Wage Law

Employment Law Update: California Bereavement Leave Bill Passes Assembly

Assembly Bill 325 passed the assembly on Thursday by a 48-26 vote. No Republicans voted in favor of the bill.

Employment Law Update: California Bereavement Leave Bill Put to Vote

Last year, the California Legislature passed AB 2340, a bill to allow employees up to three days of unpaid bereavement leave upon the death of certain family members. The bill was vetoed by Governor Schwarzenegger. Today, the Assembly votes on AB 325, which would allow employees to take up to four non-consecutive days of unpaid leave within 13 months after the death of a spouse, child, parent sibling, grandparent, grandchild or domestic partner. The bill would not apply to employees covered by certain collective bargaining agreements.

Get Ready for Labor Code Changes

There were a lot of wage and hour bills that ended with a veto from the desk of Arnold Schwarzenegger in the last few years. Already, dozens of those vetoed bills are being whisked through the Legislature in the expectation that Jerry Brown will sign them.

http://www.latimes.com/news/local/la-me-legislature-20110405,0,6782377.story

Federal Minimum Wage Increase

The federal minimum wage under the Fair Labor Standards Act, formerly $6.55 per hour, increased to $7.25 on Friday, July 24, 2009. With this change, employees who are covered by the federal Fair Labor Standards Act will be entitled to be paid no less than $7.25 per hour. Tipped employees and certain other workers are exempt or subject to different standards. This increase is the last of three provided by the enactment of the Fair Minimum Wage Act of 2007. In California, the minimum wage under state law is higher than the federal minimum wage, so this change will have relatively little impact. A revised Federal minimum wage poster is now available for viewing, downloading, and posting. Every employer of employees subject to the Fair Labor Standard Act’s minimum wage provisions must post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments so as to permit employees to readily read it.

The Lilly Ledbetter Fair Pay Act of 2009 - Text

Here is the text of the Lilly Ledbetter Fair Pay Act of 2009:

SECTION 1. SHORT TITLE.

This Act may be cited as the `Lilly Ledbetter Fair Pay Act of 2009'.

SEC. 2. FINDINGS.

Congress finds the following:

(1) The Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades. The Ledbetter decision undermines those statutory protections by unduly restricting the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions or other practices, contrary to the intent of Congress.

(2) The limitation imposed by the Court on the filing of discriminatory compensation claims ignores the reality of wage discrimination and is at odds with the robust application of the civil rights laws that Congress intended.

(3) With regard to any charge of discrimination under any law, nothing in this Act is intended to preclude or limit an aggrieved person's right to introduce evidence of an unlawful employment practice that has occurred outside the time for filing a charge of discrimination.

(4) Nothing in this Act is intended to change current law treatment of when pension distributions are considered paid.

SEC. 3. DISCRIMINATION IN COMPENSATION BECAUSE OF RACE, COLOR, RELIGION, SEX, OR NATIONAL ORIGIN.

Section 706(e) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5(e)) is amended by adding at the end the following:

`(3)(A) For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

`(B) In addition to any relief authorized by section 1977A of the Revised Statutes (42 U.S.C. 1981a), liability may accrue and an aggrieved person may obtain relief as provided in subsection (g)(1), including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.'.

SEC. 4. DISCRIMINATION IN COMPENSATION BECAUSE OF AGE.

Section 7(d) of the Age Discrimination in Employment Act of 1967 (29 U.S.C. 626(d)) is amended--

(1) in the first sentence--

(A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively; and

(B) by striking `(d)' and inserting `(d)(1)';

(2) in the third sentence, by striking `Upon' and inserting the following:

`(2) Upon'; and

(3) by adding at the end the following:

`(3) For purposes of this section, an unlawful practice occurs, with respect to discrimination in compensation in violation of this Act, when a discriminatory compensation decision or other practice is adopted, when a person becomes subject to a discriminatory compensation decision or other practice, or when a person is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.'.

SEC. 5. APPLICATION TO OTHER LAWS.

(a) Americans With Disabilities Act of 1990- The amendments made by section 3 shall apply to claims of discrimination in compensation brought under title I and section 503 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12111 et seq., 12203), pursuant to section 107(a) of such Act (42 U.S.C. 12117(a)), which adopts the powers, remedies, and procedures set forth in section 706 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5).

(b) Rehabilitation Act of 1973- The amendments made by section 3 shall apply to claims of discrimination in compensation brought under sections 501 and 504 of the Rehabilitation Act of 1973 (29 U.S.C. 791, 794), pursuant to--

(1) sections 501(g) and 504(d) of such Act (29 U.S.C. 791(g), 794(d)), respectively, which adopt the standards applied under title I of the Americans with Disabilities Act of 1990 for determining whether a violation has occurred in a complaint alleging employment discrimination; and

(2) paragraphs (1) and (2) of section 505(a) of such Act (29 U.S.C. 794a(a)) (as amended by subsection (c)).

(c) Conforming Amendments-

(1) REHABILITATION ACT OF 1973- Section 505(a) of the Rehabilitation Act of 1973 (29 U.S.C. 794a(a)) is amended--

(A) in paragraph (1), by inserting after `(42 U.S.C. 2000e-5 (f) through (k))' the following: `(and the application of section 706(e)(3) (42 U.S.C. 2000e-5(e)(3)) to claims of discrimination in compensation)'; and

(B) in paragraph (2), by inserting after `1964' the following: `(42 U.S.C. 2000d et seq.) (and in subsection (e)(3) of section 706 of such Act (42 U.S.C. 2000e-5), applied to claims of discrimination in compensation)'.

(2) CIVIL RIGHTS ACT OF 1964- Section 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-16) is amended by adding at the end the following:

`(f) Section 706(e)(3) shall apply to complaints of discrimination in compensation under this section.'.

(3) AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967- Section 15(f) of the Age Discrimination in Employment Act of 1967 (29 U.S.C. 633a(f)) is amended by striking `of section' and inserting `of sections 7(d)(3) and'.

SEC. 6. EFFECTIVE DATE.

This Act, and the amendments made by this Act, take effect as if enacted on May 28, 2007 and apply to all claims of discrimination in compensation under title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.), title I and section 503 of the Americans with Disabilities Act of 1990, and sections 501 and 504 of the Rehabilitation Act of 1973, that are pending on or after that date.

President Obama Signs The Lilly Ledbetter Fair Pay Act of 2009

If you read newspapers or online new media, listen to talk radio, or even just follow our twitter account, you already know that on Thursday, President Obama signed his first bill into law, The Lilly Ledbetter Fair Pay Act of 2009, legislation he said would “send a clear message that making our economy work means making sure it works for everybody.” We have a lot to say about the Act, more than we can find the time to do all at once, especially given some events that hit us this week. So this will be the first part in a daily series of posts about the Act and about equal pay claims. It is exciting, because for the first time since August 2007, women who have been discriminated against by being subjected to lower pay than their male counterparts will have redress. For the first time since August 2007, lawyers, such as ourselves, find themselves able to take on such claims.

President Obama welcomed Lilly Ledbetter to the White House for the signing, shown in this NY Times Photograph. Ms. Ledbetter, whose case was thrown out by the U.S. Supreme Court in 2007, is standing immediately behind the President's right shoulder.

Stephen Crowley/The New York Times

You can find the text of the Act (S. 181) at a link here; you can read President Obama's remarks here; you read the White House's blog entry on the Act; and you can even watch the press conference here on video.

We'll tell a little more about substance of the new law tomorrow.

New Minimum Wages, But Not in California

Eleven states increased their minimum wage effective January 1, 2009:

Arizona – $7.25
Colorado – $7.28
Connecticut – $8.00
Florida – $7.21
Missouri – $7.05
Montana – $6.90
New Mexico – $7.50
Ohio – $7.30
Oregon – $8.40
Vermont – $8.06
Washington – $8.55

Court Invalidates Regulation Limiting Scope of LWO

A regulation promulgated by the city agency in charge of implementing Los Angeles's Living Wage Ordinance (Los Angeles Admin. Code, § 10.37 et seq.) is invalid because it limits the reach of the LWO to exclude workers who are covered by the plain language of the LWO.  Aguiar v. Superior Court (Cintas) (2009) __ Cal.App.4th __.

Two years ago, in the same case, the Court of Appeal reversed and remanded an order denying class certification. Aguiar v. Cintas Corp. No. 2 (2006) 144 Cal.App.4th 121. However, that appeal dealt only with certification, and did not address the underlying validity of the so-called "20-hour rule" that spawned the litigation (“the validity of the 20-hour rule need not be resolved at this stage of the litigation and is not a bar to class certification because the putative class can be divided into subclasses of those employees who worked at least 20 hours per month on the DWP contracts and those who did not”). The dispute centered upon Regulation 5, which imposed limitations and exclusions to the LWO for certain workers.

Former Regulation No. 5, promulgated by the city agency entrusted with implementing the LWO, provided, prior to its rescission in 2006, if an employee of a private contractor works at least 20 hours during the month on a city service contract, he or she must be paid the appropriate wages mandated by the LWO for each hour worked on the subject agreement.  If, however, the employee works less than 20 hours per month on a city service contract, he or she is not eligible for any LWO wages. 

