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Effective January 1, 2018,new Labor Code section 432.3will prohibit all California employers from relying on salary history information as a factor in offering an applicant employment or in what salary to offer.
Effective January 1, 2018, new Labor Code section 432.3 will prohibit all California employers from relying on salary history information as a factor in offering an applicant employment or in what salary to offer.
Section 432.3 will also bar employers “orally or in writing, personally or through an agent,” from seeking “salary history information, including compensation and benefits, about an applicant for employment.”
The new provision requires an employer to disclose its pay scale on request of an applicant.
While the first portion of the law clearly states that salary history cannot be a factor in what salary level an employer may offer an applicant, a later section appears to provide an exception. If a prospective employee, “voluntarily and without being prompted,” provides salary information, then the employer may consider or rely upon that information in determining that person’s pay level. Section 432.3(h).
If and when an applicant discloses such information, it creates at least three potential pitfalls for employers, all of which should be addressed with adequate and accurate documentation.
First, an employer should document that any such applicant disclosure of past compensation was made “voluntarily and without prompting.”
Second, if employer is to consider or rely on that prior salary information to determine the person’s pay level, the company must take care to document that it is not violating the prohibition of Labor Code 1197.5 against wage disparity between men and women for substantially similar work under similar working conditions. See also, Understanding California’s Equal Pay Act, (June, 2011).
Third, since an employer may not use salary history in determining whether to hire a person, a company should be particularly careful in documenting why it legitimately declined to employ someone (e.g., not the most qualified candidate) after that applicant has voluntary disclosed past compensation levels.
Before this law goes into effect in January, California employers should eliminate any application form, policy or procedure that would run afoul of these new rules as well as train personnel management staff how to comply, including the sorts of adequate documentation a company should maintain to confirm such compliance. Employers should also create a “pay scale” for each position for which they are interviewing in case someone asks for it.
For additional information, please contact attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
October 20, 2017
Nor-Cal Venture Group, Inc., the owner of 26 Jack in the Box franchises in California, is one of the recent targets of theLabor Commissioner’s public campaign for employers to heed this state’s wage and hour laws. The commissioner’sDivision of Labor Standards Enforcement(DLSE) hasdirected Nor-Cal to pay $903,084for failing to pay 40 restaurant managers daily and weekly overtime, rejecting the employer’s claim that these workers met the tests as exempt executives or administrators.
Nor-Cal Venture Group, Inc., the owner of 26 Jack in the Box franchises in California, is one of the recent targets of the Labor Commissioner’s public campaign for employers to heed this state’s wage and hour laws. The commissioner’s Division of Labor Standards Enforcement (DLSE) has directed Nor-Cal to pay $903,084 for failing to pay 40 restaurant managers daily and weekly overtime, rejecting the employer’s claim that these workers met the tests as exempt executives or administrators.
California is one of five states or territories that requires businesses to pay their employees premiums for hours worked over a weekly or daily maximum. For this state, overtime kicks in after 40 hours in a week or eight in a day.
Executives or administrators that meet several specific requirements – including higher operational “oversight” skills and responsibilities and minimum salary levels – can be legitimately exempt from such overtime premiums. An employer is entitled to pay a validly classified exempt-from-overtime worker his/her salary no matter how many weekly or daily hours that person works.
While the managers in question may have theoretically possessed qualifying duties for exemption, the DLSE found that these workers were actually performing the same duties as other, hourly employees.
The state thus assessed Nor-Cal $416,783 in unpaid overtime and penalties, $218,277 in minimum wage violations and penalties, another $169,427 in automatic (“liquidated”) damages for minimum wage underpayments, and $98.647 in other underpayments.
Commissioner Julie Su warned: “For these employees, being misclassified as managers resulted in being paid less than minimum wage. That’s not an acceptable way of doing business in California, and my office will continue to enforce labor laws that uphold that wage floor.” She asserted that worker misclassification results in an estimated $7 billion annually in uncollected payroll tax revenue.
Employers should of course ensure that their exempt managers consistently satisfy all requirements for such classifications. See also:
For more information, please contact one of our attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.
Tim Bowles
October 17, 2017
TheCalifornia Labor Commissionercontinues to promote her department’s aggressive pursuit of employers who do not comply with wage and hour laws. In August, shetargeted a Chula Vista restaurant, Dorantes, Inc., doing business as La Querencia, for back pay to six workers totaling $164,688, plus another $110,150 in penalties.
The California Labor Commissioner continues to promote her department’s aggressive pursuit of employers who do not comply with wage and hour laws. In August, she targeted a Chula Vista restaurant, Dorantes, Inc., doing business as La Querencia, for back pay to six workers totaling $164,688, plus another $110,150 in penalties.
La Querencia was reporting it had five employees, but investigators discovered there were 14. There were six workers who received no meal or rest breaks and were paid $50/day over a nearly three-year period no matter the hours they actually worked.
