California's Domestic Worker Bill of Rights Becomes Permanent

Existing law, the Domestic Worker Bill of Rights (Labor Code section 1451-1453), regulates the hours of work of domestic work employees who are personal attendants and provides an overtime compensation rate for those employees. The Domestic Worker Bill of Rights defines terms for its purposes and requires the Governor to convene a committee to study and report to the Governor on the effects of its provisions on personal attendants and their employers.

Pursuant to Labor Code section 1453, the Domestic Worker Bill of Rights would be repealed as of January 1, 2017. SB 1015 deletes that repeal date. By extending the effect of the Domestic Worker Bill of Rights, the violation of which is a misdemeanor, this bill would expand the definition of a crime, which would impose a state-mandated local program. Here is the full text of the heart of the Domestic Worker Bill of Rights, Labor Code section 1451:

1451.  As used in this part, the following definitions apply:
   (a) (1) "Domestic work" means services related to the care of persons in private households or maintenance of private households or their premises. Domestic work occupations include childcare
providers, caregivers of people with disabilities, sick, convalescing, or elderly persons, house cleaners, housekeepers, maids, and other household occupations.
   (2) "Domestic work" does not include care of persons in facilities providing board or lodging in addition to medical, nursing, convalescent, aged, or child care, including, but not limited to,
residential care facilities for the elderly.
   (b) (1) "Domestic work employee" means an individual who performs domestic work and includes live-in domestic work employees and personal attendants.
   (2) "Domestic work employee" does not include any of the
following:
   (A) Any person who performs services through the In-Home Supportive Services program under Article 7 (commencing with Section 12300) of Chapter 3 of Part 3 of Division 9 of, or Sections 14132.95, 14132.952, and 14132.956 of, the Welfare and Institutions Code.
   (B) Any person who is the parent, grandparent, spouse, sibling, child, or legally adopted child of the domestic work employer.
   (C) Any person under 18 years of age who is employed as a babysitter for a minor child of the domestic work employer in the employer's home.
   (D) Any person employed as a casual babysitter for a minor child
in the domestic employer's home. A casual babysitter is a person whose employment is irregular or intermittent and is not performed by an individual whose vocation is babysitting. If a person who
performs babysitting services on an irregular and intermittent basis does a significant amount of work other than supervising, feeding, and dressing a child, this exemption shall not apply and the person
shall be considered a domestic work employee. A person who is a casual babysitter who is over 18 years of age retains the right to payment of minimum wage for all hours worked, pursuant to Wage Order
No. 15-2001 of the Industrial Welfare Commission.
   (E) Any person employed by a licensed health facility, as defined in Section 1250 of the Health and Safety Code.
   (F) Any person who is employed pursuant to a voucher issued through a regional center or who is employed by, or contracts with, an organization vendored or contracted through a regional center or the State Department of Developmental Services pursuant to the Lanterman Developmental Disabilities Services Act (Division 4.5 (commencing with Section 4500) of the Welfare and Institutions Code) or the California Early Intervention Services Act (Title 14 (commencing with Section 95000) of the Government Code) to provide services and support for persons with developmental disabilities, as defined in Section 4512 of the Welfare and Institutions Code, when any funding for those services is provided through the State Department of Developmental Services.
   (G) Any person who provides child care and who, pursuant to subdivision (d) or (f) of Section 1596.792 of the Health and Safety Code, is exempt from the licensing requirements of Chapters 3.4 (commencing with Section 1596.70), 3.5 (commencing with Section 1596.90), and 3.6 (commencing with Section 1597.30) of Division 2 of the Health and Safety Code, if the parent or guardian of the child to whom child care is provided receives child care and development services pursuant to any program authorized under the Child Care and Development Services Act (Chapter 2 (commencing with Section 8200) of Part 6 of Division 1 of Title 1 of the Education Code) or the California Work Opportunity and Responsibility to Kids Act (Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code).
   (c) (1) "Domestic work employer" means a person, including corporate officers or executives, who directly or indirectly, or through an agent or any other person, including through the services of a third-party employer, temporary service, or staffing agency or similar entity, employs or exercises control over the wages, hours, or working conditions of a domestic work employee.
   (2) "Domestic work employer" does not include any of the following:
   (A) Any person or entity that employs or exercises control over the wages, hours, or working conditions of an individual who performs domestic work services through the In-Home Supportive Services program under Article 7 (commencing with Section 12300) of Chapter 3 of Part 3 of Division 9 of, or Sections 14132.95, 14132.952, and 14132.956 of, the Welfare and Institutions Code or who is eligible for that program.
   (B) An employment agency that complies with Section 1812.5095 of the Civil Code and that operates solely to procure, offer, refer, provide, or attempt to provide work to domestic workers if the relationship between the employment agency and the domestic workers for whom the agency procures, offers, refers, provides, or attempts to provide domestic work is characterized by all of the factors listed in subdivision (b) of Section 1812.5095 of the Civil Code and Section 687.2 of the Unemployment Insurance Code.
   (C) A licensed health facility, as defined in Section 1250 of the
Health and Safety Code.
   (d) "Personal attendant" means any person employed by a private householder or by any third-party employer recognized in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. The status of personal attendant shall apply when no significant amount of work other than the foregoing is required. For purposes of this subdivision, "no significant amount of work" means work other than the foregoing did not exceed 20 percent of the total weekly hours worked.

