Following in the footsteps of San Francisco, the city of San Jose is considering raising the minimum wage for all work performed in the city limits to $10 an hour, with automatic annual increases based on inflation (consumer price increase). The Council will vote on the proposed ordinance Tuesday, May 22. If you have employees who are working in San Jose and wish to be heard on this issue, contact information for the City Council members is available here, and you can email or call them in advance of the vote.
Even if this measure fails, the minimum wage issue in San Jose is not dead. A group of San Jose State University students received enough petition signatures to put the measure on the November ballot. Thus, the citizens of San Jose will have a second opportunity to enact a higher minimum wage for San Jose employees in November when they go to the ballot box.
For restaurant, retail and other businesses in San Jose that employ workers at or near the minimum wage level, you will want to keep an eye on these developments. Of course, we will continue to keep you informed.
In addition, because this effort was spearheaded by local college students at SJSU, it is getting a lot of media attention and social networking discussion. If successful, it is very likely that other college students will use this as a model and similar attempts to raise the local minimum wage will increase in the coming months and years, particularly if the state minimum wage remains at $8 per hour and the economy and job market for college students remains difficult. Thus, the success of this proposal may have much broader implications than just for those doing business in the city of San Jose.
As we reported yesterday, a South Carolina District Court ruled that the NLRB did not have authority to mandate the Employee Rights Poster. The ruling is in conflict with the only other court to rule on the issue thus far--the District Court for the District of Columbia--and that decision is on appeal. Well, this morning the D.C. Circuit Court of Appeal granted the National Association of Manufacturers' request for a temporary injunction enjoining the NLRB's posting requirement pending appeal. The court reasoned that the uncertainty regarding enforceability of the posting requirement counsels in favor of temporarily preserving the status quo pending appeal. The NLRB has not yet affirmatively postponed its April 30 effective date for employer compliance, but with this ruling it appears employers will not need to comply effective April 30 and will instead need to stay tuned for developments in the ongoing legislation. The D.C. Circuit Court of Appeal's decision is here.
California employers trying to comply with the recently enacted Wage Theft Protection Act should take note that the Labor Commissioner has again modified the notice template, effective April 12, 2012. The new law, which went into effect January 1, 2012, requires California employers to provide non-exempt new hires with written notice of wage and related information. Most of the information required to be provided is set forth in the statute itself. However, the Labor Commissioner has authority to prescribe additional categories of information to be provided in the notice. Given that authority, the Labor Commissioner was also tasked with publishing a template that employers can use to satisfy their notice obligations. Causing challenge to employers is the fact that the Labor Commissioner waited until close to January 1 to publish any template and then prescribed additional content beyond that set forth in the text of the statute. If that is not confusing enough, the Labor Commissioner's office cannot seem to make up its mind about the contents of the template or the requirements of the Act. The Labor Commissioner has at least twice revised the FAQ on the Act's notice requirements, and has now issued a revised template. Employers who downloaded the original template will want to review the newly published template and newly revised FAQ. Most of the changes are fairly minor, but the newly revised template has different language on the subject of whether there is a written or oral employment agreement. It appears that this was in response to concern from employers that checking one of these boxes suggests the employee actually has some sort of employment agreement, weakening the at-will nature of the employment relationship. The new template (and FAQ) are revised to make clear that all this is referring to is whether the rate of pay is set forth in writing or was communicated only verbally. The revisions also make clear that the acknowledgement of receipt portion is optional, not mandatory. The new template and revised FAQ are available here and here. Employers will want to review these forms to ensure compliance. Unfortunately, there is no practical way for employers to stay apprised of continued changes by the Labor Commissioner going forward other than to periodically check the Labor Commissioner's website. We will of course try to report on changes on this blog.
This is a reminder that all employers covered by the National Labor Relations Act, which includes union and non-union employers, must post the 11" x 17" National Labor Relations Board's Employee Rights Poster at their workplace on or before April 30, 2012. If you have questions about the poster and the posting requirements, the NLRB has a wealth of information available on its website (including copies of the poster in multiple languages) here. There are still lawsuits pending trying to stop the implementation of the rules related to this poster, but the NLRB has stated that it is not going to further delay implementation.
