The Fair Employment and Housing Act (“FEHA”) makes it an unlawful employment practice to discriminate, harass, or retaliate against employees based on a protected class. FEHA also requires that employers take all reasonable steps to prevent and remedy illegal discrimination and harassment in the workplace. The FEHA regulations were recently amended, effective April 1, 2016, and clarify that taking all reasonable steps includes an affirmative duty to develop a written harassment, discrimination, and retaliation prevention policy that lists the protected classes. Some of the protected classes need little explanation (race, religious creed, national origin), but others, like “sex,” “gender,” “gender identity,” and “gender expression,” are not so straight-forward.
There is a difference between sex, which is determined at birth (e.g., male or female), and gender, which is an individual’s sense of self, but the distinction is blurred by the legal definition of the terms under FEHA. FEHA defines “sex” to include pregnancy, childbirth, breastfeeding, and medical conditions relating to those conditions. FEHA also defines “sex” to include “gender,” including “gender identity” and “gender expression.” Consequently, discrimination based on gender, gender identity or gender expression would also constitute discrimination based on sex. On the other hand, discrimination based on sex may or may not also constitute discrimination based on gender, gender identity, or gender expression.
Gender identity and gender expression are different, too. Under FEHA “gender identity” means “a person’s identification as male, female, a gender different from the person’s sex at birth, or transgender.” “Gender expression” means “a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.” In other words, an employee’s gender expression may or may not match the employee’s gender identity. For example, an employee whose birth sex is male and identifies as female may present at work as female or as male. How that employee presents at work (as male or as female) does not affect the employee’s gender identity as female.
The new regulations also define “transgender,” which means “a person whose gender identity differs from the person’s sex at birth.” The employee in the example, therefore, would be a transgender employee because the employee’s gender identity (female) is different from the employee’s birth sex (male). Additionally, keep in mind that sexual orientation (e.g., heterosexuality, homosexuality and bisexuality), which is another protected class under FEHA, is not connected to an employee’s gender. This means that employees whose gender differs from their birth sex may be heterosexual, homosexual, or bisexual just like employees whose gender identity is the same as their birth sex.
At a minimum, employers should ensure that they have written harassment, discrimination, and retaliation prevention policies. Employers should also educate their employees about the differences between the various protected classes, such as sex, gender, gender identity, and gender expression. In addition to written harassment, discrimination, and retaliation prevention policies, employers might also consider stand-alone gender policies that answer common questions concerning gender non-conforming employees, and that provide guidance concerning the procedures to change names on employment records, the pronouns to use to refer to employees, the use of restrooms, employee privacy, dress codes and health benefits. Employers may also consider workplace transition plans to guide them when employees transition from one gender to another in the workplace.
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To help get the year started on the right foot, we would like to share with you the attached 2016 Employment Law calendar. We hope you find the information helpful as you face various employment issues in 2016.
Please take note that the California minimum wage increased to $10 an hour, effective January 1, 2016, so you will want to reevaluate the salaries of your exempt employees in light of the increased State minimum wage. Keep in mind that some cities and counties may have adopted higher minimum wages than the State minimum, so you may also need to adjust pay rates accordingly to comply with the requirements of the city and/or county in which your employees are actually working.
Click on the link below to download your copy of the 2016 Labor & Employment Calendar!
A number of employment-related bills came out of the 2015 California Legislative session. The following bills represent just a few summary highlights from the session.
Fair Pay Act
SB 358
The California Chamber of Commerce supported Senate Bill 358 (Senator Hannah-Beth Jackson), a bill to promote gender wage equity. The Fair Pay Act addresses two main issues – salary disclosure and how determinations of gender pay disparities are viewed.
Pursuant to the Act, employees cannot be punished for either revealing or discussing wages with other employees. The more significant change relates to the components used to determine whether a pay differential between employees of the “opposite sex” is justified or if it constitutes gender wage discrimination. While wage differentials based on seniority, merit or production remain acceptable, the “bona fide factor other than sex” exception has been tightened. The law now requires a comparison of persons doing “substantially similar” work, which means that different job titles and different work sites are less relevant in the evaluation of wage differentials. This will require many employers to reevaluate how they determine compensation throughout their company.
The onus will be on the employer to show there is a bona fide business necessity reason, other than sex, for paying a person of the opposite sex differently for substantially similar work. The employee then has the ability to void the employer’s justification if the employee can show that an alternative business practice exists where a sex-based wage differential would not exist.
