California Labor & Employment Law Blog

By Marianne C. Koepf

Employers are soon to be prohibited from discriminating against individuals on the basis of their genetic information. 

Last week, the U.S. House of Representatives passed a bill on a vote of 414-1, called the Genetic Information Nondiscrimination Act (GINA), which prohibits employers from using genetic data in hiring, firing, and other workplace decisions affecting employment.  GINA also requires employers to maintain genetic information strictly confidential in compliance with the ADA and HIPAA.  The bill also forbids insurance companies from using an individual's genetic information to deny or limit coverage, or establish different rates.  The same bill unanimously passed the Senate on April 24.  

Genetic tests are now regularly used to determine an individual's predisposition for diseases such as cystic fibrosis, breast and prostate cancer, diabetes and Lou Gehrig's disease.  As genetic testing has become more prevalent in society, the U.S. Congress has enacted GINA to address widespread concern that such information would be misused, especially in the health care and employment arenas.   

President George W. Bush is expected to sign the bill.  The employer provisions of the bill will take effect in November 2009, after the U.S. Department of Labor has had an opportunity to enact implementing regulations.

By Alison L. Tsao

On April 15, 2008, the California Senate Labor and Industrial Relations Committee unanimously approved SB 1539 as amended to “declare the intent of the Legislature to enact legislation to address issues related to meal periods in employment.”   SB 1539, authored by Senator Ron Calderon (D-Montebello), sponsored and supported by the California Chamber of Commerce, California Restaurant Association, and approximately 40 trade and professional organizations, was introduced to provide a comprehensive solution to compliance with and enforcement of California’s meal period laws.

SB 1539 has generated bipartisan support from Committee members who have expressed concern over the inflexibility and ambiguity of meal period laws in California that have spawned a tidal wave of expensive litigation and liability for California employers.  As a result, Committee members have recognized the need for clarity and greater flexibility to meet the needs of both employers and employees.  SB 1539, as originally drafted, would have provided for the following changes to existing meal period law (among others):  (1) allowing the employee to waive either the first or second meal period if the employee is otherwise entitled to two meal periods in a day; (2) expanding conditions for employees to take on-duty meal periods; (3) allowing collective bargaining agreements to override provisions of the meal period rules; and (4) defining “providing an employee with” a meal period to mean “giving the employee an opportunity to take” a meal period.  The Committee amended SB 1539 to delete all of the substantive changes to the meal period laws, and amended the bill to simply declare the intent of the Legislature to enact legislation to address issues related to meal periods in employment.  While the meal period laws have not been changed, the Legislature’s declaration of intent is a good sign that lawmakers recognize the need for change and will continue to have further discussions to try to find consensus on a solution that contains adequate protections for employers and employees.  SB 1539 has been referred to the Senate Appropriations Committee.  Employers and employees are encouraged to contact the Senate Appropriations Committee to voice their opinions regarding SB 1539 to continue to build the momentum for change in meal period laws.  We will continue to monitor this legislation and apprise you of any developments.

Posted by Connor J. Moyle

San Francisco Assemblywoman Fiona Ma recently introduced a bill that, if passed, would make California the first state in the nation to force employers to provide sick leave benefits to their employees. 

Under Assembly Bill 2716 (“AB 2716”) (which is modeled after the San Francisco Paid Sick Leave Ordinance that has been discussed in numerous entries on our blog), any employee who works in California for 7 or more days in a calendar year – even those not necessarily based in California – would be entitled to paid sick time.  Employees would accrue sick leave at a rate of at least one hour for every thirty hours worked, and would be eligible to use accrued sick time beginning on their 90th calendar day of employment.  Small business employers (defined as those with 10 or fewer employees during at least 20 calendar weeks of the current or preceding year) could limit an employee’s use of paid sick time to 40 hours or 5 days in each calendar year.  All other employers would be allowed to cap usage at 72 hours or nine days per year. 

AB 2716 also contains provisions prohibiting retaliation against employees for requesting and/or using paid sick leave.  Much like the San Francisco law, the new bill imposes posting, notice, and recordkeeping requirements on employers.  Note that under AB 2716, employees may use their paid sick time for the diagnosis, care or treatment of health conditions of the employee or an employee's family member, or for leave related to domestic violence or sexual assault.  Unused sick leave may be carried over from year to year.

If passed, this bill would be extremely harmful to California employers, placing yet another burden on them that does not exist in the majority of other states, which is likely to help accelerate the exodus of California employers that have the ability to move to more business-friendly states.  The timing of this bill is particularly puzzling as many California employers, particularly small employers, are struggling to survive in today's difficult economic market.  Because this bill was only recently introduced, it is difficult to determine if it will pass through the Legislature, and whether its form and requirements will change along the way.  Please contact us directly if you have any questions regarding AB 2716 and its potential impact on your business.  We also urge you to make your lobbyists aware of this legislation so that your views can be heard. 

Earlier this week President Bush signed into law HR 4986, the National Defense Authorization Act for 2008.  Section 585 of this statute amends the Family and Medical Leave Act ("FMLA") in a number of significant ways.

Effective immediately, a spouse, child, parent or next of kin of a member of the Armed Forces (including a member of the National Guard or Reserves) may take up to 26 work-weeks of leave to care for the soldier if he is "undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness."  A "serious injury or illness" is defined as one that was incurred in the line of duty and may render the soldier medically unfit to perform the duties of his office, grade, rank or rating.  The U.S. Department of Labor ("DOL") is expected to issue comprehensive guidance regarding the rights and responsibilities of parties under this new legislation in the not-too-distant future.

The new legislation also permits an employee to take FMLA leave for any "qualifying exigency" – as that term will be defined by the DOL in forthcoming regulations – arising out of the fact that the employee's spouse, child or parent is on active duty, or has been notified of an impending call or order to active duty, in the Armed Forces.  Note that this provision of the statute is not effective until the DOL issues final regulations defining "qualifying exigency."  Although the DOL has stated that it is still preparing these regulations, it has encouraged employers to provide this type of leave to qualifying employees in the interim, even in the absence of such guidance.

Please contact us directly if you have any questions regarding steps you must take to comply with HR 4986.

Posted by Connor J. Moyle

As employers prepare to distribute W-2 and 1099 forms to their workers, they should keep the requirements imposed by Assembly Bill 650 in mind.  This bill, which went into effect on January 1, 2008, requires California employers to provide notice to all employees of their potential right to an Earned Income Tax Credit (“EITC”) on their federal tax returns.  The notice must be hand-delivered or mailed within one week before or after, or at the same time as, the employees’ annual wage summaries are provided, and should include the following language:

NOTICE TO EMPLOYEES

Based on your annual earnings, you may be eligible to receive the earned income tax credit from the federal government.  The earned income tax credit is a refundable federal income tax credit for low-income working individuals and families.  The earned income tax credit has no effect on certain welfare benefits.  In most cases, earned income tax credit payments will not be used to determine eligibility for Medicaid, supplemental security income, food stamps, low-income housing or most temporary assistance for needy families payments.  Even if you do not owe federal taxes, you must file a tax return to receive the earned income tax credit.  Be sure to fill out the earned income tax credit form in the federal income tax return booklet.  For information regarding your eligibility to receive the earned income tax credit, including information on how to obtain the IRS Notice 797 or Form W-5, or any other necessary forms and instructions, contact the Internal Revenue Service at 1-800-829-3676 or through its Web site at www.irs.gov.