The company’s failure to comply with its legal obligations resulted in citations for:
The company was also fined $54,500 for wage statement violations and assessed another $34,650 in civil penalties for minimum wage and overtime violations. The restaurant also received a $21,000 citation for insufficient workers’ compensation coverage.
The Labor Commissioner declared: “Honest business owners in California should not have to compete with businesses that skirt the law and deprive their workers of their hard-earned pay.”
Back wage and penalty assessments of this magnitude can easily close down a small business. The clear lesson is to always pay minimum wage and overtime and encourage employees to take their required breaks. See also:
For more information, please contact one of our attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.
Helena Kobrin
October 13, 2017
California isone of some 21 statesprohibiting workplace discrimination against“marital status,” defined in government regulationsas an individual’s “state of marriage, non-marriage, divorce or dissolution, separation, widowhood, annulment, or other marital state.” In California, a “spouse” is a partner in marriage, regardless of gender.
California is one of some 21 states prohibiting workplace discrimination against “marital status,” defined in government regulations as an individual’s “state of marriage, non-marriage, divorce or dissolution, separation, widowhood, annulment, or other marital state.” In California, a “spouse” is a partner in marriage, regardless of gender.
While a person’s status as married or single must be irrelevant to employment decisions, the recent Court of Appeal decision in Nakai v. Friendship House Association of American Indians (August 10, 2017) confirms that suspending or firing an employee arising from his or her marriage to a particular person is not unlawful.
Friendship House, a drug and alcohol rehabilitation center, had employed Orlando Nakai for over 20 years. Helen Waukazoo, Friendship’s CEO, was also Orlando’s mother-in-law. In May, 2016, after some two years of marriage difficulties, Karen Nakai (also a Friendship employee) called her mother, asserting Orlando had a gun, was angry with Friendship workers, was dangerous, and had relapsed on drugs.
On the basis of daughter Karen’s information, Helen, the CEO, immediately suspended Orlando and later fired him. He sued Friendship House, alleging Helen terminated him “solely because of his status as the spouse of the complaining employee and [her] son-in-law.” Orlando contended his firing constituted marital status discrimination prohibited by California’s Fair Employment and Housing Act (FEHA).
The courts disagreed, denying Orlando relief. Valid marital discrimination employee claims are for terminations due to the worker’s status as “married,” “single,” “divorced,” etc., not for “the status of being married to a particular person.” Orlando’s case failed because his employer could validly fire him out of a family dynamics problem, not a marital discrimination problem. Friendship House thus properly let Orlando go from the “entirely reasonable perspective” of thwarting a prospect of workplace violence.
Federal and state anti-discrimination laws protect employees from termination and other adverse workplace consequences based on factors unrelated to their ability and performance. Human resources executives must be able to distinguish between valid operations-based grounds for personnel decisions and those that cross the line into an employer’s unlawful conduct.
Please contact one of our lawyers, Tim Bowles, Cindy Bamforth, or Helena Kobrin, for guidance on such matters.
Tim Bowles
September 29, 2017
Federal and California law guarantee minimum wage and overtime pay, and prohibit retaliation against an employee who complains about a perceived violation of those laws. In California law, unlawful retaliation includes reporting or threatening to report any worker to U.S.Immigration and Customs Enforcement(ICE) to discourage or derail a wage claim.
Federal and California law guarantee minimum wage and overtime pay, and prohibit retaliation against an employee who complains about a perceived violation of those laws. In California law, unlawful retaliation includes reporting or threatening to report any worker to U.S. Immigration and Customs Enforcement (ICE) to discourage or derail a wage claim.
Yet, with the rising tide of whistleblower retaliation suits against employers over the past decade, it’s a wonder that many businesses still haven’t been deterred. The June, 2017 decision in Arias v. Raimondo (U.S. 9th Circuit Court of Appeals) illustrates the prevailing judicial “zero tolerance” toward such ill-considered management attempts at retribution.
After some 11 years of Angelo Dairy employment, Jose Arias, an undocumented alien, brought a 2006 suit alleging unpaid overtime and meal and rest break violations among others. As the trial date neared in that case, the employer’s attorney, Anthony Raimondo, instigated a plan to have ICE arrest Arias at his deposition and deport him.
After settling and dismissing his wage suit out of fear of being removed from the U.S., Arias sued Raimondo and Angelo Dairy for retaliation.
The 9th Circuit panel found both attorney and his employer-client liable, observing retaliation law prohibits not only an employer, but “any person” from discharging or in some other manner discriminating against an employee because that person filed a complaint or engaged in other protected activity. The law defines “person” as “an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.” See 29 U.S.C. 203(a). Mr. Raimondo could thus be held personally responsible for the retaliatory actions alleged.