There have been many changes to leave laws in recent years, both under the FMLA and under California’s CFRA. Proposed legislation recently has been introduced in California to further expand employees’ leave entitlements under CFRA. CFRA currently allows eligible employees to take up to 12 weeks of leave in a year as needed for the birth or placement of a child, or to care for their own serious health condition or that of a child (up to 18 years of age or an adult dependent), parent (which includes a step parent and/or person who stands in loco parentis to the child), or spouse/domestic partner. AB 2039 seeks to expand CFRA leave to allow employees to take such leave to care for siblings, parents in law, grandparents, and adult children. If enacted, AB 2039 will obviously increase employee leaves, resulting in additional burden to California employers. This is particularly true because California employers covered by CFRA are typically also covered by FMLA, meaning they have to comply with both laws and their employees are entitled to leave under the terms of both laws. Because FMLA does not provide for leave to care for parents in law, siblings, and grandparents, an employee who uses leave for that purpose under CFRA will not have exhausted their FMLA leave because the CFRA leave could not be concurrently counted as FMLA leave. In other words, the employee could theoretically take 12 weeks of leave under CFRA for a parent-in-law, grandparent or sibling, and then still be entitled to an additional 12 weeks of leave under FMLA for a spouse or child. This very scenario already exists in California where leave is taken for disability caused by pregnancy or to care for a domestic partner. Differences between CFRA and FMLA on these two categories result in leave not running concurrently under these two laws in these situations. AB 2039 would add further differences between CFRA and FMLA, making leave tracking even more complicated for California employers.
The full text of AB 2039 is available here. We will keep you posted on the status of this and other pertinent employment-related legislation pending in California.
Last week, we posted about the recent uproar over employers and colleges seeking to require applicants to surrender their Facebook passwords as a condition of hiring/admission and how that practice may be analyzed by the courts under an invasion of privacy challenge.
California employers should also note that the California legislature has proposed a bill that would specifically outlaw the practice. AB 1844, proposed by Assemblywoman Nora Campos (D), if enacted as currently drafted:
(a) would prohibit an employer from requiring an employee or prospective employee to disclose a user name or account password to access social media used by the employee or prospective employee; and
(b) would also provide that an employer does not fail to exercise reasonable care to discover whether a potential employee is unfit or incompetent by the employer’s failure to search or monitor social media, as defined, before hiring the employee.
The bill would add sections 980-982 to the California Labor Code to read as follows:
980. As used in this chapter, "social media" means an electronic medium where users may create and view user-generated content, including uploading or downloading videos or still photographs, blogs, video blogs, podcasts, or instant messages.
981. For purposes of a claim of negligent hiring, an employer does not fail to exercise reasonable care to discover whether a potential employee is unfit or incompetent by the employer's failure to search or monitor social media before hiring the employee.
982. An employer shall not require an employee or prospective employee to disclose a user name or account password to access social media used by the employee or prospective employee.
This bill is a mixed bag, as currently drafted. Proposed section 982 of the Labor Code would make it impossible for those California employers who wish to require applicants to surrender their Facebook and other social media passwords to engage in this conduct. Certain employers would see this as an unfair restriction. However, proposed section 981 of the Labor Code would protect California employers from negligent hiring lawsuits that are based on an employer's failure to search or monitor an applicant's social media profile and this would likely be seen as a positive piece of legislation by many California employers.
AB 1844 was referred to the Assembly Committee on Labor and Employment on March 5. We would not be surprised if this bill gained some traction as it may end up getting support from both employers and employees. We will continue to keep you updated on this and other important California legislative developments.
State and federal lawmakers are growing increasingly concerned about how our economy is making it difficult for long term unemployed workers to get back into the workforce. As a result, there is a movement to make being unemployed a new protected class. With a larger than normal percentage of voters being unemployed, you can bet this will be popular with some politicians up for re-election in November.