This notice must be provided to all employees (meaning any person who is covered by his employer's unemployment insurance pursuant to the Unemployment Insurance Code) regardless of whether they actually qualify for the EITC.  Employers should also note that they may not satisfy the requirements of Assembly Bill 650 by posting a notice on an employee bulletin board or by delivering the notices through interoffice mail.  The bill also requires employers, upon request by the employee, to process an employee’s IRS Form W-5 for advance EITC payments. 

Please contact us directly if you have any questions regarding steps you must take to comply with Assembly Bill 650.

Posted by Nancy G. Berner

New Year's Day also brought with it minimum wage increases in California.  As of January 1, 2008, employees in California must be paid no less than $8.00 per hour. However, employees working in San Francisco must be paid at least $9.36 per hour. New posters, advising employees of these change, are available at: http://www.sfgov.org/site/uploadedfiles/olse/mwo/2008_MWO_Poster.pdf and http://www.dir.ca.gov/IWC/Minwage2007.pdf. 

Mark S. Spring, our Firm Managing Partner, was the featured guest expert for the most recent "In the Know" podcast series.  In this podcast, Mr. Spring outlines all of the key developments in California employment law for 2008 and provides some suggestions on how California employers can best ensure compliance.  Mr. Spring also discusses some recent trends in the law and what to expect for 2008.  Click here to listen to the podcast.

Effective January 1, 2008, the Internal Revenue Service is increasing the standard mileage rate used by many employers to reimburse their employees for business use of a car (which includes vans, pickups and panel trucks) – the rate will increase to 50.5 cents per mile, up from 48.5 cents in 2007.  Click here to view the IRS press release on this topic.  Note that employers who reimburse mileage at the IRS rate are presumed by California's Labor Commissioner to have appropriately reimbursed their employees for expenses incurred in the use of their vehicles.

Please contact us directly to discuss any questions you may have regarding this issue.

In addition to the new laws going into effect on January 1, 2008 that were described in our blog entry of November 20th, employers need to be aware of the following:

--Assembly Bill 650:     Effective January 1, 2008, this law requires California employers (meaning those subject to and required to provide unemployment insurance to their employees under the Unemployment Insurance Code) to provide a new notice to employees along with their annual wage summaries (i.e., 1099 or W-2 forms). The new written notice provides information about employees' possible right to take an Earned Income Tax Credit on their federal tax returns, and must be hand-delivered or mailed to employees within one week before or after, or at the same time, that the annual wage summaries are provided. Note that employers may not satisfy this obligation by posting the notice on an employee bulletin board or delivering it through interoffice mail, although those methods may be used to supplement the hand-delivered or mailed notice. Click here to view the language that must be included in this notice.

--Senate Bill 1618:     Pursuant to California Labor Code section 226, California employers are required to provide certain information on employees' pay stubs, including the employees' names and social security numbers. This law, enacted in 2004, mandates that effective January 1, 2008, only the last four digits of an employee's social security number, or an employee identification number other than a social security number, be shown on the paystubs.  Click here to view amended Labor Code section 226, which describes this requirement in detail. 

The Sacramento City Council voted yesterday to make the city's trial living wage pilot program, enacted in 2003, permanent.  Under this program, companies that provide certain services to or for the city must pay workers a minimum wage of $10 per hour, adjusted annually for inflation. 

According to the Living Wage Ordinance ("LWO"), this minimum wage applies only to contracts for non-professional services including, but not limited to, tree trimming services, repair services for motor vehicles and office equipment, vehicle towing and security services.  The LWO does not apply to incidental services (i.e., delivery, installation or maintenance provided under contracts for the purchase or lease of equipment, supplies or other personal property); contracts that are subject to city, state or federal prevailing-wage requirements; contracts for professional services (i.e., services provided by engineers, architects, auditors, banks, consultants, actuaries and attorneys); and contracts with certain non-profit corporations. 

Note that the LWO is only applicable to contracts that provide compensation from the city of $100,000 or more (individually or in the aggregate) and to contractors with at least 25 employees; it is also applicable to subcontractors providing services under a covered contract if the amount of the subcontract is at least 25% of the contract amount. 

Please contact us directly to discuss any questions you have regarding the effect the LWO may have on your workplace. 

Posted by Nancy G. Berner and Connor J. Moyle

Once again, the past year provided fertile ground for the growth of additional legislation impacting California’s employers.  The following list highlights these developments and provides links to sites with additional details.

     a.  Leave for Soldier’s Partner:  Assembly Bill 392 requires employers with 25+ employees to grant unpaid leave to spouses or domestic partners of combatants on leave from deployment in a combat zone. 

     b.  Minimum Wage Goes Up:  Effective January 1, 2008, California’s minimum wage increases to $8.00/hour; San Francisco employers should note that the City's minimum wage will increase to $9.36/hour.

     c.  Minimum Wage for Exempt Computer Professionals Goes Down:  Effective January 1, 2008, Senate Bill 929 reduces the minimum hourly wage for computer professionals to not less than $36.00 per hour ($74,880.00 per year).  This is a reduction from the previous version of the statute, which placed the minimum hourly wage at $49.77 per hour and will allow greater application of this exemption.  The DLSE anticipates that it will continue to adjust this pay rate every October.

     d.  Use of Hands-Free Devices While Driving:  Note that effective July 1, 2008, Senate Bill 1613 requires drivers to use a hands-free device when using a cell phone while driving.  Employers should implement policies in accord with this new provision.

     e.  Existing Medical Privacy Laws Extended:  Assembly Bill 1298 includes certain medical and health insurance information as triggers for notification in the case of unauthorized access. 

     f.  Sexual Harassment Prevention Training:  Employers who have been making a “good faith” effort to provide the required sexual harassment prevention training every two years must now refer to specific requirements to ensure that they are in compliance.  See our prior blog entry on this topic for additional information.

     g.  San Francisco Paid Sick Leave:  Any person or company employing a person in San Francisco will be required to provide paid sick leave.  Click here for San Francisco’s answers to frequently asked questions, and here to review our prior blog entry on this topic.

     h.  San Francisco Health Care Security Ordinance:  If the current challenge by the Golden Gate Restaurant Association does not result in a stay of this legislation, effective January 1, 2008, medium and large employers in San Francisco will be required to spend a minimum amount per hour on employee health care.  Click here for an overview of the requirements.

     i.  HIPPA Extension:  California’s Health Insurance Portability and Accountability Implementation Act of 2001 has been extended through 2010 by Assembly Bill 1302.

     j.  Work-Week for Pharmacists:  Senate Bill 812 modifies the Labor Code to create an alternative work week schedule for pharmacists.  In practice, this means that pharmacists’ schedules need no longer provide no less than two consecutive days off in a given work-week.

     k.  Whistleblower Protection:  The Health and Safety Code has been modified by Assembly Bill 632 to add whistleblower protection to doctors who complain to government agencies of unsafe patient conditions in healthcare facilities.

     l.  Workers’ Compensation and Disability:  Assembly Bill 338 addresses employee injuries occurring on or after April 19, 2004 so that, effective January 1, 2008, Labor Code section 4656 extends the time period over which 104 weeks of aggregate disability payments may be collected from a two year period from the date of injury to five years after the date of injury.  (Labor Code section 4656 sets certain limits on the maximum number of compensable weeks disability benefits may be claimed under California’s workers compensation laws and the maximum time period (in years) over which those benefits may be claimed.  These limits are different for injuries occurring on different dates.) 

