EMPLOYMENT/ IMMIGRATION SEMINAR

1. EMPLOYMENT/IMMIGRATION SEMINAR James M. Peterson, Esq. Sam G. Sherman, Esq. Higgs, Fletcher & Mack LLP401 West A Street, Suite 2600San Diego, CA 92101619.236.1551www.higgslaw.com Blog: www.sdemploymentlaw.wordpress.com HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

2. EXEMPT EMPLOYEES • EXEMPT FROM ALL PROVISIONS • OUTSIDE SALESPERSONS • GOVERNMENT EMPLOYEES • MEMBERS OF IMMEDIATE FAMILY • MINIMUM WAGE, OVERTIME, REST AND MEAL PERIODS • ADMINISTRATIVE, EXECUTIVE AND PROFESSIONALS HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

3. EXECUTIVE EXEMPTION • Executive Exemption. A person employed in an executive capacity means any employee: (a) Whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and (b) Who customarily and regularly directs the work of two or more other employees therein; and (c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

4. EXECUTIVE EXEMPTION (CONTINUED) • (d) Who customarily and regularly exercises discretion and independent judgment; and • (e) Who is primarily engaged in duties which meet the test of the exemption. • (f) Such an employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment. Full-time employment is defined in Labor Code Section 515(c) as 40 hours per week. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

5. Administrative Exemption Administrative Exemption. A person employed in an administrative capacity means any employee: (a) Whose duties and responsibilities involve either: (i) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer’s customers; or (ii) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

6. ADMINISTRATIVE EXEMPTION (CONTINUED) (b) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity; or (c) Who performs under only general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or (d) Who executes under only general supervision special assignments and tasks HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

7. Professional Exemption Professional Exemption. A person employed in a professional capacity means any employee who meets all of the following requirements: (a) Who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or (b) Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

8. Professional Exemption (CONTINUED) For the purposes of this subsection, “learned or artistic profession” means an employee who is primarily engaged in the performance of: (i) Work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; or (ii) Work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work; and (iii) Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical ,or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

9. EXEMPT STATUS • “PRIMARILY ENGAGED IN” THE DUTIES WHICH MEET THE TEST OF THE EXEMPTION • MORE THAN HALF OF THEIR TIME IN EXEMPT WORK—”QUANTITATIVE TEST” • CONTRAST WITH FLSA—”PRIMARY DUTY”—”QUALITATIVE TEST” HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

10. EXEMPT STATUS • ACTIVITIES TO BE CONSIDERED EXEMPT INCLUDE WORK “DIRECTLY AND CLOSELY RELATED” TO EXEMPT WORK AND WORK PROPERLY VIEWED AS A MEANS FOR CARRYING OUT EXEMPT FUNCTIONS • GUIDANCE IN 29 C.F.R. 541.108(MANAGERIAL); 208(ADMINISTRATIVE); 308(PROFESSIONAL) • EXAMPLES: • TIMEKEEPER VS. PAYROLL CLERK • SALES RECORDS FOR SUPERVISION VS. PRODUCTION RECORDS FOR THOSE NOT UNDER CONTROL OR SUPERVISION • DISTRIBUTION OF MATERIALS OR MERCHANDISE AND SUPPLIES VS. RETAIL ESTABLISHMENT WHERE TASKS PERFORMED BY NON-EXEMPT WORKERS • SETUP WORK HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

11. EXEMPT STATUS • OCCASSIONAL TASKS • IWC DOES NOT INTEND TASKS TO BE INCLUDED IN THE CALCULATION OF EXEMPT WORK • NON-EXEMPT WORK PERFORMED BY AN EXEMPT MANAGER ON AN OCCASSIONAL BASIS MAY NOT BE COUNTED TOWARD THE 50% REQUIREMENT HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