Pursuant to the parties’ stipulation, the trial court had vacated trial and scheduled a hearing to decide certain legal issues, including, most significantly, the threshold issue of Regulation 5’s validity. On May 21, 2008 the trial court held the hearing and found Regulation 5 valid, concluding it “appears to properly clarify the LWO.” The Second District reversed:

The plain language of the LWO, coupled with its legislative history, reflect an unmistakable intent to afford a living wage to employees of city service contractors who spend any time working on city service contracts, no matter how much or how little that participation may be.  By limiting LWO eligibility to those who work 20 hours a month or more on city contracts and the amount of LWO wages to the hours actually spent on the city contract, Regulation 5 directly conflicts with the LWO’s articulated remedial purpose of raising wages for low wage service workers and ameliorating the burden placed on city social services caused by payment of inadequate compensation.  Because the trial court erred in concluding Regulation 5 was a valid and enforceable clarification of the LWO, we grant the petition for writ of mandate ... and direct respondent Los Angeles Superior Court to vacate its order upholding Regulation 5 and to enter a new and different order invalidating Regulation 5 on the ground it conflicts with the LWO.

You can download the full text of the new opinion here in PDF or Word format.

Senate Passes Lilly Ledbetter Fair Pay Act

By a vote of 61-36, the Senate has passed the Lilly Ledbetter Fair Pay Act (S. 181). As explained in a press release from the bill’s lead sponsor, Senator Barbara Mikulski (D-MD), the bill will “remedy the 2007 Ledbetter v. Goodyear Tire & Rubber Co. decision in which a divided Supreme Court held that workers must sue for pay discrimination within 180 days after the original pay-setting decision, no matter how long the unfair pay continues.” It amended Title VII of the Civil Rights Act of 1964 so that the statute of limitations runs from the date of the actual payment of a discriminatory wage, not just from the time of hiring. Thus, employees can seek a remedy based on each discriminating paycheck, not just during the first 180 days of pay discrimination.

All 36 nays were cast by Republicans. Five Republicans voted for the bill. The bill does not have to be returned to the House because the Senate approved the bill in the same form passed by the House. Here is the text of the bill:

Calendar No. 14

111th CONGRESS

1st Session

S. 181

To amend title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967, and to modify the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973, to clarify that a discriminatory compensation decision or other practice that is unlawful under such Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice, and for other purposes.

IN THE SENATE OF THE UNITED STATES

A BILL

To amend title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967, and to modify the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973, to clarify that a discriminatory compensation decision or other practice that is unlawful under such Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Lilly Ledbetter Fair Pay Act of 2009'.

SEC. 2. FINDINGS.

Congress finds the following:

(1) The Supreme Court in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), significantly impairs statutory protections against discrimination in compensation that Congress established and that have been bedrock principles of American law for decades. The Ledbetter decision undermines those statutory protections by unduly restricting the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions or other practices, contrary to the intent of Congress.

(2) The limitation imposed by the Court on the filing of discriminatory compensation claims ignores the reality of wage discrimination and is at odds with the robust application of the civil rights laws that Congress intended.

(3) With regard to any charge of discrimination under any law, nothing in this Act is intended to preclude or limit an aggrieved person's right to introduce evidence of an unlawful employment practice that has occurred outside the time for filing a charge of discrimination.

(4) Nothing in this Act is intended to change current law treatment of when pension distributions are considered paid.

SEC. 3. DISCRIMINATION IN COMPENSATION BECAUSE OF RACE, COLOR, RELIGION, SEX, OR NATIONAL ORIGIN.

Section 706(e) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5(e)) is amended by adding at the end the following:

`(3)(A) For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

`(B) In addition to any relief authorized by section 1977A of the Revised Statutes (42 U.S.C. 1981a), liability may accrue and an aggrieved person may obtain relief as provided in subsection (g)(1), including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.'.

SEC. 4. DISCRIMINATION IN COMPENSATION BECAUSE OF AGE.

Section 7(d) of the Age Discrimination in Employment Act of 1967 (29 U.S.C. 626(d)) is amended--

(1) in the first sentence--

(A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively; and

(B) by striking `(d)' and inserting `(d)(1)';

(2) in the third sentence, by striking `Upon' and inserting the following:

`(2) Upon'; and

(3) by adding at the end the following:

`(3) For purposes of this section, an unlawful practice occurs, with respect to discrimination in compensation in violation of this Act, when a discriminatory compensation decision or other practice is adopted, when a person becomes subject to a discriminatory compensation decision or other practice, or when a person is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.'.

SEC. 5. APPLICATION TO OTHER LAWS.

(a) Americans With Disabilities Act of 1990- The amendments made by section 3 shall apply to claims of discrimination in compensation brought under title I and section 503 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12111 et seq., 12203), pursuant to section 107(a) of such Act (42 U.S.C. 12117(a)), which adopts the powers, remedies, and procedures set forth in section 706 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5).

(b) Rehabilitation Act of 1973- The amendments made by section 3 shall apply to claims of discrimination in compensation brought under sections 501 and 504 of the Rehabilitation Act of 1973 (29 U.S.C. 791, 794), pursuant to--

(1) sections 501(g) and 504(d) of such Act (29 U.S.C. 791(g), 794(d)), respectively, which adopt the standards applied under title I of the Americans with Disabilities Act of 1990 for determining whether a violation has occurred in a complaint alleging employment discrimination; and

(2) paragraphs (1) and (2) of section 505(a) of such Act (29 U.S.C. 794a(a)) (as amended by subsection (c)).

(c) Conforming Amendments-

(1) REHABILITATION ACT OF 1973- Section 505(a) of the Rehabilitation Act of 1973 (29 U.S.C. 794a(a)) is amended--

(A) in paragraph (1), by inserting after `(42 U.S.C. 2000e-5 (f) through (k))' the following: `(and the application of section 706(e)(3) (42 U.S.C. 2000e-5(e)(3)) to claims of discrimination in compensation)'; and

(B) in paragraph (2), by inserting after `1964' the following: `(42 U.S.C. 2000d et seq.) (and in subsection (e)(3) of section 706 of such Act (42 U.S.C. 2000e-5), applied to claims of discrimination in compensation)'.

(2) CIVIL RIGHTS ACT OF 1964- Section 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-16) is amended by adding at the end the following:

`(f) Section 706(e)(3) shall apply to complaints of discrimination in compensation under this section.'.

(3) AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967- Section 15(f) of the Age Discrimination in Employment Act of 1967 (29 U.S.C. 633a(f)) is amended by striking `of section' and inserting `of sections 7(d)(3) and'.

SEC. 6. EFFECTIVE DATE.

This Act, and the amendments made by this Act, take effect as if enacted on May 28, 2007 and apply to all claims of discrimination in compensation under title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.), title I and section 503 of the Americans with Disabilities Act of 1990, and sections 501 and 504 of the Rehabilitation Act of 1973, that are pending on or after that date.

Democratic Policy Committee Bill Summary

Republican Policy Committee Bill Summary

We expect President Obama to sign the bill promptly.

Ledbetter Voting Tallies

Speaking of better labor laws, here are the recent vote tallies for H.R. 11 (Ledbetter) and H.R. 12 (Paycheck Fairness). The votes were largely along party lines. To successfully filibuster these bills in the Senate, the GOP will actually need a higher percentage of votes in the Senate than it got in the House.

San Francisco's Transportation Assistance Ordinance

Effective January 19, 2009, San Francisco employers are required to offer a commuter benefits program to encourage employees to use public transit or vanpools. Employers can offer commuter tax benefits as a payroll deduction, a subsidized benefit, or a combination of the two. Employers can administer the benefit themselves, purchasing the transit tickets or vouchers each month and distributing them to employees, or may hire a third-party administrator to manage their program.

The new program requires all employers in San Francisco that have 20 or more persons performing work for compensation on a full-time, part-time, or temporary basis and who work an average of at least 10 hours a week while working for the same employer within the previous calendar month, to offer one of the following options:

1. Pre-tax Transit: Employer sets up a deduction program under existing Federal Tax Law 132(f), which allows employees to use up to $115 a month in pretax wages to purchase transit passes or vanpool rides. SF Environment (San Francisco’s Environment Department) is available to assist businesses in self-administering a benefit program or can offer assistance with hiring a third-party administrator.
2. Employer Paid Transit Benefits: Employer pays for workers’ transit fares on any of the San Francisco Bay Area mass transit systems or reimburses workers for their vanpool expenses. Reimbursements for transportation expenses must be of at least an equivalent value to the purchase price of a San Francisco MUNI Fast Pass, which is presently $45.
3. Employer Provided Transit: Employer offers workers free shuttle service on a company-funded bus or van between home and place of business., employers with 20 or more employees, whether in or out of the city, must provide commuter benefits to non-exempt employees who perform at least 10 hours of work in the City each week. Employers must either:

As far as we've heard, the ordinance is the first of its kind. Employers who fail to comply may be issued administrative citations and fines by San Francisco’s Department of the Environment. You can find more information on the Commuter Benefits Ordinance on San Francisco's Department of Environment website.