     m.  Crack Down on Workers Compensation “Deadbeats”:  Senate Bill 869 authorizes the Labor Commissioner to identify employers who are not providing workers’ compensation insurance for their employees, and post the information to a website.  Expect the Labor Commissioner to begin more aggressive efforts in cracking down on employers who do not have proper workers’ compensation coverage in place, as well as on those employers who improperly misclassify employees as independent contractors.

     n.  EEOC Revises Age Discrimination Regulations:  The EEOC has made explicit that the ADEA prohibits only age discrimination against employees that are older than their co-employees.  Thus, favoring an older individual over a younger individual, based on age, is not an ADEA violation, even if the younger individual is at least 40 years old.

     o.  2007 Civil Rights Act:  California law includes 51 provisions prohibiting discrimination against members of protected classes, but the list of protected classes varies from statute to statute.  Assembly Bill 14 amends the existing nondiscriminatory provisions to be consistent with the Unruh Civil Rights Act (Civil Code section 51, et seq.) and Government Code section 11135.  In addition to adding consistency, AB 14 automatically updates other non-discriminatory provisions whenever either the Unruh Civil Rights Act or Government Code section 11135 modify their lists of protected classes.

Posted by Mark S. Spring

Yesterday, the House of Representatives in Washington D.C. passed the Employment Non-discrimination Act, a bill that provides protections against discrimination in the workplace for gay men, lesbians and bisexuals that are similar to the federal protections already in place for older workers, minorities and disabled workers under the federal ADEA, Title VII and Americans With Disabilities Act.  For those interested in the politics of this event, 35 Republicans joined 200 Democrats voting for the bill, while 25 Democrats voted against the bill.  The overall vote was 235-84. 

While this is big news in today's newspapers, it probably will have little impact in California for two reasons:

1.         Although this bill will also likely pass through the Senate, most expect President Bush to veto the measure and there are not sufficient votes to override such a veto; and,

2.         Even if it became law, California's Fair Employment and Housing Act already offers virtually all the same protections as this bill and is actually much broader, offering similar protections to any individual discriminated against based on being transgender or based in any way on their gender identity (see 2004 amendments - AB 196). 

Thus, while the path of this bill may have some interesting political ramifications and could influence how gay voters cast their ballots in 2008, for California employers it will have little practical workplace impact no matter whether it is enacted, defeated, or vetoed.

Governor Schwarzenegger has vetoed a number of employment-related bills, many of which would have imposed additional financial burdens on California employers.  Among the most significant are Assembly Bill 8 (which, among other things, would have require affected employers to either make certain minimum health care expenditures or contribute to a statewide pool for health care coverage benefits); Assembly Bill 504 (which would have forced employers convicted of fraud, misrepresentation or misconduct related to a lock-out to make restitution to affected employees for lost wages and benefits); and Senate Bill 622 (which would have penalized employers for the "willful misclassification" of independent contractors).

Please contact us directly to discuss any questions relating to the effect the Governor's actions may have on your workplace.

Recent legislation signed by Governor Schwarzenegger creates new rights for the spouses of deployed soldiers.  Specifically, Assembly Bill 392 requires employers of 25 or more employees to grant up to 10 days of unpaid leave to qualified employees (meaning those who work an average of 20 or more hours per week for the employer and who are married to members of the U.S. armed forces deployed during a period of military conflict to an area designated as a combat theater or zone, or members of the National Guard or reserves deployed during a period of military conflict).  Employees are eligible to take this time off only during "qualified leave periods," defined as periods during which the soldier-spouses are on leave from deployment.  Employers may not retaliate against employees for requesting or taking the leave provided by this new statute, which goes into effect immediately.

Please contact us directly to discuss any questions relating to the effect this new law may have on your workplace.

Governor Schwarzenegger is currently reviewing AB 537, a bill that would substantially expand the class of employees eligible to take leave under the California Family Rights Act (“CFRA”). 

CFRA requires employers with 50 or more employees to provide covered employees with up to 12 weeks of protected unpaid leave during any 12-month period 1) to bond with a child born to, adopted by, or placed for foster care with the employee, 2) to attend to the employee's own serious health condition, or 3) to care for the employee’s parent, spouse or child who has a serious health condition.  At the conclusion of such a leave of absence, CFRA requires that an employer provide the employee a guarantee of employment in the same or comparable position. 

If enacted, AB 537 would expand CFRA in two significant ways.  First, CFRA would no longer be limited to employees caring for children under the age of 18 or adult children who are dependents.  Under the new law, caring for an adult child with a serious health condition would constitute a valid reason for requesting CFRA leave.  Second, the list of family members on whose behalf an employee may use CFRA leave would also be expanded.  Specifically, under the new legislation, employees would be entitled to also take leave to care for a grandparent, sibling, grandchild, parent-in-law or domestic partner with a serious health condition. 

These amendments to CFRA have the potential to significantly increase costs for California employers by expanding the class of employees eligible to take protected leave.  Governor Schwarzenegger has until October 14th to decide whether to sign AB 537; however, there are both strong supporters and opponents of the bill, so it is uncertain at this time whether the Governor will sign the legislation into law.  In the interim, please contact us directly to discuss any specific concerns regarding the impact of AB 537 on your business.

Posted by Nancy G. Berner

United States District Court Judge Charles R. Breyer has extended a temporary restraining order that prevents the Department of Homeland Security from implementing a rule requiring employers to fire employees after they receive notices from the Social Security Administration ("SSA") of discrepancies between the employees’ names and social security numbers (so-called “no match” letters).  According to the rule, if an employer cannot resolve such a mismatch within 90 days, it is required to fire the employee or risk prosecution for employing illegal immigrants. 

The rule – originally scheduled to go into effect on September 14, 2007 – was challenged by a coalition of immigration and labor groups (including the American Civil Liberties Union, the AFL-CIO and the United States Chamber of Commerce), which claimed that the SSA's records are filled with errors that could lead to numerous legal workers, including American citizens, being unfairly fired.  The coalition initially obtained a temporary restraining order on August 31^st; after concluding that there was no immediate harm to the government, but a “potentially enormous burden on the employer,” Judge Breyer extended that restraining order for 10 additional days.  A final ruling will be issued within 10 days to determine whether or not the previously enacted rules will be implemented.

Please contact us directly to discuss any questions relating to the effect this ruling may have on your workplace.

Posted by Nancy G. Berner

The California Assembly adjourned the 2007 session without voting on Assembly Bill 1711, a bill that proposes sweeping changes to the Labor Code provisions regulating meal and rest break requirements imposed on California employers.  The Labor Code amendments were proposed by Assembly Member Lloyd Levine on the last day members were permitted to make amendments, and we anticipate that Assembly Member Levine’s proposal will be debated and considered when the Legislature reconvenes in January.  Given the controversial issues addressed in this Assembly Bill, it is likely that other proposals will also be considered in the next legislative session.

Posted by Nancy G. Berner

Last week, California Assembly Member Lloyd Levine proposed broad changes to sections of the California Labor Code regulating, among other rules, the meal and rest break requirements imposed on the state’s employers as part of AB 1711.  The bill’s most important provisions are summarized below. 

Meal Break Timing and On Duty Meal Periods

The proposed legislation requires that the meal period shall be completed before the end of the sixth hour of work.  The current interpretation is that the meal period must be commenced before the end of the fifth hour, so this bill would provide greater flexibility in the scheduling of meal breaks if enacted.