California is one of a number of states where legislation has been introduced to protect unemployed workers and prohibit an employer from using a person's unemployed status at the time of applying for a job as a negative criteria in the hiring process. The California bill is AB 1450 and was introduced in January. In addition to the California bill, Congress has introduced HR 2501 in the House and S 1471, two bills that would provide similar protections on a nationwide basis.
Currently, most protected status suits deal with harassment and termination of the employment relationship. Hiring discrimination cases are relatively rare. However, if any of these bills pass, employers covered by them should expect a wave of new litigation by unemployed applicants applied for positions but were not hired. Employers will certainly have to alter their hiring practices and train those making the hiring decisions and doing the screenings, in order to ensure that they can defend against such suits.
These bills will be something to keep an eye on in the coming months. We will continue to keep you posted on this blog.
The Department of Labor this week announced proposed regulations that would expand the military caregiver leave provisions of the FMLA, and also create special rules for FMLA eligibility for airline flight crew employees. The proposed regulations would implement amendments to the FMLA set forth in the National Defense Authorization Act for Fiscal Year 2010. The proposed regulations set forth the following changes to current FMLA leave provisions:
Military Caregiver Leave
According to the DOL, “The proposed regulations would extend the entitlement of military caregiver leave to family members of veterans for up to five years after leaving the military. At this time, the law only covers family members of ‘currently serving’ service members.”
The proposed regulations would also expand the military family leave provisions of the FMLA by extending qualifying exigency leave to employees whose family members serve in the regular armed forces. Currently, the law only covers families of National Guard members and reservists.
The DOL’s proposed regulations also contemplate other changes to the military caregiver leave provisions, including that qualifying exigency requires the service member to be deployed in a foreign country. The regulations would also expand the definition of “serious injury or illness” to include conditions that existed prior to military service but were aggravated by military service.
Airline Flight Crew Employees
According to the DOL, the proposed regulations would make the benefits of the FMLA more accessible to airline flight crew employees by adding a special hours of service eligibility requirement for them and specific provisions for calculating the amount of FMLA leave used, in consideration of the “unique and often difficult to track” hours worked by crew members. Specifically, airline flight crew employees who have worked or been paid for not less than 60 percent of the applicable total monthly guarantee and worked or been paid for not less than 504 hours (not including personal commute time or time spent on vacation, medical, or sick leave) during the previous 12 months satisfy the hours of service eligibility requirement for FMLA.
For more information on the proposed regulations, you can review the DOL’s FAQ here.
So, do employers need to worry about any of these changes now? According to the DOL, yes. Some of the changes technically are already in effect by virtue of the passage of the NDAA. The extension of qualifying exigency leave to employee’s whose covered service member is in the Regular Armed Services is in effect. Additionally, the new requirement for qualifying exigency leave that the service member be deployed in a foreign country is in effect. Finally, the expanded definition of “serious illness or injury” to include aggravations of pre-existing conditions, is currently in effect. According to the DOL, the only military caregiver leave change not yet in effect (until the proposed rules are approved and implemented) is the extension of caregiver leave for veterans as opposed to current service members.
As for the FMLA changes pertaining to airline flight crew employees, the DOL is taking the position that these changes are also effective now, per the passage of the Airline Flight Crew Technical Corrections Act (AFCTA).
We will keep you posted as to developments with these proposed regulations. In the meantime, employers will want to review their policies and procedures for compliance.