Changes Made to Exemptions for Elementary and Secondary School Teachers in California

School teachers often work long hour, and are generally exemption from overtime pay under California law. However, public school teachers often enjoy high salaries and outstanding benefits. The same is not always true, however, for private school teachers. California law currently allows private school teachers to make as little as $800 per week (double the minimum wage) and still be required to work longer hours of unpaid overtime.

AB 2230 would suspend that earnings standard until July 1, 2017. On and after that date, the bill would prescribe a revised earnings standard for exemption from the overtime provisions described above that would require the employee to earn no less than the lowest salary offered by any school district or the equivalent of no less than 70% of the lowest schedule salary offered by the school district or county in which the private elementary or secondary institution is located, as specified.

Here's the full text of AB 2230:

The people of the State of California do enact as follows:

SECTION 1.

 Section 515.8 of the Labor Code is amended to read:
515.8.
 (a) Section 510 does not apply to an individual employed as a teacher at a private elementary or secondary academic institution in which pupils are enrolled in kindergarten or any of grades 1 to 12, inclusive.
(b) For purposes of this section, “employed as a teacher” means that the employee meets all of the following requirements:
(1) The employee is primarily engaged in the duty of imparting knowledge to pupils by teaching, instructing, or lecturing.
(2) The employee customarily and regularly exercises discretion and independent judgment in performing the duties of a teacher.
(3) On and after July 1, 2017, the employee earns the greater of the following:
(A) No less than 100 percent of the lowest salary offered by any school district to a person who is in a position that requires the person to have a valid California teaching credential and is not employed in that position pursuant to an emergency permit, intern permit, or waiver.
(B) The equivalent of no less than 70 percent of the lowest schedule salary offered by the school district or county in which the private elementary or secondary academic institution is located to a person who is in a position that requires the person to have a valid California teaching credential and is not employed in that position pursuant to an emergency permit, intern permit, or waiver.
(4) The employee has attained at least one of the following levels of professional advancement:
(A) A baccalaureate or higher degree from an accredited institution of higher education.
(B) Current compliance with the requirements established by the California Commission on Teacher Credentialing, or the equivalent certification authority in another state, for obtaining a preliminary or alternative teaching credential.
(c) This section does not apply to any tutor, teaching assistant, instructional aide, student teacher, day care provider, vocational instructor, or other similar employee.
(d) The exemption established in subdivision (a) is in addition to, and does not limit or supersede, any exemption from overtime established by a Wage Order of the Industrial Welfare Commission for persons employed in a professional capacity, and does not affect any exemption from overtime established by that commission pursuant to subdivision (a) of Section 515 for persons employed in an executive or administrative capacity.