Time off
AB 304
The California mandatory paid sick leave law (the Healthy Workplaces, Healthy Families Act of 2014) went into effect on January 1, 2015. Accrual under the law was delayed, and did not begin until July 1, 2015. AB 304 (Gonzalez) was an urgency measure amending the sick leave law and changing various requirements, including accrual methods. The amendment provides clarification regarding which workers are covered, how the paid time off is accrued, and protections for employers that already provided paid sick leave before January 1, 2015.
AB 987
Employers generally must make reasonable accommodations for the religious beliefs and/or any disability of their employees pursuant to the Fair Employment and Housing Act (FEHA). AB 987 (Levine) codifies that employers may not discriminate or retaliate against employees for making a request for an accommodation due to religion or disability, even if the request is not granted.
SB 579
SB 579 (Jackson) requires that employers with 25 or more employees (at the same location) allow an employee time off (up to 8 hours in any calendar month) to find, enroll or re-enroll their child in school or day care, or to participate in activities of the school or day care, or to deal with a child care or school emergency.
Wage and Hour
AB 970
AB 970 (Nazarian) expands the Labor Commissioner’s authority by authorizing the Labor Commissioner to investigate and, upon a request from the local entity, to enforce local laws regarding overtime hours or minimum wage provisions (e.g., city minimum wage ordinances setting the minimum wage for workers in that city higher than the State minimum wage) and to issue citations and penalties for violations, except when the local entity has already issued a citation for the same violation.
AB 1506
Employee wage statements must contain certain information under California law. Statements that fail to include all the required information have subjected employers to increasingly frequent lawsuits by employees under the Private Attorney General Act (PAGA). PAGA permits employees to pursue such violations on behalf of the State. AB 1506 (R. Hernandez) amends PAGA to allow employers to correct wage statements that do not contain the inclusive dates of the pay period and/or the name and address of the employer, which are statutorily required to appear on the wage statements. In order to fix the omission(s), employers must provide three years’ worth of fully-compliant wage statements for each pay period.
SB 327
SB 327 (E. Hernandez) responds to a recent appellate court decision and clarifies that health care employee meal period waiver provisions in existing Industrial Welfare Commission wage orders have been valid and enforceable since October 1, 2000 (e.g., health care employees can waive 1 of their 2 meal periods when their shifts are longer than 12 hours).
AB 622
E-Verify is an internet-based system for employers to check the employment authorization status of their employees. AB 622 (R. Hernandez) prohibits employers from using E-Verify in a manner inconsistent with federal law and creates financial civil penalties for employers who maliciously use E-Verify against their workforce.
Shannon Smith-Crowley is an attorney and has been a registered lobbyist in California for over 15 years. On behalf of her clients, Shannon attained a series of legislative successes. She helped develop California law that requires maternity coverage in all health insurance policies, well before the enactment of similar provisions in the Affordable Care Act. She worked on bills creating California’s public umbilical cord blood banking program, which provides unique material for lifesaving stem cell transplants and groundbreaking biomedical research. She contributed to bills allowing HIV+ men to safely create families using Assisted Reproductive Technologies. Most recently she played a pivotal role in developing the Modern Family Act, protecting the rights of intended parents, donors and surrogates.
The U.S. Department of Labor Wage and Hour Division (“WHD”) issued official guidance on how to determine whether a worker is an employee or an independent contractor under the federal Fair Labor Standards Act (“FLSA”). The WHD is the federal agency that administers and enforces the FLSA. A six-factor economic realities test is used to make this determination, including whether:
the work performed is an integral part of the employer’s business;
the worker’s managerial skill affects the worker’s opportunity for profit or loss;
the worker is retained on a permanent or indefinite basis;
the worker’s investment is relatively minor as compared to the employer’s investment;
the worker exercises business skills, judgment, and initiative in the work performed; and
the worker has control over meaningful aspects of the work performed.
Although each of these factors must be considered when making a classification determination, the guidance indicates that some factors are more weighty than others, including the “integral to the business” prong of the test. The guidance also combines the economic realities test with the WHD’s broad interpretation of employment, which includes persons who businesses “suffer or permit to work.” As indicated in the guidance, economic dependence indicates that the worker is suffered or permitted to work, and therefore, the worker is likely to be seen as an employee rather than an independent contractor. The WHD concluded that, in fact, “most workers are employees under the FLSA’s broad definitions.”