The bill also contains significant modifications to Labor Code section 512(b), regulating provision of an on-duty meal period.  Current regulation leaves employers to guess when an on-duty meal period is permitted, and prudent employers generally guess “very rarely” based on prior opinion letters issued by the Division of Labor Standards Enforcement interpreting the on-duty meal break provisions. 

For years, the Social Security Administration (“SSA”) has been sending “No-Match Letters” to employers who had a significant number of employees whose social security numbers (“SSN”) did not match their personal information.  The SSA, however, provided unclear guidance for responding to the letters, and little consequence appeared to befall those employers who ignored them. 

Last year, the U.S. Immigration Customs Enforcement, a legacy of the disbanded INS, changed all that.  It announced the use of no-match letters to target employers in high-profile immigration raids, including the April 2006 raid of IFCO Systems that led to the arrests of thousands of undocumented workers and numerous current and former IFCO Executives.  In June 2006, the Department of Homeland Security followed-up the IFCO raids with proposed regulations regarding responding to no-match letters.  The final version of those regulations was announced on August 10, 2007 and published on August 15th.  In sum, employers who do not comply with the regulations will be considered to have “constructive notice” of the status of those unauthorized workers who were subjects of no-match letters and whose employment eligibility the employer failed to re-verify.  Click here to review the regulations in their entirety.

In addition to announcing the final regulations, the Department of Homeland Security also announced that it would increase civil penalties by approximately 25% and expand criminal investigations of those employers who knowingly hire unauthorized workers.  Employers therefore now face the potential of significant civil penalties and criminal sanctions for ignoring no-match letters. 

What should employers do?  Following is a brief summary of the steps employers should take after receiving a no-match letter:

San Francisco's Office of Labor Standards Enforcement recently finalized its regulations relating to implementation of the City's Health Care Security Ordinance ("HCSO").  As previously discussed, the HCSO requires covered employers to make health care expenditures for their covered employees.  In 2008, covered employees include any person who has been employed for at least 90 days and who performs at least 10 hours of work per week within the geographic boundaries of the City and County of San Francisco; effective 1/1/09, the hourly requirement is reduced from 10 to 8 hours per week.  Affected employers may purchase health insurance coverage for their covered employees, make payments to the City for the benefit of their covered employees, or make the required health care expenditure in a variety of other manners.

Significantly, employers should note that recent amendments to the HCSO changed the operative date of the employer spending requirement (previously set for July 2007) to January 1, 2008 for employers with 50 or more employees, and to April 1, 2008 for employers with 20 – 49 employees.

For specific questions regarding employer obligations relating to the implementation of the HCSO, please contact us directly.

Earlier today the Senate essentially thwarted the passage of the Employee Free Choice Act of 2007 (the "Act") with a final vote of 51 – 48 against moving the Act to the Senate floor for debate (60 votes were needed to ensure that the Act could overcome a threatened filibuster by Republican senators).

As discussed in a previous entry on this blog, the Act – which was largely opposed by business organizations and employers – had three major components: The first would have outlawed secret ballot elections by employees who were deciding whether or not to be represented by a labor union, instead allowing unions to obtain signed authorization cards from employees through which they could simply agree to labor representation.  The Act would also have instituted new mediation and arbitration processes for first-contract disputes.  Additionally, the Act would have increased penalties against employers for various labor law violations, requiring payment of three times the amount of wages lost by employees and imposing civil fines of up to $20,000 per violation.

For specific questions regarding the implications of the Senate's vote, please contact us directly.

The Employee Free Choice Act of 2007 (the "Act") is currently wielding its way through the Senate after having passed the House of Representatives.  The Act's stated purpose is to "amend the National Labor Relations Act to establish an efficient system to enable employees to form, join, or assist labor organizations and to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes."  As is evident from this preamble, because of the subject areas touched on the Act will potentially affect the overwhelming majority of American employees who are not currently members of a union.

Specifically, the Act has three main components.  The first would outlaw secret ballot elections by employees who are deciding whether or not to be represented by a labor union, instead allowing unions to obtain signed authorization cards from employees through which they could simply agree to labor representation.  The Act would also institute new mediation and arbitration processes for first-contract disputes.  Additionally, the Act would increase penalties against employers for various labor law violations, requiring payment of three times the amount of wages lost by employees and imposing civil fines of up to $20,000 per violation.

For specific questions regarding the Act's applicability to your workplace, please contact us directly.

Posted by Jennifer Barrera

Ensuring health and safety in the workplace is California’s Occupational Safety and Health Administration’s primary goal (Cal-OSHA). In order to achieve this goal, Cal-OSHA has certain powers including the ability to conduct random inspections, issue citations, and assess penalties against an employer it finds has jeopardized the health and safety of the workplace. To avoid any citations or penalties, California employers must comply with all safety regulations, including the following key safety requirements:

1.Maintain a written Injury and Illness Prevention Program (“IIPP”) and make sure the IIPP is distributed to all employees or displayed in a location for employees to easily view/access. If there are hazardous chemicals in the workplace, then the IIPP must contain a written hazard communication program as well, unless the employer already has a separate written hazard communication program.

The IIPP cannot be general. Rather, it must address the specific safety issues in the particular workplace, and contain a discussion regarding at least the following elements: responsibility, compliance, communication, hazard assessment, accident/exposure investigation, hazard correction, training and instruction, and recordkeeping. A common safety hazard for all restaurants that should be addressed in an IIPP is the threat of violence, such as a robbery, and an emergency action plan in case of an emergency. For more information regarding how to develop an IIPP, including a written hazard communication program, refer to Cal-OSHA’s publications that are located at http://www.dir.ca.gov/dosh/PubOrder.asp.

2.Inspect the workplace and identify all potential hazards employees may face while on the job. Use color codes, posters, labels, or other signs to warn employees of any potential hazards. Make sure to notify and train all employees regarding these potential hazards and document such training.

3.Establish or update standard safety operating procedures in the workplace so that employees can follow those procedures to maintain health and safety. Make sure employees are following these operating procedures, including always using the appropriate tools and properly operating equipment.

4.Immediately remove or correct any hazardous condition in the workplace that may result in a serious injury to an employee. Cal-OSHA assesses penalties against an employer based, in part, upon the severity of the safety violation, such as an employer’s failure to abate a known hazardous condition.

5.Immediately notify (within 8 hours) the nearest Cal-OSHA office of any serious injury or fatality that occurs on the job. A serious injury is considered an injury that requires the employee to be hospitalized for more than 24 hours other than for medical observation, or an injury in which part of the body is lost or permanently disfigured. To find the nearest Cal-OSHA office, refer to Cal-OSHA’s website at http://www.dir.ca.gov/dosh/DistrictOffices.htm.

6.If you have 11 or more employees at anytime during the calendar year, maintain accurate records of any work-related injuries or illness, including Cal-OSHA Form 300, Log of Work-Related Injuries and Illnesses, and Form 300A, a Summary of the Work-Related Injuries and Illnesses for the year. Employers must post the Summary for employees to review. Employees can also request to view the Log of Work-Related Injuries and Illnesses.

The above safety requirements only address a portion of the regulations employers are required to follow in order to maintain a safe and healthful workplace. If you have any questions or concerns about any health or safety issue in the workplace, Cal-OSHA provides employers with free consultation services and will even assist the employer in identifying hazards in the workplace. For more information regarding such assistance, you can access Cal-OSHA’s website at http://www.dir.ca.gov/dosh/consultation.html.