Vetoed Assembly Bills for 2008

The following are some Assembly Bills, potentially of interest to wage and hour attorneys, that were passed in 2008, but were vetoed by Governor Arnold Schwarzenegger:
_____________________________

AB 124 - Price - Meal and rest periods.
This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to pool lifeguards and stage assistants who employed in the public sector. The bill specified that pool lifeguards and stage assistants employed by a city, county, or special district, shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the public sector employer failed to provide a meal or rest period, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation.  In addition, the bill specified that should these requirements be in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control.
_____________________________

AB 435 – Brownley - Wage discrimination: gender.
This bill would have required that all employers maintain their records of wages, wage rates, job classifications, and other terms and conditions of employment for five years, and would have extended the statute of limitations for a civil action to collect back wages to 4 years, or, in the case of willful misconduct, to 5 years. 
_____________________________

AB 448 – Arambula - Compensation recovery actions: liquidated damages.
This bill would have allowed employees to recover liquidated damages in complaints brought before the Labor Commissioner alleging payments of less than the state minimum wage.  Specifically, this bill would have ensured that an employee received liquidated damages in an amount equal to the wages unlawfully unpaid and interest thereon when seeking to recover unpaid minimum wages by filing a complaint with the Labor Commissioner; which is what is currently available to those employees choosing to file a civil action to recover unpaid minimum wages. This bill would have made sure that workers received the same relief for minimum wage violations regardless of whether they pursued their claims administratively or through the courts.
_____________________________

AB 504 – Swanson - Lockouts.
Would have required restitution for employees whose employer commits specified crimes during a lockout.  Specifically, the bill would have required a private employer convicted of a crime involving fraud, misrepresentation, or misconduct during (and in furtherance of) a lockout to make restitution to the locked-out employees of any wages and benefits, including interest thereon, they would have received had there been no lockout.  The bill would not have applied to the state, its subdivisions, or any city, county, city and county, or special district.
_____________________________

AB 537 – Swanson - Family and medical leave.
This bill would have increased the circumstances under which an employee is entitled to protected leave pursuant to the California Family Rights Act (CFRA).  Specifically, this bill would have (1) eliminated the age and dependency elements from the definition of “child,” thereby permitting an employee to take protected leave to care for his or her independent adult child suffering from a serious health condition, (2) expanded the definition of “parent” to include an employee’s parent-in-law and, (3) permitted an employee to also take leave to care of a seriously ill grandparent, sibling, grandchild, or domestic partner, as defined.
_____________________________

AB 628 – Price - Meal and rest periods: pool lifeguards.
This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to pool lifeguards who are employed in the public sector. The bill specified that pool lifeguards employed by a city, county, or special district shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the employer failed to provide a meal or rest period, the employer would have to pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest period was not provided.  In addition, the bill specified that if these requirements were in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control. This bill was very similar to AB 124 (Price) from the previous year which addressed meal and rest period requirements for both pool lifeguards and stage assistants, however, this bill targets only pool lifeguards.
_____________________________

AB 1112 – Torrico - School district and community college district bonds.
Re-referred to Com. on  RLS. pursuant to Senate Rule 29.10.  Re-referred to  committee on Education.
This bill was amended, became a school bond-related bill, and was vetoed by the Governor, but as heard by the Senate Labor Committee it would have required the director of the Department of Industrial Relations to regularly post on the department’s website all available prevailing wage rates on residential projects that are public works, as defined in Labor Code §1720.  This requirement would have applied to those rates that are established by DIR on or after January 1, 2007.
_____________________________

AB 1666 – Price - Meal and rest periods: stage assistants.
This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to stage assistants who are employed in the public sector. The bill specified that stage assistants employed by a city, county, or special district shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the employer failed to provide a meal or rest period, the employer would have to pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest period was not provided.  In addition, the bill specified that if these requirements were in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control. This bill was very similar to AB 124 (Price) from the previous year which addressed meal and rest period requirements for both pool lifeguards and stage assistants; however, this bill targets only stage assistants.
_____________________________

AB 1707 – Committee on Labor and Employment. - Private employment: employment records.
This bill would have revised requirements of existing law concerning an employee’s right to inspect personnel records.  Specifically, this bill would have required employers to maintain employment records for a specified time and to provide inspection and copies within a specified time to current and former employees or their representatives.  In addition, this bill would have authorized employees to recover a $750 penalty from an employer for failure to provide access to personnel records and to bring an action to obtain compliance, and it would have provided that a violation of these provisions would have constituted an infraction.
_____________________________

AB 1709 – Hancock - Local government: community facilities districts.
Re-referred to Com. on  RLS. pursuant to Senate Rule 29.10. Re-referred to Com. on  Local Government.
This bill was amended, became a community facilities districts-related bill, and was vetoed by the Governor, but as heard in the Senate Labor Committee it would have required the Labor and Workforce Development Agency (LWDA) to submit a report to the Legislature by March 1st of each year concerning the effectiveness of the Economic and Employment Enforcement Coalition.
_____________________________

AB 1710 – Swanson - Temporary services employees: wages.
This bill would have required that temporary services employers, with certain exceptions, pay their employees weekly, regardless of when the assignment ends, as well as hold both the client and the temporary services employer or leasing employer either jointly or severally liable for damages, unless the client secures payment of worker’s compensation for all employees, including the employees of a temporary services employer or leasing employer.
_____________________________

AB 2002 – De Leon - Public works: payments.
This bill would have:
• Increased the penalty on contractors and subcontractors from $50 to $100 per day per worker, plus interest from the date of violation as provided and determined by the Labor Commissioner, for failure to pay prevailing wage rates;
• Increased the penalty on contractors and subcontractors from $25 to $50 per day per worker, plus interest from the date of violation, for failure to provide payroll records, as specified;
• Provided that a contractor is not subject to a penalty assessment due to the failure of a subcontractor to comply with the requirement to supply awarding bodies and/or the public with the required payroll records unless the contractor had knowledge, or should have had knowledge, of the failure of a subcontractor to comply with the requirement.
_____________________________

AB 2369 – Fuentes - Apprenticeship programs: prevailing wage enforcement.
Would have provided that an awarding body (i.e., a local or state agency letting contracts/funds for public works) that implements a labor compliance program shall, with the approval of the Chief of the Division of Apprenticeship Standards, assist the Director of Department of Industrial Relations in the enforcement of specified provisions of law [L.C. Sections 1777.5 & 1777.6] related to the employment of apprentices on public works projects.
_____________________________

AB 2386 - Nunez - Employment: Agricultural labor.
This bill, as originally heard in the Senate Labor Committee, would have required the annual report filed by the Agricultural Labor Relations Board to include information concerning the status of the Agricultural Employee Relief Fund.  The bill, however, was significantly amended to provide for a new collective bargaining representational election process.  The final language would have mandated a representational election upon the collection of signed cards by 50% of employees of a farm labor employer and would have established a procedure for a regular ballot booth election and a “mediated election.”  A mediated election was defined as a representative election that is mediated by a neutral mediator and that permits a bargaining unit to either select a labor organization as its representative for collective bargaining purposes without holding a ballot booth election or to choose to hold a ballot booth election.
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AB 3062 – Committee on Labor and Employment. - Employment: termination: garnishment of wages.
This bill would have prohibited the termination of an employee because garnishment of an employee’s wages has been threatened or ordered in one or more instances.

 

Vetoed Senate Bills for 2008

The following are some Senate Bills, potentially of interest to wage and hour attorneys, that were passed in 2008, but were vetoed by Governor Arnold Schwarzenegger:
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SB 18 – Perata - Public works: labor compliance programs.
This bill would have added the Kindergarten-University Public Education Facilities Bond Act of 2006 (Proposition 1-D) as a source of funds for a public works project that would require an awarding body, if it chooses to use those funds, to initiate and enforce, or contract with a third party to initiate and enforce, a labor compliance program. Specifically, this bill would have required a school and community college district, a campus of the California State University, or a campus of the University of California applying for funds from the 2006 school bond to monitor the project through a Department of Industrial Relations approved labor compliance program (LCP).
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SB 180 – Migden - Labor elections: farm workers.
This bill would have created a new election process for agricultural workers to select their representatives for collective bargaining, and also would have increased the penalties on employers engaged in unfair labor practices.
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SB 191 – Padilla - Public works: State Public Works Enforcement Fund.
This bill would have authorized an awarding body, an aggrieved employee or a contractor to file a complaint with the director of Department of Industrial Relations (DIR) that an approved private entity, contracted to initiate and enforce a labor compliance program (LCP) for a public works project, had not competently performed the responsibilities required by statute and state regulations for an LCP.  In addition, the bill would have required that the director provide notice of the complaint, determine if it appears meritorious, hold a hearing and issue a written decision regarding the complaint.  This bill would have authorized the director to order the approved private entity to return the fees paid by an awarding body and to suspend the approval of the private entity to initiate and enforce a labor compliance program until a petition of revocation of the approval is heard and determined as provided.
This bill was subsequently amended to create an alternative mechanism to fund enforcement of prevailing wage and apprenticeship requirements applicable to specified public works projects.  Specifically, when amended, the bill would have established the State Public Works Enforcement Fund (Fund) and specify that money in the fund shall, upon appropriation by the Legislature, be used by DIR to administer and enforce the prevailing wage and apprenticeship requirements of current law.  The bill would have required specified state agencies or school districts that choose to use the Kindergarten-University Public Education Facilities Bond Act of 2006 or any subsequent education facilities bond act as a source of funds for a public works project, to pay a fee levied by the director of DIR to be deposited into this fund.  In addition, this bill would have required the California High-Speed Rail Authority and any other recipient of funds from the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century to pay those administrative fees, if that act were approved by the voters at the statewide general election held on November 4, 2008.
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SB 549 – Corbett - Bereavement leave.
Would have given employees in California the right to take up to four days of unpaid leave from work upon the death of specified relatives.
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SB 622 – Padilla - Employment: misclassification of employees as independent contractors.
Would have made it unlawful for any person or employer to willfully misclassify an employee as an independent contractor.  Would have assessed a civil penalty of not less than $5,000 and not more than $15,000 in addition to any other penalties or fines permitted by law for such willful misclassification.  Also, any person found guilty of a repeated pattern of these behaviors would have been assessed a civil penalty of not less than $10,000 and not more than $25,000 in addition to any other penalties or fines permitted by law.
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SB 1583 - Independent Contractors
This bill would provide that a person (excluding attorneys) who knowingly advises another person to treat an individual as an independent contractor to avoid employee status for the individual shall be jointly and severally liable with the employer if the individual is not found to be an independent contractor.
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AB 2075 - Scope of Labor Code § 206.5 Release Obligations

The legislature also passed AB 2075 in 2008, effective January 1, 2009, which modifies California Labor Code § 206.5 to expand the meaning of the word “release.” A “release” shall now include “requiring an employee, as a condition of being paid, to execute a statement of the hours he or she worked during a pay period which the employer knows to be false.”