Ultimately, companies that use independent contractors should reexamine their relationships and employment practices with workers to determine whether they are appropriately classified. Of course, the WHD’s guidance only addresses worker classification under the FLSA. Different from the FLSA test, the multi-factor Borello economic realities test commonly used under California’s labor laws emphasizes the right to control rather than the economic dependence between the worker and the alleged employer. Business owners must be aware that different tests are used under other state and federal laws to determine whether workers have been misclassified, and the outcome may not be the same.
DID YOU KNOW... An employee may not be able to prove age discrimination under the federal Age Discrimination in Employment Act if the only evidence of discrimination is an age difference of less than ten years. France v. Johnson (9th Cir. 2015) 795 F.3d 1170, 1174 (age difference of 10 years or more is presumptively substantial while a lesser age difference is presumptively insubstantial)
Section 4980H of the Internal Revenue Code (and accompanying regulations promulgated by the Internal Revenue Service) addresses the employer excise tax as it relates to the ACA. The IRS has stated that “employers may not avoid meeting the threshold through the use of staffing agencies.” For purposes of counting an “employee” under the excise tax calculation, the IRS has stated that an “employee” means a worker who is an employee of the employer under the common law test, which is often the case when an employer contracts with a staffing agency to provide temporary staff.
Calculating the Excise Tax Penalty
There are two prongs to the excise tax penalty.
First, a penalty is assessed if an employer fails to offer its full-time employees (including “common law employees”) and their dependents an opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan.
Second, a penalty is assessed if an employer offers minimum essential coverage to its full-time employees (including “common law employees”) and their dependents, but one or more of its full-time employees enrolls in an employer sponsored health plan for which an applicable premium tax credit or cost sharing reduction is allowed or paid (i.e., employer offered health coverage that was not minimally sufficient or was unaffordable).
Health Care Enrollment Process
An employer is required under the regulations to provide its employees with an “effective opportunity” to elect or decline to enroll in the coverage at least once during the plan year. An “effective opportunity” is based on all of the relevant facts and circumstances, including whether an employee is covered by an employment staffing agency that contracts with employer for staffing services.
Consequently, if a staffing agency makes an offer of coverage to an employee who is performing services for the employer, then the employer is treated as making the offer of coverage only if it pays a fee to the staffing firm that is higher than the fee it would have paid if the employee was not offered coverage by the staffing agency firm. The employer should request an invoice that identifies the employees assigned to the employer and the costs associated with those employees of the staffing agency that are covered by the staffing agency for health care. Therefore, the employer should confirm that the invoice it pays identifies:
each employee as part-time or full-time,
for those employees who are full-time, that the employee was offered health coverage by the staffing agency, and
the specific costs in the invoice that are associated with health care provided by the staffing agency and paid by employer, and
for those full-time employees who did not select health coverage, the reason for not selecting coverage (e.g., Medicare, Medicaid, Tricare, spouse coverage etc.).
The fee the employer pays to the staffing agency employees who select health coverage must be greater than the fee paid for by employees who were offered coverage, but declined. In essence, the fees paid by the employer to the staffing agency should identify a specific cost that is associated with health coverage provided by a staffing agency for those full-time employees assigned to the employer.
In addition to the employee, an employer is required to offer coverage to each full-time employee’s “dependent.” For purposes of the ACA, “dependents” are defined as the employee’s children under the age of 26. To clarify, “dependent” under the ACA does not include an employee’s spouse. Thus, an employer is not required to offer coverage to an employee’s spouse for purpose of compliance with the employer shared responsibility provisions.
Suggested Strategies for an Employer
The employer’s HR Department should carefully evaluate the staffing company’s credentials that it contracts with to support its operations. The staffing agency must have a plan in place to pay its full time employees’ health care that is both “affordable” and “covers essential health benefits.” In addition, the contract entered into between the parties and the monthly invoice must identify the amount associated with providing health coverage. For example, the invoice should state that the fee associated with health coverage is $1.00 per hour if that is the cost to the staffing agency to provide health coverage to a full-time employee.
Also, for those staffing agencies that the employer retains to complete tasks generally within 90 days or who traditionally work less than 30 hours per week (i.e., services provided while employees are on vacation such as a receptionist, secretaries, and assistants) should be distinguished from the staffing agencies that the employer uses for longer term assignments. While an employer may use multiple staffing agencies for various tasks, the focus need only be those staffing agencies the employer tends to use for longer and more detailed assignments that take longer than 30 hours per week over a 90-day period.