Posted by Nancy Berner

On Thursday, February 8, the Rules Committee of the San Francisco Board of Supervisors is scheduled to hear the proposed modification to the Paid Sick Leave Ordinance that would delay payment of required paid sick leave until June 6, 2007, and prevent awards of penalties until the same date. The Chair of the Committee intends to entertain a motion to send the proposed modification to the Board of Supervisors as a Committee Report for consideration on February 13, 2007. It appears likely that the proposed transition period will be adopted.

Again, employers are reminded that this proposal does not allow any transition period for the requirement to record hours worked and the number of paid sick leave hours accrued. The record keeping aspect of the Ordinance, detailed in earlier articles, has been in effect since February 5. In short, the primary impact of the proposed "transition period" is to push back the date when an employee can use the paid time off, and to provide employers with a bit of "breathing room" by suspending penalties during the transition. The employer's responsibility to keep the records, however, is unchanged.

On January 31, Los Angeles City Council unanimously rescinded the ordinance that would have applied the city’s living wage ordinance to a select few hotels located on Century Boulevard near LAX under terms of a compromise with city business leaders. However, many questions still exist as to the final terms of the compromise, which includes the drafting of a new ordinance in attempts to assuage some of the local businesses’ primary concerns with the rescinded ordinance. However, business leaders are just realizing that the terms agreed to under a new ordinance do nothing to protect businesses against the concerns they had under the rescinded ordinance.

First, the new ordinance increases the workers’ pay at the dozen or so hotels targeted by the original ordinance to $9.50 an hour upon the passage of the ordinance, and on July 1, 2007, this amount increases to $10.64. Click here for an article in the Los Angeles Business Journal.

Second, the compromise proposes a system for determining whether the living wage could expand in the future based upon the economic effects of such an expansion. The economic effects would be determined by two economists, one selected by the chamber of commerce, and the other selected by the Los Angeles County of Federation of Labor. The primary concern for Los Angeles businesses was that the original rational for extending the living wage ordinance to the hotels on Century Boulevard could be used to extend the living wage to all employers operating in Los Angeles. It appears that the compromise does nothing, or very little, to actually prevent this slippery slope.

Los Angeles business leaders still need to be vigilant as there will be many more battles in this ongoing effort to increase the minimum wage of workers in Los Angeles under the guise of a living wage.

Posted by Nancy Berner

On January 30, 2007, a member of San Francisco's Board of Supervisors introduced legislation to allow a transition period in the implementation of the Paid Sick Leave Ordinance. Specifically, Supervisor Elsbernd introduced the following modification to the Paid Sick Leave Ordinance:

Ordinance adding Section 12W.17 to the Administrative Code to establish 120-day Transition Period (from February 5 through June 5, 2007) to implement Paid Sick Leave Ordinance, by providing that (1) an employer may delay payment of required paid sick leave until June 6, 2007, and (2) administrative penalties, compensatory costs to the City, liquidated damages, and attorneys' fees may not be awarded for a failure to pay required sick leave during the Transition Period.

This new modification has been assigned to the Rules Committee. While waiting to see if the modification is accepted by the Rules Committee, employers should be sure to comply with the record keeping requirements of the Paid Sick Leave Ordinance. If this proposal is accepted, employers will have the option of delaying provision of the accrued time off until June 6, 2007, but must record the time accrued during the transition period.

Posted by Nancy Berner

On Tuesday, January 30, the Office of Administrative Law ("OAL") informed the Fair Employment Housing Commission ("FEHC") that it would not approve the regulations submitted by FEHC on December 14, 2006 regarding the requirements of AB 1825, the existing law that requires California employers with 50 or more employees to provide sexual harassment training to all supervisory employees every two years. The OAL disapproved the regulations as lacking sufficient clarity and because of procedural mistakes made by FEHC in propounding the regulations. Under the California Administrative Procedures Act (Gov. Code 11349.4) the agency has 120 days to correct the errors and resubmit the regulations to OAL for further review.

From a practical point of view, this is unlikely to have a significant impact on clients. The proposed regulations contain a form of grandfather clause saying, in effect, that any business that has made a good-faith effort to comply with the statute as of the effective date of the regulation (whenever that turns out to be) will be deemed to be in compliance with the regulation. Clients who are familiar with the requirements of regulation, and can document their efforts at compliance will have little to worry about.

On January 31, 2007, the Office of Labor Standards Enforcement (OLSE) posted a list of frequently asked questions about San Francisco’s Paid Sick Leave Ordinance which takes effect on Monday, February 5, 2007.

The OLSE’s frequently asked questions information attempts to provide guidance to the many questions employers have about the ordinance, but still does not resolve the uncertainty about many other issues. Nevertheless, the FAQ’s illustrate the increased burden employers face in attempting to comply with the law and should be read by any employer conducting business in San Francisco.

Here are some excepts from the OLSE’s web-site:

Q: If an employer is based outside of San Francisco but has employees who perform work in the city, do the employees accrue paid sick leave for hours worked in San Francisco?
A: Yes. All employees who perform work in San Francisco, including on a part-time or temporary basis, accrue paid sick leave for those hours worked in the city, regardless of where their employer is located.

Q: Do employees accrue paid sick leave for hours worked outside of the city?
A: No. Under the Ordinance, employees accrue paid sick leave only for those hours worked within San Francisco.

Q: Does the Ordinance cover undocumented employees?
A: Yes. All employees who work in San Francisco – whether or not they are legally authorized to work in the United States – are covered by the law. OLSE will process an employee’s claim without regard to his or her immigration status. Employees filing a claim with OLSE will not be questioned about their immigration status.

Q: Can an employer require employees to use paid sick leave while on family medical leave under state or federal law?
A: This question involves the interpretation of the Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA). OLSE has no jurisdiction over enforcement of either the FMLA or the CFRA. OLSE recommends that employers and employees consult with the Federal Department of Labor (www.dol.gov) regarding FMLA issues and with the California Department of Fair Employment and Housing regarding CFRA issues (www.dfeh.ca.gov). In addition, employers and employees may wish to review administrative regulations implementing the FMLA (29 Code of Federal Regulations, Section 825.207) and CFRA (California Administrative Code, Title 2, Section 7297.5)

The OLSE’s answers to the frequently asked questions can be viewed here in their entirety.

Posted by Nancy Berner

What It Is And What Employers Need To Do

On February 5, 2007, San Francisco will become the first city in the country to require that employers offer paid sick leave to their employees. As with so many 'firsts,' this mandate leaves many questions unanswered while companies scramble to understand both what the new law requires, and how they can meet those requirements.

What Does The Paid Sick Leave Ordinance Say?
In brief, the Ordinance requires employers with employees who work in San Francisco, either full-time, part-time or on a temporary basis, to provide them with paid sick time, accrued at a rate of one hour of sick time for every thirty hours worked. Note that a covered employee is one who works in San Francisco, regardless of the location of the employer. For example, a San Diego based company with a branch office in San Francisco will be required to meet the requirements of the Ordinance for its San Francisco-based employees. Accrual begins on February 5 for those employees who began work for their current employer on or before that date. For those hired after February 5, accrual begins 90 days after the start of employment. Accrual is 'capped' at 72 hours for large businesses (those with 10 or more employees) and at 40 hours for small businesses (those with fewer than 10 employees).

