Employment Law Bulletin | March 2020

Handling Changes in Employee Identification Information That May Implicate the Employee’s Work Authorization

California employers have unique challenges arising from the many laws enacted to protect employees, especially when those laws seem to conflict with federal law.  Now more than ever, California employers are grappling with the conflicts between state and federal laws regarding the immigration status of prospective and current employees.  This is compounded by the lack of guidance from any government agency on the best approach for resolving these conflicting obligations.
 
The Immigration Reform and Control Act (IRCA) contains some protection against discrimination for employees, but is better known for its employer compliance requirements and restriction against knowingly hiring or continuing to employ any worker who is unable to show proof of eligibility to work in the U.S.  In order to prove compliance under IRCA, a prospective employee is required to show proof of eligibility to work via I-9 Form documentation and may begin and continue their employment only so long as the employer maintains a “good faith belief” that the employee is legally authorized to work in the U.S.  Actual knowledge of an employee’s unauthorized status can destroy this good faith belief and expose an employer to significant civil and criminal penalties. 
 
Meanwhile, the California Fair Employment & Housing Act (FEHA) and the Labor Code protect applicants and employees by prohibiting discrimination and retaliation on a far broader spectrum than IRCA and other federal laws.  In addition to the national origin and citizenship status protections under IRCA, California law protects employees against discrimination based on immigration status, ethnicity, and any actions by an employee to provide updated identity information.  Violation of California law can result in high stakes lawsuits for discrimination, retaliation and wrongful termination.  Employers presented with information that calls into question an employee’s I-9 documentation or identification information face a stressful conundrum: if we update the employee’s information as permitted by California law, have we violated IRCA by continuing their employment?
 
This can arise in a number of ways.  An employer may receive information from the Social Security Administration (SSA), the Employment Development Department (EDD), the Franchise Tax Board (FTB), the District Attorney’s office, or even an anonymous report that raises concerns about the validity of an employee’s social security number, name, or employment authorization.  For example, SSA no-match notices, which weren’t issued for 7 years during the Obama Administration, returned last year in aggressive fashion with hundreds of thousands of notices sent to what appeared to be targeted industries.  The EDD and FTB, in their active pursuit to collect revenue and prevent, investigate and prosecute fraud, now frequently send notices asking employers to verify employee identity and information.  Employees may also present updated documentation showing identity and eligibility information different from what they presented when hired.  
 
Many questions arise for employers in these circumstances.  For example:  Does the new information destroy our good faith belief of eligibility for employment under federal law?  If so, do we violate California law if we respond by terminating the employee?  What happens if we are presented with information from multiple sources or receive multiple changes to one employee’s information or documentation?
 
Under these various and sometimes nerve-wracking circumstances, employers tend to:
(1) do nothing, or (2) take actions that are detrimental to the employee and result in significant legal exposure to the employer.  While the first reaction may trigger an audit or fines by a government agency, the second may violate California law and result in a lawsuit.  Ignoring government requests, such as the SSA’s no-match notice, could destroy an employer’s good faith belief in the employee’s legal work status and potentially place the employer on the agency’s audit radar.  If proven to have knowingly employed an individual who was not authorized to work in the U.S., the employer can be fined anywhere from $500 to several thousand dollars per employee and face imprisonment.  Meanwhile, an employer who wrongfully terminates an employee because of the employee’s protected status or conduct could be exposed to a lawsuit.  Caught in the middle, an employer’s primary concern is keeping their workforce intact without violating the law, but how that can be accomplished?

It is no wonder that California employers struggle when faced with these challenging circumstances.  In working through these scenarios with our clients, we have developed strategies to ensure compliance with both state and federal law while minimizing the impact on our clients and their employees.  Given the various possibilities, each scenario should be handled on a case-by-case basis.  The following tips are a helpful starting point for an employer confronted with new or different information or documentation from an employee, or a notice from a government agency. 

What to Do:

  • Read and fully understand the information before you act
  • Develop a protocol for handling these situations, and train staff appropriately
  • Keep all communication about the information you receive confidential
  • Document your efforts to prove compliance
  • Designate a point person to become familiar with handling notices, updates, changes of identification information and employment authorizations
  • Treat each notice on a case-by-case basis

 Depending on the circumstances, you may need to:

  • Check your records for accuracy
  • Notify the employee of the notice or corrective action that needs to be taken
  • Ask the employee to take action to correct the problem and bring proof
  • Submit a W-2C
  • Create a new I-9
  • Note corrections on the original I-9
  • Terminate employment (but call counsel before doing so)

 What Not to Do:

  • Panic
  • Ignore the information/Do nothing
  • Assume that your employee isn’t authorized to work in the U.S. or committed identity theft
  • Discriminate, retaliate or otherwise take an adverse action against an employee based on the receipt of information that implicates the employee’s protected class
  • Terminate without following proper steps to ensure lawfulness
  • Re-verify non-expired I-9 documents

If you have questions about a particular notice or situation impacting your workplace, please contact an SMT employment law attorney.  These issues are complex and have legal, operational and human-impact risks.  We are here to help you work through it successfully.

Kari J. Brown

Nevada Enacts New Paid Leave Law

Do you employ 50 or more employees who work in the State of Nevada?  If so, a new Nevada mandatory paid leave law may apply to you.  Effective January 1, 2020, some Nevada employees must accrue 0.01923 hours of paid leave for each hour of work performed and can request to use this paid time off after completing 90 days of employment without providing any reason to the employer.  This Nevada law goes beyond the California paid sick leave law in that it permits employees to use accrued paid leave for any purpose.  The law also has posting requirements.  Contact an SMT employment law attorney to find out if this new law applies to your Nevada employees.

Lisa Ann Hilario

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | February 2020

Arbitration Update – Court Grants Preliminary Injunction Preventing Enforcement of AB51 Until A Trial Is Held

California enacted a major change to the law impacting arbitration agreements, originally set to take effect January 1, 2020 (AB51).  The legislation attempted to overturn decades of California law that established the criteria necessary for a mandatory arbitration provision to be enforceable, consistent with federal law under the Federal Arbitration Act (FAA).

AB51’s stated purpose is “to ensure that individuals are not retaliated against for refusing to consent to waive their rights and the procedures under FEHA (the Fair Employment & Housing Act) and the Labor Code as well as to ensure that any contract relating to those rights and procedures be executed as a matter of voluntary consent.”  AB51 was written to accomplish this via changes to the California Labor Code (LC) and the Government Code (GC).

