Employment Laws Update - 2014 What California Employers Should Know

1. Employment LawsUpdate - 2014What California Employers Should Know Presented by: Larry Kazanjian

2. Introduction Palmer Kazanjian Wohl Hodson LLP

3. January – February 2014 • Superior Court, Sacramento County and U.S. District Court, Eastern Dist. of CA: • Discrimination/Harassment/Retaliation – 51 • Leaves of Absence - 16 • Failure to Provide Meal and/or Rest Periods - 14 • All of California: • Discrimination/Harassment/Retaliation – 1,193 • Wrongful Termination – 754 • Failure to Pay Overtime – 414 * Introduction (cont.) *Data via Courthouse News Service. Palmer Kazanjian Wohl Hodson LLP

4. Contractual Relationships • Equal Employment Opportunity • Independent Contractor Issues • Compensation and Benefits • Leaves of Absence • Question/Answer Overview Palmer Kazanjian Wohl Hodson LLP

5. Contractual Relationships • Summary: • Written Policies and Procedures • At-Will Employment • Arbitration Agreements • 2014 Update Palmer Kazanjian Wohl Hodson LLP

6. Written Policies and Procedures • Federal or state law requirements • Employee requests • Management or supervisor review • Evidence in case of litigation • Establish terms of the employment relationship • Ex) Via written employment handbook Palmer Kazanjian Wohl Hodson LLP

7. At-Will Employment • Either party may terminate relationship • Without notice and/or cause • “Fully integrated” contract • Cannot terminate for “unlawful” reason Palmer Kazanjian Wohl Hodson LLP

8. Arbitration Agreements • Separate agreement signed by parties • Necessary provisions include: • Impartial arbitrator • Remedies • Benefits include: • Avoid litigation costs • Expedite dispute process Palmer Kazanjian Wohl Hodson LLP

9. 2014 Update • Compton v. American Management Services LLC (2013) • Arbitration agreement held unenforceable because it was unconscionably one-sided • Serpa v. California Surety Investigations, Inc. (2013) • Arbitration agreement contained in an employee handbook was not invalid simply because the employer could change the handbook in its discretion Palmer Kazanjian Wohl Hodson LLP

10. Equal Employment Opportunity • Summary: • Harassment • Discrimination • Retaliation • Workplace Violations • 2014 Update Palmer Kazanjian Wohl Hodson LLP

11. Harassment • “Harassment” defined • Unwelcome conduct • Complaint procedure • Investigation/Response • Remedies • Electronic media • Ex) email, Internet Palmer Kazanjian Wohl Hodson LLP

12. Discrimination • Protected classifications include race, sex, religion • Disparate Treatment vs. Disparate Impact • Keys to avoidance include: • Consistency • Legitimate, business-related reasons for decisions Palmer Kazanjian Wohl Hodson LLP

13. Retaliation • Form of unlawful discrimination • Multiple potential “retaliators” • Cannot change terms of employment • Cannot terminate employee • Protect against via written policy • Example(s): • Employee “blows the whistle on” safety violations or reported sexual harassment Palmer Kazanjian Wohl Hodson LLP

14. Workplace Violence • Zero tolerance policy • Threats, jokes, minor events • Appropriate response procedure • Legal tools, e.g. injunction Palmer Kazanjian Wohl Hodson LLP

15. 2014 Update • AB 263 – Immigration – Related Penalties • Subjects employers who engage in unfair immigration-related practices to heavy fines and allows for private enforcement actions; Defines unfair immigration practices. • SB 292 – FEHA - Sexual Harassment • Sexually harassing conduct need not be motivated by sexual desire to qualify as harassment; Clarifies that the FEHA does not require proof of sexual desire toward the plaintiff in a harassment suit. • SB 400 – Protections for Stalking • An employer cannot discharge/discriminate/retaliate against an employee because employee is a victim of domestic violence, sexual assault, or stalking; Employer must also reasonably accommodate the victim. • SB 666 – Retaliation • An employer may lose its business or professional license for retaliating against an employee/former employee/applicant on the basis of their citizenship and/or immigration status. Palmer Kazanjian Wohl Hodson LLP

16. 2014 Update (cont.) • Vicente Salas v. Sierra Chemical Co. (2014). • The CA Supreme Court will rule on a dispute over whether an employer can successfully fight a discrimination suit by alleging a worker provided false information about his immigration status, giving the court an opportunity to clarify the scope of companies' affirmative defenses when workers lie to them, lawyers say.  • The court heard oral argument on April 2, 2014. • A state appellate court previously upheld the dismissal of the employee’s disability discrimination case under FEHA, because of Sierra Chemical’s after-acquired evidence defense – in which it claimed that it found out during litigation that Salas had used someone else’s Social Security number to obtain employment and that it would never have hired Salas had it known about the misrepresentation. Palmer Kazanjian Wohl Hodson LLP

17. Independent Contractors • Summary: • Independent Contractor or Employee? • Wage and Hour Issues • 2014 Update Palmer Kazanjian Wohl Hodson LLP

18. Employment Status • Independent Contractor or Employee? • Employee presumption • Cal. Lab. Code § 3357 • Differing definitions utilized • Cal. Code Regs. tit. 22, § 4304-1 • The Employment Development Department (“EDD”) administers California’s employment tax laws • Do not use single factor to classify • S. G. Borello & Sons, Inc. (1989)  Palmer Kazanjian Wohl Hodson LLP

19. Wage and Hour Issues • “Employee” determination • Minimum wage • Overtime wages • Meal and rest periods • Reimbursement • Other issues: • Tax • Workers’ Compensation • Unemployment Insurance Palmer Kazanjian Wohl Hodson LLP