Lilly Ledbetter Fair Pay Act Up For Vote Soon

If you are the type who likes to sign electronic petitions, here's a link to one in support of the bill to change the Equal Pay Act in response to the Supreme Court holding in Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. 618, 127 S.Ct. 2162, 167 L.Ed.2d 982. The bill was defeated in the previous session by a Republican filibuster.

AB 2537 - Public Works, Volunteers

Another wage and hour bill passed in 2008 was AB 2537 (Furutani - Public works: exemption: volunteers), Chapter 678, Statutes of 2008.

This bill extends, until January 1, 2012, the exclusion from the application of the law governing "public works," any work performed by a volunteer, a volunteer coordinator, or by members of the California Conservation Corps or of certified Community Conservation Corps, thus allowing volunteers to continue contributing their labor to public works projects under specified limitations.  This bill also requires the Director of Industrial Relations to submit a written report containing information regarding volunteers on public works projects, as specified, to the Legislature by January 1, 2011.

SB 940 - Temporary Service Employees

In 2008, the legislature passed SB 940 (Yee - Temporary services employees: wages), which modifies Labor Code § 201.3, and changes payroll practices applicable to “temporary service workers.” With certain exceptions, temporary workers must be paid on a weekly basis. Wages for the current week’s work are due on the payday of the following calendar week. When the assignment is completed, the final wages for the assignment must be paid by the date of the regular payday in the week following the completion of the assignment, provided, however, that certain temporary employees assigned to work “day to day” must be paid at the end of each day. Failure to comply with these deadlines subjects the employer to waiting time penalties.

The full text of the bill, including the full text of the new and amended Labor Code sections, can be read at this link.

SB 1352 - Prevailing Wages

Among the few bills that were passed and signed in 2008 is SB 1352 (Wyland - Public works: prevailing wage rates: wage and penalty assessments)

This bill allows employers who have been assessed penalties for alleged violations of labor law to place the amount of the assessment in an escrow account to be held by the Department of Industrial Relations during the period in which the assessment is being challenged. This allows employers to avoid being charged with additional liquidated damages simply because a specified time period has elapsed before the matter is settled. The bill also eliminates a plan to shift to the use of administrative law judges for the hearing of cases, thus continuing the use of DIR hearing officers for such issues.

Prior law required the Labor Commissioner to issue a civil wage and penalty assessment to a contractor or subcontractor, or both, if the Labor Commissioner determines, after investigation, that the contractor or subcontractor, or both, violated the laws regulating public works contracts, including the payment of prevailing wages. Prior law permitted the affected contractor or subcontractor to obtain review of a civil wage and penalty assessment or a notice of withholding, as defined, by transmitting a written request for a hearing to the office of the Labor Commissioner within 60 days after service of the assessment or notice and requires a hearing officer, as specified, or, after January 1, 2009, an administrative law judge appointed by the Director of Industrial Relations, to commence a hearing within 90 days of receipt of the request. It provided that, after 60 days following the service of the assessment or notice, the affected contractor, subcontractor, and surety on a bond issued to secure the payment of wages, as provided, become liable for liquidated damages in an amount equal to the amount of unpaid wages, as specified. Prior law authorized the hearing officer, as specified, or, after January 1, 2009, an administrative judge, to waive payment of the liquidated damages if the affected contractor or subcontractor demonstrates, as provided, that he or she had substantial grounds for believing the assessment or notice to be in error, and also permits the affected contractor or subcontractor to obtain review of the administrative decision by filing a petition for a writ of mandate to the superior court within 45 days after service of the decision.

The Latest Required Wage & Hour Postings

In California, all employers must meet various workplace posting obligations, including several that pertain to wages, hours and working conditions. Workplace postings are usually available at no cost from the requiring agency. The Department of Industrial Relations requires employers to post information related to wages, hours and working conditions in an area frequented by employees where it may be easily read during the workday. Additional posting requirements apply to some workplaces. For a list of available wage and hour postings, check the chart, with downloadable forms and notices, at this DIR link.

New Lower IRS Mileage Rates

The IRS mileage rate for business miles was 48.5 cents per mile in 2007. From January 1, 2008 through June 30, 2008, the rate was 50.5 cents per mile. From July 1, 2008 to December 31, 2008, the rate is 58.5 cents per mile. On January 1, 2009, the rate will drop to 55 cents per mile, as follows:

• 55 cents per mile for business
• 24 cents per mile for medical or moving purposes
• 14 cents per mile in service of charitable organizations

The IRS press release can be found here.

In California, the DLSE presumes that employers who reimburse mileage at the IRS rate have correctly reimbursed their employees for expenses incurred in the use of their cars and complied with Labor Code § 2802. However, under Gattuso v. Harte-Hanks Shoppers, Inc. (2005) 133 Cal.App.4th 985, the IRS standard mileage rate may not conclusively establish compliance with Section 2802. If an employee can show that his or her actual expenses exceed 50.5 cents per mile, an employer may have to pay the higher amount.

San Francisco Minimum Wage Increases January 1

The San Francisco city minimum wage will increase from $9.36 per hour to $9.79 per hour on January 1, 2009. The San Francisco Minimum Wage Ordinance requires annual rate adjustments to be made each year. Information about San Francisco’s MWO requirements can be found at the San Francisco Office of Labor Standards Enforcement's website.

Another Minimum Rate Change for Computer Software Professionals

In 2007, the minimum hourly rate for exempt computer software professionals in California was $49.77 per hour. This hourly rate was reduced to $36.00 per hour in 2008. Until 2008, the exemption applied only to hourly workers. In September 2008, AB 10 amended California Labor Code § 515.5 to apply the overtime exemption to qualifying computer programmers, analysts and engineers who are paid a monthly salary of $6,250 or more each month ($75,000 annually, excluding bonuses). Alternatively, employers can also keep such employees on an hourly basis and enjoy the exemption if the employees are paid at least $36 per hour for all hours worked. The bill was passed as urgency legislation and is already in effect.

The Division of Labor Statistics and Research adjusts the rate annually for inflation in accordance with Labor Code § 515.5(a)(4). Pursuant to that provision, effective January 1, 2009, the rate will increase from $36.00 to $37.94; the minimum monthly salary exemption from $6,250.00 to $6,587.50; and the minimum annual salary exemption from $75,000 to $79,050.

A full rate history of the wages required under Labor Code § 515.5 can be downloaded here in PDF.

New Minimum Pay Levels for Exempt Medical Professionals

The licensed physicians and surgeons employee's minimum hourly rate of pay exemption will increase from $65.59 to $69.13 on January 1, 2009.

WARN Act Chart

With so many mass layoffs this year, it might be a good time to hone your skills bringing or defending WARN Act claims. This link has a very good chart that compares the rights and obligations under the California and federal statutes.

Shepherds Tending to Their Flocks Must Make a Certain Wage

The minimum monthly salary for California sheepherders is currently $1,422.52, up from $1,333.20 in 2007. Wages paid to sheepherders may not be offset by meals or lodging provided by the employer. Those are pretty modest levels, given the hours a sheepherder works.

The good news for the sheepherders is that the employer can't get away with paying them sheepherder wages and making them do tasks other than the herding of sheep.

Any employer or any other person acting on behalf of the employer who employs sheepherders and who requires them to engage in non-sheepherding duties shall be subject to the following penalties: (1) Initial violations—a civil penalty of one week’s pay computed on a basis of a 60 hour workweek and a wage of n less than the current minimum wage in effect. (2) Second violation—a civil penalty of one month’s pay computed on a basis of a 252 hour month and a wage of no less than the current minimum wage in effect. (3) Third and subsequent violation—a civil penalty equal to the cost of the contract of the approved “H2A” job order.

Bringing tidings of joy cannot be made part of the job description.

Merry Christmas nonetheless.

DLSE Report of the Public Forums on Meal and Rest Breaks

As the legislature mulls over proposals to weaken the meal and rest period statutes and regulations, here's a link to the report of the Public Forums on Meal and Rest Breaks by State Labor Commissioner Angela Bradstreet, as well as a link to the Summary of Comments and a link to the transcripts.

Legislature in Special Session

The California legislature has convened a special session to consider some of the proposals governor Arnold Schwarzenegger made in November. A copy of the governor's proclamation regarding the special session can be seen at this link.

Among the proposals on the table:

Broaden Overtime Exemptions:

Exempt employees in executive, sales, administrative, and professional jobs who earn more than $100,000 annually from overtime pay.

Eliminate Eight Hour Work Days:

Allow employees to work flexible hours in excess of 8 per day, i.e., 10/40 work weeks without overtime.

Weaken Meal And Rest Period Laws:

Relax existing law regarding meal and rest periods to provide employers and employees with a clear understanding of meal breaks and offering flexibility to both businesses and workers.

We haven't been able to find yet exactly what meal and rest period proposals are on the table, but we have a list of meal and rest period bills that were vetoed or stalled in 2008:

AB 124 - Price - Meal and rest periods (Vetoed)

This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to pool lifeguards and stage assistants who employed in the public sector. The bill specified that pool lifeguards and stage assistants employed by a city, county, or special district, shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the public sector employer failed to provide a meal or rest period, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation.  In addition, the bill specified that should these requirements be in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control.