California Farm Workers to Get Daily Overtime

AB 1066, a bill authored Assemblymember Lorena Gonzalez (D-San Diego), to provide daily overtime to California agricultural workers, has been signed into law by Governor Brown.

FARMWORKERS


Existing law sets wage, hour, meal break requirements, and other working conditions for employees and requires an employer to pay overtime wages as specified to an employee who works in excess of a workday or workweek, as defined, and imposes criminal penalties for the violation of these requirements. Existing law has exempted agricultural employees from these requirements.

AB 1066, the Phase-In Overtime for Agricultural Workers Act of 2016, removes this exemption for agricultural employees regarding hours, meal breaks, and other working conditions, and creates a schedule phases in overtime requirements for agricultural workers over the course of 4 years (from 2019 to 2022). Beginning January 1, 2022, the bill will require any work performed by a person, employed in an agricultural occupation, in excess of 12 hours in one day to be compensated at the rate of no less than twice the employee’s regular rate of pay. The bill would provide employers who employ 25 or fewer employees an additional 3 years to comply with the phasing in of these overtime requirements. The bill also authorizes the Governor to delay the implementation of these overtime pay provisions if the Governor also suspends the implementation of a scheduled state minimum wage increase. The bill would require the Department of Industrial Relations to update a specified wage order for consistency with these provisions, as specified.

Here is the full text of the new law:

The people of the State of California do enact as follows:

SECTION 1.

 Section 554 of the Labor Code is amended to read:
554.
 (a) Sections 551 and 552 do not apply to cases of emergency or to work performed in the protection of life or property from loss or destruction, or to any common carrier engaged in or connected with the movement of trains. Nothing in this chapter shall be construed to prevent an accumulation of days of rest when the nature of the employment reasonably requires that the employee work seven or more consecutive days, if in each calendar month the employee receives days of rest equivalent to one day’s rest in seven. The requirement respecting the equivalent of one day’s rest in seven shall apply, notwithstanding the other provisions of this chapter relating to collective bargaining agreements, where the employer and a labor organization representing employees of the employer have entered into a valid collective bargaining agreement respecting the hours of work of the employees, unless the agreement expressly provides otherwise.
(b) In addition to the exceptions specified in subdivision (a), the Chief of the Division of Labor Standards Enforcement may, when in his or her judgment hardship will result, exempt any employer or employees from the provisions of Sections 551 and 552.

SEC. 2.