Paid sick leave does not expire annually and the cap is absolute rather than annual. So an employee who ends the year with 72 paid sick leave hours begins the next year with the same number, and does not accrue additional hours beyond the 72 already accumulated. Employers are not required to pay employees for unused time. Once the employee has accrued time, the time can be applied to cover illness of either the employee, a family member (broadly defined to include grandparents, grandchildren and domestic partners), or a "designated person" selected by employees who are unmarried and are not part of a registered domestic partnership.

The Ordinance requires employers to post a notice of the Ordinance, and to record the amount of sick time accumulated and used by each employee and retain the records for four years. The required poster is available from the OLSE here.  The Ordinance may be enforced by the City of San Francisco, or by a civil lawsuit brought by an aggrieved employee.

Additional detailed information covering the requirements of the Ordinance is available here and here. 

What Does The Paid Sick Leave Ordinance Fail To Say?
As currently described by the Office of Labor Standards Enforcement (or "OLSE"), the Ordinance leaves unanswered a number of questions critical to employers. As an initial matter, even the apparently straightforward definition of an employee as a person working within San Francisco does not address concerns relating to employees who are only temporarily located in San Francisco, such as seasonal workers and delivery or repair people. The Ordinance simply states that while an employee is working in San Francisco, that employee is accumulating paid sick leave. Nor does the Ordinance advise employers whose workforce varies above and below the 10 person cutoff used to calculate the amount of sick time accrued. For example, a small retailer may have six employees for most of the year, but might increase to 11 to cover the busy holiday shopping season.

Currently, the OLSE maintains that the Ordinance applies to both non-exempt, hourly employees, and exempt, salaried employees. How employers will track the amount of sick time accrued by exempt employees whose hours are not tracked is not addressed by either the Ordinance or the OLSE. In addition, although the Ordinance allows employers to take "reasonable measures" to document propose use of paid sick time, "reasonable" is left undefined.

What Can Employers Do To Comply With The Paid Sick Leave Ordinance?
First, it is important to remember that it is still early days for the Paid Sick Leave Ordinance, so there are few guidelines and fewer precedents available to guide employers. For example, the OLSE is still drafting and providing sample forms, such as the form needed to identify the Ordinance's "designated person." Employers and those who advise them are left in the unenviable position of taking aim at a moving target.

That having been said, there are ways for employers to protect themselves. As an initial step, a careful review of current paid time off policies is critical to determine if modification of current policies is needed, and if so, what modifications. Although not widely applicable, the requirements of the Ordinance can be explicitly waived by a collective bargaining agreement. Perhaps the best protection lies in providing a sick leave policy that is as generous as the policy provided by the Ordinance. One simple solution would be to provide a Paid Time Off Bank in which employees accumulate time off (at no less than the rate required by the Ordinance) that can be used for any purpose, including medical care of the employee, the employee's family members, and any person the employee needs to take to the doctor during hours when he or she would normally be working. The downside for employers is that time accumulated pursuant to a Paid Time Off policy becomes a vested right of the employee, and upon termination, the employee must be paid for unused time, unlike unused sick time, which is not owed or payable upon termination of employment.

In Conclusion
In addition to the steps listed above, employers must remain vigilant and aware of developments as the Ordinance is implemented as law, particularly given the number of questions that remain in spite of the approaching compliance deadline. Additional information will be posted on this blog as soon as it becomes available.

UPDATE:  The OLSE published a sample "Designated Person" form.  The document can be downloaded here (a Word document).

Posted by Vanessa Whang

As previously posted here, the California Fair Employment and Housing Commission has been busy finalizing its proposed regulations to help California employers implement the new California sexual harassment supervisory training law, Government Code Section 12950.1 (AB 1825).

On November 14, 2006, the Commission adopted its final proposed regulations and submitted the regulations to the Office of Administrative Law ("OAL") for review on December 14, 2006. If approved by the OAL, it is expected for the regulations to become effective sometime in February 2007.

The final proposed regulations, which are available for review at www.fehc.ca.gov, specify, among other things, that:

1. independent contractors and temporary workers must be counted as part of the workforce;
2. new supervisory employees who were trained in prior employment do not necessarily need to be immediately re-trained, but the burden is on the new employer to establish that the prior training complied with the requirements of AB 1825;
3. employers can use either an individual tracking method for ensuring that each supervisor is re-trained every two years, or employers may use a “training year” method, whereby some or all supervisors are trained every other calendar year by group; and
4. the term "supervisor" adopt the broad definition in Government Code Section 12926(r) to include "any individuals having the authority, in the interest of the employer to hire, transfer, suspend, lay off, recall, promote, discharge assign, reward, or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend that action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment."

Please check back on this blog on or after February 14, 2007 to find out the status on the proposed regulations.

Carlton DiSante & Freudenberger LLP offers training conducted by its attorneys that fully complies with the requirements of California Government Code Section 12950.1 (AB 1825) and is actively monitoring the proposed regulations discussed above to ensure compliance. For more information about CDF’s training classes, click here.

Maryland law requiring corporations with 10,000 or more workers to spend 8 percent of their payrolls on health insurance, or pay the difference into a state fund was found to be preempted by Employee Retirement Income Security Act (ERISA). By a 2-to-1 ruling, the United States Court of Appeals for the Fourth Circuit in Baltimore found that the Maryland law was preempted by ERISA, a 32 year old federal labor law. ERISA was developed to allow large companies to uniformly administer health benefits across the country, rather than becoming entangled in state-by-state requirements.  Here is the opinion.

We have commented previously that it is likely California’s attempts to impose employer funded health insurance will encounter similar challenges.

Posted by Mark Spring

The United States Department of Labor is now inviting interested parties having knowledge of or experience with the FMLA to submit information. The Department welcomes any pertinent information that will provide a basis for ascertaining the effectiveness of the current regulations and the Department’s administration of the Famly Leave Act. They are seeking to understand the problems and issues that employers and employees are facing with FMLA. Supposedly, the DOL is going to be considering these comments for additional regulations and comments.

The employer's voice needs to be heard. If you have positive or negative comments or experiences with FMLA, we enourage you to participate in this process. The DOL will be taking comments through February 2, 2007.

Click here for information on how to submit comments and here to access the Federal Register Notice Page.

The U.S. House of Representatives passed a bill today to increase the federal minimum wage to $7.25 an hour in three steps over 26 months. Under the bill the minimum wage would increase to $5.85 an hour 60 days after signed into law by the president, to $6.55 and then to $7.25 over two years. It appears that the bill will have a hard time passing the U.S. Senate unless the minimum wage increase is coupled with tax breaks or other types of relief for small businesses. Click here for a Business Week article on the bill.

The bill, as it stands now, would not affect California employers' minimum wage obligations -- who are required to pay $7.50 per hour as of January 1, 2007, and this amount increases to $8 per hour effective January 1, 2008.

In a unprecedented step last November, the Los Angeles City Counsel passed an ordinance that requires private hotels located on Century Boulevard near LAX to comply with the city’s living wage ordinance (which requires employers pay $10.64 per hour in wages and benefits). Prior to this ordinance, only employers who have contracts to do business with the city had to comply with the city’s living wage requirements. The city argues that it has the power to require these private hotel employers to pay higher wages due to the benefits that the hotels receive due to their proximity to LAX, which is owned by the city.