AB 628 – Price - Meal and rest periods: pool lifeguards (Vetoed)

This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to pool lifeguards who are employed in the public sector. The bill specified that pool lifeguards employed by a city, county, or special district shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the employer failed to provide a meal or rest period, the employer would have to pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest period was not provided.  In addition, the bill specified that if these requirements were in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control. This bill was very similar to AB 124 (Price) from the previous year which addressed meal and rest period requirements for both pool lifeguards and stage assistants, however, this bill targets only pool lifeguards.

AB 1666 – Price - Meal and rest periods: stage assistants (Vetoed)

This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to stage assistants who are employed in the public sector. The bill specified that stage assistants employed by a city, county, or special district shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the employer failed to provide a meal or rest period, the employer would have to pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest period was not provided.  In addition, the bill specified that if these requirements were in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control. This bill was very similar to AB 124 (Price) from the previous year which addressed meal and rest period requirements for both pool lifeguards and stage assistants; however, this bill targets only stage assistants.

SB 342 – Torlakson - Employment: rest and meal periods. (Without further action)

This bill would have declared the intent of the legislature to clarify the law regarding on-duty meal periods for employees who work in the armored car industry. 

SB 1192 – Margett - Employment: meal and rest periods. (Without further action)

This bill would have allowed employees to take their first meal period before the conclusion of the 6th hour of work, decreased the statute of limitations on penalties for failing to provide a meal period, and defined the employer’s responsibility to provide a meal period as making a meal period available without interference.

SB 1539 – Calderon - Meal periods. (Without further action)
            
This bill would have required an employer to provide meal periods to employees covered by Industrial Welfare Commission Wage Orders before the conclusion of the sixth hour of work; defined an employer responsibility to provide a meal period as giving the employee an opportunity to take a meal period; would have exempted all employees covered by collective bargaining agreements from meal period requirements if the collective bargaining agreement covers meal periods, and would have codified and expanded on-duty meal period requirements.

AB 1034 – Keene - Employment: meal periods. (Without further action)

This was originally introduced as a bill related to water; later it was re-referred to this committee ( L. & I.R.) pursuant to Senate Rule 29.10.  Bill was held in committee pursuant to Senate Rule 29.10. This bill would have stipulated that meal periods must begin no later than the conclusion of an employee’s 6th hour of work, exempted employees covered by a collective bargaining agreement that dealt with meal periods, codified on-duty meal period regulations, and permitted the Department of Industrial Relations (DIR) to adopt regulations specifying the circumstances preventing employees from being relieved of all duty during a meal period.

The sessions, so far, have been unproductive.

New DLSE Opinion Letters: 2008.11.25, 2008.11.25-1

The DLSE issued two new opinion letters last month, involving disputes over employees obtaining security clearances and government TWIC cards for work in restricted areas such as ports, and disputes over payroll adjustments for previous payroll overpayments:

Letter No.	Manual Section	Description
2008.11.25 (Pdf)(Doc) Requesting Letter		Compensability: Time Spent Obtaining a Transportation Worker Identification Credential Card
2008.11.25-1 (Pdf)(Doc) Requesting Letter		Wage Deduction: Authorization for Overpayments Due to Payroll Practice

These are the third and fourth opinion letters issued by the DLSE in 2008.

Terminator Proposes Wage & Hour Law Changes to Reduce Terminations

In a press conference today, Governor Schwarzenegger called for a temporary 1½ cent statewide sales tax increase, along with new taxes on liquor and oil as part of a plan to increase revenues $4.4 billion to make up part of an $11 billion budget deficit. At the same time, Schwarzenegger proposed $4.5 billion in spending cuts.

To save money on wages to state workers, the governor proposes to require them to take a one-day unpaid furlough each month. Columbus Day and Lincoln's Birthday would no longer be paid state holidays, and premium pay for working a holiday would be dropped. State agencies would be given the option of establishing 10-hour, four-day work weeks, and employees would no longer be allowed to count leave time as hours worked while computing overtime pay.

Oddly enough, part of this plan requires "[k]eeping high paying jobs in California by providing overtime exemptions and allowing more flexible work schedules to increase productivity; and " [c]larifying meal and rest periods to save businesses hundreds of millions of dollars in litigation costs and create less confusion from meal break violations which will mean fewer terminations."

The governor proposes to:

Provide Overtime Exemptions: Exempt employees in executive, sales, administrative, and professional jobs who earn more than $100,000 annually from overtime pay.
· Keep high-paying jobs from leaving the state. (For every 10,000 jobs paying more than $100,000 placed out of state, California’s economy misses out on $1 billion in employee spending.)
· Save approximately $90 million per year in employee classification costs.

Allow More Flexible Work Schedules: Allow employees to work more flexible hours upon request, such as 10 hour work days for a 40 hour work without being paid overtime.
· Reduce absenteeism and boost productivity, which save employers real dollars.
· Raise employee retention rates, which will reduce claims on the Unemployment Insurance trust fund.

Clarify Meal And Rest Period Laws: Clarify existing law regarding meal and rest periods to provide employers and employees with a clear understanding of meal breaks and offering flexibility to both businesses and workers.
· Will save businesses hundreds of millions of dollars in litigation costs.
· Less confusion means fewer terminations over meal break violations and a more welcoming work environment.

Full details of the governor's plan have not been released.

What an Obama Administration Could Bring

With the election of Barack Obama as the 44th President of the United States and with the Democrats gaining seats in the House and Senate, some changes in employment law, including wage and hour law, could be coming in the next four years. Some changes that are reasonably foreseeable:

• Minimum Wage. Though the federal minimum has been increased in recent years, and moves to $7.25 per hour in 2009, greater increases in the federal minimum wage could follow.
• Sick Leave. The Obama administration is expected to push for new legislation requiring employers to provide at least seven days of annual paid sick leave to employees.
• Family and Medical Leave. The Obama administration is expected to expand the FMLA to cover more workers, including those employed by smaller firms (20-25 employees), and to cover a broader range of causes for leave.
• Equal Pay. Though Senate Republicans filibustered the Lilly Ledbetter Fair Pay Act of 2007, intended to overturn the Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. ___, 127 S.Ct. 2162, 167 L.Ed.2d 982, decision, the Democrats will take up the cause again in 2009. The 5-4 opinion severely curtailed an employee's right to recover Title VII wage claims for violations of the Equal Pay Act. The losing plaintiff, Lilly Ledbetter, spoke at the Democratic National Convention.
• NLRB/NLRA: Union membership is below ten percent. That could change with the passage of the Employee Free Choice Act, the RESPECT Act, and the Public Safety Employer-Employee Cooperation Act. President Obama's appointees to the National Labor Relations Board are likely to be much more protective of unions and employees than the appointees of President Bush, who tended to favor management and employers.
• Executive compensation. Expect more executive compensation limitations, particularly in any future bailout legislation, including clawback provisions and bans prohibiting golden parachutes. Current restrictions are vague, prospective and limited in scope. Stronger regulations with more detailed limitations and a broader scope affecting existing contracts could pass.
• Arbitration. Expect to see a new effort to pass the Arbitration Fairness Act, an amendment to the Federal Arbitration Act in 1925, which would provide new procedures and limitations on pre-dispute mandatory arbitration clauses in consumer and employment contracts.
• ERISA. A key goal of the Obama administration will be the passage of a universal health care plan with guaranteed eligibility, comprehensive benefits, and affordable premiums and co-pays.
• Supreme Court appointments. Barack Obama mentioned Ruth Bader Ginsburg and Stephen Breyer as examples of the kind of justice he would look for to fill vacancies in the SCOTUS. In the next four year, John Paul Stevens, 88, and Ginsburg, 75, are thought to be likely to retire. David Souter, 69, has expressed some interest in leaving Washington and returning to his home state of New Hampshire. Justices Anthony Kennedy and Antonin Scalia are 72 years old.

If you see anything else on the horizon, leave a comment.

DLSE Withdraws July 2008 "Brinker Memo"

The DLSE memo issued July 22, 2008 July 25, 2008, by Angela Bradstreet, Denise Padres, and Robert Roginson has been withdrawn. A new memo, dated October 23, 2008, provides: "Effective immediately, neither the [Brinker] Court of Appeal decision nor the memo may be relied upon by any DLSE staff in deciding pending or future matters." However, in the same document, Labor Commissioner Angela Bradstreet essentially tells the staff to keep following the reasoning in Brinker, even though the Supreme Court’s grant of review supersedes the Court of Appeal’s decision, and the Court of Appeal decision may not be cited or relied on by a court or a party in any other action. (California Rules of Court 8.1105(e) and 8.1115(a)).

"Until such time that the Supreme Court provides guidance on this fundamental question, the Division will rely upon the language of the statute and wage order as well as existing California Supreme Court and Court of Appeal decisions and other recent, persuasive federal court decisions in interpreting Labor Code section 512 and the meal period provisions set forth in the applicable wage orders. Taken together, the language of the statute and the regulation, and the cases interpreting them demonstrates compelling support for the position that employers must provide meal periods to employees but do not have an additional obligation to ensure that such meal periods are actually taken."

The memo instructs employees to follow Brown v. Federal Express Corporation(C.D.Cal. 2008) 249 F.R.D. 580, 585, and to disregard the only binding precedent in California, Cicairos v Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 962, because its "interpretation of California’s meal period requirements is not compelling."

On the issue of meal period timing, the memo observes that the DLSE "has varied in its interpretation of this so-called 'rolling five' hour rule in the past, [and] there is no controlling legal authority interpreting California’s meal period regulations to require employers to provide meal periods every five hours." Consequently, until a binding appellate opinion interprets the wage orders and Labor Code § 512 to require employers to provide meal periods every five hours, the DLSE "will not interpret California’s meal period provisions in that fashion." Instead, the DLSE position will be that:

• The first meal period provided by an employer must commence prior to the end of the fifth hour of work, unless otherwise expressly permitted by the applicable wage order; and

• Except as required in Labor Code § 512(a) and Section 11(B) of those wage orders requiring a second meal period, there is no obligation for employers to provide additional meal periods during the course of the workday, including instances in which employees work for a period of more than five hours of work between meal periods.