As we previously posted on this blog, a new California law was passed in October requiring California employers, effective January 1, 2012, to provide new hires with a written notice containing certain wage and other information. The new law is codified as Labor Code section 2810.5 and requires employers to provide newly hired non-exempt employees with the following categories of information (in one self-contained writing):
1. The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission or otherwise, including any rates for overtime;
2. Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;
3. The regular payday designated by the employer;
4. The name of the employer, including any “doing business as” names used by the employer;
5. The physical address of the employer’s main office or principal place of business, and a mailing address, if different;
6. The telephone number of the employer;
7. The name, address, and telephone number of the employer’s workers’ compensation insurance carrier; and
8. Any other information the Labor Commissioner deems material and necessary.
Employers are required to begin providing the foregoing information to non-exempt new hires effective January 1. If there are changes to any of the information provided, written notice of the change must be provided to employees within 7 calendar days. The information must be provided in the language normally used by the employer to communicate employment-related information. The new law exempts from the notice requirement State workers and most unionized employees covered by the terms of a collective bargaining agreement, as well as employees who are exempt from overtime.
While the foregoing seems fairly straightforward to apply, some confusion has arisen over the eighth category of prescribed information listed—“any other information the Labor Commissioner deems material and necessary.” The Labor Commissioner waited until late December to post anything substantive about this new law and has since revised its position at least once regarding the scope of the new law, leaving employers with less than clear guidance over compliance. Under the new law, the Labor Commissioner is charged with creating a template that employers may (but are not required to) use to comply with the new notice requirement. The Labor Commissioner waited until almost the end of December to publish this template, which is available here. Interestingly, the Labor Commissioner’s template includes several additional categories of information (beyond those enumerated in the actual statute):
1. The employee’s hire date and position;
2. The business form of the employer (e.g. corporation, partnership, LLC, etc.);
3. Specified information about other businesses or entities the employer uses to hire employees or to administer wages or benefits;
4. Whether the employee’s employment agreement is written or oral; and
5. The employer’s workers’ compensation policy number.
Adding more to the confusion, the Labor Commissioner also posted (at the eleventh hour) some “Frequently Asked Questions” about the new law, including guidance stating that the notice needed to be provided to all current employees, not just to new hires as indicated in the statute. It appears that the Labor Commissioner’s office then realized it had overstepped its authority in exceeding the scope of the statute by extending its coverage to current employees, so the Labor Commissioner (without explanation) revised the FAQ to delete this reference. The most current FAQ published by the Labor Commissioner’s office is here. Employers should review both the template and FAQ.
Although employers are not required to use the Labor Commissioner template as a form notice, they are advised to make sure that any written notice they create includes all categories of information indicated on the Labor Commissioner template. To be clear, it appears that the Labor Commissioner does have the authority (prescribed by the express language of the statute) to broaden the categories of information that must be provided in writing to new hires. At this time, the notice must only be provided to new hires and not to current employees. However, changes to any of the information provided in the new hire notice will need to be provided to current employees within 7 calendar days of the change.
Employers should note that although the new law does not provide for any specific penalties for non-compliance, it appears that the law can be enforced through California’s “catch-all” penalty provision, known as the Private Attorneys’ General Act (PAGA). PAGA allows for recovery of substantial penalties for non-compliance with provisions of the Labor Code. Employers should review the Labor Commissioner template and guidance and ensure that they have a compliant notice in place, if they have not already done so. Employers are advised to include language in their notice to make clear, as applicable, that the employment relationship is at will and that nothing in the notice should be construed as creating a contract of employment or for the promise of any particular term or condition of employment, and that the employer has the right to change the terms and conditions of employment at any time with both employer and employee having the right to terminate the employment relationship with or without cause or advance notice. Employers should also monitor the Labor Commissioner website from time to time in the event there are changes to the content of the notice requirement that may be prescribed by the Labor Commissioner.
