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:

• 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)
• Location, Location, Location…Location, California Municipal Minimum Wage Rates Continue to Grow (July, 2017)
• California Paid Sick Leave Law, More About, (November, 2015)
• Independent Contractors and Employees, (October, 2011)
• Working Overtime in California

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.

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:

• Bulletproofing Los Angeles’s Paid Sick Leave Ordinance (October, 2016).
• San Diego Paid Sick Leave Requirements, Effective July 11 and September 2, 2016 (August, 2016).
• Santa Monica Rides the Sick Pay Wave (August, 2016).
• California Paid Sick Leave Law, More About (November, 2015).
• Oakland Paid Sick Leave Law Provides Greater Benefits Than the Upcoming State Requirements (March, 2015).

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

Cindy Bamforth
August 15, 2017

San Francisco is the first California city to enact an ordinance requiring private employers to provide lactation breaks and rooms to employees who are nursing mothers.

Effective January 1, 2018, all non-governmental employers under San Francisco’s “Lactation in the Workplace Ordinance” must provide breaks for expressing breast milk, concurrent with existing rest breaks required by applicable California wage order, if possible. If not taken at the same time, the lactation break can be unpaid.

Affected employers must provide a “Lactation Location”: a room other than a bathroom, specifically designated for lactation purposes, close to the employee’s work area, free from intrusions and shielded from view. It must have a place to sit, a surface where the employee can place needed items, access to electricity, and be clean and safe. The employee also must have nearby access to a sink and refrigerator.

This room may be multi-purpose, with the company notifying employees that lactation accommodation takes priority.

Such employers must implement a written policy informing workers of the rights to request lactation accommodation, to a required interactive process to address the request, and to be free from ensuing retaliation. Affected businesses must provide that policy to all new employees and to any existing employee who asks about pregnancy or parental leave.

The policy must be included in the company’s workplace policy manual, if any. Employers shall keep records of all such requests and responses for three years.

For the first year, the San Francisco Department of Public Health will issue warnings and notices to employers found in violation of the ordinance. Starting in 2019, it will impose penalties up to $500 for each violation.

An employer who can demonstrate operational hardship due to the size, financial resources, nature or structure of the business will be eligible for an exemption. Examples given in the ordinance are: having to build a room, or remove seating or retail floor space.

More guidance, recommendations, samples and notices shall be provided by the San Francisco Department of Public Health website before January 2018.

For other San Francisco labor ordinances, see:

• Equal Pay for Women (August 2, 2017).
• Paid Parental Leave Required for San Francisco Employers (November, 2016).
• Banned Box and Beyond (August, 2014)

Helena Kobrin
August 9, 2017

California employers must comply with increasingly complex anti-discrimination laws. See, New Transgender Rights in the Workplace (July, 2017), High Times in California (April, 2017), and Banning the Box in Los Angeles (March, 2017).

To further aid management in determining a person’s job qualifications without violating the applicant’s rights, in the California Department of Fair Employment and Housing (DFEH) has published “Employment Inquiries: What Can Employers Ask Applicants and Employees?” (Fact Sheet [DFEH-E06P], May, 2017).

This fact sheet reminds employers they must not directly or indirectly obtain information that could divulge an applicant’s membership in a “protected class,” such as age, race, color, religion, and gender. It also reiterates prohibitions against direct discriminatory practices as well as neutral practices with an indirect, disproportionate negative impact on members of any “protected class.”

The fact sheet also provides detailed examples of acceptable and unacceptable inquiries. For example, employers may confirm an applicant is of legal age (18 or over), but may not ask questions that would otherwise reveal age, such as school attendance or graduation dates, or advertise for “college age” or “digital native” applicants.

Additional job hiring topics to avoid include:

• Race
• Fertility/childbirth
• Biological gender
• Gender identity, gender expression, or medical or surgical status or procedures
• Marital status
• Ages/numbers of children or dependents
• Generalized inquiries as to health and present medical condition(s)
• Nationality, ancestry, descent or parentage
• Maiden name
• Origin of a first or last name
• How the applicant learned to speak a foreign language
• Request for applicants’ photographs
• Birthplace or citizenship status
• Religious affiliation, dress, practices, or lack thereof

Employers should promptly distribute this new fact sheet to their job interviewers and periodically review and update their practices to ensure compliance with current legal standards.