In brief, AB51 added LC section 432.6, making it a violation of employee rights for an employer to require consent to arbitration of disputes as a condition of employment.  LC 432.6 sets out a number of ways for employer policies and actions to violate the new law, with violations subjecting the employer to both civil liability and criminal prosecution.  GC section 12953 makes a violation of LC section 432.6 also a violation of FEHA, giving employees access to the process, rights and remedies available under FEHA .

For anyone familiar with the underlying federal law under the FAA and California case law, it seemed apparent that AB51 was inconsistent with both the FAA and California law established by the California Supreme Court after decades of litigation.  It is noteworthy that former Governor Jerry Brown refused to sign similar legislation, stating that he would not sign a law that clearly violated the FAA.

In early December 2019, a group of plaintiffs, including the US Chamber of Commerce and the California Chamber of Commerce, filed a lawsuit in federal court seeking to order four California officials to stop the enforcement of AB51 (Chamber vs. Becerra).  A Temporary Restraining Order (TRO) was granted on December 30, 2019, with a hearing set for January 10 to determine whether a Preliminary Injunction should be granted to stop enforcement of the law until the full lawsuit seeking to ban enforcement of the law could be heard on its merits. 

In order to obtain a Preliminary Injunction, the plaintiffs had to prove that (1) they are likely to succeed on the merits of the case when it comes to trial, and (2) there would be irreparable harm suffered in the meanwhile if the Preliminary Injunction is not granted.  This is a very high legal standard, and difficult for any plaintiff to prove.

On January 10, the court granted the Preliminary Injunction, finding that it is likely that the Chambers of Commerce will be able to win their case at trial and that businesses in California would be materially and irreparably harmed if the law were to take effect in the meanwhile.  The written decision, in the form of a federal court Order, was issued on February 6, 2020.  

The Order enjoins (stops) the California Attorney General, Labor Commissioner, Secretary of the Labor and Workforce Development Agency, and the Director of the Department of Fair Employment and Housing from enforcing Labor Code section 432.6 and Government Code section 12953.

AB51 is thus on hold, maybe forever, but at least until the trial is held and the case seeking a Permanent Injunction stopping enforcement of these new laws can be determined.  Note that the trial will be conducted and the case will be determined (without a jury) by the same judge who just found that plaintiffs are likely to be successful on the merits of their case.  There is no trial date set.

For now, arbitration agreements in effect prior to January 1, 2020 are still in effect and as legally enforceable as they were prior to AB51.  In addition, the Preliminary Injunction means that new arbitration agreements can be entered into on an ongoing basis without violating the law, because AB51 is not yet enforceable law.  The current gray area we see is that IF the trial does not result in a Permanent Injunction, there is a slight possibility that AB51 could be given retroactive effect back to January 1, 2020.  That seems very unlikely, but it is not impossible and would create uncertainty as to the ultimate enforceability of arbitration agreements entered into between January 1, 2020 and the date of any court decision that both denies the Permanent Injunction and makes the decision retroactive.

If you want to discuss how this Preliminary Injunction impacts your workplace and arbitration policies specifically, feel free to contact an SMT employment law attorney.

Jan Gabrielson Tansil

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | January 2020

In this month’s Employment Law Bulletin we bring you our 2020 Employment Law Update Action Items checklist. Employers can use this handy checklist to help ensure their organization is in compliance with new laws that took effect in January 2020. Please reach out to an SMT employment attorney if you have questions. We are here to help.

2020 Employment Law Update Action Items

REQUIRED LABOR LAW POSTINGS
 Update CA Labor Law Poster

MINIMUM WAGE IN CALIFORNIA
 Review hourly pay rates and increase as needed
 Review pay for EEs where minimum wage is used as a threshold and increase as needed:

o Wage Order 16 EEs who provide their own hand tools/equipment
o EEs paid minimum wage for travel, waiting time, etc.
o Commissioned sales people (to maintain overtime-exempt status)
o EEs in the construction industry exempt from paid sick leave law based on CBA that provides for pay at least 30% > minimum wage
o EEs exempt from state overtime law based on CBA that provides for regular hourly pay at least 30% > minimum wage

 Review exempt EE salaries and increase as needed
 Since the new minimum wage laws are triggered by ER size, pay attention to fluctuation in EE counts throughout the year and adjust the minimum wage accordingly
 Make sure you have the current minimum wage posting
 Check local ordinance if you have a CBA

OVERTIME FOR AGRICULTURAL WORKERS
 ERs with > 25 EEs: implement new 9/day; 50/week overtime standard now and plan for future changes
 ERs with 1-25 EEs, first change is not effective until 1/1/2022, but now is a good time to review future overtime exposure and develop plans to address (limiting overtime exposure by hiring more EEs vs. keeping the same number of EEs who work more hours and are owed overtime)
 The new OT law is triggered by ER size, so pay attention to fluctuation in EE counts to be sure to apply the correct overtime rule

MINIMUM WAGE CHANGE/LOCAL ORDINANCES IN NORTHERN CALIFORNIA
 If you have EEs who work any hours in these other cities, check to see if they fit the definition of EE such that the minimum wage ordinance applies to them
 Review hourly pay rates and raise if necessary

REPORTING TIME PAY
 Review your call-in and on-call policies, procedures and enforcement to ensure EEs receive all legally required compensation

IRS MILEAGE RATE FOR 2020
 Ensure EEs using personal vehicles for business are being properly reimbursed for business-related mileage
 Inform your payroll/finance department of the mileage rate change so EEs are properly reimbursed

LACTATION ACCOMMODATION
 Update EHB and policies
 Ensure that EEs have a room or location other than the restroom to use for lactation breaks
 Distribute lactation policy with other pregnancy-disability leave documents

NATURAL HAIR AND TRAITS HISTORICALLY ASSOCIATED WITH RACE – CROWN ACT
 Check all written and unwritten policies and practices to ensure compliance: job descriptions and EHBs, recruitment advertising content, training materials for in-house recruiters, workplace dress codes, and performance and disciplinary documents

STATUTE OF LIMITATIONS EXTENDED FOR FILING FEHA COMPLAINT
 Check EE count to ensure proper leave and EE rights management
 Implement best practices to protect against claims and improper leave management