The ordinance consists of three measures. The first measure extends the city’s living wage requirements of $9.35 per hour for hotel employees who have health benefits or $10.64 per hour if the employees do not have health benefits. The second measure requires new purchasers of the hotels to retain existing employees for at least 90 days after taking control of the hotel. The third measure requires hotels to pass all service charges for banquets and special events on to servers and other line employees.

Los Angeles business leaders have gathered over 100,000 signatures to challenge the ordinance, placing it in a holding pattern for now. If the signatures are verified, the City Counsel will then have to decide whether to repeal the ordinance or to place a referendum on the ballot in the citywide elections in May 2007.

This ordinance poses a threat to businesses not only along the Century Boulevard Corridor, but to all businesses in the state of California. If the ordinance succeeds, it is very likely that cities throughout the state will similarly attempt to regulate private employers. This is simply a backdoor approach by the labor unions and other forces supporting this ordinance to attempt to increase the minimum wage even further, and to overturn the outcome of the voter’s rejection of a referendum in 2004 that would have required businesses to provide health care coverage to their employees. We will continue to monitor the status of the ordinance and publish updates as more information becomes available.

Posted by Jeremy Naftel

The holiday season is almost here and many employers are planning holiday parties for their employees. Such parties are often important to espirit de corps and have become part of the “corporate culture.” Unfortunately, holiday parties have become associated in the minds of some with excessive use of alcohol. Employees, including managers and supervisors, fail to drink responsibly and become a hazard to themselves and others. In such cases, they may also become a source of liability for their employers.

Under California law, a “host” generally is not responsible for the injuries caused by a guest’s consumption of alcoholic beverages. However, this general immunity may not shield employers from liability for injuries caused by employees who consume alcohol at company functions. In several cases, California courts have allowed non-employee third parties to sue employers for the injuries and damages caused by employees, where their conduct was a “foreseeable risk” of the employee’s consumption of alcohol occurring after ordinary working hours, but within the “scope of employment.” In this context, a risk is “foreseeable” if the employee’s conduct is not so unusual that it would be unfair to include the loss within the employer’s cost of doing business. Attending a company function and consuming alcoholic beverages is considered “within the scope of employment” if (1) the activity is endorsed by the express or implied permission of the employer, and (2) there is some conceivable benefit to the employer or the activity is a customary aspect of the employment relationship. Thus, in addition to their social responsibilities as good citizens, employers who serve alcohol at company functions may have legal responsibilities to assure the safety of others.

In light of this potential for disaster, the safest course is to prohibit the consumption of alcohol at company functions. For those employers for whom an outright prohibition is unattractive, the following safeguards should reduce, but will not eliminate, legal exposure:

1. Make attendance voluntary and hold the function at a facility off company property.
2. Use a cash bar and give written instructions that servers should not serve more than a specified number of drinks to any individual.
3. Serve alcohol only at specific times during the evening (e.g., before dinner), and serve food throughout the evening.
4. Arrange for transportation home, e.g., taxi vouchers and designated drivers.
5. Remind managers and supervisors of their obligation to set an example and to prevent others from becoming intoxicated or driving a vehicle while intoxicated.

Have a happy and safe holiday season and a prosperous new year.

The recent National Labor Relations Board (NLRB) ruling in Oakwood Healthcare, Inc. [click here for opinion] provides a much needed clarification of the standards to determine which employees qualify as “supervisors” under the National Labor Relations Act. By a 3-2 vote, the Board held that the permanent charge nurses employed by the Employer, Oakwood Heritage Hospital, an acute care hospital, exercised supervisory authority in assigning employees within the meaning of Section 2(11) of the National Labor Relations Act.

The definition of supervisor under the Act is critical because employees who qualify as supervisors under the National Labor Relations Act are excluded from bargaining units and may be prohibited from supporting unionization. Employers across the country are pleased with the outcome because the ruling provides a rational and clear standard for determining which employees are supervisors. However, unions are already expressing concerns that the Board’s decision is too narrow and excludes too many employees from the union’s control.

Supervisors Under the National Labor Relations Act
Section 2(11) of the Act defines supervisors as “any individual having the authority, in the interest of the employer, to hire, transfer, suspend, lay off , recall, promote, discharge, assign, reward, or discipline other employees, or responsibly direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” In Oakwood, the Board clarified the terms “assign,” “responsibly to direct,” and “independent judgment.”

Assign
The Board defined “assign” as the act of “designating an employee to a place (such as a location, department, or wing), appointing an individual to a time (such as a shift or overtime period), or giving significant overall duties, i.e. tasks, to an employee.” Further, to “assign” for purposes of the Act, “refers to the . . . designation of significant overall duties to an employee, not to the . . . ad hoc instruction that the employee perform a discrete task.”

SB 1745, authored by Shelia Kuehl, passed both the Assembly and Senate on September 7, 2006. As it left the Senate, the bill declared that it was the intent of the Legislature to develop legislation that protects victims of domestic violence, sexual assault, and stalking from housing and employment discrimination.

This bill provides that it is against public policy of the state to discriminate against a person in employment because he/she is a victim of domestic violence, sexual assault, or stalking as defined in the bill. Specifically, SB 1745 prohibits any person from discharging, refusing to hire or harass any individual, or otherwise discriminate or retaliate against any individual “because the individual is a victim of domestic violence, sexual assault or stalking.” Supporters of the bill state that “the ability to gain and keep a job is vital to the independence and recovery of victims” of domestic violence, while opponents of the bill claimed it would add new employer liability over issues over which an employer has no control. No word on whether the Governor will sign the bill.

Yesterday, September 12, 2006, Governor Schwarzenegger signed the bill that raises California's minimum wage, currently $6.75 per hour, to $7.50 per hour on January 1, 2007. On January 1, 2008, California’s minimum wage will increase to $8 per hour.

The increase will also affect some of California's exempt executive, administrative and professional employees who must meet minimum salary requirements (in addition to a duties test) that are tied to the state minimum wage. Exempt employees must earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. With the current minimum wage of $6.75 per hour, exempt employees must earn a monthly salary of at least $2,340 ($2,340 = $28,080 ÷ 12), which is an annual salary of at least $28,080 per year ($28,080 = 2 x $6.75 x 40 hours x 52 weeks). On January 1, 2007, the minimum salary requirement to qualify as an exempt employee will increase to $2,600 per month, or $31,200 per year. On January 1, 2008, the amount exempt employees must earn will increase to $2,773.33 per month, or $33,280 per year.

Today, the Fair Employment & Housing Commission posted on its website the revised sexual harassment training and education regulations that it adopted in its August 29, 2006 meeting.

On August 29, 2006, the Commission adopted modified proposed regulations on Harassment Training and Education, interpreting Government Code section 12950.1 [A.B. 1825], which requires harassment training for supervisors of employers with 50 or more employees. The August 29, 2006, regulations modify earlier June 20, 2006 regulations, which this blog commented about here. The August revisions can be viewed at the Commission’s website here.

The August revisions clarify the issues about who is qualified to design and teach the sexual harassment training, the frequency of training required for supervisors, and whether the sexual harassment training requirement applies to supervisors outside of California. The major revision made in the August proposed regulations clarify that supervisors who are located outside of California and supervise employees within California are not covered by the regulations. Therefore, supervisors located outside of California are not subject to the sexual harassment training requirements under the proposed regulations.

The other clarification made in June 2006 regarding which employees are counted within a company in order to determine whether a company has 50 employees remained unchanged.  The proposed regulations state that for the purposes of counting the 50 employees, employees both inside and outside California should be counted.

