Articles Posted in Posts for Employers

In the 1940’s, a soap company in Chicago hired a small crew of firefighters to live on the premises and be available for emergencies. The crew officially worked a nine-hour shift but were also required to sleep in a designated location and respond alarms, if necessary. A legal dispute arose about whether the “on call” time should have been compensated as hours worked. The U.S. Supreme Court ruled that it did, with Justice Robert Jackson stating:

“Of course an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen. Refraining from other activity often is a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself, and time spent lying in wait for threats to the safety of the employer’s property may be treated by the parties as a benefit to the employer.” Armour & Co. v. Wantock (1944) 323 U.S. 126, 133.

The Supreme Court’s ruling opened the door for a litany of subsequent cases on the issue of “on call pay.” In the days of modern cellphone technology, the issue has become even more complex. After all, with a cellphone in every pocket, a beckoning call from an employer is just seconds away.

When Thomas Jefferson commissioned an expedition to explore the western frontier in 1803, he called upon two men who, among other things, were valiant record-keepers. Meriwether Lewis, a secretary, and William Clark, a cartographer, spent three years exploring and documenting an unknown territory. Some of the most important things to come from the Lewis and Clark Expedition were their personal journals, which contained invaluable information used by those who followed their trail westward.

thomas-jefferson-3-1421198-182x300
The value of record-keeping cannot be overstated. Advanced civilizations require written language, arts, sciences and government – which all begin with record-keeping. The same can be said about business. While all businesses keep records, there is a significant difference between a cave painting and the Great Library of Alexandria. Unfortunately, some business owners remaining in the stone age of record-keeping, which can create significant liability.

Both Federal and State law require employers to create and maintain employment records. This includes payroll records, employee’s name, address, occupation, hours worked each day and week, wages paid and date of payment, amounts earned as straight-time pay and overtime, and deductions. These records must be maintained for three years. [Lab.C. §§ 226(a), 1174(d), 29 CFR § 516.5]. Other records, such as time and earning cards and work schedules must be kept for two years. [29 CFR § 516.6].

In April 30, 2018, the world of employment law was shaken by the decision of the California Supreme Court to apply a stricter standard for determining whether a worker was an employee or independent contractor. The new standard, set forth in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, is known as the ABC Test.

Soon after the California Supreme Court published its landmark decision of Dynamex Operations W. v. Superior Court, (2018) 4 Cal. 5th 903, 962 (“Dynamex”), the law firm of Davis & Wojcik APLC experienced an influx of employer consultations at a rate never before experienced by a single court ruling. The immediate application of the ABC Test caught many employers by surprise, and they were eager to know how Dynamex would impact their business. Their concern was well-founded.

Immediately after the Dynamex decision was published, the employment world was left wondering whether the ABC Test would be applied retroactively. Thanks to the U.S. Court of Appeals for the Ninth Circuit, we now have an answer.

California law prohibits discrimination against job applicants and employees on the basis of age, race, color, religion, sex (including pregnancy, childbirth, breastfeeding, and related medical conditions), national origin, ancestry, mental and physical disability (including HIV and AIDS), medical conditions (such as cancer and genetic characteristics), marital status, genetic information, sexual orientation, gender (including gender identity and gender expression), and military and veteran status.

In order to avoid the appearance of discrimination, employers should limit requests for information during the pre-employment process to those details essential to determining a person’s qualifications to do the job. The following are some general guidelines that employers and employees should know regarding the employment application process.

NAME: An employer should never ask questions about an individual’s name that require the applicant to disclose ancestry, national origin, race, religion or marital status, (i.e., asking for an applicant’s “maiden” name, or asking questions about the origin of a name, rather than simply asking if other names have been used). However, it is acceptable to ask an applicant’s name or previous name for purposes of checking their past work record.

Breaking up is hard to do. There can be many reasons why an employer finds it necessary to end the employment relationship. It could be for performance reasons, a reduction in force or realignment of duties. Under any of these circumstances, it is not to easy to tell an employee that they are unemployed. Administering the termination in a legally improper way will only make it worse. Here are a few legal tips for administering a termination.