GUN VIOLENCE RESTRAINING ORDER
 Prepare protocols for dealing with violence or potential violence in the workplace
 Designate responsible person who knows what to do if a restraining order is needed

OSHA REPORTING REQUIREMENT
 Update reporting procedures and policies

AB 5 EMPLOYEES OR INDEPENDENT CONTRACTORS?
 Review accounts payable records and identify every person paid on a 1099 basis
 Apply the “ABC Test”
 If any fail the “ABC Test”, contact SMT to discuss strategically reclassifying them as EEs, or analysis of ABC Test exceptions

ARBITRATION AGREEMENTS (BEFORE Chamber v. Becerra DECIDED)
 Don’t include ARB in any AGM modified, extended or entered into after 1/1/2020
 Think carefully before modifying or extending any existing AGM with ARB clause
 Stay tuned because part of these new constraints will likely be overturned; until then, don’t become the test case

NEW LAWS (AND OTHER KEY ISSUES) IMPACTING RELEASES
 Review any form Releases for compliance
 Review any Severance Plan documents for compliance

SEXUAL HARASSMENT TRAINING
 All ERs of 5 or more EEs: Implement training protocol to ensure compliance with timing requirements
 Construction ERs: watch for industry-specific harassment and discrimination prevention policy and training standards and implement

OCCUPATIONAL SAFETY & HEALTH TRAINING FOR VALLEY FEVER
 Determine if the law applies to you, and if so, provide awareness training

ORGAN DONOR LEAVE
 Train HR personnel regarding change in the law

PAID FAMILY LEAVE INSURANCE
 Watch for publication of new PFLI pamphlet in June 2020

NO MATCH NOTICES
 Designate point person who is – or who can get – familiar with different notices
 Develop step-by-step protocol on how to handle no match situations

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | November 2019

New Law Expands Lactation Accommodation Requirements and Opportunity for Employee Claims

Governor Newsom recently approved SB 142, a bill that substantially expands California’s lactation accommodation law starting January 1, 2020.  Prior to 2018, employers were required to provide a private space, other than a toilet, for employees to express milk.  That law was later modified to ensure that lactation spaces were located outside of the restroom.  Now, with SB 142, all California employers (with some limited exceptions discussed below) must provide a private place, other than a restroom, that also meets the following additional criteria:

  • close proximity to the employee’s work area, shielded from view, and free from intrusion;
  • safe, clean, and free of hazardous materials;
  • contains a surface to place a breast pump and personal items and has a place to sit; and
  • has access to electricity or alternative devices, including, but not limited to, extension cords or charging stations needed to operate an electric or battery-powered breast pump.

 

Employers must now also provide employees with access to a sink with running water and a refrigerator (or if unavailable, a cooler) suitable for storing milk in close proximity to the employee’s workspace.

SB 142 includes a few exceptions for particular employers who might find meeting the requirements of the new law challenging.  For example, agricultural employers can comply by providing a private, enclosed and shaded space, such as an air-conditioned cab of a truck or tractor.

Employers with less than 50 employees are also given some leeway.  If an employer with less than 50 employees can show that a certain requirement would cause an undue hardship either because it is significantly difficult to achieve or too expensive, the employer may be excused from having to meet that requirement.  However, these employers must still make reasonable efforts to provide employees with a space that is not a toilet stall and is in close proximity to the employee’s work area regardless of the hardship caused.   For these employers, a restroom could be an approved lactation space, but we only recommend this if it is the only option available.

In addition to addressing the specifics of lactation room requirements, SB 142 also contains obligations related to lactation accommodation policies.  Specifically, all employers must develop and implement a lactation accommodation policy that includes all of the following elements:

  • a statement about an employee’s right to request lactation accommodation;
  • the process by which the employee can make a request for lactation accommodation;
  • information regarding an employer’s obligation to respond to the request; and
  • a statement that the employee has the right to file a complaint with the Labor Commissioner for any violation of the lactation accommodation law.

 

The policy must either be included in an employee handbook or in the place where other employee-related policies are located.  Employers must also distribute their lactation accommodation policy to each new employee upon hire and to any employee who makes an inquiry about or requests pregnancy disability or parental leave.

Finally, SB 142 carries teeth to ensure it is taken seriously.  Under the new law, it is illegal for an employer to discriminate or retaliate against an employee for exercising or attempting to exercise the right to request a lactation accommodation.  Further, denying an employee reasonable break time or an adequate space to express milk is deemed to be a failure to provide a rest break, which means employees will now have an additional basis to claim missed rest break premium pay or to recover rest break penalties if the employee files a claim with the Labor Commissioner.

If you have concerns about your ability to meet the lactation accommodation requirements under SB 142 or you need assistance with updating your policy in order to make it legally compliant for 2020, please contact an SMT attorney.

Kari Brown

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | October 2019

Santa Rosa Minimum Wage to Reach $15/hour Starting July 1, 2020

The City of Santa Rosa announced that it will be next in line to expedite the march towards a $15/hour minimum wage.  On October 1, the Santa Rosa City Council voted unanimously to adopt Ordinance No. 19-0705, which sets the City’s minimum wage at $15/hour effective July 1, 2020 for employers with 26 or more employees, and $14/hour for employers with fewer than 26 employees.  Employers must pay Santa Rosa’s minimum wage to any employee who performs at least two hours of work per week within the geographic boundaries of Santa Rosa. 

Santa Rosa’s ordinance advances the state’s timeline for increasing the minimum wage to $15/hour by two years.  It also requires employers to pay an uncapped cost of living adjustment based on the Consumer Price Index for Urban Wage Earners and Clerical Workers in addition to the minimum wage.  Starting January 1, 2021, all Santa Rosa employers, regardless of size, will be required to pay the $15/hour minimum wage plus the additional cost of living adjustment.  Effective January 1, 2022 and annually thereafter, the minimum wage will be tied to any increase in the cost of living adjustment.  While the Council contemplated capping the annual cost of living adjustment at 3.5%, it ultimately rejected the limitation.  The inclusion of the uncapped cost of living adjustment and the expedited higher minimum wage make Santa Rosa’s ordinance one of the most progressive minimum wage laws in the state.

For information regarding recent minimum wage ordinances adopted by the Cities of Sonoma and Petaluma, please see our August 2019 Employment Law Bulletin.

If you have questions about implementing the new local minimum wage ordinances in your workplace, please contact an SMT attorney.

