria A. Lipnic commended the employees who came forward in this case. She also acknowledged both sides for coming to a resolution that provides relief to the aggrieved individuals and makes “positive changes to the company’s workplace practices.”

The case is another stark and expensive example why employers should take all appropriate preventative measures to prevent harassment, discrimination and retaliation including unambiguous “zero tolerance” policies, adequate and regular training, and close adherence to procedures to promptly investigate and resolve employee complaints of harassment of any kind, consulting with experienced legal counsel.

See also:

• Additional Protection from Sexual 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.

Cindy Bamforth

August 9, 2018

Is California’s “Paid Family Leave” a Protected Leave of Absence?

Employers are sometimes uncertain how to properly respond to an employee’s request for Paid Family Leave because the name is somewhat misleading. Some unpaid “leaves of absence” (for example for medical conditions or family emergencies) are legally “protected,” meaning the employer must accept the eligible employee back to the same (or comparable) job position at the same (or comparable) pay rate. See, e.g., California “New Parent Leave Act” Impacts Small Business (December, 2017).

However, California’s Paid Family Leave (PFL) is not an additional, stand-alone protected leave of absence. Rather, it is a temporary disability program administered under the state’s Employment Development Department (EDD) to provide partial wage replacement benefits when a person must be off work in certain circumstances.

To qualify for PFL benefits of up to six weeks partial pay in a 12-month period, the employee must need time off from work to care for a seriously ill family member or to bond with a new child; be covered by State Disability Insurance; have earned at least $300 in the past five to 18 months; and submit the PFL claim to EDD within a specified time period.

If an employee applies for PFL benefits while concurrently on authorized and permitted leave under California’s Pregnancy Disability Leave (PDL), California’s New Parent Leave Act, the Federal Family and Medical Leave Act (FMLA) and/or the California Family Rights Act (CFRA), then the employer must provide job protection as legally required under any such leave law(s).

If, however, the employee qualifies to receive PFL benefits (i.e., to care for a seriously ill family member or for baby-bonding) but is not covered by any protected leave of absence (e.g., if the company has less than five employees and is therefore not required to provide any of the above-mentioned protected leaves), then the employer does not have to grant the requested time off or guarantee job reinstatement afterwards. In those circumstances, the company should base its decision to grant the requested time off on its internal policies, previous practices and, perhaps the most basic consideration, common sense.

All California employers regardless of size must comply with all PFL requirements, including filing applicable PFL forms with the EDD. When the PFL begins, employers must proceed with any payroll deductions according to the EDD’s rates and provide the employee with a Notice as to Change in Relationship.

Employers must distribute a mandatory PFL information brochure (DE 2511) to all new hires and any worker commencing such time off work. The employer must also post this information (DE 1857A) in the workplace where the employees can read it easily. To download the most current notices and posters, visit the EDD’s website. See, Changes to California Paid Family Pamphlets (July, 2015).

As state and federal leave and wage benefit regulations are complex and often overlapping, employers should have well-written, standardly-implemented policies and consult with an attorney as needed when faced with an employee requesting PFL.

See also:

• California Family Rights Act New Regulations (July, 2015)
• Requiring Use of Paid Vacations for Unpaid Leaves (August, 2012)

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

Cindy Bamforth

August 3, 2018

Spa Nailed for $1.2 Million, “Wage Theft”

The California Labor Commissioner’s Office has announced large citations against Young’s Nail Spa in Temecula, for misclassification of 36 workers as independent contractors and for wage theft, paying by the service instead of paying them hourly and overtime in spite of 50-hour weeks. The salon was also faulted for failing to provide appropriate meal and rest breaks. The total $1.2 million citation included:

• $126,702 for minimum wage violations, plus $144,076 in liquidated (automatic) damages for such violations, plus $17,735 interest;
• $118,825 for unpaid overtime;
• $87,155 for missed rest periods;
• $18,103 for meal period violations;
• $65,312 for lack of itemized wage statements; and
• $92,492 for failing to provide proper final paychecks.

The Commissioner also imposed $572,187 in civil penalties, including $160,000 for misclassifying workers as independent contractors, $104,000 for not having proper wage statements; $100,300 for wage violations; and $207,887 for not having workers’ compensation insurance.