In conclusion, the employer may avoid providing health coverage to its employees who are placed via a staffing agency if:
(1) the employee works less than 30 hours per week at the employer,
(2) the employee is temporary in that he or she works less than 90 days for the employer, and
(3) the staffing agency offers or pays health coverage for all of its staff, including staff assigned to the employer so long as such payment is noted in the invoice as an additional charge.
Last year we reported on the California Supreme Court’s decision that class action waivers in employment contracts are enforceable in California notwithstanding unconscionability or State public policy to the contrary when the Federal Arbitration Act (“FAA”) applies. [1] This past month, one of the California courts of appeal revisited the issue in a circumstance in which the FAA did not apply, and came to the contrary conclusion; determining that a court may refuse to enforce a class action waiver.
In Garrido v. Air Liquide Industrial U.S. LP, 2015 WL 6451011 (Cal. Ct. App., Oct. 26, 2015, B254490), the employee and employer entered into an employment agreement containing an arbitration clause that prohibited class arbitration. After the employee was fired, he filed a class action lawsuit alleging, among other claims, wage and hour violations of the California Labor Code. The employer moved to compel arbitration and to enforce the prohibition on class arbitration. The trial court denied the employer’s motion to compel arbitration, and the employer appealed. The court of appeal determined that the federal FAA did not apply, the California Arbitration Act (“CAA”) did, and a court may refuse to enforce class action waivers on grounds of unconscionability or public policy when the CAA applies. The court of appeal ultimately upheld invalidation of the class arbitration waiver because it posed a significant hurdle to the vindication of the employees’ statutory wage and hour rights.
Employers will want to determine whether their arbitration agreements are subject to the FAA, which could affect the enforceability of class action waivers in their arbitration agreements, like in Garrido, and reduce the benefit of arbitration to them. The applicability of the FAA may also affect the enforceability of the arbitration agreement itself. For example, if the FAA does not apply, then employees may still be able to bring lawsuits for the collection of due and unpaid wages in court, notwithstanding purported waivers of their individual claims in a private arbitration agreement. (Lab. Code § 229.)
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[1] Iskanian v. CLS Transp. Los Angeles, LLC, 2014 WL 2808963 (June 23, 2014).
DID YOU KNOW…
Employers generally must pay their employees at least the State minimum wage (currently $9/hour). Depending on where the employees work, employers may need to pay a minimum wage that is higher than the State minimum. Sacramento recently passed an ordinance increasing its minimum wage to $12.50/hour by 2020.
California Labor Code section 1102.5 (Section 1102.5) protects employees in reporting information that they have reasonable cause to believe discloses a violation of the law, and prohibits employers from retaliating against such employees. The anti-retaliation prohibition applies even when the information reported by employees does not arise out of the employer’s business, and even if the information relates to private matters. As one employer recently learned, violating Section 1102.5 can be costly.
In Cardenas v. Fanaian, 2015 WL 5734835 (Cal. Ct. App., Oct. 1, 2015, F069305), a dental hygienist left her ring on the breakroom table. It was not on the table when she returned, and she eventually came to suspect that it had been stolen. The employee filed a police report, and the police came to the dental office on multiple occasions to investigate. After the second time that the police visited, the employer fired the employee because the situation was negatively affecting the workplace. The former employee sued for retaliation under Section 1102.5, and was awarded $117,768 in damages related to her termination, including lost earnings. The employer appealed, and argued that Section 1102.5 did not protect the employee because her report to the police was an entirely private matter (e.g., so that the employee could either get the ring back or file an insurance claim) unrelated to employer wrongdoing. The court of appeal rejected the employer’s argument, and determined that an employee is protected in reporting information concerning a violation of the law. Period. The court of appeal, therefore, upheld the award because theft is illegal, and the employee was terminated for reporting what she reasonably believed was a theft.
This decision is a reminder of the costly mistake of retaliating against employees who engage in activity protected under California law. Employers need to make sure that the grounds for taking any adverse employment actions against their employees are lawful, and should scrutinize the basis for their proposed conduct before implementing any course of action. This is particularly true when employees have made complaints near in time to any proposed adverse employment action.
DID YOU KNOW…
Employees can bring representative actions under the Private Attorneys General Act (“PAGA”) on behalf of themselves and current or former employees for violations of California Labor Code provisions that provide for civil penalties. When an aggrieved employee brings a PAGA claim, that claim cannot be divided into an individual claim and a representative claim because PAGA claims are representative actions, brought by the employee as the agent for the State. As a result, the employee cannot be compelled to arbitrate any portion of the PAGA claim. Williams v. Superior Court, 237 Cal.App.4th 642, 649 (2015).