Kari Brown

New Law Nearly Eliminates Independent Contractor Classification in California

Last month, Governor Newsom signed Assembly Bill 5 (“AB5”) into law granting almost all California workers with employee status and the protections of its wage and hour and unemployment insurance laws.  With this new law, only a select few can lawfully be classified as independent contractors.

You may recall our discussion of the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court in our June 2018 Employment Law Bulletin.  The Dynamex court held that all workers are employees unless the hiring entity can prove all conditions of “the ABC Test.”  The Dynamex decision applied only to wage and hour claims under the Industrial Welfare Commission Wage Orders.  AB5 was introduced to codify Dynamex and extend the ABC Test to California’s Labor and Unemployment Insurance Codes.

With the introduction of AB5, many industries lobbied for exemptions from the application of the ABC Test.  Some of them were successful, while some were not.  The end result is a 15 page, single-spaced detailed and complicated amended AB5 that nearly requires a law degree to wade through.  As with any piece of complicated legislation, we anticipate there will be clarifying regulations and amendments to AB5 in the coming year, but for now, I’ve attempted to take you through the requirements in a step-by-step approach.  After reading a few lines, you’ll see this is very complicated.  Don’t be surprised if you need to get a cup of coffee, close your door, turn off the phones, and use a flow chart to follow this.  Ok, here we go!

GENERAL RULE:  All Workers Are Employees, Unless The Hiring Entity Can Prove Otherwise – and the Burden of Proof Is Very High.

Under the new law, a person providing labor or services for pay is automatically considered an employee, rather than an independent contractor, unless the hiring entity can either prove that ALL of the conditions of the “ABC Test” are satisfied OR the elements of an exemption from AB5 and that the worker meets the elements of the independent contractor test in Borello & Sons, Inc. v. Department of Industrial Relations (“the Borello Test”).  To determine which independent contractor test applies and whether your business can meet it, follow the steps below.

STEP 1:  The ABC Test.  Can the hiring entity prove the worker meets the ABC Test?  If not, go to Step 2.  If yes, the worker is an independent contractor.  (Note, independent contractor status will only very rarely be found under the ABC Test.)
(A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
(B) the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

STEP 2:  Occupations Exempt From the ABC Test.  Does the worker fall within one of the specified occupations specifically exempt from the application of the ABC Test?  If not, go to Step 3.  If yes, use the Borello Test in Step 6 to determine if the worker is an employee or independent contractor.  (See AB5 for specific requirements for each occupation).

  • licensed insurance agents;
  • California licensed physicians, surgeons, dentists, podiatrists, psychologists & veterinarians;
  • California licensed lawyers, architects, engineers, private investigators and accountants;
  • securities broker-dealers, investment advisers or their agents and representatives registered with the Securities and Exchange Commission or the Financial Industry Regulatory Authority or licensed by the State of California;
  • direct sales salespersons (as defined by Unemployment Insurance Code section 650);
  • commercial fisherman working on an American vessel.

 

STEP 3:  Contracts For Professional Services.  Is the worker providing services under a contract for “professional services” that is exempt from the application of the ABC Test?  If not, go to Step 4.  If yes, use the Borello Test in Step 6 to determine if the worker is an employee or independent contractor.

For the Professional Services Contract exemption, the contract must be for one of the types of services listed in AB5 AND the individual worker must have an established business that meets five specific requirements:

Types of Services:

  • marketing, provided that the contracted work is original and creative in character and the result of which depends primarily on the invention, imagination, or talent of the worker or work that is an essential part of or necessarily incident to any of the contracted work;
  • human resources administrator, provided that the contracted work is predominantly intellectual and varied in character and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time;
  • some travel agent services;
  • graphic design;
  • grant writer;
  • fine artist;
  • services provided by an enrolled agent who is licensed to practice before the IRS;
  • still photographer, photojournalist, freelance writer, editor or newspaper cartoonist who does not license content submissions to the hiring entity more than 35 times per year;
  • licensed esthetician, electrologist, barber, or cosmetologist (provided the individual meets several requirements set out in AB5); or
  • licensed manicurist (only until 12/31/2021).

 

Worker’s Business Requirements:

Even if the worker provides services that meet the definition of “professional services”, the worker must perform those services in connection with an established business that meets ALL of the following requirements:

  • the worker must maintain a business location, which may include the individual’s residence, that is separate from the hiring entity;
  • the worker must have all required professional licenses and permits to practice their profession (if work is performed after July 1, 2020);
  • the individual must have the ability to set or negotiate their own rates for the services performed
    outside of project completion dates and reasonable business hours, the worker must have the ability to set the individual’s own hours;
  • the individual must be customarily engaged in the same type of work performed under contract with another hiring entity or must hold themselves out to other potential customers as available to perform the same type of work; and
  • the  individual  customarily  and  regularly  exercises  discretion  and  independent judgment in the performance of the services.

 

STEP 4:  Business-To-Business Exception.  Is the worker providing services under a contract that fits the Business-To-Business exception?  If not, go to Step 5.  If yes, use the Borello Test in Step 6 to determine if the worker is an employee or independent contractor.

The Business-To-Business exception applies when a business entity (“business service provider”) contracts to provide services to another business (“contracting business”) and all of the following criteria are met:

  • the business service provider is free from the control and direction of the contracting business entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
  • the business service provider is providing services directly to the contracting business rather than to customers of the contracting business;
  • the contract with the business service provider is in writing;
  • if the work is performed in a jurisdiction that requires the business service provider to have a business license or business tax registration, the business service provider has the required business license or business tax registration;
  • the business service provider maintains a business location that is separate from the business or work location of the contracting business;
  • the business service provider is customarily engaged in an independently established business of the same nature as that involved in the work performed;
  • the business service provider actually contracts with other businesses to provide the same or similar services and maintains a clientele without restrictions from the hiring entity;
  • the business service provider advertises and holds itself out to the public as available to provide the same or similar services;
  • the business service provider provides its own tools, vehicles, and equipment to perform the services;
  • the business service provider can negotiate its own rates;
    consistent with the nature of the work, the business service provider can set its own hours and location of work; and
  • the business service provider is not performing the type of work for which a license from the Contractor’s State License Board.

 

STEP 5:  Other Exceptions.  Is the worker providing services that meet one of the following exceptions?  (See Labor Code section 2750.3 for the specific detailed requirements of each exception).  If not, use the Borello Test in Step 6 to determine if the worker is an employee or independent contractor.  If yes, apply the test listed next to the exception.