See also, Job Interviewer Guidelines (June, 2016).

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

Cindy Bamforth
August 8, 2017

The California Labor Commissioner has announced a $4,874,661 award against Irvine Auto Towing, Inc. and Yaco Investments, Inc. for multiple wage theft violations affecting 187 drivers, mechanics, and dispatchers.

Following a formal administrative proceeding, a hearing officer found these two tow companies had generally paid a flat rate $110/day to employees working 12-hour shifts, sometimes seven days a week, with no meal and rest breaks. The companies underpaid regular wages and overtime. The hearing officer also found these employers wrongfully charged workers for uniforms and made other improper pay deductions in violation of California law.

The $4.8M award was for regular wage, overtime, meal and rest break violations, and charging employees for uniforms. The award also included “liquidated damages” equal to the unpaid minimum wage amount plus interest as well as “waiting time penalties,” up to 30 days of additional pay when an employer has failed to pay all wage amounts due upon a worker’s departure from employment.

This July 26, 2017 news release is another step in Labor Commissioner Julie Su’s stepped-up campaign against wage and hour violations. She stated: “This is an egregious case of wage theft affecting a large group of workers who were denied a just day’s pay and forced to work without meal or rest breaks.” She cautioned that her “office enforces California’s labor laws to prevent employers from cheating workers as a means to gain an unfair advantage over their law-abiding competitors.”

The takeaways are simple. Employers must pay hourly workers at least the applicable minimum wage and any earned overtime compensation. They must also issue and adhere to a proper meal and rest break policy. Employers must also pay or reimburse their employees for work-related expenses.

If you need assistance on how to pay employees correctly, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin
August 4, 2017

Taking a cue from the California Equal Pay Act (2016), San Francisco’s Board of Supervisors has passed a city-wide “Parity in Pay Ordinance” promoting gender wage equality by restrictions on what an employer can ask a job applicant on his/her pay history.

Effective July 1, 2018, the ordinance prohibits covered businesses from:

• Inquiring about an applicant’s salary/pay history.
• Deciding whether to hire a prospective employee based on previous pay rates.
• Relying on an applicant’s pay history when deciding what wage rate to offer.
• Retaliating for an applicant’s declining to disclose his/her pay/salary history.

Employers will face penalties and possible legal action should they disregard these limitations.

If an applicant volunteers information about any previous compensation rate, the ordinance bars the employer from using that information to justify paying that person less than a worker of another gender, race, or ethnicity doing substantially similar work under similar working conditions.

Covered employers will have to post a city-directed notice specifying these standards. Please check the City of San Francisco website to download the notice once the city publishes it.

Assembly Bill 168, containing similar state-wide requirements, is currently making its way through the California Legislature.

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

See also: Understanding California’s Equal Pay Act.

Cindy Bamforth
August 2, 2017

California was among the first states to require a minimum hourly wage, 16 cents in 1916. Federal law finally joined the trend in 1938. Now, cities and counties are enacting ordinances for ever-higher minimums. See, The History of Minimum Wage Laws, and Location, Location, Location…Location (July, 2017). Increasing overtime requirements go hand in hand. See, A Super-Sized McDonald’s Overtime Class Action Ruling (April, 2017).

Part of a series, a California Labor Commissioner press release last month made an example of a Yuba County convenience store owner ordered to pay a former clerk over $42,000 in back minimum wage and overtime pay, nearly three times that employee’s written claim.

The Commissioner hearing officer found Mike’s Food & Liquor was incorrectly paying this hourly worker a set salary for a presumed 80 hours-worth of labor twice a month. The hearing officer also rejected the employer’s claim that it did not have complete time records because the employee had stolen them, ruling that if the “employer’s records are inadequate, inaccurate or nonexistent . . . [t]he solution is not to penalize” the employee. Instead, the Labor Commissioner may approximate the amount that is owed. Thus, on the clerk’s plausible descriptions, the hearing officer approximated an average of 62.2 average weekly working hours, or 8.9 average hours daily/seven days a week.