Title VII of the Civil Rights Act of 1964 (“Title VII”) prohibits discrimination on the basis of sex. The U. S. Equal Employment Opportunity Commission (“EEOC”) is the federal agency charged with enforcing Title VII’s prohibition of employment discrimination on the basis of sex, and it recently determined that prohibited sex discrimination under Title VII includes discrimination based on “sexual orientation.”
In Complainant v. Foxx, E.E.O.C. Appeal No. 0120133080 (July 16, 2015), the employee alleged that he was not promoted because he was a gay man. The EEOC determined that the employee successfully stated a claim for sex discrimination under Title VII. In its ruling, the EEOC determined that sexual orientation discrimination is a form of sex discrimination for three reasons. First, because “sexual orientation” cannot be defined without referring to sex, sexual orientation discrimination is sex discrimination “because it necessarily entails treating an employee less favorably because of the employee’s sex.” Second, sexual orientation discrimination constitutes sex discrimination because it is a form of associational discrimination-treating an employee differently because the employee associates with a person of the same sex. Finally, sexual orientation discrimination is sex discrimination since it is based on gender stereotypes. The idea that a man should only be attracted to women and vice versa is the ultimate gender stereotype.
Federal courts generally defer to EEOC decisions, but do not have to follow them. A number of federal courts of appeal, before the EEOC’s decision, determined that Title VII does not encompass discrimination based on sexual orientation. Regardless of whether federal courts follow the EEOC’s decision, employment discrimination based on sexual orientation is specifically prohibited under California’s Fair Employment and Housing Act. The EEOC’s recent decision presents an opportunity for employers – especially employers who operate in other states besides California – to review their discrimination policies and practices to ensure compliance with the state and federal discrimination laws in each state where they operate, particularly with respect to sex and gender discrimination (e.g., gender, gender identity, gender expression, and sexual orientation).
DID YOU KNOW…
Employers who fail to provide meal and rest periods are required to pay premium pay (an additional hour of pay) for each workday that their employees miss meal or rest periods. Their employees are automatically entitled to premium pay without having to request it, and the employer’s failure to pay such premium pay may constitute an unfair business practice. Safeway, Inc. v. Superior Court of Los Angeles County, 238 Cal.App.4th 1138 (2015) (upholding class certification for violation of Unfair Competition Law based on employer’s failure to pay premium pay when due).
These doing business in California references for employers discuss recent advancements in the
State’s labor and employment laws and how those laws affect their business.
We assembled the Firm’s monthly labor and employment newsletters in easy-to-access e-books, now available for you to download.
Employment agreements commonly include a provision designating the place or forum where any employment related-claims must be litigated. Ordinarily, the party opposing a forum selection clause has the burden to demonstrate that the clause should not be enforced. However, the burden is reversed when the underlying claims are statutory rights that may not be waived, such as California Labor Code provisions concerning employee compensation. In such cases, the party seeking to enforce the forum selection clause must demonstrate that the forum selection clause will not diminish the statutory rights; otherwise, the clause will not be enforced.
In Verdugo v. Alliantgroup, L.P., 237 Cal.App.4th 141 (2015), the employer was headquartered in Harris County, Texas, and had regional offices in other states, including California. The employer hired an employee to work at its California office, and required her to sign an employment agreement. The employment agreement included a forum selection clause designating Harris County, Texas as the forum for litigation. The employee filed a lawsuit in California based on various provisions of the California Labor Code concerning proper pay, meal and rest breaks, and wage statements that the Legislature declared cannot be waived by private agreement. The employer moved to stay the action based on the forum selection clause. The employer did not demonstrate that Texas would have applied California law, or, that Texas provided the same or greater rights as California. As a result, the California court of appeal did not stay the action and the lawsuit continued in California.
Employers with California employees should review their forum selection clauses because forum selection clauses that violate California’s public policy on employee compensation will not be enforced. Employers desiring to litigate employment related claims outside California should determine the likelihood that the clauses will be enforced. Provisions designating California law as the applicable law (choice of law provision) may make it more likely that the forum selection clause will be enforced, provided that the forum state would enforce the provision and apply California law. Or, employers may just need to consider alternative forums for claims by their California employees.