12. EXEMPT STATUS • EXERCISE OF DISCRETION AND INDEPENDENT JUDGMENT • COMPARISON AND EVALUATION OF POSSIBLE COURSES OF CONDUCT AND ACTING OR MAKING A DECISION AFTER THE VARIOUS POSSIBILITIES HAVE BEEN CONSIDERED 29 C.F.R. § 541.207 • AUTHORITY OR POWER TO MAKE AN INDEPENDENT CHOICE, FREEE FROM IMMEDIATE DIRECTION OR SUPERVISION AND WITH RESPECT TO MATTERS OF SIGNIFICANCE HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

13. EXEMPT STATUS • REALISTIC EXPECTATIONS • WORK ACTUALLY PERFORMED MUST BE EXAMINED AND THE AMOUNT OF TIME SPENT ON EXEMPT WORK TOGETHER WITH THE EMPLOYER’S REALISTIC EXPECTATIONS AND THE REALISTIC REQUIREMENTS OF THE JOB MUST BE CONSIDERED HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

14. EXEMPT STATUS • SALARY REQUIREMENTS • SALARY EQUILAVENT TO TWO TIMES THE STATE MINIMUM WAGE ($7.50) OR $2600 PER MONTH. • INCREASES TO $8.00 PER HOUR 1/1/08 OR ABOUT $2775 PER MONTH HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

15. SALES PERSONS • OUTSIDE SALESPERSON • “Outside salesperson” means any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities. • EXEMPT FROM WAGE ORDERS HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

16. SALES PERSONS • COMMISIONED SALES PERSONS • EXEMPT FROM OVERTIME REQUIREMENTS • EARNINGS MUST EXCEED ONE AND ONE-HALF MINIMUM WAGE, IF MORE THAN HALF OF THE EMPLOYEE’S COMPENSATION REPRESENTS COMMISSIONS HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

17. COMMISSIONS • In order to comply with the requirements of the exemption for each workweek the earnings of the employee, whether actual commissions or a guaranteed draw for the workweek against commissions to be earned within such work week, must exceed 1.5 times the minimum wage for each hour worked during the pay period. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

18. COMMISSIONS • THE 50% OF EARNINGS FROM COMMISSIONS RULE, MUST ALSO BE SATISFIED IN EACH WORKWEEK. • THE ACTUAL DETERMINATION OF COMPLIANCE CAN BE DEFERRED UNTIL THE RECONCILIATION DATE FOLLOWING THE END OF THE SECOND PAY PERIOD. • OVERTIME WILL BE DUE FOR ANY WEEK IN WHICH THE SECOND COMPONENT IS NOT MET. TO TEST FOR WHETHER THE COMPENSATION ARRANGEMENT IS A BONA FIDE COMMISSION PLAN, CALIFORNIA LAW ALSO USES A PERIOD OF AT LEAST ONE MONTH. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

19. EXEMPT EMPLOYEES • PENALTIES AND REMEDIES FOR MISCLASSFICATION • ADMINISTRATIVE ENFORCENT BY THE DLSE • LABOR COMMISSIONER OR BERMAN HEARINGS • JUDICIAL ENFORCEMENT • INTEREST, WAITING TIME PENALTIES, ATTORNEYS FEES, PENALTIES HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

20. STATUTE OF LIMITATIONS • STATUTORY CLAIMS • 3 YEARS—STATUTORY CLAIM FOR WAGES • 1 YEAR-PENALTIES • 4 YEARS-UNFAIR COMPETITION HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

21. AVOIDING CLAIMS • REVIEW THE POSITION • USE OF JOB DESCRIPTIONS • UPDATE TO REFLECT ACTUAL WORK • MONITOR ACTIVITIES AND TRAIN REGIONAL MANAGERS HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

22. AUDITING STATUS • SELF EVALUATION • JOB SHADOWING • EVALUATIONS • POLICY MANUALS OR OPERATIONS MANUALS • INTERVIEW OF CO-WORKERS OR SUBORDINATES HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

23. Reductions in Force • CA WARN ACT • CA Labor Code Section 1400 et. seq. • 75 or more employees within the proceeding 12 months • Layoff of 50 or more employees during any 30 day period • 60 days notice to employees and EDD • Back pay, Civil Penalty, Civil Action HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