 Chapter 6 (commencing with Section 857) is added to Part 2 of Division 2 of the Labor Code, to read:
CHAPTER  6. Agriculture
857.
 This chapter shall be known and may be cited as the Phase-In Overtime for Agricultural Workers Act of 2016.
858.
 The Legislature finds and declares all of the following:
(a) Agricultural employees engage in back-breaking work every day.
(b) Few occupations in today’s America are as physically demanding and exhausting as agricultural work.
(c) In 1938, the United States Congress enacted the federal Fair Labor Standards Act of 1938 (29 U.S.C. Sec. 201 et seq.), which excluded agricultural workers from wage protections and overtime compensation requirements.
(d) It is the intent of the Legislature to enact the Phase-In Overtime for Agricultural Workers Act of 2016 to provide any person employed in an agricultural occupation in California, as defined in Order No. 14-2001 of the Industrial Welfare Commission (revised 07-2014) with an opportunity to earn overtime compensation under the same standards as millions of other Californians.
859.
 For purposes of this chapter, “employed in an agricultural occupation” has the same meaning as in Order No.14-2001 of the Industrial Welfare Commission (revised 07-2014).
860.
 Notwithstanding any other provision of law, including Chapter 1 (commencing with Section 500):
(a) (1) Commencing January 1, 2019, except as provided in paragraph (2), any person employed in an agricultural occupation shall not be employed more than nine and one-half hours in any one workday or work in excess of 55 hours in any one workweek, unless the employee receives one and one-half times that employee’s regular rate of pay for all hours worked over nine and one-half hours in any workday or over 55 hours in any workweek.
(2) This subdivision shall apply to an employer who employs 25 or fewer employees commencing January 1, 2022.
(b) (1) Commencing January 1, 2020, except as provided in paragraph (2), any person employed in an agricultural occupation shall not be employed more than nine hours in any one workday or work in excess of 50 hours in any one workweek, unless the employee receives one and one-half times that employee’s regular rate of pay for all hours worked over nine hours in any workday or over 50 hours in any workweek.
(2) This subdivision shall apply to an employer who employs 25 or fewer employees commencing January 1, 2023.
(c) (1) Commencing January 1, 2021, except as provided in paragraph (2), any person employed in an agricultural occupation shall not be employed more than eight and one-half hours in any one workday or work in excess of 45 hours in any one workweek, unless the employee receives one and one-half times that employee’s regular rate of pay for all hours worked over eight and one-half hours in any workday or over 45 hours in any workweek.
(2) This subdivision shall apply to an employer who employs 25 or fewer employees commencing January 1, 2024.
(d) (1) Commencing January 1, 2022, except as provided in paragraph (2), any person employed in an agricultural occupation shall not be employed more than eight hours in any one workday or work in excess of 40 hours in any one workweek, unless the employee receives one and one-half times that employee’s regular rate of pay for all hours worked over eight hours in any workday or over 40 hours in any workweek.
(2) This subdivision shall apply to an employer who employs 25 or fewer employees commencing January 1, 2025.
861.
 Except as set forth in Section 860 and subdivision (a) of Section 862, all other provisions of Chapter 1 (commencing with Section 500) regarding compensation for overtime work shall apply to workers in an agricultural occupation commencing January 1, 2017.
862.
 (a) Beginning January 1, 2022, except as provided in subdivision (c), and consistent with Section 510, any work performed by a person, employed in an agricultural occupation, in excess of 12 hours in one day shall be compensated at the rate of no less than twice the employee’s regular rate of pay.
(b) Consistent with Section 861, notwithstanding subdivision (a) or Section 863, the other provisions of Section 510 shall be applicable to workers in an agricultural occupation commencing January 1, 2019.
(c) Subdivision (a) shall apply to an employer who employs 25 or fewer employees commencing January 1, 2025.
863.
 (a) Notwithstanding Section 860 or 862, the Governor may temporarily suspend scheduled phase in of the overtime requirements set forth in Section 860, or subdivision (a) of Section 862 only if the Governor suspends scheduled minimum wage increases pursuant to clause (i) of subparagraph (A) of, and subparagraph (B) of, paragraph (3) of subdivision (d) of Section 1182.12.
(b) If the Governor makes a final determination to temporarily suspend scheduled phase in of the overtime requirements set forth in Section 860 or subdivision (a) of Section 862 for the following year, all implementation dates applicable to Section 860 and subdivision (a) of Section 862 that are suspended subsequent to the September 1 final determination date, consistent with clause (i) of subparagraph (A) of, and subparagraph (B) of, paragraph (3) of subdivision (d) of Section 1182.12, shall be postponed by an additional year, but the full implementation of the overtime requirements set forth in Section 860 or subdivision (a) of Section 862 shall in no event be later than January 1, 2022. The Governor’s temporary suspension under this section shall be by proclamation.
(c) The Governor’s authority to suspend the scheduled overtime requirements under this section shall end upon the phase in of the overtime requirements contained in subdivision (d) of Section 860, the phase in of the overtime requirements contained in subdivision (c) of Section 862, or January 1, 2025, whichever occurs first.
864.
 The Department of Industrial Relations shall update Wage Order No. 14-2001 to be consistent with this chapter, except that any existing provision in Wage Order 14-2001 providing greater protections or benefits to agricultural employees shall continue in full force and effect, notwithstanding any provision of this chapter.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

California's Salaried Exempt Minimum Increases to $41,600

Now that the California minimum wage has increased to $10 per hour as of January 1, 2016, California employers must also pay more to keep exempt workers exempt. In addition to the Duties Test, California employers who classify workers as salaried exempt must meet the Salary Test. Among other things, this means that the salary must be no less than double the minimum wage for full time work.

