Following San Francisco, Los Angeles, and other cities and states across the country, California has added a provision to the Fair Employment and Housing Act (FEHA) banning employers from asking applicants for criminal convictions before a conditional offer of employment has been made. See, San Francisco Employers Must Give Former Convicts a Fighting Chance (August, 2014); Ban the Box in the City of Los Angeles (January 2017).

Effective January 1, 2018, Government Code 12952 will prohibit California employers with five or more employees from making pre-offer inquiries concerning criminal background.

Initial Applicant Screening. An employer may not include questions on an employment application form, or otherwise inquire into or consider criminal conviction history before the employer makes a conditional offer of employment to the applicant.

Conditional Offer and Fair Chance Process. Once an employer makes a conditional offer, it may require the candidate to disclose criminal conviction information. Before reversing that offer to hire, the employer must assess the nature, gravity and timing of the applicant’s convictions, completion of any sentence, and how the convictions relate to the job being sought.

If on that review an employer decides to rescind the offer, it must notify the applicant in writing of that preliminary decision, the conviction(s) upon which that decision is based, and the applicant’s right to respond within five business days, along with a copy of any conviction history report. If within that time the applicant notifies the employer in writing that he/she disputes the conviction history, he/she may have an additional five days to obtain evidence before fully responding.

The employer must consider any information an applicant submits before making its final decision. Should the denial of employment stand, the employer must notify the applicant in writing of: (1) its final decision; (2) any procedure the employer has for the applicant to dispute the decision; and (3) the applicant’s right to file a complaint with the Department of Fair Employment and Housing (DFEH).

Banned Considerations. This new law prohibits an employer from considering most arrests that were not followed by a conviction, referral to a diversion program, and sealed, dismissed, or expunged convictions.

Exemptions from the Law. New section 12952 does not apply to certain government positions, hiring of farm labor contractors, and positions for which the law requires a criminal background check.

Repeal/Retention of Existing Law. The new law repeals Labor Code 432.9, which banned state and local agencies from making criminal history inquiries while leaving in place Labor Code 432.7 which bans employer inquiries into arrests or detentions not resulting in conviction.

Affected California employers should review new section 12952 and what they must do to comply, including modifying employee applications and adjusting assessment and interviewing protocol, to ensure lawful inquiry into an applicant’s criminal history.

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

Helena Kobrin
October 27, 2017

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 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 minimum salary levels and spending more than half their time on higher-skilled operational “oversight” responsibilities -- can be legitimately exempt from such overtime premium rules. 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:

• Working Overtime in California
• California’s Exemptions from Overtime Pay (January, 2012)
• The California Executive Exemption (November, 2009)
• The California Administrative Exemption (November, 2009)
• Location, Location, Location…Location, California Municipal Minimum Wage Rates Continue to Grow (July, 2017)
• Larger California Employers Must Pay Higher Minimum Wages and Salaries (November, 2016)

Tim Bowles
October 17, 2017

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:

• $72,290 minimum wage underpayments
• $1,735 unpaid overtime
• $3,077 meal break violations
• $3,234 rest break violations
• $83,131 liquidated damages (the unpaid minimum wage amount plus interest)
• $1,221 waiting time penalties (payable to former employees who did not receive their full wages on departure)

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:

• Cautionary Tales Episode One, A Minimum Wage and Overtime Recovery for Three Times Amount Claimed (July, 2017)
• Cautionary Tales Episode Two, Two Tow Companies Owe $4.8M in Unpaid Wages and Overtime (August, 2017)
• Cautionary Tales Episode Three, Construction Company Sued for $6,300,338,Alleged Misclassification of Independent Contractors (August, 2017)
• Location, Location, Location…Location, California Municipal Minimum Wage Rates Continue to Grow (July, 2017)
• Working Overtime in California

Helena Kobrin
October 13, 2017

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.

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. 9^th 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 9^th 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 report anyone to ICE or other law enforcement over alleged or actual undocumented worker status.

See also:

• The State of Workplace Retaliation and Harassment Claims (July, 2017)
• Workplace Retaliation on the Rise (February, 2017)
• Unlawful Retaliation Defined (September, 2016)
• California Law Protects Undocumented Employees from Workplace Discrimination (April, 2015)

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

Helena Kobrin
September 22, 2017

Mr. Peter Breyer has joined the firm as our finance director.

Peter comes to us with an extensive finance background in the publishing industry. As a chief financial officer, he supervised collections, disbursements and accounting procedures. He is pleased to be working with a law firm, having acquired an interest in the law during his work securing publishing rights.

Originally from Germany, Peter set out at an early age to travel the world, eventually settling in Los Angeles. In his spare time, Peter likes to read and take walks with his dogs. He is also an avid skier and in the winter has been spotted ripping up the slopes at Big Bear.

We welcome Peter to the firm and look forward to working with him!

September 20, 2017

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:

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

Cindy Bamforth
September 15, 2017

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:

• Section A. The type of accommodation the employee requested and how it will help to perform his or her job; the anticipated recovery date, if any; and whether the employee has requested any protected leave of absence.
• Section B. Employer’s request for medical certification (if required to verify the need for an accommodation).
• Section C. Documentation of “interactive discussions” with the employee, including lists of all potential accommodations and their relative strengths and weaknesses and the employer’s recommended accommodation.
• Section D. Description of specific accommodation(s) provided and an explanation why the employer denied other options.
• Section E. Documentation of all further interactive discussions.

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,

• Mind the Stink (June, 2017)
• Employers Duties To Reasonably Accommodate Worker Disabilities (May, 2015)
• Pregnancy Disability Leave (February, 2011)
• Disability and Leave of Absence Policies
• Disability Employment (October, 2010)

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

Cindy Bamforth
August 24, 2017