DID YOU KNOW…
Generally, prevailing parties in civil litigation are entitled to an award of their litigation costs. Not necessarily so with respect to claims under the Fair Employment and Housing Act, or FEHA. In FEHA cases, the California Supreme Court recently ruled that prevailing employees should ordinarily receive their costs (and attorney fees), but prevailing employers should not be awarded costs (or attorney fees) unless “the action was objectively without foundation when brought, or the [employee] continued to litigate after it clearly became so.” Williams v. Chino Valley Independent Fire Dist., 61 Cal.4th 97, 115 (2015).
The National Labor Relations Board (“NLRB”) enforces the federal National Labor Relations Act (NLRA), which applies to most private employers. Periodically, the General Counsel of the NLRB releases reports to clarify issues that arise in the workplace. One of the more recent reports discusses the lawfulness of employee rules found in a number of different employee handbooks. Section 7 of the NLRA protects the rights of all employees, not merely unionized employees, to communicate with one another or third parties at or away from work regarding terms and conditions of employment. Section 8 of the Act makes it unlawful for employers to interfere with, restrain or coerce employees in the exercise of their Section 7 rights.
Many of the examples of unacceptable employee handbook language were provisions containing broad, general language that would encompass Section 7 rights, whether or not that was the employer’s intention. Section 7 allows employees to be critical of their employer and management. Consequently, a handbook provision requiring employees to “[b]e respectful of others and the Company” would violate Section 7 because the rule would prohibit employees from criticizing working conditions and labor policies. Similarly, employers cannot institute general prohibitions on “negative” or “inappropriate” discussions among employees, but could more narrowly ban harassment of employees or prohibit the “use of racial slurs, derogatory comments, or insults” by employees.
Policies requiring employees to direct or refer all inquiries from the media or government to a particular person in the company would also violate Section 7 because employees have a right to speak about employment matters and labor concerns. Employers have a right to present their official position, but employees also have a right to communicate with the media, government and other third parties on their own behalf.
A handbook provision instituting a general prohibition on the use of company logos without permission would also run afoul because Section 7 protects non-commercial use of company logos by employees on protest materials, such as picket signs or leaflets. Section 7 would not protect employees in disparaging the employer’s product or customers, though.
The NLRB appears to be taking a greater interest in non-unionized workplaces under Section 7, and non-unionized employers should take note. Ultimately, whether a provision will be permissible will depend on how employees would interpret the clause, and context matters. Clauses that would otherwise be impermissible may be fine if employees would understand them to be limited in scope so as not to interfere with their Section 7 activity. Employers should review their policies (including email and social media policies), arbitration agreements, and handbooks to ensure compliance with Section 7 and the NLRA’s recent guidance. Otherwise, they could face an unfair labor practice charge prompting an investigation and an administrative action to remedy any unfair labor practice.
DID YOU KNOW…
The U.S. Supreme Court recently ruled that an employer may not discriminate against a job applicant’s religious beliefs during the hiring process under federal law (Title VII), even if the employer does not have actual knowledge of the need for a religious accommodation. E.E.O.C. v. Abercrombie & Fitch Stores, Inc. (2015) 135 S.Ct. 2028, 2031 (failure to hire Muslim applicant who wore a headscarf because the headscarf conflicted with company dress code).
* Kathryne is currently a law student at The University of the Pacific, McGeorge School of Law and was hand-selected for a 2015 summer clerkship with Wilke Fleury. She is also a member of McGeorge’s Nationally Ranked Mock Trial Team and is President of the McGeorge Women’s Caucus.
The California Healthy Workplaces/Healthy Families Act of 2014 has been operative since January 1, 2015 even though employees have not yet begun to accrue sick leave pursuant to the law. Employees will only begin to accrue sick leave pursuant to the law on July 1, 2015.
The California Healthy Workplaces/Healthy Families Act of 2014 requires that employers, subject to very limited exceptions, provide paid sick leave to their employees. The new law covers exempt and non-exempt (including part-time, per diem, and temporary) employees. Employees who have worked in the State for 30 or more days within a year from the start date of their employment will accrue paid sick leave at the rate of one hour for every 30 hours worked, and may use their accumulated leave beginning on the 90th day of employment.
Paid Sick Leave law went into effect on January 1
Since January 1, California employers have been obligated to post the Labor Commissioner’s Healthy Workplaces/Healthy Families Act poster in a conspicuous location in the workplace. The information about the new law is also contained in the revised Notice to Employee, which is the Labor Commissioner’s form for newly hired non-exempt employees that contains employment-related information, such as pay rates and entitlement to sick leave. Employers have been using this revised form for non-exempt employees who are hired after January 1, 2015. As to non-exempt employees hired pre-January 1, 2015, employers already provided written notice of the sick leave law information on a revised Notice to Employee or in another writing, or will provide such notice by July 8, 2015, depending on date of implementation of their policy or the new law’s requirements.