  • Construction Subcontracts (Labor Code section 2750.5 and the Borello Test)
  • Referral Agency contracts (Borello Test)
  • Motor Club worker (Borello Test)
  • Real Estate Licensees (Business & Professions Code section 10032)
  • Repossession Agencies (Business and Professions Code section 7500.2)

 

STEP 6:  Does the Worker Meet the Independent Contractor Status Test Announced In Borello?  If not, the worker is an employee. If yes, the worker is an independent contractor.  (Note, independent contractor status is also rarely found under the Borello Test).

The Borello Test examines the total circumstances of the relationship between the hiring entity and the worker performing the work, in light of the 11 factors listed below.  While easier to meet than the ABC Test, the Borello Test also strongly favors a conclusion that a worker is an employee, rather than an independent contractor.

  1. whether the worker is engaged in an occupation or business that is distinct from that of the hiring entity;
  2. whether the work is part of the hiring entity’s regular business;
  3. whether the hiring entity or the worker supplies the equipment, tools, and the place for the person doing the work;
  4. the worker’s financial investment in the equipment or materials required to perform the work;
  5. the skill required in the particular occupation;
  6. the kind of occupation, with reference to whether, in the locality, the work is usually done under the hiring entity’s direction or by a specialist without supervision;
  7. the worker’s opportunity for profit or loss depending on his or her own managerial skill (a potential for profit does not include bonuses);
  8. how long the services are to be performed;
  9. the degree of permanence of the working relationship;
  10. the payment method, whether by time or by the job; and
  11. whether the parties believe they are creating an employer/employee relationship.

 

Although no single factor in the Borello test is determinative, the first one—whether the individual’s work is the service or product that is the hiring entity’s primary business—is given the most weight.

Conclusion

Congratulations on making your way through the AB5 requirements!  If you’re confused, you’re not alone.  AB5 clearly shows California’s strong public policy in favor of protecting workers.  While the least risky and most conservative approach is to hire every worker as an employee, the AB5 exceptions are there to be used, but applying them won’t be easy.  With AB5, you can expect the Labor Commissioner, the Employment Development Department and attorneys who represent employees to be laser-focused on this issue, which means high risk and potential liability for hiring entities that don’t classify workers as employees.

We’ll keep you updated on future AB5 regulations and amendments.  In the meantime, if you’re thinking of hiring an independent contractor, contact an SMT employment attorney for help with the detailed analysis AB5 now requires.

Lisa Ann Hilario

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

 

Employment Law Bulletin | September 2019

Emergency Legislation Extends Sexual Harassment Training Deadline

On August 30, 2019, Governor Newsom signed emergency legislation extending the new sexual harassment training compliance deadline for an additional year.  The new training compliance deadline is January 1, 2021.  This is great news for employers.
 
This sexual harassment training requirement was originally set to require completion of the first round of training by 1/1/2020.
 
As a reminder, the training law, effective 1/1/2019, requires employers with five to forty-nine employees to provide at least two hours of specific training and education regarding sexual harassment to all supervisory employees and at least one hour of training and education to all nonsupervisory employees within six months of assuming their position and once every two years thereafter. These requirements now take effect on January 1, 2021. (Government Code §12950.1)  The training law for employers of fifty or more employees remains unchanged.
 
This legislation in no way minimizes the importance of providing a workplace free from prohibited harassment, it just allows employers a bit of breathing room when scheduling this very important training.

Protection from Wildfire Smoke: New Regulation Imposes Obligations on Certain California Employers to Monitor Air Quality

If you are a California employer and the air quality of your workplace is likely to be affected by wildfire smoke, the requirements of a new Cal/OSHA emergency regulation may apply to you.  The regulation is somewhat unclear and provides limited guidance for employers, but here’s what we know to date.

First off, the regulation, which is in effect now through January 28, 2020, provides exemptions for workplaces that are enclosed (including vehicles) and have an air filtering system so long as all windows, doors, bays and other openings are kept closed to minimize contamination by outdoor or unfiltered air.  Firefighters engaged in wildland firefighting are also exempt.  If these exemptions apply to your workplace, you can take a breath of fresh air.  If not, keep reading.  

Cal/OSHA is requiring employers who either 1) have a workplace with a current Air Quality Index (AQI) for PM2.5 of 151 or greater or 2) anticipate that their employees will be exposed to wildfire smoke, to take certain measures to protect their staff.  These two categories create many questions for employers, the foremost of which is: What the heck is PM2.5?  

According to the regulation, PM2.5 is defined as “solid particles and liquid droplets suspended in air, known as particulate matter, with an aerodynamic diameter of 2.5 micrometers or smaller.”  In other words, the department wants employers to know how much particulate matter is in the workplace air because, at a certain level, it is harmful for humans to breathe.  
How do you know what level the PM2.5 is at?  While employers can choose to use special devices to measure the air quality themselves, the AQI for PM2.5 can actually be found quite easily on various Cal/OSHA approved websites including the EPA’s AirNow website (www.airnow.gov).   

The chart below is also a helpful tool in understanding the ranges of AQI for PM2.5, the colors on AQI maps, and the health concerns that correspond with an increase in the AQI for PM2.5 levels.

AQI for PM2.5 Levels of Health Concern/Color Indicator
0 to 50 Good
51 to 100 Moderate
101 to 150 Unhealthy for Sensitive Groups
151 to 200 Unhealthy
201 to 300 Very Unhealthy
301 to 500 Hazardous

Chart Adapted from Table 2 of Title 40 CFR, Part 58, Appendix G.  

AQI for PM2.5 must be checked or measured by employers who have affected workplaces before each shift and periodically throughout the day as needed to protect the health of the employees.  There is no guidance on how often the air quality must be checked, so employers should use their best judgment.  If an employer can demonstrate that the AQI for PM2.5 is less than 151 or that employees will only be exposed to harmful air quality for an hour or less per shift, the employer does not have to comply with the remaining obligations of the regulation. 

If the AQI for PM2.5 is 151 or more, employers are required to move employees to enclosed structures (including vehicles) that have air filtering systems if possible.  Otherwise, employers must undertake efforts to lower the intensity of the work, provide more rest breaks, and/or reduce work hours.  In addition, employers are required to provide NIOSH-approved respirators (such as N-95 masks) to employees for voluntary use.  Note that when the PM2.5 exceeds 500, respirators are required to be provided and worn. 