The case arose on referral by the Labor and Workforce Development Agency (LWDA) from an initial worker complaint alleging violations under the Private Attorney General’s Act (PAGA). PAGA directs an aggrieved employee to notify the LWDA of an employer’s purported Labor Code violations. If the LWDA chooses not to investigate, that worker may bring a direct legal action for himself or herself as well as for all co-workers similarly affected.

In her announcement, Labor Commissioner Julie Su stated: “Using misclassification as a business model not only denies workers of their rightful pay, but also gives the employer an unfair advantage over law-abiding businesses. California law is clear that if employers pay less than the minimum wage, when they are caught they will be responsible for paying not just the wages owed, but an equivalent amount in liquidated damages plus interest.”

Any small business owner can imagine the devastating effect such a citation would have. To avoid these potential repercussions, employers should regularly review their employment practices to confirm compliance with current federal, state, and local law.

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

Helena Kobrin

August 1, 2018

Drywall Company Plastered With Nearly $2 Million in Citations

The Labor Commissioner has again looked to the construction industry for its latest round of wage theft citations. A July 24, 2018 release announces that Fullerton Pacific Interiors, Inc. will have to pay over $1.9 million for underpaying several hundred workers over a nearly two-year period.

Affected employees performed taping and drywall installation on hotel, recreation center and casino projects throughout Los Angeles and surrounding counties. The Commissioner found the employer paid the workers a daily rate which did not cover all overtime hours, failed to provide mandated ten minute rest breaks and issued inaccurate itemized wage statements.

Fullerton Pacific must compensate 289 workers $386,685 for unpaid overtime, 472 workers $798,664 for rest period violations and $592,500 for wage statement violations. It also must pay $14,431 in unpaid wages, liquidated damages and waiting time penalties (up to 30 days additional wages for untimely final pay) to those workers who were not paid full minimum wage. The employer is also responsible for $72,400 in civil penalties.

Labor Commissioner Julie A. Su admonished that: “In construction, unscrupulous contractors attempt to obscure their wage theft by paying workers a flat rate rather than for all hours worked. But a daily or other flat rate system does not take the place of minimum wage and overtime obligations.”

The Commissioner’s office was again prompted to investigate after workers complained to a non-profit organization, this time the Carpenters Contractors Cooperation Committee.

Assessments of this magnitude can of course crush a business. It is vital to always pay required minimum wage and overtime to hourly workers, to have proper policy and practice encouraging employees to take their required breaks, and to issue complete and accurate pay stubs in compliance with California law.

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

Helena Kobrin

July 26, 2018

California Employers May Disclose Sexual Harassment Allegations to Prospective Employers

Defamation refers to the laws that make someone accountable for harming another’s reputation through the spread of falsehoods either verbally (slander) or in writing (libel). Alleged sexual harassers have sued employers and sometimes victims for defamation in connection with statements made in a sexual harassment complaint or investigation.

In response to the #MeToo and #WeSaidEnough movements’ goals of enabling individuals to more freely speak out about harassment allegations, the California legislature recently amended Civil Code section 47 to clarify what types of communications are “protected” (i.e., privileged as a matter of law) from an accused harasser’s defamation claims.

In order to eradicate “the culture of silence that has allowed serial harassers to evade accountability and strike anew,” the amended law, effective January 1, 2019, explicitly protects:

• any sexual harassment complaint made by an employee to an employer “without malice” (i.e., not motivated by hatred or ill will or not lacking reasonable grounds) based upon credible evidence;
• any communication between an employer and interested persons without malice regarding a sexual harassment complaint; and
• a current or former employer’s non-malicious answer to a prospective employer’s inquiry as to whether a decision to not rehire the employee is based upon the employer’s determination that the former employee engaged in sexual harassment.

Although a former employer may lawfully inform a prospective employer in good faith that it would not re-hire an ex-employee due to prior allegations of sexual harassment, it should proceed with caution before doing so. California employers should obtain the assistance of employment counsel to properly determine whether and to what extent to divulge communications about sexual harassment complaints to anyone outside the company, as well as how to document such discussions, and – on the other end — how to address and document any harassment-related information obtained when checking a job applicant’s employment references.

See also:

• 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.

Cindy Bamforth

July 19, 2018

Workplace Illness and Injury Prevention Programs are Mandatory in California

On July 10, 2018, Cal/OSHA issued a press release that is a stark reminder of the need for an Illness and Injury Prevention Program (IIPP) both on paper and in practice. Cal/OSHA cited SSA Pacific Inc., a marine cargo handler in San Diego, for safety violations that resulted in the death of a longshoreman at the Port of San Diego after a forklift accident. The citations total a proposed $205,235.