Lesson: businesses may not retaliate, whether directly or through a third party (here, an attorney) against any employee because he or she complains of workplace conditions. In California at least, this includes threatening to report or reporting anyone to ICE or other law enforcement over alleged or actual undocumented worker status.
See also:
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Helena Kobrin
September 22, 2017
As a result, many areas have increased local minimum wage rates according to business size and consumer price index.
Federal minimum wage rate, currently set at $7.25, is often inadequate to meet basic needs and expenses, especially in certain high-end urban locations.
As a result, many areas have increased local minimum wage rates according to business size and consumer price index.
The following table lists minimum wage levels greater than the federal standard:
(Note: An employee who declines or is ineligible for a medical benefit plan must receive the higher minimum wage. See FAQs p.17 No.9b)
500 or less employees: $13.00 (or $11.00 if the employee receives specified paid medical benefits and/or earns $2/hour in tips)January 1, 2017501 or more employees: $15.00 (or $13.50 if the employee receives specified paid medical benefits)500 or less employees: $14.00 (or $11.50 if the employee receives specified paid medical benefits)January 1, 2018501 or more employees: $15.00 (if the employee receives specified paid medical benefits). Check state website before year-end for more details.Tacoma, WA$11.15January 1, 2017$12.00January 1, 2018
West Virginia$8.75 (6 or more employees)January 1, 2017
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Cindy Bamforth
September 15, 2017
TheCalifornia Fair Employment and Housing Act(FEHA) requires employers with five or more on payroll to engage in an “interactive process,” i.e., a timely, good faith communication to explore if and how to reasonably accommodatea physically or mentally disabled workerin order to perform theessential functionsof his or her job.
The California Fair Employment and Housing Act (FEHA) requires employers with five or more on payroll to engage in an “interactive process,” i.e., a timely, good faith communication to explore if and how to reasonably accommodate a physically or mentally disabled worker in order to perform the essential functions of his or her job.
Depending on the situation, different types of reasonable accommodation can include modifying the individual’s job duties, providing temporary unpaid leave, changing work schedules, or providing temporary transfers.
To assist employers in conducting and documenting the “interactive process,” the Department of Fair Employment Housing (DFEH) published a Request for Reasonable Accommodation Package (Package) in July 2017, which includes:
Although not required by law, this Package is a useful tool to help employers properly undertake and document their “interactive process” obligations to a disabled worker.
See also:
For more information, please contact Tim Bowles, Cindy Bamforth, or Helena Kobrin.
Cindy Bamforth
August 24, 2017
TheCalifornia Labor Commissioner has sued Glendale-based Calcrete Construction, Inc. claiming $6,300,338 for the company’s willful misclassification of some 175 persons as independent contractors as well as other wage violations. The Commissioner credits theCarpenters/Contractors Cooperation Committee, a union-affiliated non-profit organization monitoring workplace compliance, for referring the case.
The California Labor Commissioner has sued Glendale-based Calcrete Construction, Inc. claiming $6,300,338 for the company’s willful misclassification of some 175 persons as independent contractors as well as other wage violations. The Commissioner credits the Carpenters/Contractors Cooperation Committee, a union-affiliated non-profit organization monitoring workplace compliance, for referring the case.
The suit alleges Calcrete forced employees to agree to be independent contractors on threat of termination. The company then purportedly attempted to shield itself from liability by paying these workers through two staffing agencies.
The Commissioner also asserts that starting in 2014, Calcrete underpaid their employees for 18-28 hours of overtime weekly, failed to allocate required sick pay, and provided defective wage statements.
The $6.3M in potential damages includes some $2.6M in penalties for misclassification, $2.5M on the wage issues, and over $1M for failure to provide the proper wage statements.
The Commissioner seeks to use the suit as a warning: “[i]t is illegal for employers to use subcontractors to distance themselves from the obligation to pay workers, and we will use every tool to dissuade employers from this scheme.”
An ultimate finding of willful misclassification could generate back taxes scrutiny for Calcrete from the IRS and the California EDD.
Whatever the outcome here, the suit is a stark reminder of the importance of correct classification of workers as employees or as independent contractors. See also:
For more information, please contact one of our attorneys Tim Bowles, Cindy Bamforth, or Helena Kobrin.
Helena Kobrin,
August 18, 2017
Currently, no federal paid sick leave law exists. However, over the last decade, many states, counties and cities have passed distinct laws requiring covered employers to provide such benefits to designated workers.
Currently, no federal paid sick leave law exists. However, over the last decade, many states, counties and cities have passed distinct laws requiring covered employers to provide such benefits to designated workers.
Businesses employing persons in multiple covered locations may face conflicting requirements for each.
A current list of jurisdictions nationwide that we have found with such laws:
See also:
For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
Cindy Bamforth
August 15, 2017