A full-time minimum wage earner now makes $20,800 per year. Thus, a salaried exempt worker must be paid at least $41,600 annually to meet the California standards ($10 per hour x 40 hours per week x 52 weeks per year, doubled).

Failure to meet this standard can prove costly, even if an employee only works an extra 30 to 60 minutes per day. A worker who is misclassified as exempt who works an extra 45 minutes a day, at $40,000 a year, would accrue an overtime liability of $5,625 per year. Employees can reach back four years under California's statute of limitations, so that could grow to $22,500 over four years, for just one worker. Make the same mistake with a staff of 45 employees and you're looking at a seven figure liability.


California Minimum Wage is Now $10 Per Hour

Effective January 1, 2016, the minimum wage in California is $10.00 per hour.

Final199910snbl00002040a

The minimum wage applies to adults and minors, tipped and non-tipped employees in California.

If you are a sheepherder, in which case your minimum wage is a monthly salary of $1,777.98.

Employers take note: Wages paid to sheepherders may not be offset by meals or lodging provided by the employer. Instead, there are provisions in IWC Order 14-2007, Sections 10(F), (G) and (H) that apply to sheepherders with respect to monthly meal and lodging benefits required to be provided by the employer.


California Fair Pay Act Signed Into Law

SB 358 by Senator Hannah-Beth Jackson (D-Santa Barbara) – Conditions of employment: gender wage differential

Existing law regulates the payment of compensation to employees by employers and prohibits an employer from conditioning employment on requiring an employee to refrain from disclosing the amount of his or her wages, signing a waiver of the right to disclose the amount of those wages, or discriminating against an employee for making such a disclosure.

Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. Existing law establishes exceptions to that prohibition where the payment is made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex. Existing law makes it a misdemeanor for an employer or other person acting either individually or as an officer, agent, or employee of another person to pay or cause to be paid to any employee a wage less than the rate paid to an employee of the opposite sex as required by these provisions, or who reduces the wages of any employee in order to comply with these provisions.

This bill would revise that prohibition to eliminate the requirement that the wage differential be within the same establishment, and instead would prohibit an employer from paying any of its employees at wage rates less than those paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, as specified. The bill would revise and recast the exceptions to require the employer to affirmatively demonstrate that a wage differential is based upon one or more specified factors, including a seniority

system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor other than sex, as specified. The bill would also require the employer to demonstrate that each factor relied upon is applied reasonably, and that the one or more factors relied upon account for the entire differential. The bill would prohibit an employer from discharging, or in any manner discriminating or retaliating against, any employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of these provisions. The bill would authorize an employee who has been discharged or discriminated or retaliated against, in the terms and conditions of his or her employment because the employee engaged in any conduct delineated in these provisions, to recover in a civil action reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief. The bill would prohibit an employer from prohibiting an employee from disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under these provisions. The bill would also increase the duration of employer recordkeeping requirements from 2 years to 3 years. By changing the definition of a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0351-0400/sb_358_bill_20150831_enrolled.pdf

 

Walsh & Walsh, P.C.
420 Exchange, Suite 270
Irvine, California 92602-1316
https://www.walshandwalshpc.com/
http://www.facebook.com/walshandwalshpc


SB 390 Signed

SB 390 (employee wage withholdings, failure to remit) amending Labor Code § 227 concerning employee wage withholdings, has been signed by Governor Brown:

Existing law makes it a crime for an employer to fail to make agreed-upon payments to health and welfare funds, pension funds, or various benefit plans. Existing law provides that the crime be punished as a felony or a misdemeanor, as specified, if the amount unpaid exceeds $500, and as a misdemeanor, if the amount is less than $500.

This bill would make it a crime, as described above, for an employer to fail to remit withholdings from an employee’s wages that were made pursuant to state, local, or federal law. The bill would prescribe how recovered withholdings or court-imposed restitution, if any, are to be forwarded or paid. By broadening the definition of a crime, this bill would impose a state-mandated local program.

© Walsh & Walsh, P.C., wage & hour, employee wage withholdings.