Required Documents

After the decision has been made to terminate an employee, there are certain legal requirements that must be met. For example, federal law requires that all employers with 20 or more employees provide a Consolidated Omnibus Budget Reconciliation Act (COBRA) notice and election form to employees who are participating in the employer’s group health plan the day before the termination and to any of the terminating employee’s dependents on the plan. Cal-COBRA must be offered to both terminated employees of small employers (2-19 employees) and terminated employees covered under federal COBRA when their 18 months of federal COBRA coverage expires.

The #MeToo movement, with its focus of preventing sexual harassment and sexual assault, has led to the passage of new California employment laws. Some of these laws are good for employers, some are bad, and some depend on your political outlook. Regardless of political affiliation, there is no doubt that the #MeToo movement has influenced California lawmakers into passing new legislation aimed at supporting the #MeToo movement. Here are a few laws that will take effect on January 1, 2019.

Freedom from Defamation

It is common practice for potential employers to call former employers for a reference on prospective employees. Currently, employers are permitted to inform another prospective employer whether the employer would rehire an employee. Such communications are deemed to be privileged and protected from a lawsuit for defamation — if done without malice.

The importance of an employee handbook cannot be understated. As long as the handbook is drafted properly, and the policies are followed, an employee handbook can be used as both a sword and shield to protect the employer liability.

shield-1412482-300x200As a shield, an employee handbook helps reduce potential liability. One of the greatest benefits of having an employee handbook is its potential to protect companies from employees’ legal claims. An employee handbook can be used to assist the employer in avoiding and defending against discrimination, harassment and wrongful discharge claims.

longsword-1422533-300x225As a sword, the employee handbook allows employers to be proactive. An employee handbook should articulate the employer’s expectations by clearly describing the employer’s policies and procedures. This includes the actions supervisors and employees should take in the event that an employee has a problem or grievance. Employers should not wait until a lawsuit is filed before learning about what occurs at the workplace. In addition, one of the goals of an employee handbook should be to promote fairness and evenhanded treatment of employees by establishing uniform standards that can be applied by all employees.

In California, covered employers are required to provide up to 12 weeks of unpaid, job-protected leave to eligible employees for certain family and medical reasons, such as an employee’s serious health condition. But what happens if the employee is unable to return to work after the protected leave expires? When can an employer hire someone else to fill that position?

Our firm gets this question often from employers who feel they are being “held hostage” by employees who are unable to return to work. Their business suffers from an insufficient workforce, but it will suffer more if accused of disability discrimination.

Under the Family Medical Leave Act (“FMLA”) and the California equivalent, the California Family Rights Act (“CFRA”), an employer is only required to make an offer of equivalent employment. However, the Americans with Disabilities Act (“ADA”) and workers’ compensation laws create additional obligations to “reasonably accommodate” the employee’s disability.

The Independent Contractor classification may not be dead, but it is seriously wounded. The California Supreme Court recently announced a new test for determining whether a worker is an employee or an independent contractor in the landmark decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles, No. S222732 (Cal. Sup. Ct. Apr. 30, 2018).

Under the new Dynamex decision, a hiring entity classifying an individual as an independent contractor now bears the burden of establishing that such a classification is proper under the “ABC test.” To do so, the entity must prove each of the following three factors:

(A)  that 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;

We’ve all heard the cliché saying, “It’s cheaper to keep her.” While it may be relevant in divorce, and a good reason to strive for a happy marriage, it may not be a good mantra for business. The greatness of American business is rooted in “Mom and Pop Shops” — small, family-owned, businesses with a minimum number of employees. The appeal of these small businesses are low start-up costs and exclusive control. However, exclusive control is just a facade as Mom and Pop still need to be compliant with the law.

California employment laws are expansive and evolving. According to the Department of Industrial Relations, thirty-two employment-related laws were amended in 2016, and in 2015, there were over 110 amendments or additions. In other words, unless Mom and Pop receive yearly training, they are already falling behind. This is the same for any company, but the difference is that larger companies can terminate their payroll personnel if a mistake is made. Pop can’t exactly fire Mom if she miscalculates overtime.

So, what is Pop to do? The answer is simple: get Mom some help so she doesn’t make a mistake. If a mistake is made, consult an attorney before it becomes a lawsuit. Here are three tips from an employment lawyer to help Mom and Pop avoid common obstacles in operating a business.