California is one of the few states requiring payment for weekly or daily overtime, including 1.5x regular rate for daily hours after eight; 2x for hours after 12; 1.5x for the first eight hours on a 7^th day of work in a week; and 2x for hours after eight on that 7^th day. See, Working Overtime in California.

While the claimant had sought a relatively modest $14,520 in back wages, the hearing officer used the 8.9 daily average to award $22,162 in regular wages as well as 1.5x and double time, plus another $20,728 in “liquidated damages,” interest and penalties, a $42,980 total. When the employer failed to pay, the Commissioner went to court and eventually recovered $48,860, including additional interest.

The June 27, 2017 release is part of a campaign condemning wage violations in criminal terms. The notice quotes Labor Commissioner Julie Su: “Workers [who] are not paid correctly are victims of wage theft and my office can help get them back what they have earned. This case shows that when workers exercise their labor rights and come forward to report wage theft, they can do so on their own time without an attorney, they can receive the wages they are owed, and in some cases even more.”

The lessons are obvious. First, employers are responsible for paying each hourly worker at least the applicable minimum wage and any accompanying overtime compensation. Second, in order to calculate (and later confirm as needed) the proper wage amounts, employers must preserve complete and reliable records of employee hours worked.

If you need assistance to determine how to pay employees correctly, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin
July 28, 2017

California’s Department of Fair Employment and Housing (DFEH) recently heeded Dylan’s lyric “the times they are a-changin’” and released Regulations Regarding Transgender Identity and Expression.

Effective July 1, 2017, the new regulations expand existing protections under FEHA (Fair Employment and Housing Act) for “gender identity” and “gender expression” to include individuals who identify as transgender and those who are “transitioning.” Transitioning is defined as “a process some transgender people go through to begin living as the gender with which they identify, rather than the sex assigned to them at birth. This process may include, but is not limited to changes in name and pronoun usage, facility usage, participation in employer-sponsored activities (e.g. sports teams, team-building projects, or volunteering), or undergoing hormone therapy, surgeries, or other medical procedures.”
In gender-neutral language, the new regulations, among other things:

• Prohibit discrimination against transitioning employees and applicants, including a bar on employer queries about an applicant’s transitioning process.

• With limited exceptions, direct most employers to ensure their dress codes do not require workers to dress or groom themselves in a manner inconsistent with their gender identity or gender expression.

• Require employers to provide facilities that ensure employee privacy (e.g. locking toilet stalls, staggered schedules for showering, shower curtains, etc.) and proper neutral signage, such as “Restroom,” “Unisex,” “Gender Neutral,” and “All Gender Restroom.”

The DFEH’s user-friendly FAQs provide further assistance in complying with the new regulations.
See also:

• The State of Workplace Harassment and Retaliation Claims. (July, 2017)
• Single Occupant Toilet Facilities Must be All Gender as of March 1, 2017. (December, 2016)
• A California Employer’s Guide to New Laws 2012: Gender Identity and Expression Protection. (December, 2011)

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

Cindy Bamforth
July 21, 2017

The federal government requires employers to verify identity and work authorization of their employees using a Form I-9 (Employment Eligibility Verification) with certain supporting documentation.

After revising the form on November 14, 2016, the U.S. Citizen and Immigration Services (USCIS) announced on April 6, 2017 that the form had a glitch during the initial three days of issuance and that employers must fix any resulting errors. See, Employers Must Fix the I-9 Glitch; Download the Corrected Form ASAP (May, 2017)

On July 17, 2017, USCIS announced yet another revised Form I-9, with use required no later than September 18, 2017.

USCIS added the Consular Report of Birth Abroad (Form FS-240) in List C as an acceptable document that employees can provide and explains how to access this form.

For further guidance on the use of the I-9 form, you can download the updated Handbook for Employers M-274. The July 17, 2017 version of the Form I-9 Supplement and the Instructions for Form I-9 are also available on the USCIS website.

Helena Kobrin,

July 20, 2017