SB 435 Signed

SB 435 (compensation, meal and rest or recovery periods) amending Labor Code § 226.7 concerning meal and rest periods, has been signed by Governor Brown:

Existing law prohibits an employer from requiring an employee to work during any meal or rest period mandated by an order of the Industrial Welfare Commission (IWC) and establishes penalties for an employer’s failure to provide a mandated meal or rest period.

This bill would make that prohibition applicable to a meal or rest or recovery period mandated by applicable statute or applicable regulation, standard, or order of the IWC, the Occupational Safety and Health Standards Board, or the Division of Occupational Safety and Health. The bill would exempt specified employees from the prohibition. The bill would require an employer to pay an employee, for any meal or rest or recovery period mandated by law, one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided. The bill would define “recovery period” for those purposes.

© Walsh & Walsh, P.C., wage & hour, meal periods, rest periods, recovery periods.


SB 168 Signed

SB 168 (farm labor contractors, successors, wages and penalties) has been signed by Governor Brown, adding Labor Code § 1698.9 concerning wages and penalties for farm labor contractors and their successors.

Existing law requires farm labor contractors to be licensed by the Labor Commissioner and to comply with specified employment laws applicable to farm labor contractors. Under existing law, a person who violates farm labor contractor requirements is guilty of a misdemeanor punishable by specified fines, or imprisonment in the county jail for not more than 6 months, or both.

This bill, in addition, would make a farm labor contractor successor to any predecessor farm labor contractor that owed wages or penalties to a former employee of the predecessor, whether the predecessor was a licensee or not, liable for those wages and penalties, if the successor farm labor contractor meets one or more specified criteria. By imposing a new requirement on farm labor contractor successors, the violation of which would be a crime, the bill would impose a state-mandated local program.

© Walsh & Walsh, P.C., wage & hour, penalties, farm workers


NLRB Labor Appointment Rulings Create Regulatory Uncertainty

Following a January DC Circuit opinion that found the Obama's administration's recess appointments to the NLRB unconstitutional, GOP legislators have put forth a bill that proposes to prohibit the NLRB and the Consumer Financial Protection Bureau from enforcing or implementing decisions and regulations without a confirmed board or director.

According to this Reuters story, the bill, sponsored by senators Mike Johanns, Lamar Alexander and John Cornyn, "has little chance of becoming law", but "adds to pressure on the Obama administration to reach a compromise to keep both agencies operating and determine whether it will appeal the ruling."

"Any decisions or regulations made by the people who have no right to be there are invalid," Johanns, of Nebraska, said in a statement.

Among the decisions called into question is D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 6, 2012), in which the NLRB held that mandatory arbitration agreements requiring all employment disputes to be resolved through individual arbitrations violate Section 8(a)(1) of the National Labor Relations Act because they impair employees' ability to engage in concerted action for mutual aid or protection. Several district court rulings, including some in California, have rejected the NLRB decision in D.R. Horton as inconsistent with the Supreme Court ruling in AT&T Mobility v. Concepcion (2011) 563 U.S. ___, 131 S. Ct. 1740, which held that the FAA required enforcement of an arbitration agreement that included a class action waiver.


Governor Brown Signs AB 2675

AB 2675 has been signed into law, amending Labor Code § 2751 regarding written commission agreements.

Existing law requires that whenever an employer enters into a contract of employment with an employee for services to be rendered within California, and the contemplated method of payment of the employee involves commissions, the contract must be in writing and must set forth the method by which the commissions are to be computed and paid. This bill would exempt from this requirement temporary, variable incentive payments that increase, but do not decrease, payment under the written contract.

You can read the full text of the bill here in PDF.


Governor Brown Signs AB 1855

AB 1855 has been signed into law, amending Labor Code § 2810.

Existing law prohibits a person or entity from entering into a contract or agreement for labor or services with specified types of contractors if the person or entity knows or should know that the contract or agreement does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided. AB 1855 applies these provisions to warehouse contractors, as well.