The memo concludes with the instruction that "any wage claim filed with DLSE that has a meal period issue is reviewed by your Senior Deputy prior to making any final determination on its merits." To us, this sounds a lot like an underground regulation adopted without complying with APA requirements. More importantly, many low-income workers who rely upon DLSE enforcement of their complaint will suffer in the next 18-24 months as we wait for the Supreme Court to decide Brinker.

Computer Professional Exemption Expands to Include Salaried Workers

Governor Schwarzenegger has signed a bill to significantly revise the way certain computer software professionals can be paid. An odd quirk in California's overtime laws allowed employers to avoid paying overtime to certain computer programmers, analysts and engineers, but only if they were hourly employees, and were paid for all of their hours of work. Employers wanted to be able to put such employees on salaries without losing the exemption. Assembly Bill 10 accomplishes that goal. It amends California Labor Code § 515.5 to apply the overtime exemption to qualifying computer programmers, analysts and engineers who are paid a monthly salary of $6,250 or more each month ($75,000 annually, excluding bonuses). Alternatively, employers can keep the employees on an hourly basis and enjoy the exemption if the employees are paid at least $36 per hour for all hours worked. The bill was passed as urgency legislation* and is already in effect.

The compensation test will be given annual CPI adjustments, but can always be legislated back down, as happened last year when the hourly rate was suddenly reduced to $36. Section 515.5's compensation requirements started at $41 per hour in 2000; annual CPI increases brought the rate to $49.77 by 2007. The reduction to $36 per hour became effective January 1, 2008.

The Animation Guild Blog has a roll call listing every aye and nay vote.

Section 515.5 now reads:

(a) Except as provided in subdivision (b), an employee in the computer software field shall be exempt from the requirement that an overtime rate of compensation be paid pursuant to Section 510 if all of the following apply:

   (1) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment.

   (2) The employee is primarily engaged in duties that consist of one or more of the following:

   (A) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
   (B) The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications.
   (C) The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.

   (3) The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, or software engineering. A job title shall not be determinative of the applicability of this exemption.

   (4) The employee's hourly rate of pay is not less than thirty-six dollars ($36.00) or, if the employee is paid on a salaried basis, the employee earns an annual salary of not less than seventy-five thousand dollars ($75,000) for full-time employment, which is paid at least once a month and in a monthly amount of not less than six thousand two hundred fifty dollars ($6,250). The Division of Labor Statistics and Research shall adjust both the hourly pay rate and the salary level described in this paragraph on October 1 of each year to be effective on January 1 of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

(b) The exemption provided in subdivision (a) does not apply to an employee if any of the following apply:

   (1) The employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer
systems analysis, programming, and software engineering.

   (2) The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.

   (3) The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.

   (4) The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not engaged in computer systems analysis, programming, or any other similarly skilled computer-related occupation.

   (5) The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for onscreen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-ROMs.

   (6) The employee is engaged in any of the activities set forth in subdivision (a) for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry.

*This "urgency" legislation was introduced in December 2006, amended seven times over the next 19 months, and passed in September 2008 as part of the budget compromise.

Public Comment Sought on Proposed Ethics Rule

The State Bar seeks public comment on new Proposed Formal Opinion Interim No. 98-0001 (Offers of Settlement Conditioned on Client's Waiver of Statutory Right to Seek Attorney's Fees)

BACKGROUND: The State Bar Standing Committee on Professional Responsibility and Conduct (COPRAC) is charged with the task of issuing advisory opinions on the ethical propriety of hypothetical attorney conduct. In accordance with Tab 19, Article 2, Section 6(g) of the State Bar Board Book the Committee shall publish proposed formal opinions for a public comment period of no less than 60 days.

DISCUSSION/PROPOSAL: Proposed Formal Opinion Interim No. 98-0001 considers the situation where, in a lawsuit prosecuted by Attorney A against Defendant, Client has a statutory right to seek an award of attorney's fees. Attorney B, Defendant's counsel, makes a settlement offer, conditioned on Client's waiver of his statutory right to attorney's fees, that is insufficient to compensate Attorney A for her fees. (1) May Attorney A bar the settlement notwithstanding Client's desire to accept it? (2) Does Attorney B violate any ethical obligation by recommending or conveying the fee-waiver settlement offer in this case? (3) Does Attorney B violate any ethical obligation by recommending or conveying fee-waiver settlement offers in cases generally?

The opinion interprets rules 1-500, 3-210, 3-510 and 4-200 of the Rules of Professional Conduct of the State Bar of California; and Business and Professions Code sections 6068, 6069, and 6103.5.

The opinion digest states: 1) A lawyer must inform the client of a fee-waiver settlement offer and consummate the settlement in accordance with the client's wishes even if it reduces the likelihood of recovering some or all of his or her fees. 2) A lawyer does not violate any ethical obligation by recommending or conveying a fee-waiver settlement offer in a given case. 3) A lawyer does not violate any ethical obligation by recommending or conveying fee-waiver settlement offers in cases generally.

At its June 20, 2008 meeting and in accordance with its Rules of Procedure (State Bar Board Book Tab 19, Art. 2, Sec. 6(g)), the State Bar Standing Committee on Professional Responsibility and Conduct tentatively approved Proposed Formal Opinion Interim No. 98-0001 for a 90-day public comment distribution.

COMMENT DEADLINE: October 31, 2008

DIRECT COMMENTS TO:

Angela Chang
Office of Professional Competence, Planning and Development
The State Bar of California
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More Brinker Reactions

Angie Wei, the Legislative Director for the California Labor Federation, wrote a letter to Labor Commissioner Angela Bradstreet asking her to withdraw her one-sided July 25, 2008 Memorandum to DLSE Staff, regarding Brinker Restaurant Corp. v Superior Court of San Diego County (Hohnbaum) (2008) __ Cal App. 4th ___, 2008 WL 2806613. The letter is well written, and is must-read material for anyone unfortunate enough to be preparing for a Berman hearing on a meal period or rest period case right now. Unfortunately, we suspect that Ms. Bradstreet is taking orders from someone who makes sure that important decisions get the "green light" from lobbyists for the California Chamber of Commerce and/or the California Restaurant Association, so we would be surprised if the memorandum is withdrawn, even if the Supreme Court grants review of the Brinker case.

The Recorder had a blurb last week on its Ad Hominem (Opinion and Satire) page that overstated Brinker's effect dramatically. Under the "Bar-ometer", it reported that "A court says you can only file wage and hour cases on an individual basis. And no lawyer will take those cases." That's not a very accurate summation of the holding, and the claim that no lawyer will take those cases is quite untrue. Individual wage and hour cases are filed every day.

In a few days, we'll post links to the various blog posts, articles, client alerts and newsletters discussing the case. Legal updates, in and of themselves, are not billable, so it takes some of the defense firms a couple of weeks to get their articles, client alerts and newsletters out. We remember what it was like....

New Opinion Letters

The DLSE has published two new opinion letters, concerning money network checks and payroll/debit cards.

2008.07.07 (Pdf)(Doc) Requesting Letter 1 Requesting Letter 2		Payroll/Debit Cards – Means of Payment of Wages Labor Code §§ 212 and 213
2008.07.07-2 (Pdf)(Doc) Requesting Letter		Money Network Checks – Means of Payment of Wages under Labor Code § 212

DLSE Manual Updated

DLSE quickly updated (pdf, doc) its Enforcement Policies and Interpretations Manual to reflect the decision in Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum) (2008) ___ Cal.App.4th ___. The decision was just three days when the revisions went into effective. Opinion Letter 1999.02.16 has been withdrawn.

The DLSE is now taking comments. If you believe that a section of the Enforcement Policies and Interpretations Manual or an opinion letter needs to be reviewed to determine if it should go through the regulatory process pursuant to the Administrative Procedures Act, you can submit comments to dlsecomments@dir.ca.gov. Any inquiries should mention a specific manual section or opinion letter number and explain specific concerns. The Division of Labor Standards Enforcement - Comments mailbox account has been established solely to take comments on the enforcement manual and opinion letters. All comments will be read and considered, but no responses to questions or specific advice will be provided.

Governor Threatens to Cut All State Workers to Minimum Wage Until Budget is Passed.

According to a news report in the Sacramento Bee, California Governor Arnold Schwarzenegger threatened to sign an executive order today cutting the wages of more than 200,000 state employees to the federal minimum wage of $6.55. The order would provide that the balance of their wages would be paid once the state budget, due July 1, 2008, is passed.

The announcement caused quite a stir. Petitions were circulated, protests were planned and state Controller John Chiang announced that he would ignore the governor's order. "He will pay state workers the salaries that they have earned, and that's full salary," said Deputy Controller Hallye Jordan.

In addition to cutting salaries, including union and other contractually specified salaries, the order would require state agencies to stop authorizing overtime for most employees, impose a hard hiring freeze except for state jobs directly related to the preservation and protection of human life and safety, and suspend work for all retired annuitants, permanent intermittent employees, seasonal employees, temporary help workers, student assistants and some contractors.

As his deadline approached, the governor postponed the issuance of the order until at least Thursday.