Employers are also required to comply with specific educational and training components of the regulation.  Employers are now expected to implement a system of communication that informs employees of the current AQI for PM2.5 and educates them on the protective measures available to them.  Employers are specifically required to encourage employees to report worsening air quality in the workplace and any adverse symptoms or reactions resulting from wildfire smoke without fear of retaliation.  

The information must be conveyed to employees in a format that employees can understand and must include the following information:

  • The employee’s right to obtain medical treatment
  • How employees can obtain the current AQI for PM2.5 
  • The requirements for employers under the Cal/OSHA regulation
  • The employer’s two-way communication system (think “open door”)
  • The methods the employer uses to protect employees from wildfire smoke 
  • Education regarding respirator masks


To view the emergency regulation and its Appendices, follow the link below: https://www.dir.ca.gov/oshsb/documents/Protection-from-Wildfire-Smoke-Emergency-apprvdtxt.pdf.  

If you have questions about whether you need to comply with this Cal/OSHA regulation or on how to protect, train, or assist your employees when wildfire smoke is present in the workplace, please contact an SMT employment attorney.

CROWN Act Creates a New Protected Status:  Natural Hair and Traits Historically Associated with Race        

The California Fair Employment and Housing Act (FEHA) and the California Education Code have been revised to expand the definition of “race” to include “traits historically associated with race, including but not limited to hair texture and protective hairstyles”. This protects California students, employees, residents and applicants for employment and housing against discrimination based on any traits historically associated with race, including but not limited to hair texture and protective hairstyles (Natural Hair).  “Protective hairstyles” include, but are not limited to, hairstyles such as braids, locks and twists.  

As with other protected status categories, the law also protects against discrimination based on the perception that the person has this characteristic, or that the person associates with a person who has, or is perceived to have, this characteristic. 

The purpose of the law is to eliminate discrimination against people who do not meet the (mostly) unwritten societal norms that have historically equated European-centric looks and norms with professionalism, and dark skin or kinky, curly or textured hair with a lack of professionalism and other negative employment traits.  This discrimination has denied people with these traits opportunities in education, housing and employment; this law is intended to ban that discrimination.

In the employment context, any policy or practice that impacts recruiting, hiring, job qualifications, retention, promotion, compensation, discipline or termination cannot include traits historically associated with race, including Natural Hair characteristics, in any negative or disqualifying way.  

Employers should check all written and unwritten policies and practices to ensure compliance with the new law.  Obvious written policies to check and potentially revise include job descriptions and employee handbooks, but don’t forget to check and potentially revise recruitment advertising content, training materials for in-house recruiters, workplace dress codes, and performance and disciplinary documents.

This new law, which may seem quirky or unnecessary to some, is another opportunity for all of us operating in the employment arena to check our own biases and perceptions, examine them thoughtfully, and make any adjustments to our workplace-related policies and behavior accordingly.  Those of us working in the employment trenches have the ability to make a real difference in people’s lives and economic opportunities, and the California legislature has just shown us another way to have a positive impact.

Please contact an SMT employment law attorney with any questions or for guidance in bringing your employment policies into compliance with this new law.

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started. 

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | August 2019

The Harassment Prevention Training Deadline is Fast Approaching – Are You Ready?

In December 2018, we reported on a new California law requiring employers with 5 or more employees to provide harassment prevention training to all employees by the end of 2019.  As 2020 is quickly approaching, we thought we’d remind you of the training requirements now so you can be sure you are in compliance by the end of the year.

  • Non-supervisory employees must receive one hour of training.
  • Supervisors must receive two hours of training (even if they received training in 2018).
  • After the initial training in 2019, training must be repeated for every two years.
  • New hires must receive training within six months of their hire date, unless they can provide evidence they completed training with a previous employer during 2019.
  • Employees promoted to a supervisory position must receive the supervisor training within six months of their promotion.
  • Beginning January 1, 2020, seasonal and temporary employees, and employees who are hired to work for less than six months, must receive training within 30 days of their date of hire or within 100 hours worked, whichever occurs first.

Not sure where to go from here?  Contact an SMT employment attorney.  We can provide the employee training or discuss other options to help you select the most efficient and cost-effective training method for your business.

Sonoma and Petaluma Adopt Their Own Minimum Wage

The cities of Sonoma and Petaluma recently established their own minimum wage for nearly all employees doing any work in Petaluma or Sonoma, even those who perform only a few hours of work per week in those cities.  These new laws apply regardless of the employer’s business location and exceed the State of California’s state minimum wage requirements.

Both ordinances apply to any employee who works for more than 2 hours in any week within the city’s geographic boundaries.  In the City of Sonoma, once the 2-hour threshold is met, all time the employee works in Sonoma that week must be paid at Sonoma’s minimum wage rate.

Under both laws, the time an employee spends traveling from a point outside the city to a destination outside the city is not subject to the ordinance so long as the employee doesn’t make an employment-related stop in the city while traveling through.

As with the State of California minimum wage, the cities of Petaluma and Sonoma adopted a phase-in schedule based on employer size.  When counting employees, the employer must count all employees working inside and outside of the cities.

City of Sonoma

Effective 1-25 Employees 26 or more Employees
1/1/2020 $12.50 $13.50
1/1/2021 $14 $15
1/1/2022 $15 $16
1/1/2023 $16 $17

City of Petaluma

Effective 1-25 Employees 26 or more Employees
1/1/2020 $14 $15
1/1/2021 $15* $15*

*may be adjusted up based on the Consumer Price Index.

State of California

Effective 1-25 Employees 26 or more Employees
1/1/2020 $12 $13
1/1/2021 $13 $14
1/1/2022 $14 $15
1/1/2023 $15 $15

Starting January 1, 2021, the City of Sonoma ordinance provides that employers who pay at least $1.50 per hour per employee towards an employee medical benefits plan can take a $1.50 per hour health credit from the minimum wage listed above.  The City of Petaluma specifically rejected such a credit.

Both laws have some limited exemptions. They also have employee notice, posting and record retention requirements.

If you pay more than the minimum wages listed above, you can breathe easy.  If you don’t and you have employees who perform any work in the cities of Sonoma or Petaluma, please contact an SMT employment attorney to discuss how these new ordinances apply to your business.

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | July 2019

New California Retirement Savings Program Open for Employer Registration July 1

Starting July 1, 2019, California began offering a retirement savings program to private sector employees through the California Retirement Savings Program, or CalSavers.