Employees begin to accrue sick leave pursuant to the Paid Sick Leave law on July 1
Starting July 1, employees will accrue paid sick leave either pursuant to the Healthy Workplaces/Healthy Families Act only or pursuant to employer sick leave policies. Employees who simply accrue paid sick pursuant to the minimum requirements of the new law will accrue approximately 8 days (69 hours) of paid sick leave each calendar year, with accrued, unused paid sick leave carrying over to the following year.
Conversely, employees may accrue paid sick leave pursuant to employer sick leave or paid time off (PTO) policies. Employers, through sick leave or PTO policies, may cap the accrual and use of paid sick leave available to their employees pursuant to the Healthy Workplaces/Healthy Families Act. For example, company paid sick leave policies may limit full-time employees to using 3 days (24 hours) of paid sick leave in each year of employment. Accrued but unused paid sick leave must carry over from year to year unless employers simply advance the full 3 paid sick days at the beginning of each year. Employers may cap total accrual of paid sick leave at 6 days (48 hours).
Before employers simply fall back on their written paid sick leave or PTO policies, though, they should ensure that those policies satisfy the accrual, carryover, and use requirements of the Healthy Workplaces/Healthy Families Act. In other words, employer policies must meet the minimum requirements of the new paid sick leave law, and if they do, then employers do not have to provide additional sick leave. If they do not, employers must either modify their polices or allow their employees to accrue paid sick leave pursuant to the new law. Of course, employer policies may also exceed the minimum legal requirements of the new law.
Finally, employers should also be aware that the new law imposes record keeping requirements concerning sick leave, including requiring employers to provide written notice of the amount of sick leave available on the employee’s itemized wage statement or in another writing, and to maintain records concerning sick leave for 3 years.
The California Fair Employment and Housing Act (“FEHA”) protects employees from employment discrimination based on mental disability. “Mental disability” is broadly defined under FEHA, and includes mental disorders and conditions that limit major life activities, like working. This is broader than the federal Americans with Disabilities Act, which requires that mental impairments “substantially limit” major life activities. Still, not all mental impairments rise to the level of a “mental disability” under FEHA.
In Higgins-Williams, No. C073677, 2015 WL 3451590 (Cal. Ct. App. May 26, 2015), an employee was diagnosed by her physician as suffering from anxiety and stress due to her normal interactions with her supervisor and the human resources department. The employer was aware of the diagnosis and granted the employee leaves of absence, including leave under the FEHA as a disability accommodation. The employer eventually terminated the employee when she failed to provide information as to when she could return to work or that additional leave would effectuate her return, and the employee sued alleging various causes of action, including disability discrimination. The trial court granted the employer’s motion for summary judgment on all causes of action and the court of appeals affirmed, largely because an inability to work under a particular supervisor because of anxiety and stress related to the supervisor’s standard oversight of job performance is not a mental disability recognized under the FEHA.
This case reaffirms that while FEHA’s definition of “mental disability” is broad, it is not limitless. Other impairments that are not considered mental disabilities include “sexual behavior disorders, compulsive gambling, kleptomania, pyromania, or psychoactive substance use disorders resulting from the current unlawful use of controlled substances or other drugs.” (Gov. Code section 12926(j)(5).) This case is also a good reminder for employers that a leave of absence may be a reasonable accommodation. However, an employer does not have to wait indefinitely for an employee’s return.
DID YOU KNOW…
It is unlawful for an employer to willfully misclassify an individual as an independent contractor. (Lab. Code § 226.8.) This prohibition applies to the employer making the misclassification, and to any joint employer who is aware that the co-employer has willfully misclassified their joint employees. Noe v. Superior Court, No. B259570, 2015 WL 3463006, at 1 (Cal. Ct. App. June 1, 2015).
Employers frequently require employees to agree to arbitrate employment-related disputes as a condition of employment, or of continued employment. The California Arbitration Act (CAA) supplies default procedures for arbitration. Arbitration can proceed in accordance with other procedures, but only if employers can demonstrate that their employees agreed to them.