Existing law provides for a rebuttable presumption affecting the burden of proof that there has been no violation of this requirement of sufficient funding if specified conditions are met, including that the contract or agreement be in writing. The California Public Records Act requires state and local agencies to make public records available for inspection, subject to specified criteria, and with specified exceptions. AB 1855 require sthat upon the request of the Labor Commissioner, the person entering into the written agreement or contract must provide to the Labor Commissioner a copy of the provisions of the contract or agreement, and any other documentation, as provided. The bill would exempt any documents received by the Labor Commissioner pursuant to this requirement from the California Public Records Act.

You can read the full text of the bill here in PDF.


Governor Brown Signs AB 2674

AB 2674 has been signed into law, amending the recordkeeping and inspection provisions under Labor Code § 226 and reducing the violations of these provisions from a misdemeanor to an infraction.

Existing law requires that every employer, semimonthly or at the time of each payment of wages, furnish to 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 specified items. Existing law requires an employer to keep a copy of the statement and the record of deductions on file for at least 3 years at the place of employment or at a central location within the State of California. This bill would provide that the term “copy,” for purposes of these provisions, includes a duplicate of the itemized statement provided to an employee or a computer-generated record that accurately shows all of the information that existing law requires to be included in the itemized statement.

Under existing law, an employee has the right to inspect the personnel records that his or her employer maintains relating to the employee’s performance or to any grievance concerning the employee. This bill would require an employer to maintain personnel records for a specified period of time and to provide a current or former employee, or his or her representative, an opportunity to inspect and receive a copy of those records within a specified period of time, except during the pendency of a lawsuit filed by the employee or former employer relating to a personnel matter. The bill would provide that an employer is not required to comply with more than 50 requests for a copy of the above-described records filed by a representative or representatives of employees in one calendar month. The bill would provide that the above provisions shall not apply with respect to an employee covered by a valid collective bargaining agreement if the agreement provides, among other things, for a procedure for inspection and copying of personnel records. In the event an employer violates these provisions, the bill would permit a current or former employee or the Labor Commissioner to recover a penalty of $750 from the employer, and would further permit a current or former employee to obtain injunctive relief and attorney’s fees.

Under existing law, an employer who fails to permit an employee to inspect the employee’s personnel records is guilty of a misdemeanor punishable by a fine or imprisonment, as specified. This bill would, instead, provide that a violation of the above provisions requiring that personnel records be made available for inspection constitutes an infraction.

You can read the full text of the bill here in PDF.


Governor Brown Signs AB 2103

AB 2103 has been signed into law, boosting California overtime laws that were weakened by the Court of Appeal in Arechiga v. Dolores Press, Inc. (2011) 192 Cal.App.4th 567. Arechiga disregarded the language of Labor Code § 515(d) to validate private agreements for a fixed salary, including regular and overtime pay, for non-exempt employees. AB 2103 clarifies that "payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee's regular, nonovertime hours, notwithstanding any private agreement to the contrary."

You can read the full text of the bill here in PDF.

You can read the Arechiga v. Dolores Press, Inc. opinion here.


Governor Brown Signs SB 1255

SB 1255 has been signed into law. Labor Code § 226 has teeth again, as SB 1255 restores and clarifies the itemized wage statement requirements of the Labor Code after several court decisions weakened the statute's worker protections. This bill provides that an employee is deemed to suffer injury if the employer fails to provide accurate and complete information and the employee cannot promptly and easily determine from the wage statement alone all of the information required by the statute: the amount of the gross or net wages paid to the employee during the pay period, deductions made from the gross wages to determine the net wages paid to the employee during the pay period, the name and address of the employer or legal entity that secured the services of the employer, and the name of the employee and only the last 4 digits of the social security number or employee identification number.

You can read the full text of the bill here in PDF.


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.


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.


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.


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.
_____________________________

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:
_____________________________

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).
_____________________________

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.
_____________________________

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.
_____________________________

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.
_____________________________

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.
_____________________________

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.
_____________________________


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.


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.


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.


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
180 Howard Street
San Francisco, CA 94105
415-538-2116
415-538-2171 Fax


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....