This new program requires all private sector employers with 5 or more employees who do not currently offer a qualified retirement plan to register for CalSavers or risk costly penalties, discussed below.

But don’t panic.  Although employer registration began on July 1, 2019, compliance is not required right away.  The compliance deadlines range from June 30, 2020 to June 30, 2022, depending on the number of employees in your organization.

Number of Employees Compliance Deadline
100+ employees 6/30/2020
50+ employees 6/30/2021
5+ employees 6/30/2022

Beyond the registration and payroll deduction obligations, employers are expected to have very little involvement in the administration and management of the program.  Employers are not required to make any contribution on behalf of employees, or pay any fees.  The is intended to allow employees to save for their own retirement automatically via payroll deduction, at no cost to their employers.

Employee CalSavers accounts, which function similar to Individual Retirement Accounts (IRAs), are self-funded through automatic payroll deductions from the employee’s wages.  The state of California set a standard savings rate for CalSavers accounts at 5% of gross pay, which is deducted on an after-tax basis from each paycheck.  This savings rate will increase 1% each year until 8% is deducted per paycheck.  However, employees are also free to adjust their contribution rate to as little as 1% or to a higher rate, within IRS limits.  The CalSavers program is funded by fees charged to the employee accounts, which are estimated to be approximately .83 to .95 cents per year for every $100 in the account.  If an employee prefers a different solution for their retirement needs, he or she can opt out of CalSavers at any time.

A covered employer who does not timely offer the CalSavers program will be sent a non-compliance notice by the State.  That employer can be fined $250 per eligible employee if it fails to offer the program to employees after being served with a non-compliance notice.  An additional penalty of $500 per eligible employee will be levied for non-compliance that continues for more than 180 days after service of such notice.  Employers covered by the CalSavers program requirements should pay careful attention to any non-compliance notices received.

For more information on this new program, visit https://www.calsavers.com/.  The “Employers” link contains helpful information, a template letter that can be used to introduce CalSavers to your employees, and links to assist your payroll department with the administration of the program.  If you have any additional questions about CalSavers and whether it applies to you, please contact us.

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | June 2019

Ready, get set, summer is here! Are your company’s vacation policies ready?

Vacation season is upon us.  It’s important to keep in mind some key concepts and practices related to the use of this very treasured and valuable ability to take time off with pay.  This article addresses key points and concepts aimed at helping employers legally and safely adopt and administer a vacation policy.  Please note that this article does not address paid or unpaid sick leave, and all references to time off with pay refer to vacation time, not sick leave.  All references to vacation apply equally to the portions of paid time off (PTO) policies not directed at sick leave.

For starters, vacation is NOT required by law, even in California.  There are still employers who do not provide any form of paid time off other than mandated sick leave.  Having zero paid vacation would likely have a negative impact on recruiting and retention in most work places, but it is legal.

Once a California employer decides to provide paid vacation, it is heavily regulated.  And, most employees greatly value and count on their vacation time off, so this is one of those policies in your Employee Handbook that needs to be clear and easy to understand and follow because it’s very likely that your employees will be reading it carefully.

Key #1:  Be sure your written vacation policy accurately describes the policy you intend to have.

If you haven’t read your vacation policy lately, please take the time to do so.  The employer will be legally bound to provide nothing less than what is described in the written language of the policy.  Look at it with fresh eyes, and try to put yourself in the place of a non-HR professional:  what would it mean to you if you were a new hire? A long-term employee? An exempt employee? An employee who works remotely or offsite on a routine basis? If it isn’t a clear and workable written policy from all perspectives, then it should be revised. It is especially important to be sure the standards related to accrual and usage are clearly spelled out.  Examples can be very helpful if you have a complicated formula or policy.

Vacation policies can be changed with reasonable advance notice, so be sure that any policy changes take place at least a week or two after they are announced.  The more drastic the change, the longer the advance notice should be.  No change can result in a forfeiture of previously accrued vacation time.  If you have any employees with written employment contracts containing vacation terms, check the terms of each contract to see the requirements for amending the contract.

Key #2:  Be sure to address all of the important vacation terms and conditions in your policy.  Once adopted, be sure to administer the accrual and use of vacation consistent with the written policy and the law.

There are several main areas to address:

  • Eligibility:  The policy should clearly identify which employees are eligible to earn vacation benefits.  Eligible and ineligible employees may be defined by employment status (regular, temporary, probationary), job categories (exempt, non-exempt, office, field employees) and/or the number of hours they are regularly scheduled to work (40 hours, 32 hours per week).
  • Accrual:  This should be mathematical and not discretionary.  Employees should be able to understand (1) when accrual begins, (2) whether there are times when accrual pauses (i.e., during leaves of absence or when they reach a stated maximum accrual), and (3) how much vacation they have available at any given time.  We strongly recommend that vacation accrual and usage be shown on paystubs on an ongoing basis to avoid errors and misunderstandings.
  • Usage:  The parameters for usage should be explicitly spelled out.  Some employers require completion of a specific length of employment (i.e., 3, 6 or 12 months) before accrued vacation can be taken.  While most employers require that vacation not be taken in advance of accrual, some employers allow use prior to accrual (“going negative” in general, or only under certain limited circumstances).  Be sure to address this in your policy.
  • Scheduling:  If a specific amount of advance notice is required, that should be specified (2 weeks, 30 days, etc.)  Some employers have blackout times (during crush for wineries, during December for retail, during tax season for accounting firms, during a Performance Improvement Plan) when no vacation may be taken.  Some employers require the use of vacation during certain times (when the doctor is out of the office for X number of work days, during an anticipated slow period or time of year).  We recommend that employers reserve the right to schedule an individual employee’s vacation in any situation deemed appropriate, but to exercise that right rarely and carefully (suspected embezzlement, certain investigation situations, etc.).  The method of requesting vacation time off should also be specified (in writing, using a specified form, to a certain person or position, etc.).  As with any employee policy, any exceptions made should be documented to show the reasons for the exception, so another employee can’t later successfully claim that the denial of their own request for an exception was based on protected status.  Be careful not to let your exceptions swallow the rule.  Employees who follow the rules should see that the same standards apply to everyone.
  • Forfeiture/Accrual Cap:  There is no circumstance where forfeiture of accrued vacation is permissible under California law.  (See Suastez v. Plastic Dress-Up Company, which has to be the best name ever for an important published decision.)  Put another way, California does not allow “use it or lose it” policies.  However, some of the same goals can be achieved by a carefully worded accrual cap.  This stops further vacation from accruing, but does not allow forfeiture of any previously accrued vacation.  Accrual caps are allowed only when the employee is allowed a reasonable amount of time in order to use the accrued vacation.  The general minimum accrual cap allowed is a “1.5 times” rule, which means that the cap cannot kick in until the employee has accrued at least 1.5 times his or her then-current annual accrual amount.