In Cruise v. Kroger Co., 233 Cal.App.4th 390 (2015), an employee sued her employer in state court following her termination, and the employer moved to compel arbitration. The employee initialed an arbitration provision in the employment application when she applied for employment. That provision incorporated the employer’s arbitration policy, which was found in the employee handbook. The trial court denied the employer’s motion to compel arbitration, and the court of appeals reversed. The court of appeals determined that the provision in the employment application sufficiently expressed an agreement to arbitrate employment disputes. But, arbitration would proceed pursuant to the rules of the CAA, not the procedures in the arbitration policy, because the employer failed to establish that the employee agreed to be governed by those procedures. The arbitration policy was undated, unsigned, not attached to the employment application and was not given to the employee at the time she applied for employment.
Agreements to arbitrate employment related disputes do not have to be long but they must express an agreement to arbitrate. They may even be enforced when they are only signed by the employee, for example, when they are part of an employment application on the employer’s company letterhead and the arbitration provision declares the employer’s intent to be bound by it. Employers who desire procedures for arbitration that diverge from the CAA must ensure that the agreement to proceed by such procedures is clear and lawful, and should require their employees to affirmatively indicate their agreement, such as through their signature on any documents that are part of the agreement to arbitrate.
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Certain wage orders allow employees in the health care industry to voluntarily waive one of their two meal periods on shifts longer than 8 hours. However, they cannot waive their second meal period if their shift is longer than 12 hours. Gerard v. Orange Coast Memorial Center, 234 Cal.App.4th 285 (2015).
The California Healthy Workplaces/Healthy Families Act of 2014 has been operative since January 1, 2015 even though employees have not yet begun to accrue sick leave pursuant to the law. Employees will only begin to accrue sick leave pursuant to the law on July 1, 2015.
The California Healthy Workplaces/Healthy Families Act of 2014 requires that employers, subject to very limited exceptions, provide paid sick leave to their employees. The new law covers exempt and non-exempt (including part-time, per diem, and temporary) employees. Employees who have worked in the State for 30 or more days within a year from the start date of their employment will accrue paid sick leave at the rate of one hour for every 30 hours worked, and may use their accumulated leave beginning on the 90th day of employment.
Paid Sick Leave law went into effect on January 1
Since January 1, California employers have been obligated to post the Labor Commissioner’s Healthy Workplaces/Healthy Families Act poster in a conspicuous location in the workplace. The information about the new law is also contained in the revised Notice to Employee, which is the Labor Commissioner’s form for newly hired non-exempt employees that contains employment-related information, such as pay rates and entitlement to sick leave. Employers have been using this revised form for non-exempt employees who are hired after January 1, 2015. As to non-exempt employees hired pre-January 1, 2015, employers already provided written notice of the sick leave law information on a revised Notice to Employee or in another writing, or will provide such notice by July 8, 2015, depending on date of implementation of their policy or the new law’s requirements.
Employees begin to accrue sick leave pursuant to the Paid Sick Leave law on July 1
Starting July 1, employees will accrue paid sick leave either pursuant to the Healthy Workplaces/Healthy Families Act only or pursuant to employer sick leave policies. Employees who simply accrue paid sick pursuant to the minimum requirements of the new law will accrue approximately 8 days (69 hours) of paid sick leave each calendar year, with accrued, unused paid sick leave carrying over to the following year.
Conversely, employees may accrue paid sick leave pursuant to employer sick leave or paid time off (PTO) policies. Employers, through sick leave or PTO policies, may cap the accrual and use of paid sick leave available to their employees pursuant to the Healthy Workplaces/Healthy Families Act. For example, company paid sick leave policies may limit full-time employees to using 3 days (24 hours) of paid sick leave in each year of employment. Accrued but unused paid sick leave must carry over from year to year unless employers simply advance the full 3 paid sick days at the beginning of each year. Employers may cap total accrual of paid sick leave at 6 days (48 hours).
Before employers simply fall back on their written paid sick leave or PTO policies, though, they should ensure that those policies satisfy the accrual, carryover, and use requirements of the Healthy Workplaces/Healthy Families Act. In other words, employer policies must meet the minimum requirements of the new paid sick leave law, and if they do, then employers do not have to provide additional sick leave. If they do not, employers must either modify their polices or allow their employees to accrue paid sick leave pursuant to the new law. Of course, employer policies may also exceed the minimum legal requirements of the new law.
Finally, employers should also be aware that the new law imposes record keeping requirements concerning sick leave, including requiring employers to provide written notice of the amount of sick leave available on the employee’s itemized wage statement or in another writing, and to maintain records concerning sick leave for 3 years.
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