24. 2011 EMPLOYMENT UPDATE • LEGISLATIVE UPDATE • NLRB Posting Requirement • NLRB First Issues Final Rule Requiring Posting • Must inform workers of right to organize a union • Join or assist a union • Bargain collectively • Discuss your wages or terms of employment with other employees or union • Take action with other employees to improve conditions • Strike and picket HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

25. 2011 EMPLOYMENT UPDATE • NLRB POSTING • Originally contained November 14, 2011 effective date • Lawsuit by manufacturing group challenging NLRB’s authority • October 5, 2011, NLRB delays posting until January 31, 2011 HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

26. 2011 EMPLOYMENT UPDATE • SB 459 • Tougher Sanctions for Willful Misclassification of Employees as Independent Contractors • Allows Labor and Workforce Development Agency (LWDA) to assess civil penalties for violations • Allows LWDA to notify CSLB in event licensed contractor violates law • Allows Labor Commissioner to assess civil and liquidated damages against violations • Joint and Several Liability for Conspirators HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

27. 2011 EMPLOYMENT UPDATE • AB 22 • Prohibits Reliance on Credit Reports in hiring • Exceptions: • Department of Justice • Managerial positions • A sworn peace officer • Position involving regular access to people’s bank records HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

28. 2011 EMPLOYMENT UPDATE • AB 469 • Notice of Pay Details • Pay rate and basis (hourly, Salary, etc…) • Allowances claimed as part of minimum wage • Regular payday • Name of the employer (including DBAs) • Employers physical address and phone number • Worker’s compensation carrier information HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

29. 2011 EMPLOYMENT UPDATE • AB 1396 • Requires written contracts for commissioned employees • Former law applied only to foreign employers • AB 1396 extends requirement to California employers • January 1, 2013 deadline HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

30. 2011 EMPLOYMENT UPDATE • SB 299 • Health benefits for 4 months during PDL • Law has long required employers to provide 4 months of disability leave for pregnancy • Prior to SB 299, only had to provide same benefits given to other disabled employees • Now, must give same benefits given to non-disabled employees (can require contributions) • Can require premium reimbursement if employee fails to return to work HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

31. 2011 EMPLOYMENT UPDATE • New Case Law • Brennan v. Townsend & O'Leary • Hostile work environment and sexual harassment • Off-color santas at Christmas parties • Plaintiff inadvertently obtained e-mail written by another employee referring to her as “big titted” and “mindless” • Plaintiff quit, claimed constructive discharge, and sued. • Jury found in her favor and awarded $250,000 • Judge threw out the verdict finding no evidence of severe and pervasive conduct • Appellate Court agreed HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

32. 2011 EMPLOYMENT UPDATE • Holmes v. Petrovich • Attorney-Client privilege • Plaintiff claimed harassment and discrimination based on pregnancy • Plaintiff e-mailed her attorney using company e-mail system before claiming constructive discharge • Company found e-mails and used them at trial. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

33. 2011 EMPLOYMENT UPDATE • Holmes v. Petrovich • Court found e-mails not privileged • No expectation of privacy • Signed employee handbook stating 1.) e-mail only for business purposes; 2.) employee messages could be monitored at any time; 3.) e-mails were not private • Not clear if court would rule the same in absence of policy HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

34. 2011 EMPLOYMENT UPDATE • Brinker Update • Issue: Must employers provide meal periods or ensure they are taken • Oral argument scheduled for November 8, 2011 • Court, generally, has 90 days from oral argument to issue a ruling. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

35. 2011 EMPLOYMENT UPDATE • Brinker Update (Continued…) • Hernandez v. Chipotle Mexican Grill, Tien v. Tenent healthcare Corp., & Flores v. Lamps Plus, Inc. • Court found employer must only provide breaks. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

36. 2011 EMPLOYMENT UPDATE • Hofferica v. St. Mary Medical Center • FMLA Retaliation • Employee terminated after failing to return to work after taking FMLA leave • Claimed she simply required a brief leave extension • Defense prevailed on a motion to dismiss and Plaintiff appealed HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