For example, the accrual cap for an employee currently accruing two weeks of vacation per year must be set no lower than three weeks.  In addition, if the employee’s workload is such that the employee cannot reasonably take vacation time off, or if the employer has denied one or more requests to take vacation time off, then the employee has an argument that the timing of the accrual cap is not reasonable, because there was not a reasonable opportunity to take the accrued time off before the accrual cap kicked in.

If an employer requires any employee to forfeit accrued vacation and the forfeiture is not corrected prior to the end of employment, that employee is eligible to file a claim for failure to pay all final pay when due, likely leading to liability against the employer for the dollar value of all previously forfeited vacation at the employee’s final rate of pay plus 30 days of waiting time penalties under Labor Code section 203.  This is a steep penalty that is routinely granted in vacation forfeiture situations.

  • Asking for Vacation Time Off Should be a Request:  Be sure that both your policy and administration of the policy is clear:  the employee is asking permission to take vacation time off at a certain time, they are not giving you notice of when they will be off work.  Some policies contain language reminding employees that it is a request, and not to pay for non-refundable tickets or accommodations prior to receiving appropriate approval in writing.  It’s important for the staff in charge of handling vacation requests to respond promptly and in writing, and to be respectful and regretful when circumstances do not allow approval of the request.

 

Key #3:  Accurately track vacation accrual and usage.

Make sure you have systems in place to accurately track each employee’s earning and use of vacation.  You should be able to identify each hour/day of vacation taken and to track all “deposits” and “withdraws” from each employee’s “vacation bank.”

Key #4:  If you use timekeeping software to track vacation or a third party handles your payroll, check to make sure they are properly implementing your vacation policy.

Audit your timekeeping software and outside payroll company, accountant or bookkeeper periodically to make sure they are accruing and tracking vacation in accordance with your policy.  If you change your vacation policy, make sure to provide it to the third party and ask them to update their systems.  Employers are responsible to their employees for payroll errors, so it’s important to make sure your systems and outside administrators are carrying out your policy.

We hope your vacation policies are in shape for summer but, if you feel like there is room for improvement or have questions about the concepts discussed in this article, please contact an SMT employment attorney.  We are here to help.

Jan Gabrielson Tansil

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | May 2019

When Civic Duty Calls

If you have ever been summoned for jury duty, you may have noticed that attorneys rarely get selected as jurors.  In fact, trial attorneys are notorious for making sure that people with backgrounds in the legal field do not serve as jurors on their cases.  There are many theories behind this approach – some are founded on superstition; others on the fear that these types of jurors might lead the jury to reach the “wrong” conclusion.  Regardless of whether the strategy is based on myth or reality, attorneys are generally gone from the jury panel as soon as trial counsel can utter the words, “I would like to thank and excuse juror number…”

However, we recently discovered that things may be changing in the world of jury selection.  Since the beginning of the year, two SMT attorneys, Lisa Ann Hilario and Katie Jeffrey, were selected to serve as jurors in Sonoma County jury trials.  It is clear from talking with Lisa Ann and Katie that they enjoyed the unusual opportunity to perform their civic duty and watch their peers in action.  Discussing their experience with them also made us think of the employment law issues surrounding jury duty and that this is the perfect time to provide a quick refresher on these issues for our clients.

Jury duty can often present practical challenges that are difficult for employers and employees to navigate.  In Lisa Ann and Katie’s trials, the estimated timeframe for jury duty was at least two weeks, which is fairly typical.  Managing the absence of an employee who is unexpectedly gone for this amount of time not only demands the support of the employee’s co-workers, but also requires employers to understand the laws regarding the rights and protections related to jury duty.  For example, California employers are prohibited from discharging, discriminating or otherwise punishing an employee who is required to appear for jury duty.  In fact, employers must provide jury duty leave so long as the employee has given reasonable notice of the requirement to serve.

And what about pay during jury duty leave?  Employers may choose to provide non-exempt employees with either paid or unpaid time off for the purpose of performing jury duty.  If an employer chooses to provide paid jury duty leave, the number of paid days of leave is at the employer’s discretion, as are the categories of employees who are eligible to receive paid jury duty leave, i.e., full or part-time.  In addition, any fees paid to employees in connection with their jury duty may be deducted from the paid leave amount.  However, it is important to keep in mind that under both California and federal law, exempt employees must receive their full salary during jury duty unless it causes them to miss an entire week of work.  In this age of technology, with employees performing work by email and phone, it’s likely rare that an exempt employee will miss an entire week of work for jury duty.

Our Tips:  Make sure your employees know that jury duty leave is available to them if they are called for service.  We recommend having a policy in place that clearly explains whether the leave will be paid or unpaid.  If paid, your policy should set out eligibility requirements and the duration of paid leave.  Having a good policy in place will reduce anxiety and set expectations for both the employer and employee.  It will also assist the employer in treating all employees consistently with respect to jury duty leave.

Your policy should also outline what an employee is required to do when he or she receives a summons for jury duty.  We recommend that employees be required to show proof of the summons to their supervisor as soon as possible so that coverage can be arranged.  If necessary, employers may also require employees to show proof of attendance for each day of service.  Many courts have jury trial schedules that provide for early dismissal or “dark” days, when no court is held at all.  In Sonoma County, several judges have adopted a trial schedule that runs from 8:30 a.m. to 1:30 p.m., so employees are typically able to work at least partial days. To avoid employees skipping work when they are not otherwise in court, be sure that your policy requires your employees to report for work during regular working hours when attendance in court is not required.  Finally, remember to never fire, demote, cancel health insurance, withhold the accrual or use of benefits, or engage in any other adverse action against an employee simply because he or she is required to appear for jury duty or you might end up in a jury trial of your own!

If you have questions about how jury duty leave will affect your business, please reach out to an SMT employment attorney.

Kari J. Brown

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish.  Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims.  Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown