California Employment Law

In 2007, the United States Supreme Court ruled that a female employee who was paid less than her male counterparts failed to timely file her discrimination suit because the disparate pay was instigated years before she actually found out about the pay differential.  The court, in Ledbetter v. Goodyear, rejected the plaintiff’s argument that the statute of limitations begins to run each time the employer issues a new paycheck with the disparate pay.  Instead, the court decided that the discrimination occurred when the employer initially decided to pay the female employee less
than the male employees, even though the female employee had no idea she was being paid less.

The House immediately passed a bill to change the law, but the Senate version languished significantly longer.  The Senate bill was defeated yesterday in a 56-42 vote (the bill required 60 votes to pass).  According to the Wall Street Journal, “The outcome wasn’t a surprise, as Democrats acknowledged ahead of time that it was unlikely they would overcome Republican opposition.”  As a result, the Ledbetter case continues to be the law.  As it currently stands, employees who believe they are the victim of discrimination must file an administrative claim with the EEOC within 180 days (300 days in California) of the initial discriminatory decision, not within 180 days of the effect of the discriminatory act.

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

Feel free to suggest topics for the blog. We are happy to consider questions or comments pertaining to general points of Labor and Employment Law. If you desire legal advice, please contact one of our attorneys directly though the Contact Us page of our website.

Your use of this blog does not create an attorney-client relationship between you and Phillip J. Griego & Associates. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Phillip J. Griego & Associates cannot guarantee the confidentiality of anything posted to this blog.

The IRS appears to be taking stronger steps toward ensuring employees are not misclassified as independent contractors.  The IRS “considers this a major issue of non-compliance.”  The IRS encourages workers that believe they have been misclassified to file a Form SS-8 with the IRS to challenge the determination and to get the IRS to reclassify the worker.

The IRS also allows workers to file a Form 8919 while the reclassification is being reviewed.  The form allows workers to pay only the portion of the FICA and Medicare that are attributable to employee, instead of the entire FICA and Medicare tax applicable to true independent contractors.

The IRS looks at three areas to determine a workers’ status:

• Behavioral control (whether the business has a right to direct and control how the worker performs the task for which they are hired)
• Financial control (whether a worker has the ability to affect financial decisions)
• Type of relationship (what does the contract between the worker and the business say; does the worker get benefits; permanency of the relationship)

The IRS correctly directs employers and employees with questions regarding appropriate classification to seek advice from a knowledgeable professional.

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

Feel free to suggest topics for the blog. We are happy to consider questions or comments pertaining to general points of Labor and Employment Law. If you desire legal advice, please contact one of our attorneys directly though the Contact Us page of our website.

Your use of this blog does not create an attorney-client relationship between you and Phillip J. Griego & Associates. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Phillip J. Griego & Associates cannot guarantee the confidentiality of anything posted to this blog.

I commonly recommend employers have job descriptions for each position. One reason for ensuring accurate job descriptions exist is to make it easier to determine what, if any, reasonable accommodations can be made for employees with disabilities. An employee does not qualify as “disabled” within the meaning of the Americans with Disabilities Act (ADA) or the Fair Employment and Housing Act (FEHA) unless the employee can perform the essential functions of the job with or without a reasonable accommodation.

But what exactly are the “essential functions of the job?” The EEOC provides the following guidance:

How Are Essential Functions Determined?

Essential functions are the basic job duties that an employee must be able to perform, with or without reasonable accommodation. You should carefully examine each job to determine which functions or tasks are essential to performance. (This is particularly important before taking an employment action such as recruiting, advertising, hiring, promoting or firing).

Factors to consider in determining if a function is essential include:

• whether the reason the position exists is to perform that function,
• the number of other employees available to perform the function or among whom the performance of the function can be distributed, and
• the degree of expertise or skill required to perform the function.

Your judgment as to which functions are essential, and a written job description prepared before advertising or interviewing for a job will be considered by EEOC as evidence of essential functions. Other kinds of evidence that EEOC will consider include:

• the actual work experience of present or past employees in the job,
• the time spent performing a function,
• the consequences of not requiring that an employee perform a function, and
• the terms of a collective bargaining agreement.

From The ADA: Your Reponsibilities as an Employer, Addendum available at http://www.eeoc.gov/facts/ada17.html

I typically recommend employers review the job descriptions, including the essential functions of the job, with the employee periodically to ensure the job description accurately reflects the work the employee is performing.

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

Feel free to suggest topics for the blog. We are happy to consider questions or comments pertaining to general points of Labor and Employment Law. If you desire legal advice, please contact one of our attorneys directly though the Contact Us page of our website.

Your use of this blog does not create an attorney-client relationship between you and Phillip J. Griego & Associates.  The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Phillip J. Griego & Associates cannot guarantee the confidentiality of anything posted to this blog.

A couple of times each year the Department of Labor issues opinion letters interpreting statutes and regulations under their jurisdiction.   On February 14, 2008, the DOL provided two new opinions regarding interpretations under the Fair Labor Standards Act.  Employers in California are required to comply with the FLSA and California law and courts often use DOL interpretations even when deciding cases under California law.

In FLSA2008-1NA, the DOL was asked whether the minimum salary of $455 per week under the FLSA could be prorated to reflect the part-time status of an employee.  The DOL rejected the idea that the minimum weekly salary could be reduced.  Courts interpreting similar provisions under California law would likely agree with the DOL’s conclusion. California employer should be aware, however, that employees qualifying for California’s Administrative, Professional or Executive exemptions must receive a weekly salary of at least $640 (two times California’s current minimum wage).

In FLSA2008-2NA, an employer asked if it was using an acceptable method of tracking hours worked when employees performed mandatory on-line training while at home.  The employer’s time records showed the type of training taken, the completion date, start and end times and contained a place for the employee’s and manager’s signature.  The DOL pointed out that “No particular method of keeping required records is prescribed, provided that the relevant information [i.e., hours worked each day] is maintained and preserved.

The opinion letter  serves as a good reminder that employers are required to compensate non-exempt employees for time spent in mandatory training, even if the training occurs at home.  Accurate records of hours worked by non-exempt employees must be maintained and preserved.

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

Feel free to suggest topics for the blog. We are happy to consider questions or comments pertaining to general points of Labor and Employment Law. If you desire legal advice, please contact one of our attorneys directly though the Contact Us page of our website.

Your use of this blog does not create an attorney-client relationship between you and Phillip J. Griego & Associates.  The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Phillip J. Griego & Associates cannot guarantee the confidentiality of anything posted to this blog.

Last month we let you know that the President signed amending the Family Medical Leave Act regarding injured members of the armed forces (see Bush Expands Family Medical Leave Act).

This month the U.S. Department of Labor issued an insert for the current FMLA poster. The insert provides important information regarding the new law that became effective on January 28, 2008. As a reminder, the new law permits a “spouse, son, daughter, parent, or next of kin” to take up to 26 workweeks of leave to care for a “member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness.”

Until the final regulations are approved, employers are required to act in good faith in providing the new leave. The new poster can be downloaded here ( New FMLA Insert) or from the DOL’s website.

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

Jim posted the following:

I work for a large non-profit in Southern California. At our Management Team Meeting a couple of days ago, the Executive Director informed us (exempt staff) that effective immediately, if we take off early for a medical appointment, we must charge those hours against our sick leave hours. We were also informed that if we come in to work for a partial day (for example working less than a full day to get work done before heading off for vacation), we must charge whatever hours we don’t work, against our Personal Time Off.

As exempt staff, part of our job is to attend evening and weekend events (in addition to hours in the office). Is this legal? Does this mean that we are no longer exempt, but hourly?

It should first be noted that if any of the time is taken off under the Family Medical Leave Act (FMLA) or the California Family Rights Act (CFRA), the employer can deduct the hours from your pay without risking losing the exemption.  This is true because FMLA and CFRA specifically provide that the time off is “unpaid.”

If an otherwise  exempt salaried employee absents himself or herself for a full day or more on personal business, such absence may be deducted on a pro rata basis from the salary owed.  A deduction under these circumstances does not affect the salaried exempt worker’s exempt status.

The state Labor Commissioner has taken the position that “If an exempt employee performs any work during the work day, no deduction may be made from the salary of the employee as a result of what would otherwise be a ‘partial day absence.’”

However, in 2005 a California Appellate Court decided Conley v. PG&E (2005) 131 Cal.App.4th 260.  One of the issues decided was whether an employer can deduct for partial day absences of four hours or more from an employee’s vacation pay bank, when the employee is salaried exempt. Under PG&E’s vacation pay policy, employees could take vacation in increments of 4 hours. The court held that under the facts of PG&E’s vacation pay policy, where the company only deducted for absences of 4 hours per day or more, there was nothing in California law which prohibits this practice.  This enforcement policy is consistent with that of the U.S. Department of Labor.  (See, Wage and Hour Division, U.S. Department of Labor, Opinion Letter dated July 21, 1997).

Based on Conley, the Labor Commissioner adopted the policy that “If a sick leave plan provides for a vested right to wages, as is the case with vacation and PTO plans, the holding in Conley is applicable and deductions from accrued sick leave may be made only for absences of at least 4 hours in duration. If a sick leave plan does not establish a vested right to wages, deductions from sick leave for increments of less than 4 hours continue to be permissible to the extent that such leave credits exist at the time of the partial day absence.”

Assuming the employer provides paid PTO, the employer can require exempt employees to charge time off against their accrued PTO.  Once that PTO is exhausted, the employer can reduce the employee’s salary for partial day absences in 4-hour increments without risking losing the exemption provided the employer’s PTO policy allows employees to take PTO in 4-hour increments.  If the time off is less than 4-hours, or if the employer’s policy only allows PTO to be taken in full day increments, the employer cannot reduce the employee’s salary.  The employer may be able to deduct the time from future PTO that has not yet accrued, thereby causing the employee to go into a negative PTO balance.  The employer may have a difficult time recouping the negative PTO.

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

One reader asked what the rules are regarding makeup time.

It should first be noted that there are two different Labor Code provisions employers and employees need to know. Labor Code §204.3 regarding Comp time allows an employee to work more hours in one workweek and take the time off (at time and one-half) at a later date. This is different from the makeup time provisions of Labor Code §513, which allows an employee to work extra time in one day and make it up with time off (in an equal amount of time) during the same workweek.

Comp Time
Labor Code §204.3 allows an employee to compensating time off under certain circumstances in lieu of overtime compensation. First, the comp time must be at one and one-half times the employee’s regular rate. In other words, if the employee should be paid one hour of overtime, the employee must receive one and one-half hours of comp time.

Second, there must be a written agreement between the employer and the employee, or in a collective bargaining agreement, allowing comp time before the employee accrues the comp time. The employee cannot accrue more than 240 hours of comp time.

Finally, the employee must request the use of comp time in writing. Upon discharge from employment, any unused comp time shall be paid at the employee’s current rate of pay, or the average of the employee’s regular rate over the last three years, whichever is greater.

Employees can require the employer pay the comp time in cash for any accrued comp time over the preceding two pay periods. Industries under IWC Orders Nos. 1, 3, 8, 10, 13, and 14 cannot use comp time (industries handling products after harvest or preparing agricultural products for market on the farm, industries in the canning, freezing, and preserving industries, industries affecting public housekeeping and amusement and recreation industries, and the manufacturing industry.)

The Labor Commissioner has issued the following Caveat regarding comp time:

The provisions of Section 204.3 are patterned on provisions found in 29 U.S.C. §207(o). It should be noted that these compensatory time provisions are only applicable under the federal law to state and local government employees; the compensating time provisions under federal law are not applicable to employees of private employers. Any employer utilizing the provisions of Section 204.3 should be advised of this caveat as use of the compensating time provisions of the state law may result in violation of the federal law.

In other words, while a private employer can adopt a comp time plan under California law, if the employee works more than 40 hours in the workweek, the employer may owe the employee overtime pay under the Fair Labor Standards Act.

Makeup Time
Labor Code §513 states:

If an employer approves a written request of an employee to make up work time that is or would be lost as a result of a personal obligation of the employee, the hours of that makeup work time, if performed in the same workweek in which the work time was lost, may not be counted towards computing the total number of hours worked in a day for purposes of the overtime requirements specified in Section 510 or 511, except for hours in excess of 11 hours of work in one day or 40 hours in one workweek. An employee shall provide a signed written request for each occasion that the employee makes a request to make up work time pursuant to this section. An employer is prohibited from encouraging or otherwise soliciting an employee to request the employer’s approval to take personal time off and make up the work hours within the same week pursuant to this section.

This Labor Code section is incorporated into each of the IWC Orders except 14:

If an employer approves a written request of an employee to make-up work time that is or would be lost as a result of a personal obligation of the employee, the hours of that make-up work time, if performed in the same workweek in which the work time was lost, may not be counted toward computing the total number of hours worked in a day for purposes of the overtime requirements, except for hours in excess of eleven (11) hours of work in one (1) day or forty (40) hours of work in one (1) workweek. If an employee knows in advance that he or she will be requesting make-up time for a personal obligation that will recur at a fixed time over a succession of weeks, the employee may request to make-up work time for up to four (4) weeks in advance; provided, however, that the make-up work must be performed in the same week that the work time was lost. An employee shall provide a signed written request for each occasion that the employee makes a request to make up a work time pursuant to this section. While an employer may inform an employee of this make-up time option, the employer is prohibited from encouraging or otherwise soliciting an employee to request the employer’s approval to take personal time off and make-up the work hours within the same workweek pursuant to this section.

The Makeup Time exception requires:

1. Written request by the employee to make up time which would be lost by the employee due to a personal obligation
2. Makeup hours worked in one day may not exceed eleven (11) nor, of course, may the number of makeup hours worked in one workweek exceed forty (40).
3. Request may be made for makeup time for a recurring personal obligation which is “fixed in time over a succession of weeks” provided a written request is made every four (4) weeks.
4. Employers are prohibited from soliciting or encouraging employees to make a request for makeup hours, but informing employees of this right is permitted.

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

On January 28,2008, President Bush signed HR 4986, section 585, of the National Defense Authorization Act for FY 2008 into law. The new law amends the Family Medical Leave Act regarding injured members of the armed forces and is effective immediately.

The National Defense Authorization Act (NDAA) allows an employee to take FMLA leave for “any qualifying exigency arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty or has been notified of an impending call or order to active duty in the Armed Forces in support of a contingency operation.”

According to the Department of Labor, this provision of the NDAA is not effective until the Secretary of Labor issues final regulations defining “any qualifying exigency.”

The Department of Labor is in the process of preparing the required regulations. In the meantime, employers are encouraged to provide leaves of absences to employees who need time off work due to a family members’ call to duty.

The NDAA will likely be in addition to any rights an employee would have under California’s newly enacted AB 392 (see California Employers Must Allow Leave For Spouses of Armed Forces).

Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

Effective January 1, 2008, California employers are required to notify their employees, either by hand or through the U.S. mail that the employees may be eligible for the Federal Earned Tax Credit (EITC).  This notification must be given one week before, one week after, or at the same time that the employer provides a W-2 form, 1099 or similar wage statement.

To comply, employers must mail directly to employee or hand the notice to the employee personally.  It is no longer enough to post notice of the EITC tax credit on an employee bulletin board or sending notice through the office mail.

Sample notices are available at the Internal Revenue Service website.

 Original article by Robert E. Nuddleman of Phillip J. Griego & Associates

On December 19, 2007 the California Labor Commissioner filed an action against Excell Cleaning & Building Services, Inc., and MO Restaurant Cleaning of California, Inc., for allegedly failing to pay approximately 300 janitorial workers proper wages and engaging in unfair business practices.  The complaint seeks damages exceeding $5 million. The State Attorney General has agreed to join the legal action with the Labor Commissioner.

The legal action resulted from an investigation initiated by the Labor Commissioner in 2006. The investigation purportedly uncovered a failure provide meal and rest breaks, failure to pay employees all earned wages and overtime to which they were entitled.  The investigation also revealed that employees were being misclassified as independent contractors to avoid paying nearly $250,000 in payroll taxes. This misclassification  resulted in workers being paid less then minimum wage and not being paid overtime.

The announcement of this litigation followed shortly after the Labor Commissioner issued a press release regarding the distribution of funds from a $2.7 million settlement agreement with Rady Children’s Hospital.

The DLSE has recently increased its enforcement efforts.  Employers should review their wage and hour practices to ensure compliance with recent changes to the law.

 Original article by Robert E. Nuddleman of Phillip J. Griego & Associates