Federal Minimum Wage Increases to $6.55

The Fair Minimum Wage Act of 2007 amended the FLSA to increase the federal minimum wage in three steps. The first step raised the rate to $5.85 per hour last year. The second step goes into effect today, and raises the minimum wage to $6.55 per hour. On July 24, 2009, the final raise under act becomes effective, at which time the minimum wage in all 50 states will be at least $7.25 per hour. Employees in states with higher minimum wage rates under state law (e.g., California) will still be entitled to the higher rate under state law. Approximately 2 million workers will be affected by the change.

IRS Increases Mileage Rates through December 31, 2008

The Internal Revenue Service has announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

"Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS Commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2008-63 on the optional standard mileage rates.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes

Purpose	Rates 1/1 through 6/30/08	Rates 7/1 through 12/31/08
Business	50.5	58.5
Medical/Moving	19	27
Charitable	14	14

No Action in 2008 on the Arbitration Fairness Act

Congress is still considering legislation that would ban the use of pre-dispute arbitration agreements involving consumers or employees. The Senate Bill, S.1782, has seen no action since December 2007. The bill summary is as follows:

Arbitration Fairness Act of 2007 - Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of: (1) an employment, consumer, or franchise dispute, or (2) a dispute arising under any statute intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power.

Declares, further, that the validity or enforceability of an agreement to arbitrate shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement.

Exempts arbitration provisions in collective bargaining agreements from this Act.

Its companion bill, H.R. 3010, was last seen in subcommittee in October.

Not surprisingly, NELA favors the bills. The president would probably issue a veto if they passed.

Legislative Update - SB 1202

One of the many pending bills seeking to curb the ability of employees to bring class actions to enforce their legal rights against employers is SB 1202 (Harman). SB 1202 would amend section 1021.5 of the Code of Civil Procedure to allow judges to withhold part of the plaintiff's attorney's fees in class action lawsuits until class members have been contacted and have received their portion of the settlement funds.

Existing law allows a court, upon motion, to award attorney's fees to a successful party against one or more opposing parties in any action that has resulted in the enforcement of an important right affecting the public interest, if certain conditions are met. This bill would authorize the judge in a class action to order a part of the attorney's fees awarded pursuant to this provision to be withheld until all class members have received their portion of the settlement funds.

The actual amendment looks like this:

Section 1021.5 of the Code of Civil Procedure is
amended to read:
1021.5. (a) Upon motion, a court may award
attorneys' attorney' s fees
to a successful party against one or more opposing parties in any
action which that has resulted in the
enforcement of an important right affecting the public interest if
: (a) a all of the following are met:
(1) A significant benefit,
whether pecuniary or nonpecuniary, has been conferred on the general
public or a large class of persons , (b)
the .
(2) The necessity and financial
burden of private enforcement, or of enforcement by one public entity
against another public entity, are such as to make the award
appropriate , and (c) such .
(3) Those fees should not ,
in the interest of justice , be paid out of the
recovery, if any. With
(b) With respect to actions
involving public entities, this section applies to allowances
against, but not in favor of, public entities, and no claim shall be
required to be filed therefor, unless one or more successful parties
and one or more opposing parties are public entities, in which case
no claim shall be required to be filed therefor under Part 3
(commencing with Section 900) of Division 3.6 of Title 1 of the
Government Code.
Attorneys'
(c) Attorney's fees awarded to a
public entity pursuant to this section shall not be increased or
decreased by a multiplier based upon extrinsic circumstances, as
discussed in Serrano v. Priest , (1977)
20 Cal. 3d Cal.3d 25, 49.
(d) In an action based on Section 382, the judge may order a part
of the attorney's fees awarded pursuant to this section to be
withheld until the class members have received their portion of the
settlement funds.

Section (d) is the major deal point. Frankly, we're not so sure why everyone is excited about this. We've never even tried to structure a class action settlement in such a way that we would get our money before the class members get their money. We did once present a settlement agreement for preliminary approval which was worded in such a way that the judge thought it ambiguous enough to possibly mean that the attorney's fees, which were being deducted from the gross settlement proceeds, would be the first thing paid, and the judge withheld preliminary approval until we cleared that up for him. Those fees were not based upon section 1021.5, but if there is a significant difference that, under current law, allows the lawyers to get their fees under section 1021.5 before class member shares get distributed, we've never heard of it.

Supposedly, Tom Harman advanced this bill to prevent abuses like one which occurred in a Kentucky case in which the judge and the class counsel cheated the class by letting millions of dollars get funneled into a charity that the judge oversaw. But the bill wouldn't prevent that sort of abuse at all, because it merely provides that the judge "may" order a part of the fees to be paid later. If your judge was crooked, he or she probably wasn't going to exercise a lot of discretion to protect the class in the first place. It sounds like yet another legislative "fix" offered by Senator Harman for a problem that is merely theoretical.

The bill was voted down in committee, 3-2, on March 25, but a motion for reconsideration passed 5-0 that same day. If someone can explain that process to us, by all means, leave a comment.

Genetic Information Nondiscrimination Act Increases Penalties for Child Labor Violations

A provision in the recently passed Genetic Information Nondiscrimination Act of 2008 (H.R. 493) ("GINA"), increases certain penalties under the Fair Labor Standards Act ("FLSA") for child labor law violations. GINA was signed into law by President Bush on May 21, 2008. GINA passed the House by a vote of 414-1 and passed the Senate by a vote of 95-0. Congressman Ron Paul cast the only nay vote.

Section 302 of GINA amended Section 16(e) of the FLSA, raising the maximum penalty to $50,000 for each violation with the possibility of a penalty of up to $100,000 in cases where the employer's violation is a repeated or willful violation. The $50,000 penalty (doubled for repeated or willful violations) can be assessed for each child labor law violation that causes the death or serious injury of an employee under the age of 18 years. A “serious injury” is defined as the permanent loss or substantial impairment of one of the senses; permanent loss or substantial impairment of the function of a bodily member, organ, or mental faculty, including the loss of all or part of an arm, leg, foot, hand or other body part; or permanent paralysis or substantial impairment that causes loss of movement or mobility of an arm, leg, foot, hand or other body part. The amendment also increases the civil penalty for other child labor violations to $11,000 per affected employee; and increases the penalty for willful violations of FLSA overtime and minimum wage provisions to $1100 per violation.

The FLSA amendment is effective immediately. The increased penalties apply to violations and deaths or serious injuries that occur after May 21, 2008. Most of the other provisions in the act, pertaining to discrimination in employment on the basis of genetic information take effect November 21, 2009.

The full text of the FLSA amendment is as follows:

SEC. 302. CHILD LABOR PROTECTIONS.

(a) In General- Section 16(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 216(e)) is amended to read as follows:

`(e)(1)(A) Any person who violates the provisions of sections 12 or 13(c), relating to child labor, or any regulation issued pursuant to such sections, shall be subject to a civil penalty not to exceed--

`(i) $11,000 for each employee who was the subject of such a violation; or

`(ii) $50,000 with regard to each such violation that causes the death or serious injury of any employee under the age of 18 years, which penalty may be doubled where the violation is a repeated or willful violation.

`(B) For purposes of subparagraph (A), the term `serious injury' means--

`(i) permanent loss or substantial impairment of one of the senses (sight, hearing, taste, smell, tactile sensation);

`(ii) permanent loss or substantial impairment of the function of a bodily member, organ, or mental faculty, including the loss of all or part of an arm, leg, foot, hand or other body part; or

`(iii) permanent paralysis or substantial impairment that causes loss of movement or mobility of an arm, leg, foot, hand or other body part.

`(2) Any person who repeatedly or willfully violates section 6 or 7, relating to wages, shall be subject to a civil penalty not to exceed $1,100 for each such violation.

`(3) In determining the amount of any penalty under this subsection, the appropriateness of such penalty to the size of the business of the person charged and the gravity of the violation shall be considered. The amount of any penalty under this subsection, when finally determined, may be--

`(A) deducted from any sums owing by the United States to the person charged;

`(B) recovered in a civil action brought by the Secretary in any court of competent jurisdiction, in which litigation the Secretary shall be represented by the Solicitor of Labor; or

`(C) ordered by the court, in an action brought for a violation of section 15(a)(4) or a repeated or willful violation of section 15(a)(2), to be paid to the Secretary.

`(4) Any administrative determination by the Secretary of the amount of any penalty under this subsection shall be final, unless within 15 days after receipt of notice thereof by certified mail the person charged with the violation takes exception to the determination that the violations for which the penalty is imposed occurred, in which event final determination of the penalty shall be made in an administrative proceeding after opportunity for hearing in accordance with section 554 of title 5, United States Code, and regulations to be promulgated by the Secretary.

`(5) Except for civil penalties collected for violations of section 12, sums collected as penalties pursuant to this section shall be applied toward reimbursement of the costs of determining the violations and assessing and collecting such penalties, in accordance with the provision of section 2 of the Act entitled `An Act to authorize the Department of Labor to make special statistical studies upon payment of the cost thereof and for other purposes' (29 U.S.C. 9a). Civil penalties collected for violations of section 12 shall be deposited in the general fund of the Treasury.'.

(b) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.

DLSE's View on What it Means to "Authorize and Permit"

IWC Wage Order 14, which governs hours and working conditions for farm workers, requires employers to "authorize and permit" employees to take meal periods and rest periods. This "authorize and permit" language appears in most other wage orders as to rest periods, but not meal periods. The language is in stark contrast to the meal period language of other wage orders ("no employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes"), for which the DLSE policy is set forth in section 45.2.1 of the DLSE enforcement policy and interpretations manual.

A February 2007 DLSE memo defines the meaning of the phrase "authorize and permit" in the meal period requirement of Wage Order 14. Lupe Almaraz, who retired last year as Deputy Chief of DLSE, issued a memo to DLSE staff regarding the meal period requirement under Wage Order 14. It states that an employer must

"authorize the worker to take a meal period and not dissuade or deny the worker the opportunity for the entitled meal period..."

In essence, in DLSE enforcement actions, this shifts the burden to employees to prove not only that he or she was not permitted to take a meal period, but that the employer affirmatively dissuaded or denied the meal period. It leaves open to interpretation whether the employer is liable for meal periods that could not be taken simply because the workload does not leave any opportunity to take the break without the employee failing to perform necessary job duties. The memo is an "underground regulation" which the courts need not follow, but nonetheless is appearing more frequently in state court law and motion in support of employers' motions regarding pleadings, discovery, certification and summary adjudication.

At some point in the next month or two, we might get a ruling from the Fourth District Court of Appeal in the Brinker case, which is set for argument this afternoon, as to what it means to "provide" a meal period or "authorize and permit" a meal period or rest period.

Pending Bills - SB 1539, Amended, Withdrawn from Committee

A bill seeking to make it more difficult for employees to get meal breaks, or to sue, individually or collectively, for meal break wages made it out of committee on April 9, but was substantially amended on April 15 and set for hearing today. However, that hearing has been withdrawn.

SB 1539 (Margett) initially sought to specify that "providing" an employee with a meal break meant "giving the employee an opportunity to take" a meal break.

This bill would revise the statutory requirements for the provision of meal periods to specify that the requirements apply only to employees subject to the meal period provisions of an order of the IWC. The statutory requirements for providing the meal periods would be revised to specify that a meal period based on working more than 5 hours in a workday is required to be provided before the employee completes 6 hours of work, unless the existing waiver provision is invoked. The waiver provision for the 2nd meal period would be changed to provide an exception for different provisions within IWC wage orders in effect as of January 1, 2008, and to permit the employer and employee to agree to waive either the first or the 2nd meal period if the employee otherwise is entitled to 2 meal periods. The bill also would specify conditions under which on-duty meal periods are permitted rather than meal periods in which the employee is relieved of all duty. The meal period provisions of a valid collective bargaining agreement would be required to be implemented for covered employees rather than the statutory requirements. The bill would require that orders of the IWC be interpreted in a manner consistent with this section, and would require the Department of Industrial Relations to amend and republish specified IWC wage orders to be consistent with the revised meal period requirements. The bill also would declare that all those provisions are declaratory and not amendatory of existing law.

With the latest amendment, the bill looks quite different:

An act to amend Section 512 of the Labor Code, relating to employment.

LEGISLATIVE COUNSEL'S DIGEST

SB 1539, as amended, Calderon. Meal periods.

Existing law requires an employer to provide an employee who works more than 5 hours in a workday with a meal period of not less than 30 minutes, unless the employee works no more than 6 hours in a workday and the meal period is waived by mutual consent. An employer also is required to provide an employee who works more than 10 hours in a workday with a second meal period of not less than 30 minutes, unless the employee works no more than 12 hours, the first meal period was not waived, and the second meal period is waived by mutual consent. The Industrial Welfare Commission (IWC) of the Department of Industrial Relations adopts and amends wage orders that, among other things, specify how meal periods are required to be provided to covered employees within various industries, including the procedures for providing employees with on-duty meal periods.

This bill would declare the intent of the Legislature to enact
legislation to address issues related to meal periods in employment.

Instead of a massive overhaul of Labor Code section 512, the text of the bill now just reads:

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1.   It is the intent of the Legislature to enact legislation to address issues related to meal periods in employment.

That's it for now. Senator Margett's other meal period bill, SB 1192, was withdrawn on April 8. That bill would have reduced the statute of limitations on meal and rest period pay to one year, and would have allowed employers to force their employees to wait as long as six hours to take a meal break.

Filibuster Defeats Ledbetter Equal Pay Bill

On Wednesday, a Senate filibuster blocked legislation to overturn the Supreme Court holding in Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. __. Hillary Rodham Clinton and Barack Obama each took time away from the campaign trail to speak in favor of the bill, but John McCain stayed away, expressing satisfaction over the bill's failure.

"I am all in favor of pay equity for women, but this kind of legislation, as is typical of what's being proposed by my friends on the other side of the aisle, opens us up to lawsuits for all kinds of problems. This is government playing a much, much greater role in the business of a private enterprise system."

In other words, he likes the equal pay laws, as long as few people actually get relief from the courts if the law is disregarded. Only six Republican senators supported the bill, which would have passed by a majority vote of 56-42, but could not be put to a vote without the 60 votes needed to end the filibuster. Had the filibuster failed, the White House vowed to veto the bill.

SB 1283 Defeated

Senate Bill 1283, which would have allowed employers to delay payment of final wages to terminated employees to as late as 24 hours following the start of the next business day after the termination, has been voted down in the California Senate. "Unfortunately, many California businesses are currently forced into the practice of immediately providing compensation when an employee is discharged for any cause," said a disappointed bill sponser Senator Harman, "for many discharged employees, the requirement on businesses creates an opportunity to take advantage of the employer by joining with other former employees to file a class action lawsuit, thereby unnecessarily clogging our already burdened court system with frivolous claims." We've never heard of even a single lawsuit, much less a class action, arising out of a single day's delay in the payment of final wages, so it sounded to us like a strong-handed solution to a problem that was merely theoretical. We think the failure of SB 1283 will have neither an effect on business nor an effect on any pending or future cases. The lesson for employers: fire at will, but don't send your discharged employee home empty-handed.

Ledbetter Legislation Update

Today is Fair Pay Day, which marks the day of the year a typical woman’s earnings catch up with a typical man’s earnings from the previous year. Despite the enactment of the Equal Pay Act and the Civil Rights Act, women still make only 77 cents, on average, for every dollar a man makes. This year, Fair Pay Day coincides with Senate debate on a bill involving equal pay and the governing statute of limitations on equal pay claims.

On May 29, 2007, the Supreme Court of the United States ruled that Lilly Ledbetter, a 19-year employee of Goodyear Tire and Rubber Company, could not sue for wage discrimination because she had not filed a claim within 180 days of Goodyear’s decision to pay her unfairly. Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. __. The decision has already had a profound effect upon a large number of pending cases.

Within a few weeks of the decision, Congressman George Miller (D-Calif.) and 93 cosponsors introduced a bill in the House of Representatives to overturn the Ledbetter holding. H.R. 2831, The Fair Pay Restoration Act of 2007, passed the House by a margin of 225 to 119. Senator Edward Kennedy and 43 other Senators cosponsored a companion bill in the Senate, the Fair Pay Restoration Act (S. 1843). That bill will be debated on the Senate floor today.

The official summary states as follows:

Fair Pay Restoration Act - Amends the Civil Rights Act of 1964 to declare that an unlawful employment practice occurs when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to the decision or practice, or when an individual is affected by application of the decision or practice, including each time compensation is paid. Accrues liability, and allows an aggrieved person to obtain relief including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practice that has occurred during the charge filing period is similar or related to a practice that occurred outside the charge filing period.

Applies certain amendments made by this Act to claims of compensation discrimination under the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973.

Amends the Age Discrimination in Employment Act of 1967 to declare that an unlawful practice occurs when a discriminatory compensation decision or other practice is adopted, when a person becomes subject to the decision or other practice, or when a person is affected by the decision or practice, including each time compensation is paid.

Senator Feinstein has indicated her support for the bill. Senator Boxer is one of the cosponsors.

Study Shows Courts Far More Reluctant to Vacate Employment Arbitrations if Employer Wins

According to a new study published by a professor at the University of Illinois Law Center, and discussed in the National Law Journal today, courts are more commonly vacating or partially vacating arbitration awards for employees, and rarely disturbing awards that favor employers.

"When courts vacate many awards that rule for employees, the individual must either return to a lengthy and costly 'do over' arbitration -- or worse, be stuck with a useless award, and no other recourse ... [Court review is becoming] "an insurance program that protects employers from costly awards."

Arbitration reform could be a significant issue in 2009 if the Democrats win the White House in November.

Why Class Certification Orders Are Not Immediately Appealable

This is double-hearsay, but attorney H. Scott Leviant, who authors the legal blog The Complex Litigator, published a Forum piece in last week's Daily Journal, entitled "Cutting Class". We can't link to the article for non-subscribers, but there's a nice summary of the article over at the UCL Practitioner. The article explains why A.B. 1905, which would have allowed defendants to immediately appeal orders granting class certification, appropriately died in committee last month.

Labor Code § 226 Changes Now In Effect

Pursuant to California Labor Code § 226, California employers are required to provide certain information on employees' pay stubs, which information may include the employees' social security numbers. However, effective January 1, 2008, employers are only permitted to print the last four digits of an employee's social security number, or an employee identification number other than a social security number, on the paystubs.

Labor Code § 226(a) provides that:

Every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee's wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing

(1) gross wages earned,

(2) total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission,

(3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis,

(4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item,

(5) net wages earned,

(6) the inclusive dates of the period for which the employee is paid,

(7) the name of the employee (and the last four digits of his or her social security number or an employee identification number other than a social security number may be shown on the itemized statement),

(8) the name and address of the legal entity that is the employer, and

(9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.

Under Labor Code § 226(e), an employee suffering injury as a result of a knowing and intentional failure by an employer to comply is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney's fees. Because these penalties can accrue at a clip of four thousand dollars per employee, plus attorney's fees, such errors can create substantial exposure to employers.

The statute requires strict compliance. In Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, the Court of Appeal held that Section 226 must be followed exactly, concluding that paystubs identifying the employer in that case as "Summit" rather than "Summit Logistics, Inc." violated the statute. We warned our clients and readers about the change in the social security number requirements three years ago, but another reminder can't hurt.