20. 2014 Update • SB 168 – Farm Labor Contractors • Existing law requires farm labor contractors to be licensed with the California Labor Commissioner and comply with applicable law. • New law makes a successor farm labor contractor liable for any wages or penalties owed to a former employee by the predecessor employer, whether or not the predecessor was a licensee. • The criteria for determining whether the farm labor contractor is a successor is enumerated in Labor Code § 1698.9. Palmer Kazanjian Wohl Hodson LLP

21. 2014 Update (cont.) • Baumann v. Chase Investment Services Corp. (March 13, 2014) • 9th Circuit Court of Appeals held that the federal district does not have original jurisdiction under the federal Class Action Fairness Act (CAFA) over wage and hour suits brought under California’s Private Attorneys General Act (PAGA). Palmer Kazanjian Wohl Hodson LLP

22. Compensation and Benefits • Summary: • Overtime & Minimum Wage Obligations • Meal and Rest Periods • Other Compensation Palmer Kazanjian Wohl Hodson LLP

23. Overtime & Minimum Wage • Overtime Exemptions: • Executive • Administrative • Professional • Use of Alternative & Flexible Schedules • Limits on Hours of Work • Regular Rate of Pay • Related Record-Keeping Requirements Palmer Kazanjian Wohl Hodson LLP

24. Meal and Rest Periods • Brinker Restaurant Corp. (2012) • Employee can contest up to four (4) years after a missed meal period • Employers’ compliance objective: • Create best evidence possible that meals were provided, regularly taken and accurately recorded Palmer Kazanjian Wohl Hodson LLP

25. Other Compensation • Expenses • Vacation • No statutory definition; only DLSE Opinion Letters • Sick Leave • Only includes a right to take time off that accrues periodically with the passage of time. • Bonuses • Commissions • Employers who pay commissions are required to enter into written commission contracts with employees Palmer Kazanjian Wohl Hodson LLP

26. 2014 Update • AB 10 – Minimum Wage • On and after July 1, 2014, minimum wage is $9.00 per hour. • On January 1, 2016, minimum wage will increase again, to $10.00 per hour. Palmer Kazanjian Wohl Hodson LLP

27. 2014 Update (cont.) • SB 390 – Employee Wage Witholdings • Existing state law made it a crime for an employer to fail to make agreed- upon payments to health and welfare funds, pension funds, or various benefit plans. • As of 2014, it is a crime for a California employer to fail to remit withholdings from an employee’s wages that were made pursuant to state, local, or federal law. • SB 435 –Recovery Periods • California employers are prohibited from requiring an employee to work during any meal or rest period and must provide one hour of pay as a penalty for failure to comply. • This law expands the prohibition to cover meal, rest, or recovery periods mandated by applicable statutes, regulations, standards, or orders of applicable government agencies. • A “recovery period” is defined as a cool down period afforded to an employee to prevent heat illness. • OSHA mandates a recovery period of not less than five minutes for employees who work outside when the temperature exceed 85 degrees. Palmer Kazanjian Wohl Hodson LLP

28. 2014 Update (cont.) • Kilby v. CVS Pharmacy, Inc. (2013); and Henderson v. JPMorgan Chase Bank NA (2013). • In March 2014, the 9th Circuit Court of Appeals asked the California Supreme Court to clarify how the state law requiring employers to provide workers with “suitable seating” should be applied. • California’s IWC wage orders require most employers to provide their employees with suitable seating “when the nature of the work reasonably permits the use of seats.”  • This has been the law for decades, but the suitable seating requirement was little noticed until after the enactment of the California Labor Code Private Attorneys General Act of 2004 (the “PAGA”). Palmer Kazanjian Wohl Hodson LLP

29. Leaves of Absence • Summary: • Family Medical Leave Act (“FMLA”) • Disability Leave & • Reasonable Accommodation • Pregnancy Leaves and Other Leaves • 2014 Update Palmer Kazanjian Wohl Hodson LLP

30. The FMLA • FMLA/CFRA • ADA/FEHA • Workers Compensation • PDL and other state laws • Separate analysis for each • Consistent application • Paid sick leave for family medical conditions Palmer Kazanjian Wohl Hodson LLP

31. Disability and Accommodation • Employee Qualifications • “Disability” defined • “Reasonable Accommodation” • “Undue Hardship” • Certification Requirements • Reinstatement Obligations • Collective Bargaining Obligations Palmer Kazanjian Wohl Hodson LLP

32. Pregnancy and • Other Types of Leaves • Pregnancy Leave • Industrial Injury Leave • Vacation Leave • Sick Leave • Military Leave • Other Leaves • Civic duty, election, religious leave, holiday leave, bereavement leave Palmer Kazanjian Wohl Hodson LLP

33. 2014 Update • SB 770 – Expansion of Paid Family Leave • Under existing law, the California Family Rights Act (“CFRA”) provides up to six (6) weeks of wage replacement benefits to workers who take time off to care for a seriously ill child, spouse, parent or domestic partner, or to bond with a minor child. • The scope of this program will now be expanded to include time off to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law. Palmer Kazanjian Wohl Hodson LLP

34. 2014 Update (cont.) • California, AB 1522 – Paid Sick Days • Under proposed legislation, workers would accrue one (1) hour of paid sick leave for every 30 hours worked, and employers could cap the leave at 24 hours, or three (3) work days each year. • Unused sick leave would be carried over into the following year, a provision representing a significant change to existing law. • The Patient Protection and Affordable Care Act • Businesses with 50+ full-time employees will be subject to fines if they do not provide healthcare coverage for workers after this January 1, 2015. Palmer Kazanjian Wohl Hodson LLP

35. Questions? Palmer Kazanjian Wohl Hodson LLP

36. Thank You Employment Laws Update - 2014What Employers Should Know