Additionally, the language added in June that harassment training for an employee does not create an inference that that employee is a supervisor also remained in the proposed regulations. Furthermore, at the August 29th meeting, the Commission added language that a contractor who attends sexual harassment training will also not be inferred to be an “employee or a supervisor” for the employer providing the training. The Commission previously stated that it “does not want to discourage employers from offering two hours of harassment training to a variety of non-supervisory employees for fear that these employees might be construed to be supervisors on the sole basis that they had received harassment training.”

On October 2, 2006, the Commission will decide whether to adopt the August 29, 2006, modified regulations or make further changes to its proposed regulations.  Anyone interested may submit their comments about the proposed regulations by 5 p.m. on September 15, 2006.  Comments can be submitted to:

Ann M. Noel
Executive and Legal Affairs Secretary
Fair Employment and Housing Commission
455 Golden Gate Avenue, Suite 10600
San Francisco, CA 94102
email: regs@fehc.ca.gov

Carlton DiSante & Freudenberger LLP offers training conducted by its attorneys that fully complies with the requirements of California Government Code Section 12950.1 (AB 1825) and is actively monitoring the proposed regulations discussed above to ensure compliance. For more information about CDF’s training classes, click here.

As chronicled on this blog (here, here, and here), Governor Schwarzenegger and the state legislature have been in an embroiled dispute over increasing California’s minimum wage for over one year. The major area of disagreement between the Governor and the legislature was whether the state’s minimum wage would be indexed for inflation so that the minimum wage would automatically increase each year. Last year the Governor vetoed a bill requiring this automatic increase each year.

It appears that there has been an agreement reached. Initial reports are that the agreement between the state legislature and the Governor calls for an increase the state’s minimum wage by $1.25 over the next year and a half to $8 per hour. The agreement specifies that the minimum wage will increase by 75 cents per hour next January, increase again by 50 cents per hour the following January, and there will be no automatic increases each year due to inflation. Currently, the California minimum wage is $6.75 per hour.

Posted by Kendra D. Miller

The DLSE has endorsed the position taken by the California Court of Appeal last year in Conley v. Pacific Gas and Electric Co., 131 Cal. App. 4th 260 (Cal. App. 1st Dist., 2005) that employers may deduct partial-day absences from exempt employees’ accrued vacation/PTO banks for absences of 4 hours or more without jeopardizing their exempt status. The DLSE amended its Enforcement Policies and Interpretations Manual to reflect the Conley decision. See DLSE Enforcement Policies and Interpretations Manual § 51.6.15.4. This is a clear position reversal from that stated in a 2002 opinion letter which suggested that such deductions might jeopardize exemptions under the “salary basis” test and expose employers to significant risks of having to pay overtime to exempt workers.

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The American Civil Liberties Union of San Diego and Imperial Counties and the California Rural Legal Assistance Inc. of Oceanside have filed a lawsuit claiming that a city of Vista ordinance regulating the hiring of day laborers on city streets is unconstitutional because it restrains free speech and is discriminatory. The two groups represent an employer who has hired day laborers in Vista as well as and two Vista day laborers.

The groups are seeking a temporary restraining order to prevent a city of Vista law, unanimously approved by the City Counsel on June 27, from going into effect on July 28. The law requires anyone who hires off-site day laborers to register with the city, display a certificate in a car window, and present workers with written terms of employment. Violations would be misdemeanors punishable by no more than six months imprisonment or $1,000.

This is very similar to the city of Redondo Beach law preventing people from soliciting work on public property and hiring someone on public property (click here for prior post). The law was in the city's municipal code since the 1980's, but was not enforced until recently. When the city's arrest of day laborer's in violation of the ordinance was challenged in federal court recently, the law was held to violate worker's first amendment rights to solicit work on city streets.

Plaintiff Dark was a heavy-equipment operator for the Road Department of Curry County, Oregon. Dark suffers from epilepsy. His seizures are usually preceded by a nervous jerk, called an "aura." Dark experienced an aura, went to work despite the aura, and suffered a seizure while driving a County truck. The County terminated Dark after receiving a doctor's report recommending that he not work around moving machinery. Dark then sued for wrongful termination under the Americans with Disabilities Act.

The district court granted summary judgment in favor of the County, finding no genuine issue of material fact that the County terminated Dark for misconduct (acting recklessly by driving the truck despite constructive knowledge of an imminent seizure). The Ninth Circuit reversed, holding that Dark had raised genuine issues of material fact about the reasons for his termination, about whether he was qualified for his position despite his disability, and about whether he posed a direct threat to the safety of others. The decision relied in part on a holding that conduct resulting from a disability (e.g. driving despite knowing of the possibility of an imminent seizure) is generally deemed to be part of the disability, rather than a separate basis for termination. Given that Judge O'Scannlain (typically one of the more conservative members of the Ninth Circuit) ruled in favor of the employee in a published opinion, the case could signal a trend toward greater sympathy for employees on ADA claims. Dark v. Curry County, No. 04-36087 (9th Cir. July 6, 2006)

A woman who worked as a hair model at a L'Oreal show earned $500 for her day of work, but did not receive the money until two months after the show. She sued on behalf of herself and other models for failure to pay wages immediately upon discharge in violation of Labor Code § 201, and sought $15,000 in penalties under Labor Code § 203. The trial court granted L'Oreal's motion for summary judgment and the court of appeal denied Plaintiff's petition for writ of mandate. The California Supreme Court reversed and remanded, holding that the definition of "discharge" under the statute is not limited to termination, and may also apply when an employer releases an employee after completion of a specific job assignment or time duration. Between this and the Yanowitz decision, not a good year for L'Oreal, from a Supreme Court litigation standpoint. Smith v. Superior Court (L'Oreal USA, Inc.), 2006 DJDAR 8988 (July 10, 2006)

The Fair Employment and Housing Commission recently released its proposed modifications to California Government Code section 12950.1 (AB 1825), which requires two hours of harassment training for supervisors of employers with 50 or more employees.

The proposed regulation clarifies two main issues that were unclear in AB 1825. First, the proposed regulations state that for the purposes of counting the 50 employees, employees both inside and outside California should be counted. Second, the proposed regulations require sexual harassment training for supervisors who are located outside of California, but supervise employees within California.

It is also important to note that the proposed regulation adds language that harassment training for an employee does not create an inference that that employee is a supervisor. The Commission stated that it "does not want to discourage employers from offering two hours of harassment training to a variety of non-supervisory employees for fear that these employees might be construed to be supervisors on the sole basis that they had received harassment training."

The Commission is seeking written comments on these modifications, which can be submitted until July 21, 2006. The next Commission meeting is set for August 29, 2006, in Riverside, California. At this meeting the Commission will decide whether to adopt these proposed regulations, modify the regulations, or make further changes. For more information regarding the proposed regulation, the California Fair Employment and Housing Commission's web site can be found here.

InhouseBlog, has published a guest article by Cal Labor Law's own Brian Van Vleck and Anthony Zaller entitled, "Top Ten Items Out-Of-State Employers Need To Know About California's Unique Labor Laws." Click here to read the article.

InhouseBlog is written by Geoffrey G. Gussis, Esq. who has been in-house counsel and is now back in private practice at Riker, Danzig, Scherer, Hyland & Perretti LLP. InhouseBlog is an excellent resource for in-house attorneys and provides information on a wide range of issues.