Last week the increasingly controversial NLRB issued a decision holding that class action waivers in employment arbitration agreements (non-union) violate employees' rights to engage in protected concerted activity under the NLRA. The case involved a national homebuilder, D.R. Horton, Inc. Like many employers, D.R. Horton several years ago started requiring its employees, as a condition of employment, to agree to resolve any employment-related disputes by way of binding arbitration. Also like most similar agreements, D.R. Horton's agreement contained a class action waiver provision--a provision that precludes arbitration of collective or class claims. There has been much litigation both in California and on the federal level concerning the enforceability of class action waivers, the most recent important decision being that of the United States Supreme Court in AT&T Mobility v. Concepcion. In the AT&T Mobility case, the Supreme Court upheld the validity of class action waivers in consumer arbitration agreements, holding that the Federal Arbitration Act (FAA) preempted a California state law invalidating such class action waivers in consumer agreements. Although the AT&T Mobility case was not an employment case, its reasoning may be applied to similarly support the enforceability of class action waivers in employment arbitration agreements. There have been numerous legislative efforts both in California and in the United States Congress to bar mandatory arbitration agreements in the employment context but none of these legislative efforts have succeeded to date. With the NLRB's decision in D.R. Horton, it appears the NLRB is now presenting a new attack on the validity of such agreements, at least insofar as the agreements contain a class action waiver.
In the D.R. Horton case, the employees were required to sign an agreement to arbitrate any and all employment disputes arising between them and the company. The agreement included a provision indicating that arbitration proceedings had to be conducted individually and not on a collective or classwide basis. Notwithstanding this provision, an employee by the name of Michael Cuda advised the company that he intended to initiate arbitration of a claim for unpaid overtime on behalf of himself and all similarly situated employees who were allegedly misclassified by the company. D.R. Horton took the position that the demand for arbitration was invalid because the arbitration agreement precluded class claims and mandated that any claim in arbitration be pursued individually. Cuda filed an unfair labor practices charge with the NLRB, alleging that the class action waiver provision violated the employees' rights under the NLRA. The NLRB agreed.
The NLRB first held that the arbitration agreement violated the NLRA because its scope could be interpreted by employees as precluding them from filing unfair labor practice charges with the NLRB. If this were the sole finding of the NLRB, it would not be much cause for alarm because employers with mandatory arbitration agreements could simply revise them to clarify that the agreement does not prohibit the filing of unfair labor practice charges with the NLRB. Most administrative claims (for example, EEOC claims and claims filed with similar state agencies) are already exempted from the scope of arbitration agreements by virtue of applicable law. The NLRB did not so limit its holding, however. Instead, the NLRB went on to hold that the agreement's class action waiver further violated employees' rights to engage in concerted activity to improve the terms and conditions of employment on matters such as wages, hours and working conditions. According to the NLRB, an individual pursuing a lawsuit on behalf of other employees is one such means of concerted activity: "Clearly, an individual who files a class or collective action regarding wages, hours or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by Section 7."
The NLRB held that neither the FAA nor the Supreme Court's decision in AT&T Mobility compelled a different conclusion. The Board held that the FAA does not require enforcement of arbitration agreements where a party is precluded from vindicating substantive rights protected by statute. The NLRB reasoned that the class action waiver impairs employees' substantive right to band together to improve working conditions as set forth in Section 7 of the NLRA. The NLRB similarly distinguished the AT&T Mobility case, reasoning that it did not involve the compatibility of two federal statutes (the FAA and the NLRA) and harmonizing their purposes. Instead, the AT&T Mobility case involved the issue of federal law (the FAA) preempting a state law disfavoring enforceability of arbitration agreements.
The NLRB did not go so far as to say that all employment arbitration agreements violate the NLRA. The NLRB instead said that agreements prohibiting employees from pursuing collective or classwide relief in any forum violate the NLRA. So long as the agreement allows employees to pursue collective/classwide relief in some forum--arbitral or judicial--it will not violate the NLRA. This is of course of little practical utility to employers utilizing arbitration agreements.
Does the NLRB's D.R. Horton decision mean that employers should stop including class action waivers in their arbitration agreements? Not so fast. It should be expected that the NLRB's decision will be appealed to the Eleventh Circuit Court of Appeals and possibly further reviewed by the United States Supreme Court. This is amidst much other controversy surrounding the current NLRB and many of its other recent actions. There is so much current uncertainty regarding the NLRB and the validity of its recent actions that employers should stay tuned and monitor continuing developments on this front.