37. 2011 EMPLOYMENT UPDATE • Hofferica v. St. Mary Medical Center (Continued…) • Court found Plaintiff stated a valid claim for FMLA Retaliation given the employer’s failure to return her calls • Employer treated her differently based on her FMLA leave given it returned her calls before she took leave HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

38. 2011 EMPLOYMENT UPDATE • Lu v. Hawaiian Gardens Casino, Inc. • Tip Pooling • Plaintiff served as card dealer in casino • Required to set aside 15-20% of tips • Plaintiff brought class action • Supreme Court granted review to determine if violations of Labor Code section 351 provides a private right of action HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

39. 2011 EMPLOYMENT UPDATE • Lu v. Hawaiian Gardens Casino, Inc. (Continued…) • Section 351 prohibits employers from taking employees’ tips. • Statute must manifest an intent to create a private right of action • Two ways: 1.) Expressly states that a person is liable for a cause of action for violating the statute; or 2.) refer to a remedy or means of enforcing its substantive provisions. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

40. 2011 EMPLOYMENT UPDATE • Lu v. Hawaiian Gardens Casino, Inc. (Continued…) • Section 351 states that violators subject to misdemeanor and states that the Department of Industrial Relations “shall enforce the provisions of the article.” • Found this was inconsistent with legislative intent to create a private right of action. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

41. 2011 EMPLOYMENT UPDATE • Futrell v. Payday, Inc. • Payroll company as joint employer • Employee sued employer and payroll processing company claiming they were joint employers liable for wage and hour violations • Payroll company 1.) did not hire/fire; 2.) control work; 3.) set wages; 4.) supervise work; or 5.) set schedule. Payroll company did 1.) complete timecards; 2.) complete employee information sheets; 3.) employment eligibility verifications; 4.) W-4 certificates. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

42. 2011 EMPLOYMENT UPDATE • Futrell v. Payday, Inc.(Continued…) • Pay stubs identified the payroll company as the employer of record • Trial Court granted summary judgment in favor of payroll company • Appellate Court affirmed • Labor Code identifies employer as entity responsible for wages, hours, and working conditions. Processing of wages does not qualify HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

43. 2011 EMPLOYMENT UPDATE • Thompson v. North Am. Stainless, LP • U.S. Supreme Court • Plaintiff and fiancé employees of NAS. • Fiancé files claim of sex discrimination with EEOC • Three weeks later, NAS terminates Plaintiff. • Plaintiff sues alleging retaliation. • Trial court and Sixth Circuit dismissed claims finding that Title VII does not permit third-party relations claims HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

44. 2011 EMPLOYMENT UPDATE • Thompson v. North Am. Stainless, LP(Continued…) • Supreme Court reversed Sixth Circuit • The court found it is “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew her fiancé would be fired.” HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

45. 2011 EMPLOYMENT UPDATE • United Parcel Serv. v. Superior Court • Premium payments for missed meal and rest breaks • Labor Code section 226.7 allows employee that misses a meal or rest period to receive one additional hour of pay as a premium payment. HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

46. 2011 EMPLOYMENT UPDATE • Issue: One hour per day as penalty, or one hour per violation? • Court found that employees get one hour of pay per violation • Get two hours of pay per day if miss both a meal and rest break HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

47. 2011 EMPLOYMENT UPDATE • Dukes v. Wal-Mart • Plaintiffs claimed that policy allowing local discretion for employment decisions has disproportionate impact on female employees • Trial court and Ninth Circuit certified class • U.S. Supreme Court reversed, finding that commonality absent • Requires significant proof that Wal-Mart operated under a general policy of discrimination HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

48. 2011 EMPLOYMENT UPDATE • Dukes v. Wal-Mart (Continued…) • Critical to finding: • Wal-Mart has anti-discrimination policy • Policy of allowing local discretion is a policy against discrimination • Left to their own devices, most managers will select sex-neutral, performance-based criteria for hiring and promotion. • Company’s size was critical to decision HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM

49. ASK THE LAWYER HIGGS, FLETCHER & MACK LLP WWW.HIGGSLAW.COM