The press release describes what appears to be negligence on the part of the deceased worker in running the forklift into a concrete support column. Cal/OSHA cited the employer because the worker was not wearing a seatbelt and several safety devices on the forklift were disabled. The agency also faulted employer for lack of maintenance, inspection, training and safety checks. The citation also included the unrelated violation of not having an effective heat illness prevention plan. It classified the violations as willful (intentional and knowing) and/or serious (realistic possibility serious harm or death could result).

Fatalities of this nature also often result in wrongful death lawsuits.

While many employers do not have such potentially dangerous equipment in their businesses, California law requires all employers to have an IIPP. As Cal/OSHA did not cite the employer for lack of an IIPP, we can assume the company had one but was not following it. An IIPP must include: assignment of responsibilities to specific staff; a system for effective safety communications; an employee compliance system; accident investigations; correction procedures for non-compliant conditions; training and instruction on safety and health; and documentation/recordkeeping. Having and actually implementing an IIPP protects workers from injury or death, thereby also avoiding expensive repercussions to the employer.

The law allows employers with fewer than 10 employees to address most requirements in a simpler way, with oral instruction “in general safe work practices with specific instructions with respect to hazards unique to the employees’ job assignments” and other reduced record-keeping rules.

Cal/OSHA has many tools available to assist businesses, including a guide to creating an IIPP, and sample IIPPs for high hazard employers, non-high hazard employers, intermittent workers, and workplace security. Employers also can seek assistance from an attorney in preparing an IIPP and should have the attorney review any self-drafted IIPPs.

Of course, having an IIPP on paper will accomplish nothing if the business does not implement it. The savings in safe and healthy workers and avoided fines and lawsuits is well worth it.

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

Helena Kobrin

July 19, 2018

2018 California Wage Orders Overview

The California Department of Industrial Relations (DIR) through the California Industrial Welfare Commission (IWC) created and continues to refine 17 wage orders (Wage Orders) to regulate employee pay and working conditions by applicable industry or occupation. For example, Wage Order 4 applies to professional, technical, clerical, and mechanical occupations; Wage Order 9 regulates the transportation industry, and Wage Order 12 addresses the motion picture industry.

After determining which Wage Order(s) apply(ies) to a business, employers must prominently post the most recent version(s) at the workplace, including any job site.

Among other things, the Wage Orders address:

Definitions. Who or what is an employer, employee, wages, workweek, alternative workweeks, commission pay, etc.

Exemptions from Overtime Pay. These include the criteria to qualify a worker for the administrative, executive and/or professional exemptions. See also, California Exemptions from Overtime Pay (January, 2012)

Overtime. How to calculate and when to pay daily, weekly and double time rates. See, The Basics of Overtime (May, 2018).

Alternative Workweek Schedules. California law recognizes a workday exceeding eight hours in a 24 hours period without overtime payments under limited circumstances, also called an alternative workweek schedule. The Wage Orders explain how to implement a state-approved alternative workweek schedule.

Meal and Rest Periods. General rules for when and how to provide employee meal and rest breaks. Several Wage Orders contain exceptions or variations to the general standards for given industries, including those rules permitted in certain industries, such as Construction, Drilling, Logging and Mining (Wage Order 16), Residential Care (Wage Order 15), Health Care (Wage Order 4 and Wage Order 5), Motion Pictures (Wage Order 12), and Broadcast Industry (Wage Order 11). See also, Required meal periods and rest breaks revisited (April, 2018).

Minimum Wage. California’s statewide minimum wage rates will increase annually until reaching $15 per hour in 2022 for larger employers and in 2023 for those with 25 or fewer. See also, California’s Gradual Increases in Minimum Wage, to Reach $15.00 Per Hour by January 1, 2022 (April, 2016). A growing number of cities and counties are requiring even higher rates for employees within their boundaries. See, for example, Mid-Year Changes (June, 2018).

Other Workplace Rules and Conditions: These include, for example, rules and standards for “reporting time pay” (the minimum an employee must receive on a day he/she “reports”/shows up at the workplace but the employer has little or no work to be performed), recordkeeping, cash shortages and breakage, uniforms and equipment, appropriate changing and resting facilities, workplace temperature, and suitable seating.

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

Cindy Bamforth

July 13, 2018